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The Fed Raised Rates. What Comes Next?
Confirmed
In Short: The Federal Reserve raised interest rates to 3.75%-4%, defying President Trump's calls for cuts, as policymakers anticipate further hikes this year and next.
A small majority of policymakers believe rates could rise further to the 4.25-4.5% next year, before cuts begin in 2028 and 2029, according to the BBC.
The move follows a stretch of stubborn inflation readings that prompted the central bank to shift back toward tighter monetary policy after previously lowering rates, as reported by CBS News.
Background
What Comes Next is a thriller written by the American author John Katzenbach published on June 5, 2012. It was translated into German, Spanish, English and Portuguese.
What's confirmed
- A small majority of policymakers believe rates could rise further to the 4.25-4.5% next year, before cuts begin in 2028 and 2029, according to the BBC.
- The move follows a stretch of stubborn inflation readings that prompted the central bank to shift back toward tighter monetary policy after previously lowering rates, as reported by CBS News.
What's still developing
- Rates were hiked to 3.75%-4% from 3.5%-3.75% by the Federal Reserve in a unanimous decision, despite fierce opposition from President Donald Trump, who had called for rates to be cut.
- "And the, interest rates are too high. They're not appropriate... I talked to Kevin and I said, 'you might as well vote with the board because it's not going to matter.' The board is very hostile, they're very political," he added.
- Warsh declined to provide his own view on where he saw the Fed's rates going, but the majority of his fellow policymakers said they believe rates would be hiked again before the end of this year to between 4-4.25%.
- Watch: Why has the Federal Reserve raised interest rates?
- US interest rates have been raised for the first time in more than three years and could be increased further in a bid to slow rising prices.
- Higher interest rates make borrowing more expensive for people wanting to secure loans, mortgages, and credit cards, but can lead to better returns on savings.
- In fact, some of that adjustment may already be reflected in the mortgage rates lenders are offering today.
- Whether mortgage rates climb meaningfully from current levels will ultimately depend on whether markets see this hike as an isolated adjustment or the start of a broader shift toward tighter monetary policy.