Consumer price index exceeds economists’ expectations as Fed weighs when to start cutting borrowing costs
Inflation ticked higher in the United States last month as the Federal Reserve weighs the latest stage of its battle against price growth.
The headline consumer price index increased at an annual pace of 3.4% in December, according to the Bureau of Labor Statistics, up from 3.1% in the previous month, and exceeding economists’ expectations of about 3.2%.
Continue reading...US Fed will also have to raise rates more aggressively than forecast, says Washington-based body
Interest rates in the UK will need to stay higher for longer than previously forecast in order to tackle stubbornly high inflation, the International Monetary Fund has warned.
The IMF’s regular update on the state of the global economy singled out the US Federal Reserve and the Bank of England as two central banks that will need to raise official borrowing costs more aggressively than it assumed only three months ago.
Continue reading...Banks seek to calm markets as investors fear repeat of First Republic and SVB failures
[NEW]Trading in shares of the California-lender PacWest have been suspended after plummeting 42% amid wider fears about the health of the US’s regional bank sector.
PacWest had sought to calm markets on Wednesday and said it was in talks with several potential investors after its shares plummeted by as much as 60%. But the sell-off continued on Thursday and affected other regional banks.
Continue reading...Analysts say US Federal Reserve will probably reject further increase in borrowing costs next week
The world’s most powerful central banks could be forced to stop raising interest rates after the Silicon Valley Bank crisis, economists have said, amid growing signs of financial stress linked to rapid increases in borrowing costs over the past year.
Analysts said the US Federal Reserve would probably leave interest rates on hold at its decision next week, as the meltdown at the California-based technology lender ripples through global financial markets.
Continue reading...US regulators seize SVB’s assets after a run on the bank, as global institutions monitor situation closely
US regulators rushed to seize the assets of top tech lender Silicon Valley Bank on Friday after a run on the bank, marking the largest failure of such an institution since the height of the financial crisis more than a decade ago.
Silicon Valley Bank (SVB), the nation’s 16th largest bank, failed after depositors – mostly technology workers and venture capital-backed companies – hurried to withdraw their money this week as anxiety over the bank’s situation spread.
Continue reading...Fed confirms 0.75 percentage-point increase as Americans across country hit hard by rising prices and shortages of key items
With soaring inflation and the shadow of recession hanging over the United States, the Federal Reserve announced a 0.75 percentage-point increase in interest rates on Wednesday – the largest hike since 1994.
Until this week the Fed had been expected to announce a smaller increase. At a press conference, the Fed chair, Jerome Powell, said the central bank decided that a larger hike was needed after recent economic news, including last week’s announcement that inflation had risen to a 40-year high.
Continue reading...Federal Reserve expected to increase cost of borrowing by 0.75 percentage points to curb rising inflation
The world’s financial markets are bracing themselves for the sharpest rise in US interest rates in almost 30 years, as America’s central bank takes action to halt rising inflation.
After days of frenzied investor speculation and signs of growing central bank anxiety, the Federal Reserve is expected to increase the official cost of borrowing by 0.75 percentage points for the first time since 1994.
Continue reading...Under pressure from Wall Street and the White House, the Federal Reserve lowered interest rates on Wednesday for a second straight meeting, but declined to signal if it would continue to drop rates in the future.
Related: Ilhan Omar condemns Trump for spreading 'lies that put my life at risk'
Continue reading...Signs of a global economic slowdown roiled the markets on Wednesday as shares dived and investors fled to bonds with such intensity that short-term yields rose above longer-term ones for the first time since the crisis of a decade ago – an inversion many market-watchers saw as a strong signal of an approaching recession.
Related: Inverted curve proves White House has won its battle with the Fed
Continue reading...The US Federal Reserve snubbed Donald Trump’s call for a cut in interest rates on Wednesday as the central bank noted economic activity was still rising at “a solid rate”.
After a two-day meeting the Fed board unanimously decided to hold rates steady at a range between 2.25% and 2.5%.
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