Fed hikes interest rates to 22-year high after June pause

Published

2 years ago

July 27, 2023

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The Federal Reserve on Wednesday took its foot off the brakes and hiked interest rates yet again — taking them to a 22-year high.

Fed Chairman Jerome Powell announced the unanimous decision for a quarter-point hike, raising the benchmark federal-funds rate to a range between 5.25% and 5.5%.

It marked the 11th increase in the past 12 meetings following last month’s brief pause.

The hike sent the benchmark rate to its highest point since 2001 — and Powell signaled that another increase is possible before the year’s out as officials continue to wrestle with stubbornly-high inflation.

The process of getting inflation back down to 2% has a long way to go,” Powell said at a press conference following the decision.

“We think were going to need to hold, certainly, policy at restrictive levels for some time, and wed be prepared to raise further if we think thats appropriate.

Powell, who initially insisted that inflation was “transitory before it soared to a four-decade high, also proclaimed that Fed staff is no longer forecasting a recession.

“We do have a shot” for inflation to return to target without high levels of job losses, he said.

“So the staff now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession,” he said.

Key measures of inflation remain more than double the Fed’s target, and the economy by many measures, including a low 3.6% unemployment rate, continues to outperform expectations given the rapid increase in interest rates.

Job gains remain “robust,” the Fed said, while it described the economy as growing at a “moderate” pace, a slight upgrade from the “modest” pace seen as of the June meeting. New data on Thursday is expected to report the economy grew at a 1.8% annual pace in the second quarter, according to economists polled by Reuters.

Powell ruled out the possibility of cutting the fed rate this year.

“Well be comfortable cutting rates when were comfortable cutting rates, and that wont be this year,” he said.

Investors took the anticipated quarter-point hike in stride, pushing the Dow into the green for the 13th straight session — it’s best streak since 1987. The S&P 500 and the Nasdaq closed slightly down.

“The forward guidance remains unchanged as the committee leaves the door open to further rate hikes if inflation does not continue to trend lower,” said Kathy Bostjancic, chief economist at Nationwide. “Our view is the Fed is likely done with rate hikes for this cycle since continued easing of inflation will passively lead to tighter policy as the Fed holds the nominal fed funds rate steady into 2024.”

Despite the positive stock run, higher rates mean Americans are in for increased costs when it comes to borrowing funds to purchase homes and cars, which will likely dampen consumer spending.

The cost of credit cards may also remain high, making it more difficult for consumers to pay off their debt.

The average credit card interest rate in the US is currently 24.24%, according to LendingTree — the highest rate since the online loan marketplace began tracking average rates in 2019.

The latest figure is up from the average credit card interest rate of 16% in March 2022, just before the Fed started hiking rates.

Meanwhile, the Consumer Price Index a closely-monitored measure of inflation that tracks changes in the costs of everyday goods and services rose 3% in June versus a year earlier.

Last month’s advance was short of the 4% rise the CPI saw in May compared to the same month in 2022.

In June 2022, inflation peaked at 9.1%.

Policymakers are set to meet three more times by the end of this year, in September, November and December.

With Post Wires

Politics

The BBC’s billion dollar question

Published

2 hours ago

November 11, 2025

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👉Listen to Politics at Sam and Anne’s on your podcast app👈

With US President Donald Trump threatening to sue the BBC, how likely is the broadcaster to pay out? And how have those across the political spectrum been reacting?

And with 15 days until Chancellor Rachel Reeves’s budget, Matthew McGregor – the chief executive of campaign group 38 Degrees and a former digital strategist for both Labour and Barack Obama – takes issue with Sam’s take from yesterday and sends in a voice note.

And Sam and Anne discuss the latest twist in the Your Party saga, and it’s all about money.

World

At least 12 killed after suicide bombing in Pakistan

Published

3 hours ago

November 11, 2025

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At least 12 killed after suicide bombing in Pakistan

At least 12 people have been killed in a suicide bombing outside the gates of a court in Pakistan’s capital of Islamabad, the country’s interior minister has said.

At least 27 other people were also wounded after the bomber detonated his explosives next to a police car.

Interior minister Mohsin Naqvi said the attacker tried to “enter the court premises but, failing to do so, targeted a police vehicle”.

Mr Naqvi added that authorities are “looking into all aspects” of the attack.

No group immediately claimed responsibility for the explosion, but authorities have recently struggled with a resurgent Pakistani Taliban.

The explosion, which was heard from miles away, occurred at a busy time of day when the area outside the court is typically crowded with hundreds of visitors attending hearings.

More than a dozen badly wounded people were screaming for help as ambulances rushed to the scene.

“People started running in all directions,” said Mohammad Afzal, who claimed he was at the court when he heard the blast.

Pakistani security forces earlier said they foiled an attempt by militants to take cadets hostage at an army-run college overnight, when a suicide car bomber and five other attackers targeted the facility in a northwestern province.

The authorities blamed the Pakistani Taliban, which is separate from but allied with Afghanistan’s Taliban, but the group denied involvement in that attack on Monday evening.

The assault began when a bomber attempted to storm the cadet college in Wana, a city in Khyber Pakhtunkhwa province near the Afghan border.

The area had, until recent years, served as a base for the Pakistani Taliban, al Qaeda and other foreign militants.

According to local police chief Alamgir Mahsud, two of the militants were quickly killed by troops while three others managed to enter the compound before being cornered in an administrative block.

The army’s commandos were among the forces conducting a clearance operation, and an intermittent exchange of fire went on into Tuesday, Mr Mahsud said.

Pakistani Prime Minister Shehbaz Sharif denounced both attacks and said those responsible must be brought to justice swiftly.

“We will ensure the perpetrators are apprehended and held accountable,” he said.

Mr Sharif described attacks on unarmed civilians as “reprehensible”, adding: “We will not allow the blood of innocent Pakistanis to go to waste.”

UK

Police release update on Bob Vylan Glastonbury investigation

Published

4 hours ago

November 11, 2025

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Police release update on Bob Vylan Glastonbury investigation

Police say they have interviewed a man over comments made during punk-rap duo Bob Vylan’s set at Glastonbury.

A man in his mid-30s attended a voluntary interview with officers on Monday, Avon and Somerset Police said.

The outspoken punk duo sparked controversy with their performance at Glastonbury in June, when frontman Bobby Vylan led a chant of “death, death to the IDF” on stage.

Police said they had consulted the Crown Prosecution Service and received legal advice on the investigation in October.

“It has been important for us to have a full understanding of any legal precedents, which is a complex process, and therefore over the past couple of months we have been seeking early legal advice from the Crown Prosecution Service (CPS),” the force said in a statement.

“Following a review of the advice, a voluntary police interview was arranged to help us progress our enquiries… The matter has been recorded as a public order incident while we continue to investigate and consider all relevant legislation.

“Voluntary police interviews are commonly used in investigations where an individual agrees to attend and an arrest is not considered necessary, for example on the grounds of public safety or for the preservation of evidence. Attendees are interviewed under caution and have the same legal rights as anybody who is arrested.”

Bob Vylan’s set at Glastonbury was live-streamed by the BBC as part of its coverage of the festival, leading to fierce criticism of the corporation.

The BBC’s Executive Complaints Unit has since found the broadcast breached editorial standards related to harm and offence.

However, the unit’s findings cleared the corporation of breaching its guidelines relating to material that is likely to encourage or incite crime.

Following the performance, the BBC issued an apology to viewers, especially the Jewish community, and promised to take action to “ensure proper accountability”.

It also said it would no longer live broadcast “high risk” performances.