2023-11-01 18:01:51
The Federal Reserve (Fed) announced on Wednesday (1st) that it would maintain the benchmark interest rate corridor at a range of 5.25% to 5.5%, the highest since 2001. It was also the first time in this interest rate hike cycle that interest rates have not been raised for two consecutive months.
The Federal Reserve’s latest statement reiterated that the committee remains determined on the extent to which it will further tighten policy to achieve its inflation goal. The Committee will continue to evaluate additional information and its implications for monetary policy.
At the same time, the Fed statement also reflected better economic data since the September interest rate meeting. The latest statement said: “Economic activity expanded at a ‘robust’ pace in the third quarter.” The September statement said “the economy expanded at a ‘robust’ pace.” The latest statement also noted that job growth “has not increased since earlier this year.” It’s slowed down a bit since then, but it’s still strong.”
last week u.s. 10-Year Treasury Bond YieldIt briefly rose above the 5% mark, triggering market turmoil. The Federal Reserve hinted in a statement on Wednesday that the recent rise in U.S. bond yields may put pressure on the economy and inflation.
“Tighter financial and credit conditions for households and businesses might weigh on economic activity, employment, and inflation,” the statement read. “The magnitude of these effects remains uncertain, and the Fed remains highly concerned regarding inflation risks.”
The Federal Reserve has not ruled out raising interest rates once more to continue to slow inflation. The big question facing the Fed now centers on officials’ expectations for the economy and how they conclude it is moving in the right or wrong direction. A continued slowdown in inflation might allow officials to keep interest rates on hold, while any acceleration in price pressures might lead to another rate hike.
After the news was announced,S&P 500 IndexUp regarding 0.38%, U.S. bonds continued their gains,10-Year Treasury Bond Yieldfell to around 4.8%, and the 2-year government bond yield, which is sensitive to interest rate policies, fell 7.5 basis points to temporarily report at 4.996%.dollar indexgo lower.
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