Markets expect at least a 75 bps hike at the next FOMC meeting, which takes place July 26-27. More than half of respondents expect the Fed will need to increase rates an additional 100 bps over the next year to tame inflation.
The spread between the two-year and 10-year notes dipped negative last Monday for the first time since April. Historically, protracted inversions of the yield curve have preceded U.S. recessions.
In a move to slow the specter of inflation, the Federal Reserve today increased the target range for the federal funds rate by three-quarters of a percentage point to 1.5% to 1.75%—the central bank’s most aggressive hike since 1994.
The cost of existing credit card debt continues to rise as the Federal Reserve has increased interest rates this year—so far, by $4.9 billion, according to a recent WalletHub survey.
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.
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.
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.
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.
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.
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.