Interest rates

One asset manager recalled the prelude to the global financial crisis and the 2001 dot-com bust, when companies that loaded up on debt when costs were low got hit with a steep bill years later.

The bond market's reenergized bulls may want to dial down their excitement, because their fortunes hinge on whether an abstract, almost elusive number, is as low as they assume.

High interest rates could dampen demand for refinancing, which took a hit during the pandemic-era pause in federal student loan payments. "Curb your enthusiasm," one analyst said.

Bond traders have overestimated month-over-month headline inflation heading into four of the last seven Consumer Price Index releases, says strategist Raghav Datla.

When the once-ubiquitous interest rate goes away at the end of June, some businesses that have older loans may see a sudden jump in their payments. Banks, lawyers and business leaders are doing last-minute work to avoid that scenario.

Financial tightening stemming from two recent bank collapses has served as its own check on inflation, according to Federal Reserve Chair Jerome Powell. He said the relatively small rate hike announced Wednesday was not the result of financial stability concerns.

Ahead of this week's Federal Open Market Committee meeting, where it is expected to enact another large rate hike, 11 lawmakers sent a letter to the central bank, urging it not to go too far.

Almost two-thirds of banking executives believe the U.S. will see its highest interest rates this cycle in the first half of next year. And close to 60% of executives said they are concerned the Federal Reserve is hiking rates too quickly.

The Pittsburgh company's finance chief expects more gains in interest income, though he conceded rising deposit costs could curb the pace of advances.

During a visit to Buffalo on Friday, New York Federal Reserve President John Williams said the central bank may need to keep cranking up interest rates to gain greater control over high inflation.