Fed Holds Rates Steady as Yields Rally on Policy Outlook
TL;DR Summary
The Federal Reserve left its federal funds rate at 3.5%-3.75% in a 9-3 vote under Chairman Kevin Warsh, while Treasury yields jumped—30-year to about 5.236%, 10-year to about 4.70%, and 2-year to about 4.289%—as traders weigh the future path of policy. Deutsche Bank economists still expect roughly 50 basis points of rate hikes this year, though market action suggests doubts about a quick return to price stability. Investors will also watch weekly jobless claims and the June PCE price index for more inflation signals, with estimates around 3.7% headline and 3.3% core.
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- US borrowing costs hit 19-year high as Federal Reserve defies inflation fears Financial Times
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