All articles tagged with #interest rates
Minutes from the Fed's March meeting show some officials want to keep the option of rate hikes on the table amid persistent inflation and near-term energy-price pressures, while others push out anticipated rate cuts; the committee remains divided on the trajectory of policy.
Powell said the U.S. economy faces mixed signals: downside labor-market risks argue for keeping rates low, while upside inflation risks argue against simply staying accommodative. The Fed remains committed to returning inflation to 2%, inflation expectations look stable, and there’s no immediate rate decision due to unresolved effects from the Iran war. The Fed’s March dot plot still indicates one rate cut in 2026, underscoring uncertainty about the policy path amid opposing forces.
Fed Governor Stephen Miran again urged rate cuts, saying policy could be about a point lower over the year even as oil prices spike, arguing the energy shock won’t drive inflation unless wage-price dynamics deteriorate and inflation expectations rise. He notes policy acts with a lag and inflation expectations remain anchored, and he has dissented at every meeting since September 2025; markets expect no moves this year, and Warsh’s chairmanship remains blocked.
Powell told a Harvard economics class that the economy is growing solidly and signaled a rate hold for now, as markets weigh a cautious policy path amid external risks. With his May term end and a stalled Senate confirmation of successor Kevin Warsh, plus investigations into Fed HQ renovations, the transition faces hurdles.
Geopolitical tensions push stock valuations to reflect higher-for-longer oil prices and interest rates; the S&P 500 is down about 8.7% from its January high and has breached its 200-day moving average, suggesting a potential 10–15% correction if tensions persist. Bearish sentiment is high, which could be a contrarian bullish signal if the fog lifts and markets stabilize or improve on any easing in Strait of Hormuz tensions.
Futures markets are pricing in a real chance the Fed will raise rates by year-end as energy-price shocks keep inflation elevated, contrasting with officials' expectations and the president's preferences. The CME FedWatch puts about 26% odds of a higher policy rate by year’s end, and the two-year Treasury yield around 3.9%, suggesting traders expect higher rates in coming years despite ongoing debate about the path forward.
Investors are rattled as the Fed keeps rates steady amid Iran-war–driven uncertainty and higher energy prices. Powell and the Fed signal a 'wait-and-see' stance with inflation still above target, and the dot plot shows a divided committee with no clear path for cuts in 2026. At the same time, the labor market is cooling (unemployment about 4.4%, February payrolls fell), complicating the Fed's effort to tame inflation without slowing growth.
The ECB keeps its 2% policy rate for the sixth straight meeting as surging energy prices push near-term inflation higher, with 2026 inflation seen around 2.6% and growth trimmed to 0.9% this year; policymakers expect inflation to ease toward 2% in 2027–28, while the war in the Middle East adds uncertainty and traders still anticipate potential rate moves later in the year, and the euro rose after the decision.
Bank of England Governor Andrew Bailey cautioned markets not to jump to conclusions about future rate rises, noting the current context differs from 2022 with high rates and softer demand, and emphasizing a data‑dependent approach to policy.
The ECB left its three key rates unchanged (deposit 2.00%, main refinancing 2.15%, marginal lending 2.40%), aiming for 2% inflation in the medium term; the ongoing Middle East conflict adds uncertainty and upside inflation risk via higher energy prices, with medium‑term effects depending on conflict intensity and energy pass‑through, and markets await Lagarde’s press conference for further guidance.
The Federal Reserve kept its benchmark rate at 3.5-3.75% amid elevated uncertainty about the outlook, citing a cooling labour market and rising prices driven in part by geopolitical tensions after US-Israel strikes on Iran; energy costs and wholesale inflation have picked up, while unemployment rose to 4.4% and job openings stayed at 6.9 million, prompting policymakers to stay cautious on future moves.
Powell warned Americans are still facing economic strain—slow job gains, a largely unchanged unemployment rate, and elevated inflation—even as the Fed left rates unchanged, and he rejected Trump’s push for rate cuts, linking inflation to tariffs and noting gas/oil price pressures from Middle East tensions; the piece also covers Powell’s DOJ probe, GOP defense of Fed independence, and a Warsh succession plan as his term ends in 2028.
The Federal Reserve kept the federal funds rate at 3.5%-3.75% and Powell said he will serve as chair pro tempore until a successor is confirmed. Warsh’s nomination is blocked by Sen. Tillis amid a criminal investigation, with Powell indicating he won’t leave the board until that matter is resolved. The Fed’s projections show at least one rate cut possible this year, but officials remain divided about the path ahead as inflation risks rise from energy prices and geopolitical tensions.
The Federal Reserve left the target federal funds rate at 3.5%–3.75%, saying growth remains solid but inflation remains somewhat elevated and uncertainty is high, including risks from Middle East developments. The committee emphasized a data-driven approach and said it stands ready to adjust policy to achieve maximum employment and 2% inflation over the longer run, with one dissenter favoring a 25-basis-point rate cut.
Markets expect the Federal Reserve to keep the federal funds rate at 3.5%–3.75% at the upcoming meeting, with no cut priced in until at least September or October and likely only one cut for the year. Officials are balancing Iran-related oil shocks, inflation risks, and a mixed labor market, and updates to the SEP and dot plot are not anticipated to differ meaningfully from December projections. Powell's messaging will be closely watched for hints about the future path of policy amid political pressure and ongoing uncertainty.