All articles tagged with #rates
Fed Chair Kevin Warsh framed the latest quarter-point rate hike as removing a 'dose of accommodation,' a stance that has markets pricing in additional hikes and raising questions about how far the Fed will go if policy remains restrictive above its neutral rate.
Veteran economist David Rosenberg argues the bigger risk from the upcoming Fed decision isn’t the 25 basis point hike itself but the market’s pricing of four to five additional hikes, a path he says isn’t supported by the data; with the 10-year yield above 5%, he highlights discrepancies in core inflation measurements, wage trends slowing, and surging energy costs as the true inflation driver, predicting bonds may outperform stocks as investors position for a weaker economy, and noting the November 4 Treasury issuance will be a telling datapoint.
August core CPI rose 0.3% month-over-month (above expectations), keeping odds of a September Fed rate hike intact and triggering volatile moves in gold and silver as traders weigh higher-for-longer policy, with a firmer dollar, higher yields, and oil hovering around $100+.
Gold rose about 1.5% after August CPI showed hotter core inflation, keeping the Fed rate-hike question in play. While inflation remains above target, the metal’s safe-haven bid and market pricing of higher rates support prices, though higher rates cap gains. Analysts see pullbacks as buying opportunities, amid debt dynamics that could limit how high rates go and keep volatility ahead of the Fed decision.
Fed Governor Christopher Waller said he is leaning to hold the federal funds rate steady at the September meeting if upcoming inflation data stay on track, arguing disinflation is taking hold even though inflation remains above the 2% target; he warned a data surprise could justify tightening and noted tariffs and energy prices have had muted effects. Markets priced around a 55% chance of a hike, and Waller stressed policy is currently only modestly restrictive, with upcoming CPI/PPI data and BEA revisions to the PCE index likely to influence the decision.
In a collage of social posts, Trump says he has respect for Warsh and that he’ll do what he’s told, pushes back against high interest rates and hints there will be no rate hikes (possibly cuts) under Warsh; he also says Hormuz is in good shape with robust oil flow and that Iran’s strikes would be limited, while chatter links Venezuela leaving OPEC and bond-market positioning to the broader Fed story.
Fed Chair Kevin Warsh delivered a hawkish debut at Jackson Hole, warning inflation remains above 2% and signaling the Fed will keep policy restrictive until prices move decisively, which sent major indices lower and pushed yields higher as traders priced in a roughly 61% chance of a September rate hike, creating a sentiment headwind for equities despite solid earnings outlook.
CEOs from 15 major insurers warn Gov. Newsom’s plan to end (and gradually phase out) subrogation for wildfire losses could raise homeowners’ premiums statewide and destabilize California’s insurance market. The updated proposal would still eliminate the right to recoup losses from utilities, with rate impacts potentially tied to future regulatory approvals; writing is due by Friday as the legislative session winds down, and critics argue costs could spike, especially in high-risk areas.
AI enthusiasm and strong demand are lifting stocks to record highs, but rising interest rates threaten the high-multiple tech valuations by discounting future profits; investors weigh inflation and Fed policy as at least one rate increase by year-end is priced in, while AI-related capital expenditures may take years to pay off, making rates a key risk for the rally.
The Federal Reserve left its policy rate at 3.5%–3.75% at the latest meeting, marking a fifth straight hold, even as three officials—Neel Kashkari, Lorie Logan, and Beth Hammack—dissented in favor of a 25‑basis‑point increase. The decision kept the statement largely intact, noting inflation remains elevated due to energy shocks from Middle East tensions; June core inflation came in around 2.6%, suggesting inflation is easing but not yet on a firm path to the 2% target. Fed Chair Warsh reaffirmed the commitment to price stability while acknowledging policy challenges from supply shocks and energy prices.,
The European Central Bank left rates at 2.25% but warned inflation will stay well above target through the first half of 2027; traders expect a 0.25 percentage-point hike in September as higher energy prices threaten to sustain inflation.
Jamie Dimon warned that a potential shock in US markets could hit stocks and bonds, citing hotter inflation, higher rates (10-year around 4–4.5%), geopolitical tensions, and rising deficits as risks not fully priced in; he’s avoided broad indices, would consider only truly great individual names, and warned that bond vigilantes could push yields higher even as bank earnings look strong.
Bond traders and Fed chair Warsh agree the inflation fight isn’t over, with markets pricing in additional rate hikes later this year (likely September or October, possibly December) even after June’s CPI drop sparked relief. Two-year Treasury yields have risen, lifting borrowing costs and reinforcing a hawkish stance as Warsh emphasizes returning inflation to around 2%. Bank of America and other strategists anticipate hikes in the Sept/Oct/Dec meetings, and traders remain cautious ahead of the July blackout period amid data volatility and evolving energy and AI-driven growth dynamics.
Federal Reserve Bank of New York President John Williams said policy remains well positioned to bring inflation back to 2% even as AI-driven demand could push prices higher. He expects AI-related supply-demand imbalances to recede as more supply comes online, with inflation peaking and then easing in coming quarters. Williams projects inflation around 3.25% by year-end and returning to 2% by 2028, as shelter and energy inflation trend down and the labor market stays resilient. He also cautioned that the magnitude and duration of AI’s inflation effects are uncertain, that policymakers are divided on near-term rate moves, and that tariffs are not expected to pressure consumer prices.
Markets start a lighter week as investors eye PMIs and ISM services data after a June jobs report that added 57,000 payrolls and saw revisions lower, tempering bets on an imminent Fed rate hike while inflation remains a concern. Earnings highlights include PepsiCo and Delta Air Lines. In the AI space, memory and processor names (MU, INTC, AMD) led gains in the first half of 2026, helping the Philadelphia Semiconductor Index rally roughly 75% year-to-date, underscoring Bank of America’s view that AI’s growth now hinges on physical infrastructure—chips and power—as memory shortages persist.