The Fed’s solution might be worse than the problem
2 years, 2 months ago

The Fed’s solution might be worse than the problem

Live Mint  

The Federal Reserve System, the central bank of the US, has increased its benchmark interest rate, from near zero in mid-March 2022 to 3-3.25% in late-September 2022, in five hikes over the past six months, and projections place it in the range of 4.5% by end-2022. Small Indian cinemas take on big Hollywood studios Contrasting Q2 stories of two tech giants of India Premium trumps regular in demand for consumer durables How to transfer shares from a demat account to another Such sharp increases in the benchmark Federal funds rate—the main monetary policy tool in the US—is puzzling at this juncture. Thus, the consequences of higher interest rates, both on the supply side and the demand side, could further dampen the fragile growth in output and hurt the modest recovery in employment. In situations where prices are being driven up by excess liquidity, tightening monetary policy using higher interest rates could—but might not always—curb inflation. Fighting inflation using higher interest rates, could belie hopes of a soft landing with moderated inflation which also revives output growth and employment expansion.

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History of this topic

US Federal Reserve lowers interest rates, signals slower cuts for 2025
Trending News
5 days, 2 hours ago

US Federal Reserve lowers interest rates, signals slower cuts for 2025

India TV News  

The Federal Reserve cut its benchmark interest rate by a quarter for the third consecutive time. Future outlook: Moderate reductions expected by 2025 Another quarterly outlook indicated only two rate cuts in 2025, with officials predicting government rates to reach 3.75 per cent-4 per cent by the end of that year. Fed Governor Michelle Bowman warned that inflation would remain …

The Fed expects to cut rates more slowly in 2025. What that could mean for mortgages, debt and more
5 days, 7 hours ago

The Fed expects to cut rates more slowly in 2025. What that could mean for mortgages, debt and more

Associated Press  

NEW YORK — The Federal Reserve’s third interest rate cut of the year will likely have consequences for debt, savings, auto loans, mortgages and other forms of borrowing by consumers and businesses. “Because the upcoming Trump administration’s policies might cause a resurgence in inflation or otherwise throw the economy off balance, the Fed might choose to take a wait-and-see approach …

Surge in wages means beleaguered borrowers must wait for interest rates cut
Trending News
6 days, 14 hours ago

Surge in wages means beleaguered borrowers must wait for interest rates cut

The Independent  

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy The Bank of England is …

Federal Reserve is likely to slow its rate cuts with inflation pressures still elevated
1 week ago

Federal Reserve is likely to slow its rate cuts with inflation pressures still elevated

Associated Press  

WASHINGTON — Americans hoping for lower borrowing costs for homes, credit cards and cars may be disappointed after this week’s Federal Reserve meeting. The Fed’s policymakers are likely to signal fewer interest rate cuts next year than were previously expected. Instead, inflation has become stuck at a higher level, yet the Fed after Wednesday’s meeting will likely have lowered its …

Personal Loan: How inflation influences your interest rates? Explore here
2 weeks ago

Personal Loan: How inflation influences your interest rates? Explore here

Live Mint  

Another component of our personal finance, where inflation leaves an impact is interest rates of personal loans. When the repo rate goes up, borrowing becomes more expensive for banks, leading to higher consumer interest rates personal loans are no exception. Ashish Tiwari, Chief Marketing Officer, Home Credit India, expressed that, “Personal loan interest rates are closely tied to inflation levels …

Why Trump and the Federal Reserve could clash in the coming years
2 weeks, 4 days ago

Why Trump and the Federal Reserve could clash in the coming years

Associated Press  

WASHINGTON — President-elect Donald Trump campaigned on the promise that his policies would reduce high borrowing costs and lighten the financial burden on American households. And even if Powell reduces the Fed’s benchmark rate, Trump’s own policies could keep other borrowing costs — like mortgage rates — elevated. The Fed would likely respond by slowing or stopping its rate cuts, …

The US Fed needs a serious rethink at its next policy review
2 weeks, 5 days ago

The US Fed needs a serious rethink at its next policy review

Live Mint  

Next year, the US Federal Reserve will undertake an exercise with global implications: its periodic monetary policy framework review, at which it rethinks its approach to managing the world’s largest economy. By March 2022, interest rates were still near zero and the Fed was buying Treasuries and mortgage-backed securities to push down longer-term rates—while the US unemployment rate was 3.8% …

Economic advice for Donald Trump and Jerome Powell: First, do no harm
3 weeks, 5 days ago

Economic advice for Donald Trump and Jerome Powell: First, do no harm

Live Mint  

If US economic growth is so good, then why does the Fed need to cut interest rates? Underpinning the success is growth in labour productivity, which has averaged 2.3% in the past two years, about half a percentage point faster than in the four years before covid. By focusing on the issues facing small young businesses—as opposed to large well-established …

It’s Reasonable to Consider Rate Cut Next Month, Fed’s Kashkari Says
4 weeks ago

It’s Reasonable to Consider Rate Cut Next Month, Fed’s Kashkari Says

Live Mint  

-- Federal Reserve Bank of Minneapolis President Neel Kashkari said it is still appropriate to consider another interest-rate cut at the central bank’s December meeting. “It’s still a reasonable consideration,” Kashkari said Monday on Bloomberg Television in response to a question about whether policymakers should reduce borrowing costs by a quarter point at their last meeting of the year. “Right …

US Fed rate cut: First inflation uptick in 7 months does little for Powell-led FOMC’s December plans; here’s why
1 month, 1 week ago

US Fed rate cut: First inflation uptick in 7 months does little for Powell-led FOMC’s December plans; here’s why

Live Mint  

The US Federal Reserve will likely stay on course towards delivering another interest rate cut in its December policy meeting even after the latest inflation print revealed that consumer prices rose for the first time in seven months. Wall Street analysts say that October's inflation data "will change little for the US Fed'' when the Federal Open Market Committee will …

Trump enters just as the Fed is shifting its focus
1 month, 2 weeks ago

Trump enters just as the Fed is shifting its focus

Live Mint  

With its second consecutive interest-rate cut this year, the Federal Reserve is attempting to boost the odds of a soft landing. Alternatively, any resurgence in inflation could force the Fed to stop cutting rates, raising the odds that the economy faces a hard landing later in Trump’s term. Due in part to the Fed cutting rates with a solid economy, …

Federal Reserve cuts its key interest rate by a quarter-point
Trending News
1 month, 2 weeks ago

Federal Reserve cuts its key interest rate by a quarter-point

The Hindu  

The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week. Why rate cuts by the U.S. Federal Reserve matter to world markets In a statement after its latest meeting ended, the Fed said the …

Federal Reserve cuts its key interest rate by a quarter-point after Trump's election win
Top News
1 month, 2 weeks ago

Federal Reserve cuts its key interest rate by a quarter-point after Trump's election win

Hindustan Times  

The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week. Federal Reserve Board Chairman Jerome Powell The rate cut follows a larger half-point reduction in September, and it reflects the Fed’s renewed focus on …

US Federal Reserve cuts rate by 0.25% after first post-election meeting, notes easing inflation
Trending News
1 month, 2 weeks ago

US Federal Reserve cuts rate by 0.25% after first post-election meeting, notes easing inflation

Firstpost  

The interest rate in the US is now in the range of 4.5-4.75 per cent. The US Federal Reserve on Thursday cut the benchmark lending rates in the country by 0.25 per cent. Inflation has made progress toward the Committee’s 2 per cent objective but remains somewhat elevated,” the Federal Open Market Committee, which is responsible for changes to the …

Fed cuts rates in boost for Trump
1 month, 2 weeks ago

Fed cuts rates in boost for Trump

The Telegraph  

The US Federal Reserve cut interest rates on Thursday night in a boost for incoming president Donald Trump. The central bank voted to lower rates by a quarter of a percentage point, two days after the worries about the economy under the Democrats helped propel Mr Trump back into power. Before Thursday evening’s decision, traders had already begun paring forecasts …

Sharply rising bond rates could stem Wall Street's 'relief rally' and push interest rate cuts further into the future
1 month, 2 weeks ago

Sharply rising bond rates could stem Wall Street's 'relief rally' and push interest rate cuts further into the future

ABC  

The apparent roar of approval was almost deafening. It's a world that, down the track, promises a return of inflation and permanently higher interest rates as America shifts to a more protectionist global stance that punishes China and, by extension, hurts Australia. Since mid-September, US money markets almost inexplicably have begun forecasting a rise in interest rates. The bond is …

US Fed cuts interest rates by quarter of a percentage point
Top News
1 month, 2 weeks ago

US Fed cuts interest rates by quarter of a percentage point

Al Jazeera  

The Fed will have to navigate a changing economic landscape with the election of Donald Trump as the next US president. The United States Federal Reserve has cut interest rates by a quarter of a percentage point as policymakers took note of a job market that has “generally eased” while inflation continues to move towards the central bank’s 2 percent …

The Fed cuts interest rates — but Trump's election could make things trickier
1 month, 2 weeks ago

The Fed cuts interest rates — but Trump's election could make things trickier

NPR  

The Fed cuts interest rates — but Trump's election could make things trickier toggle caption Anna Moneymaker/Getty Images North America The Federal Reserve lowered interest rates by a quarter percentage point Thursday, as expected — but the central bank may grow more cautious about future rate cuts as it monitors the impact of economic policies in a second Trump administration. …

Americans' Economic Optimism Soars as Interest Rates Fall
1 month, 4 weeks ago

Americans' Economic Optimism Soars as Interest Rates Fall

CNN  

Americans' economic sentiment has improved, with a rise in consumer sentiment and lower inflation expectations. The Federal Reserve's recent interest rate cut has played a significant role in this improvement, easing borrowing costs and making it cheaper for consumers to purchase durable goods. However, the government's retail spending report indicates that sales of durable goods declined in September, suggesting that …

Inflation in Europe falls below 2% and opens the way for faster rate cuts
2 months, 3 weeks ago

Inflation in Europe falls below 2% and opens the way for faster rate cuts

The Independent  

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Please enter a valid email address Please enter a valid email address SIGN UP I would like to be emailed about offers, events and updates from The Independent. Please try again later {{ …

US Federal Reserve is finally lowering rates: Here's what consumers need to know
3 months ago

US Federal Reserve is finally lowering rates: Here's what consumers need to know

Hindustan Times  

The Federal Reserve has cut its benchmark interest rate from its 23-year high, with consequences for debt, savings, auto loans, mortgages and other forms of borrowing by consumers and businesses. “Act cautiously and responsibly," Channel said, "and don’t make any rash decisions based on a single Fed meeting or economic report.” Eventually, yields for savers will decline as the Fed …

Ahead of elections, US Federal Reserve shifts interest rates dramatically to deal with worst inflation
3 months ago

Ahead of elections, US Federal Reserve shifts interest rates dramatically to deal with worst inflation

India TV News  

The Federal Reserve cut interest rates by half of a percentage point on Wednesday, kicking off what is expected to be a steady easing of monetary policy with a larger-than-usual reduction in borrowing costs that followed growing unease about the health of the job market. "The committee has gained greater confidence that inflation is moving sustainably toward 2%, and judges …

How the economy will respond to the Fed's rate cuts
3 months ago

How the economy will respond to the Fed's rate cuts

Politico  

“Rate cuts going into the end of this year and the beginning of next year will help provide some momentum to the economy,” said Bharat Ramamurti, a former Biden White House official who’s now advising Harris’s campaign. “Very sharp and significant Fed rate hikes didn’t have the same effect on the economy that you would have expected,” said David Wessel, …

The Federal Reserve starts cutting interest rates in a big moment for the economy
3 months ago

The Federal Reserve starts cutting interest rates in a big moment for the economy

NPR  

The Federal Reserve starts cutting interest rates in a big moment for the economy toggle caption Win McNamee/Getty Images North America The Federal Reserve moved aggressively Wednesday to start cutting interest rates as its single-minded focus on fighting inflation gives way to a growing interest in protecting the job market. On average, members of the Fed's rate-setting committee expect borrowing …

Will the Federal Reserve cut interest rates fast enough to deliver a ‘soft landing’?
3 months, 1 week ago

Will the Federal Reserve cut interest rates fast enough to deliver a ‘soft landing’?

LA Times  

Federal Reserve Chair Jerome H. Powell speaks during a news conference at the Fed in Washington in May. Typically, Fed rate cuts lead to lower borrowing costs for things such as mortgages, auto loans, credit cards and business loans. Fed Chair Jerome H. Powell emphasized in a speech last month in Jackson Hole, Wyo., that the Fed is prepared to …

Fed leader, concerned about jobs downturn, tees up interest rate cuts
4 months ago

Fed leader, concerned about jobs downturn, tees up interest rate cuts

LA Times  

Federal Reserve Chair Jerome H. Powell now sees inflation as less of a threat and maximizing jobs as even more important. But Powell’s emphasis on doing “everything we can to support a strong labor market” gave some economists reason to think that the Fed could make a half-point move next month. Powell said that the pace of policy actions would …

'The time has come' to lower interest rates: Fed Chair Jerome Powell
4 months ago

'The time has come' to lower interest rates: Fed Chair Jerome Powell

NPR  

'The time has come' to lower interest rates: Fed Chair Jerome Powell toggle caption Drew Angerer/Getty Images North America Federal Reserve chairman Jerome Powell says he's increasingly confident that inflation will soon be tamed, setting the stage for the central bank to start cutting interest rates next month. Speaking at one of the most closely-watched annual gatherings of global central …

Fears US economy headed towards recession spark jitters across global markets
4 months, 2 weeks ago

Fears US economy headed towards recession spark jitters across global markets

ABC  

There are genuine concerns the world's largest economy is heading toward a recession, and the fear is gripping global financial markets. "Shares went sky high into July on the back of better news on inflation, increasing optimism about lower interest rates ahead and optimism about IT and AI-related earnings," Mr Oliver, who manages $3 billion in investments, said. The US …

Buckle up: Wall Street’s shaky July could be a preview for more sharp swings
4 months, 3 weeks ago

Buckle up: Wall Street’s shaky July could be a preview for more sharp swings

Associated Press  

NEW YORK — For more than a year, the U.S. stock market went in mostly one direction, up, and in mostly one manner, quietly. A bonanza around artificial-intelligence technology helped drive Big Tech stocks higher, while other areas of the market held up amid rising hopes for coming cuts to interest rates by the Federal Reserve. A measure of fear …

First interest rate cut in 4 years likely as the Federal Reserve meets
4 months, 3 weeks ago

First interest rate cut in 4 years likely as the Federal Reserve meets

Associated Press  

WASHINGTON — Federal Reserve Chair Jerome Powell on Wednesday set the stage for the central bank’s first rate cut in four years, citing greater progress toward lower inflation as well as a cooler job market that no longer threatens to overheat the economy. Instead, Powell said that, if inflation continues to fall, “a reduction in our policy rate could be …

Inflation figures may give government a rate rise reprieve next week, but the path is not yet certain
4 months, 3 weeks ago

Inflation figures may give government a rate rise reprieve next week, but the path is not yet certain

ABC  

Jim Chalmers faces a nervous wait over the next six days to the Reserve Bank of Australia rate decision even if today's inflation data look to have handed him a brief political 'get-out-of-jail' card. Underlying inflation, which is the Reserve Bank's main guiding measure as it removes outlier and one-off impacts that add volatility to the headline consumer price index, …

US Fed paves the way for pre-election rate cut
4 months, 3 weeks ago

US Fed paves the way for pre-election rate cut

The Telegraph  

The chairman of the US Federal Reserve has paved the way for a pre-election rate cut in a sign that the era of high borrowing costs around the world is coming to an end. Speaking after the Fed held borrowing costs in a range of between 5.25pc and 5.5pc for the eighth time, Mr Powell said: “The broad sense of …

US economic growth increased last quarter to a healthy 2.8% annual rate
4 months, 4 weeks ago

US economic growth increased last quarter to a healthy 2.8% annual rate

Associated Press  

WASHINGTON — The nation’s economy accelerated last quarter at a strong 2.8% annual pace, with consumers and businesses helping drive growth despite the pressure of continually high interest rates. The central bank’s favored inflation gauge rose at a 2.6% annual rate last quarter, down from 3.4% in the first quarter of the year. the Fed thinks that it’s getting close …

'Risk of major financial fallout' as IMF sounds the alarm on persistent global inflation
5 months, 1 week ago

'Risk of major financial fallout' as IMF sounds the alarm on persistent global inflation

ABC  

The message seems to have been lost in all the noise. The biggest risk is that higher American interest rates "disrupt capital flows and impede planned monetary policy easing, which could adversely impact growth". Even worse, "persistently high interest rates could raise borrowing costs further and affect financial stability if fiscal improvements do not offset higher real rates amid lower …

Stock market today: Wall Street rolls to the edge of records as hopes remain for cuts to rates
5 months, 1 week ago

Stock market today: Wall Street rolls to the edge of records as hopes remain for cuts to rates

Associated Press  

NEW YORK — U.S. stocks rose Friday after some mixed signals on big banks’ profits and inflation did little to dent Wall Street’s belief that easier interest rates are on the way. In the bond market, which has been home to some of Wall Street’s strongest action this week, Treasury yields yo-yoed after the release of the latest update on …

US inflation cools again, Fed may cut interest rates soon
5 months, 1 week ago

US inflation cools again, Fed may cut interest rates soon

Associated Press  

WASHINGTON — Inflation in the United States cooled in June for a third straight month, a sign that the worst price spike in four decades is steadily fading and may soon usher in interest rate cuts by the Federal Reserve. “This confirms that there is very little chance of inflation re-accelerating and that it’s time for some rate cuts from …

Powell stresses message that US job market is cooling, a possible signal of coming rate cut
5 months, 1 week ago

Powell stresses message that US job market is cooling, a possible signal of coming rate cut

Associated Press  

WASHINGTON — Federal Reserve Chair Jerome Powell on Wednesday reinforced a message that the Fed is paying growing attention to a slowing job market and not only to taming inflation, a shift that signals it’s likely to begin cutting interest rates soon. “We also have an employment mandate.” On Tuesday, when Powell addressed the Senate Banking Committee, he suggested that …

U.S. job openings went up in May despite high interest rates
5 months, 3 weeks ago

U.S. job openings went up in May despite high interest rates

Associated Press  

WASHINGTON — U.S. job openings rose slightly to 8.1 million in May despite the impact of higher interest rates intended to cool the labor market. AP AUDIO: US job openings rise to 8.1 million despite higher interest rates AP correspondent Rita Foley reports on job openings in May. The U.S. economy and job market have been remarkably resilient in the …

US Employment Seen Moderating Along With Wage Growth
5 months, 3 weeks ago

US Employment Seen Moderating Along With Wage Growth

Live Mint  

-- US employers probably tempered their hiring while wage growth moderated in June, another favorable development for Jerome Powell and his Federal Reserve colleagues seeking more confirmation that inflation is slowing. Among central banks, minutes from the Reserve Bank of Australia’s June meeting will draw a lot of attention on Tuesday after Governor Michele Bullock said the board considered a …

Further rate rises look increasingly possible, but would they fix inflation?
6 months ago

Further rate rises look increasingly possible, but would they fix inflation?

ABC  

After 13 interest rate hikes that sent home loan repayments soaring, we still have an inflation problem. Two years of rate rises have failed to slow the economy down enough to get inflation back within the RBA's preferred range. According to the RBA governor, aggregate demand continues to outstrip supply even though a large number of households are under extreme …

Federal Reserve sees some progress on inflation but envisions just one rate cut this year
6 months, 1 week ago

Federal Reserve sees some progress on inflation but envisions just one rate cut this year

Associated Press  

WASHINGTON — Federal Reserve officials said Wednesday that inflation has fallen further toward their target level in recent months but signaled that they expect to cut their benchmark interest rate just once this year. The policymakers’ forecast for one rate cut was down from their previous projection of three cuts, because inflation, despite having cooled in the past two months, …

Inflation eases in May, but major relief on interest rates not coming soon
6 months, 1 week ago

Inflation eases in May, but major relief on interest rates not coming soon

LA Times  

Federal Reserve Chair Jerome H. Powell and his colleagues at the central bank have kept interest rates at a more than 20-year high to fight inflation. The Federal Reserve has raised interest rates to the highest level in more than two decades to fight inflation, and on Wednesday policymakers said the fight wasn’t over. “But we don’t see ourselves as …

High US interest rates forever: Do not count on this scenario
6 months, 3 weeks ago

High US interest rates forever: Do not count on this scenario

Live Mint  

In spite of the highest Federal Reserve policy rates in two decades, the US economy grew about 2.5% last year, unemployment remains low and stocks are near all-time highs, leading many observers to conclude that the economy has become less interest-rate sensitive—and probably needs permanently high benchmark rates to prevent overheating. Once inflation had been beaten, economists assumed that policy …

Are US interest rates high enough to beat inflation? The Fed will take its time to find out
7 months, 1 week ago

Are US interest rates high enough to beat inflation? The Fed will take its time to find out

Associated Press  

WASHINGTON — The sharp interest rate hikes of the past two years will likely take longer than previously expected to bring down inflation, several Federal Reserve officials have said in recent comments, suggesting there may be few, if any, rate cuts this year. “That would suggest that they either need to stay high for longer or maybe even higher for …

Are US interest rates high enough to beat inflation? The Fed will take its time to find out
7 months, 1 week ago

Are US interest rates high enough to beat inflation? The Fed will take its time to find out

Associated Press  

WASHINGTON — The sharp interest rate hikes of the past two years will likely take longer than previously expected to bring down inflation, several Federal Reserve officials have said in recent comments, suggesting there may be few, if any, rate cuts this year. “That would suggest that they either need to stay high for longer or maybe even higher for …

The Reserve Bank's interest rate dilemma: Households are hurting but inflation remains stubbornly high
7 months, 2 weeks ago

The Reserve Bank's interest rate dilemma: Households are hurting but inflation remains stubbornly high

ABC  

Please make it stop. That's what Michele Bullock must say to herself after RBA board meeting days, when journalists conjure a dozen different ways to ask the same question — what's going to happen with interest rates? Over the past year, the inflation rate for discretionary goods and services has been within the RBA's 2-3 per cent target band, at …

Why further interest rate hikes by the Reserve Bank won't fix Australia's inflation problem
7 months, 2 weeks ago

Why further interest rate hikes by the Reserve Bank won't fix Australia's inflation problem

ABC  

If only there was a diagnosed condition called One Size Fits All syndrome. That's helped push one measure of price rises — core inflation — higher on a quarterly measure. Quick as a flash, that's sparked a renewed demand from some sections of the economics commentariat for further rate hikes to smash the evils of inflation once and for all. …

Federal Reserve says interest rates will stay at two-decade high until inflation further cools
7 months, 3 weeks ago

Federal Reserve says interest rates will stay at two-decade high until inflation further cools

Associated Press  

WASHINGTON — The Federal Reserve on Wednesday emphasized that inflation has remained stubbornly high in recent months and said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target. Despite the recent setbacks, he said, “My expectation is that over the course of this year, we will see …

Fed keeps interest rates at 23-year high
7 months, 3 weeks ago

Fed keeps interest rates at 23-year high

NPR  

Fed keeps interest rates at 23-year high Enlarge this image toggle caption Justin Sullivan/Getty Images Justin Sullivan/Getty Images The Federal Reserve voted to keep interest rates at a 23-year high on Wednesday, as the central bank tries to curb stubborn inflation. "Inflation has eased over the past year but remains elevated," the Fed's rate-setting committee said in a statement. Sponsor …

Wages, employment, inflation are up, causing headaches for the Fed
7 months, 3 weeks ago

Wages, employment, inflation are up, causing headaches for the Fed

NPR  

Wages, employment, inflation are up, causing headaches for the Fed Enlarge this image toggle caption Michael Mathes/AFP via Getty Images Michael Mathes/AFP via Getty Images The Federal Reserve has promised to be "data driven" in deciding when to cut interest rates. "I think it's clear at this point that the progress that we've made lowering inflation towards target has stalled," …

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