{"id":40131,"date":"2023-11-01T18:44:51","date_gmt":"2023-11-01T18:44:51","guid":{"rendered":"https:\/\/prosfunds.com\/business\/us-federal-reserve-holds-interest-rates-at-22-year-high\/"},"modified":"2023-11-01T18:44:51","modified_gmt":"2023-11-01T18:44:51","slug":"us-federal-reserve-holds-interest-rates-at-22-year-high","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=40131","title":{"rendered":"US Federal Reserve holds interest rates at 22-year high"},"content":{"rendered":"<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Simply sign up to the <!-- -->US interest rates<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=5b01c471-6289-41a0-9044-97b6df48b507&amp;concept-id=9577c6d4-b09e-4552-b88f-e52745abe02b\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The Federal Reserve held interest rates at a 22-year high on Wednesday but kept open the possibility of additional monetary tightening amid mounting evidence the US economy remains strong. <\/p>\n<p>The meeting is the second in a row at which the Federal Open Market Committee opted not to increase interest rates, as officials seek more clarity on whether they have sufficiently restrained consumer and business demand to bring inflation under control. After 11 increases since March 2022, the benchmark federal funds rate is now between 5.25 and 5.5 per cent.<\/p>\n<p>In a statement on Wednesday, the Fed upgraded its assessment of the world\u2019s largest economy, saying that activity had expanded at a \u201cstrong pace\u201d, compared with the \u201csolid\u201d clip it described in September. <\/p>\n<p>The Fed also acknowledged that jobs gains remain healthy despite some moderation in the monthly pace.\u00a0However, in recognition of the recent rise in long-term bond yields, the central bank warned that tighter financial and credit conditions were likely to bite.<\/p>\n<p>It reiterated that it would factor in those developments, as well as the effects of its previous rate rises, when deciding whether more monetary tightening was needed.<\/p>\n<p>Immediately following the announcement, the two-year Treasury yield, which moves with interest rate expectations, dropped to 4.98 per cent, its lowest level in nearly three weeks. The 10-year yield, which moves with growth and inflation expectations, briefly dipped before recovering.<\/p>\n<p>The FOMC decision, which had unanimous support, comes at a delicate moment for global financial markets.<\/p>\n<p>Financial conditions, including companies\u2019 costs of borrowing money, have tightened since the Fed\u2019s last meeting in September, when officials emphasised there would be little let-up in interest rates in coming years.<\/p>\n<p>Long-dated Treasury yields have reached multiyear highs, roiling global markets at a time when geopolitical tensions have intensified. An escalating war in the Middle East has renewed concerns about oil price volatility, adding to what Fed chair Jay Powell has described as a \u201crange of uncertainties\u201d that are complicating the central bank\u2019s task of balancing the risk of doing too much in terms of tightening against that of doing too little.<\/p>\n<p>Analysts as well as Fed officials believe that the recent rise in long-term interest rates will aid the central bank\u2019s efforts to damp demand. Yields edged down on Wednesday as the Treasury adjusted its debt issuance plans. <\/p>\n<p>That has helped to firm bets among traders in fed funds futures markets that the central bank has finished raising rates and will keep them on hold until about the middle of next year.<\/p>\n<p>However, US economic demand has been far more resilient than expected, with consumer spending still high and unemployment historically low.<\/p>\n<p>Some economists worry that the country\u2019s economic strength could halt or slow the decline in inflation, making it harder to reach the Fed\u2019s longstanding target of 2 per cent and potentially requiring the central bank to impose higher borrowing costs.<\/p>\n<p>Broad inflation indices, including the consumer price index, have fallen well below June 2022\u2019s peak of 9.1 per cent. September\u2019s rate was 3.7 per cent. But officials remain aware that some price pressures remain difficult to root out or are starting to resurface.<\/p>\n<p>Figures published on Wednesday showed that the labour market remains strong, with the number of job vacancies above expectations, while data earlier in the week indicated that wage growth is still high. However, activity in the manufacturing sector contracted more than forecast.<\/p>\n<p>Despite a sell-off in recent days, global oil prices also remain historically high. The World Bank warned this week that a prolonged conflict could push crude prices beyond $150 a barrel. Food prices were also susceptible to destabilising increases, the multilateral lender said.<\/p>\n<p><em>Additional reporting by Kate Duguid in New York<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/5b01c471-6289-41a0-9044-97b6df48b507\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stay informed with free updates Simply sign up to the US interest rates myFT Digest &#8212; delivered directly to your inbox. The Federal Reserve held interest rates at a 22-year high on Wednesday but kept open the possibility of additional monetary tightening amid mounting evidence the US economy remains strong. The meeting is the second [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-40131","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US Federal Reserve holds interest rates at 22-year high | Prosfunds<\/title>\n<meta name=\"description\" content=\"Stay informed with free updatesSimply sign up to the US interest rates myFT Digest -- delivered directly to your inbox.The Federal Reserve held interest\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/prosfunds.com\/?p=40131\" \/>\n<meta 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