If the Fed opts against raising interest rates on Wednesday, investors will probably increase their forecasts for inflation, injecting new turmoil into the government bond market.
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Investor fears about an AI spending slowdown and the impact of interest-rate hikes are subsiding.
The Treasury secretary and the Federal Reserve chairman face similar tests: calming investors’ growing worries about inflation and deficits.
“The higher that yields go — for at least new money — it becomes more enticing to think about putting money into bonds,” one strategist notes.
The Federal Reserve’s first increase to interest rates since July 2023 comes less than two months before the midterm elections.
Kevin M. Warsh, the chairman of the Federal Reserve, on Wednesday left open-ended how much more interest rates may have to rise to tame inflation.
Kevin M. Warsh, the Federal Reserve chairman, said the bank acted to fight inflation that ‘is too high and has been for too long.’
The long awaited Innovation Exemption comes two days after the Senate voted to block the Clarity Act crypto market structure bill from advancing.
The Bank of England kept rates steady Thursday, even after U.K. inflation rose to 3.1% and energy costs put pressure on prices.
Amazon was granted warrants to buy up to $340 million worth of Generac stock as part of a deal to supply backup power generators for its data centers.
The 10-year Treasury yield breached levels last seen in 2007, with intensifying worries about energy-driven inflation contributing to bond investors’ angst.
The Federal Reserve is expected to raise interest rates on Wednesday, putting Kevin M. Warsh, the chairman, at odds with the administration just before the midterms.