Free Republic

Summary Due to high government spending and a series of hot inflation reports, Treasury yields are near 20-year highs, with implications for housing, autos, banks, tech, and the stock market. The potential for much higher yields is supported by theoretical, practical, and historical reasons. We could easily reach 6% for 10-year Treasury yields, 9% for mortgages, and 8% for car loans in 2024. Since late October, large-cap U.S. stocks have seen a furious 25% rally based on the idea that the Fed will soon pivot and dramatically cut interest rates. The move in stocks has been driven almost entirely by...

Russia's Central Bank on Friday raised its key interest rate to 16%, the fifth hike since summer as it fights to keep accelerating inflation down and a move widely anticipated by analysts. "Current inflationary pressures remain high," the Central Bank said in a statement explaining the rate hike, adding that "annual inflation for 2023 is expected to be close to the upper bound of the 7.0–7.5 percent forecast range." This is a developing story.

The Federal Reserve hiked its benchmark federal funds rate by a quarter of a percentage point on Wednesday after skipping the previous hike, bringing the rate to the highest level since 2001. The rate hike brings the Fed’s target rate within a range of 5.25% and 5.50%, making this the eleventh hike since March 2022, after temporarily pausing the rate increases in June. Most economists anticipated a quarter-point interest rate hike as a part of the ongoing effort to bring inflation down, bringing the high end of the range to the highest rate since January 2001, according to the Federal...

Damn it, Janet (Yellen)! So much for Treasury Secretary Janet Yellen’s proclamtion that inflation is transitory and would subside to under 2%. April’s core inflation (PCE Deflator) rose to 4.7% YoY. Despite M2 Money growth crashing to -4.6% YoY. Today’s Fed Funds Futures data is pointing to another rate hike or two. With Core PCE at 4.7%, the Taylor Rule suggested Fed Funds Target rate is now 10.57%. So, The Fed is only about half way there.

In prank call with Russian radio-hosts posing as Ukraine's President Volodymyr Zelensky, Jerome Powell confirms that Federal Reserve will increase rates at least two more times, and probably keep rates "higher for longer"

The Federal Reserve on Wednesday hiked interest rates by three quarters of a percentage point, its most aggressive move yet to try to control inflation, as it squeezes the U.S. economy.

Today, the Federal Reserve announced an increase in the target for the federal funds rate to between 0.25 and 0.50 percent after holding the rate close to zero since the onset of the pandemic to help the economy recover. The increase is meant to help tame rising inflation; however, any changes in interest rates will also have implications for the federal government’s borrowing costs and therefore the nation’s fiscal picture. Setting the target for the federal funds rate — the interest rate at which commercial banks lend to each other overnight — is an important tool for the Federal Reserve....

The central bank announces it’s taking down its benchmark overnight lending rate to a target range of 1.75% to 2%. According to the Fed’s “dot plot” of individual expectations, five members thought the FOMC should have held its previous range of 2% to 2.25%, five approved of the 25 basis point cut but keeping rates there through the rest of the year, and seven favored at least one more cut this year. The Federal Reserve approved a much-anticipated quarter-point interest rate cut Wednesday but offered few indications that further reductions are ahead as members split on what to do next......

The Federal Reserve on Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn. Policymakers led by Fed Chairman Jerome Powell voted 8-2 in favor of a small cut in the federal funds rate, and recommitted to their promise to "act as appropriate" to sustain the country's longest economic expansion in history. Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%. The rate cut follows months of pressure from President Donald Trump, who...

...The yield on US 10-year Treasury paper is up almost 100 basis points since last September. Meanwhile, the government continues to borrow money and roll over its existing debt. But now it has to do so at ever-higher interest rates, which means it has to pay more interest, which means its deficits are rising, which means it has to borrow even more money at higher interest rates... and so on until this "interest rate death spiral" becomes fatal. It would already be fatal, if not for the Federal Reserve's willingness to buy Treasury bonds at extremely favorable prices (i.e., very...

There is little room for doubt that the US Federal Reserve will raise the benchmark interest rate in the coming week for only the second time in a decade. With unemployment at a nine-year low, jobs being created at an average of 180,000 per month, the economy growing at better than three percent in the most recent quarter and some signs of a pickup in inflation, the writing is on the wall. "I think the economy's doing fine," he told AFP. "The Fed taking its foot off the gas is not going to derail the US economy."

The Federal Reserve left interest rates unchanged Wednesday after its two-day policy meeting, as expected, and longer-term rate projections show an even slower pace of increases. Still, policymakers painted a mostly upbeat picture about the job market and overall growth and signaled that the Fed's key rate will rise before year-end. Markets have increasingly been pricing in a December hike... ...Fed's forecasts show policymakers expect three rate hikes through the end of 2017, down from five at their June meeting. The estimate for the fed funds rate in 2017 has slipped to 1.1% in 2017 from a 1.6% view in...

The Federal Reserve is about to raise interest rates for the first time in almost ten years and it couldn’t come at a worse time for the oil and gas industry. On the one hand, the oil boom was fueled by loose money from the Fed. With near-zero interest rates, money flowed into capital-intensive shale oil and gas drilling for many years. That succeeded in creating a production boom. But the boom was too successful – the glut caused prices to crash. In this sense, the Fed helped inflate the drilling bubble, which burst in 2014. Now the Fed is...

Am I reading this wrong or is the T-Bill rate for 13 weeks a negative? I went here when reading the 90 day T-Bill rate is zero. http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=billrates This is news that affects everyone yet no one covers.

Global debt levels are dangerously high and central banks cannot keep the game going indefinitely, warns the high priest of orthodoxy Debt ratios have reached extreme levels across all major regions of the global economy, leaving the financial system acutely vulnerable to monetary tightening by the US Federal Reserve, the world's top financial watchdog has warned. The Bank for International Settlements said the wild market ructions of recent weeks and capital outflows from China are warning signs that the massive build-up in credit is coming back to haunt, compounded by worries that policymakers may be struggling to control events. "We...

The Bank of England's website says that the "effective lower bound" for the interest rate it sets, Bank Rate, is the current rate of 0.5%. This is the level, according to the Bank, "below which it cannot be set" - the lowest practicable official interest rate. But on this important issue the website is behind the thinking of the Bank of England's Monetary Policy Committee, which sets Bank Rate as its main tool to keep inflation on target. The Bank of England's website says that the "effective lower bound" for the interest rate it sets, Bank Rate, is the current...

Despite endless proclamations that the world has 'escaped' the financial crisis, the data (and actions) simply do not back that up. The constant propagandizing of either a) US is economically strong and will drive the world's growth engine (factually incorrect), or b) the rest of the world is about to revert to higher growth seems entirely anathema to the fact that in 2015, we have seen a wave of monetary easing - most recently today by Israel. That makes it20 central banks that have cut rates (or eased policy) in the last few weeks - covering over 50% of the...

First Swiss Franc, now Euro... RBC TO CHARGE NEGATIVE INTEREST ON EURO-DENOMINATED BALANCES — Russian Market (@russian_market) January 21, 2015 Opinion: Think negative interest rates can’t happen here? Think again In the last week, the markets have had to get used to the idea of the negative interest rate, where you actually get charged for keeping money in the bank rather than going out and spending it. So far, that is restricted to two relatively small economies, both of which are struggling with the likely launch of a massive program of quantitative easing this week in the eurozone. But what...

A B.C. couple are speaking out about how they feel they were misled into a 25 per cent vehicle loan from TD, which has left them paying more than double the price of their car. “We’re paying $21,000 for the loan — then $23,000 in interest,” said Angie Hauser of Kelowna. “They’re making money off of people who have no money.” “We’ve been robbed by a bank with the help of a car dealer. I mean, that’s the only way I see it,” said her husband Enzo Gamarra. "Why would I want to pay $44,000 for a car that's now...

STOP your bellyaching. That was the message delivered last Thursday to Americans who today make almost nothing on the savings in their bank accounts. It came from Sarah Bloom Raskin, an insider at the Federal Reserve. Ms. Raskin, one of the governors on the Fed board, made the usual disclaimer that her comments reflected her own thinking. But Fed watchers said her remarks probably mirrored views inside the central bank. The issue — as anyone looking for income-producing investments knows — is that the Fed drove down interest rates to almost zero to shore up big banks and an economy...