ABA Data Bank: Real rates remain deeply negative in US, EU
Despite the Fed tightening monetary policy—increasing the fed funds rate 75 basis points—real rates* remained deeply negative at the end of April, ticking up only 30 bps over the month.
Browsing: Interest rates
Powell: High Inflation Could Push Longer-Term Expectations ‘Uncomfortably Higher’
With the U.S. economy experiencing a period of high inflation and with new economic uncertainties prompted by the Russian invasion of Ukraine, Federal Reserve Chairman Jerome Powell today warned that these conditions could push the Federal Open Market Committee’s longer-term expectations “uncomfortably higher,” underscoring a need for the FOMC “to move expeditiously” to raise interest rates.
Powell Signals Fed to Move Forward with Interest Rate Hikes
Federal Reserve Chairman Jerome Powell told members of the House Committee on Financial Services today that he expects the Fed to raise interest rates at the next meeting of the Federal Open Market Committee on March 15-16.
N.Y. Fed’s Williams Signals Rate Increases at Next Fed Meeting
In remarks at an industry event today, Federal Reserve Bank of New York President and CEO John Williams signaled that the Fed is likely to begin raising interests rates at its next meeting, as expected by analysts, and that the Fed could begin reducing its holdings of Treasury and mortgage-based securities sometime later in the year.
Federal District Court Upholds OCC, FDIC’s ‘Valid-When-Made’ Rules
A federal district court on Tuesday upheld the OCC’s and FDIC’s “valid-when-made” rules in separate rulings. The agencies’ rules had affirmed that permissible interest on a loan made by a national or state-chartered bank or federal thrift remains valid when the loan is transferred or sold.
ABA Data Bank: ABA Economic Advisory Committee Forecasts Interest Rates to Rise, Inflation to Slow in 2022
The ABA Economic Advisory Committee consensus forecast anticipates softer, though still elevated, inflation in 2022 along with three 25 basis point rate increases from the Federal Reserve.
FOMC: Higher Inflation, Labor Developments Spurred Asset Purchase Tapering
In light of elevated inflation pressures and further improvements in the labor market, Federal Open Market Committee members decided in December to further reduce the monthly pace of the Federal Reserve’s net asset purchases. In minutes from the group’s Dec. 14-15 meeting released today, members remarked that that a quicker conclusion of net asset purchases would better position the committee “to set policy to address the full range of plausible economic outcomes.”
FOMC to Accelerate Asset Purchase Tapering
The Federal Reserve will accelerate its planned tapering of Treasury securities and mortgage-backed securities purchases, according to the latest Federal Open Market Committee statement issued today.
ABA Data Bank: Real Interest Rates in the Red Across the World’s Developed Economies
Headline inflation surged to 6.2% in October, yet the federal funds rate remains near-zero. As a result, the real interest rate in the U.S. (the difference between inflation and the nominal rates set by central banks) is at its lowest level in decades, -5.97%.
Financial Trades: 36% Fee and Rate Cap Could Constrain Credit
A coalition of financial trade groups including ABA today urged Senate Banking Committee members to reject any legislative proposal that would impose a national fee and interest rate cap of 36%, noting that such a cap would create barriers to credit access for consumers.