Tag: Interest Rates
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How Does the Fed Raise Interest Rates? It Doesn’t Set Yours.
How does the Fed raise interest rates? It sets a 3.75%-4% target range and four overnight rates for banks, then markets carry the move to your mortgage, credit card and savings. Here is how the machinery works, what Volcker and the 2022-23 cycle taught us, and why Washington’s borrowing makes the Fed’s job harder.
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Bessent Blames an Energy Shock. Wholesale Prices Say Otherwise.
The producer price index rose 0.3% in October and 6.5% over the past year, the fastest since 2022. Treasury Secretary Bessent says it’s a fading energy shock and the Fed shouldn’t hike. But energy fell in October, while core wholesale prices rose 0.5% and are up 4.9% from a year ago.
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Treasury Yields Hit 5%. Washington’s Borrowing Makes It Hurt.
Treasury yields jumped after October’s hot inflation report, and the 10-year is back above 5%. The Fed should keep hiking until inflation breaks. But with the government refinancing debt that averages 3.57% at rates near 5%, Washington’s borrowing is what makes higher rates so expensive for taxpayers.
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October CPI Has No Yearly Rate. The Monthly Math Is Still Hot.
The October CPI rose 0.4%, with core prices up 0.3% for a third straight month, and both beat forecasts. BLS skipped the yearly rate because of last year’s shutdown, but the index levels show prices up 3.9% over 13 months and running near a 5.7% annualized pace over three. The Fed’s December choice is now…
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The Fed Blinked Before the Midterms. Two Dissenters Wanted a Hike.
The Fed held rates at 3.75% to 4% in a 10-2 vote, six days before the midterms, even as it admits inflation remains elevated. Lisa Cook and Beth Hammack wanted a hike. Here’s what the pause means for your wallet, and why Washington’s spending is the other half of the inflation story.
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Inflation Is Back at 3.7%. The Fed Can’t Blink for the Election.
Inflation is back at 3.7%, wages are falling behind, and the Fed decides on rates Oct. 28, six days before the election. Why a hold is defensible, why the message matters more, and where the real fix lies.
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Interest on the National Debt Just Beat Defense Spending
Washington spent $1.052 trillion on interest in fiscal 2026, more than it spent on national defense. Revenue rose 3% while spending rose 6%. This is a spending problem, and it has a fix.
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