All articles tagged with #interest rate
The Federal Reserve’s FOMC kept the federal funds rate at 3.50%–3.75%, maintaining ample reserves, as it notes solid economic activity despite geopolitical uncertainty; productivity and investment are strong, hiring is solid with unemployment little changed, while inflation remains above the 2% goal due to supply shocks including energy, and the Committee remains focused on price stability.
The Dow Jones Industrial Average fell by more than 500 points on Fed day, erasing early gains after new Fed Chair Kevin Warsh’s first policy meeting, as the broader market also slipped (the S&P 500 down about 1.2% and the Nasdaq down 1.4%). The Fed kept rates unchanged, but several policymakers signaled possible hikes later this year, amplifying inflation concerns (annual inflation around 4.2%). Warsh offered limited projections, while Trump criticized the Fed’s stance, highlighting ongoing debate over monetary policy.
The Bank of Japan lifted its key policy rate to 1%, a three-decade high driven by persistent inflation, signaling a shift toward tighter monetary policy with potential effects on borrowing costs and the yen.
Russian Central Bank Governor Elvira Nabiullina misses Putin’s rate-setting meeting and has not appeared in public for about a week, fueling speculation about a possible replacement as her 2027 term nears; three candidates—Maxim Oreshkin, Pyotr Fradkov, and Andrei Kostin—have been floated, though the final decision rests with Putin.
The Reserve Bank of Australia raised its cash rate to 4.35%, the third consecutive hike, citing persistent inflation and higher fuel costs tied to Middle East tensions, and warned inflation will stay above the 2-3% target for some time, with forecasts implying further tightening into 2026 even as growth outlook softens.
The Bank of England left Bank Rate at 3.75% in an 8-1 vote, with one dissenter pushing for a hike, citing the Iran-led energy shock and renewed inflation risks. Officials warned energy costs may rise further and stressed policy can’t control energy prices, though tighter financial conditions and a softening labor market could help cool inflation; second‑round wage effects remain a risk and a rate hike remains unlikely unless activity stays strong.
Australia's central bank hiked the cash rate by 25 basis points to 4.1%, the highest since April 2025, citing inflation staying above target and upside risks from the Iran war, with a tight labor market and solid growth underpinning the decision which passed 5-4.
In November, U.S. private payrolls unexpectedly declined by 32,000, primarily due to significant job cuts in small businesses, signaling a slowdown in the labor market. Larger firms added jobs, but the overall decrease was the largest since March 2023, raising concerns ahead of the Federal Reserve's upcoming rate decision.
The Japanese Yen appreciated and bond prices declined following hints from the Bank of Japan governor about potential interest rate increases, signaling a shift in monetary policy outlook.
Asian stocks declined from record highs due to profit taking after recent tech rallies, amid weak US economic data and divergent Fed policy views, while the US dollar rose to a nine-month peak; markets remain cautious about future rate cuts and economic outlooks.
The Federal Reserve's FOMC announced a 1/4 percentage point cut in the federal funds rate to 3-3/4 to 4 percent, citing moderate economic growth, slowed job gains, and elevated inflation, while emphasizing ongoing monitoring and readiness to adjust policies as needed to support maximum employment and 2% inflation.
Treasury Secretary Scott Bessent confirmed five finalists for the Fed chair position, with President Trump indicating a decision will be made before year's end. The finalists include current Fed Governors and other economic leaders, and the decision comes amid ongoing interest rate discussions and potential shifts in Fed leadership.
The Federal Reserve is expected to cut interest rates by 0.25 percentage points on Wednesday, influenced by a softer inflation rate of 3% and ongoing economic concerns, despite a government shutdown limiting economic data. This marks the second rate cut this year, aiming to support the labor market and economic growth, with potential further cuts anticipated in December.
Russia's central bank has cut its key interest rate and lowered its 2025 economic growth forecast due to high inflation, Western sanctions, and ongoing geopolitical tensions, particularly affecting the oil and gas sector which is vital to the economy.
The US government shutdown has delayed the official jobs report, but private-sector indicators suggest the labor market is slowing down, with sluggish hiring, limited layoffs, and modest wage gains, potentially prompting the Federal Reserve to consider another interest rate cut.