The rate hikes are coming! The rate hikes are coming! Eventually. Days after the Federal Reserve seemed to sound the alarm that the era of near-zero interest rates is ending, Chairman Ben Bernanke tempered those expectations a bit this week.
It was just two days ago when we observed that during the latest Fed matinee, none other than Goldman's Jan Hatzius presented a slide deck suggestively titled "Hiking Rates in the Name of Financial Stability."
WASHINGTON: The Federal Reserve hiked interest rates for the first time in nearly a decade on Wednesday, signaling faith that the US economy had largely overcome the wounds of the 2007-2009 financial crisis. The US central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a per centage point to between 0.25 per cent and 0.50 per cent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.
WASHINGTON — Federal Reserve Chair Janet Yellen on Wednesday pointed to a possible December interest rate “liftoff” but said rates would rise only slowly from then on to nurture the U.S. economic recovery.
In her first public comments since the Fed’s meeting last week Yellen laid out what now appears the base case at the U.S. central bank – that low unemployment, continued growth and faith in a coming return of inflation means the country is ready for higher interest rates.
The ECB did the unexpected today, cutting the interest rate to .25% from .50%.
Here is the ECB press release.
7 November 2013 - Monetary policy decisions
At today’s meeting the Governing Council of the ECB took the following monetary policy decisions: