When the Fed raises its key rate, it typically leads to higher rates on mortgages, auto loans, credit cards and many business loans. That would be a sharp shift from just a week ago, when Chair Jerome Powell suggested to a Senate committee that if inflation didn’t cool, the Fed could raise its benchmark interest rate by a substantial half-point at its meeting March 21-22. The Fed, for now, may focus on boosting confidence in the financial system before it resumes its long-term drive to tame inflation. Many other analysts foresee only a modest quarter-point rate increase next week rather than the half-point Fed hike they had previously expected. Despite chronically high inflation, some economists expect the central bank to suspend its year-long streak of interest rate hikes when it meets next week. That is a far higher pace than is consistent with the Fed’s 2% annual target.īut the failure of two large banks since Friday has raised fears about financial instability and has complicated the Fed’s upcoming decisions about how high and how fast to raise interest rates to fight inflation. Core prices, which exclude volatile food and energy costs and are seen as a better gauge of long-term inflation, rose 0.5% from January to February, the highest such rate since September. The figures follow a report Tuesday on consumer prices that showed that inflation is still rising faster than the Federal Reserve would prefer.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |