Interest rates

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.

Fed Chairman Jerome Powell brushed off concerns that rapidly tightening monetary policy could disrupt the financial system. Some economists and policy experts beg to differ, raising concerns about loan defaults or even the collapse of a key institution or counterparty.

Wells Fargo, U.S. Bancorp, Truist Financial and PNC Financial were among the banks that said they are raising their prime lending rates from 4.0% to 4.75%.

The Federal Reserve’s forceful moves to fight inflation are resetting expectations about how quickly banks will need to start raising their deposit rates.

In a recent survey, just over half of community bankers expressed concern that the central bank will harm the U.S. economy by raising rates too fast in its quest to contain inflation.

U.S. central bankers should move expeditiously and raise interest rates to neutral — the level which neither speeds up or slows down the economy — by the end of the year, Federal Reserve Bank of San Francisco President Mary Daly said.

The Federal Reserve’s most hawkish official cracked open the door to discussing the first 75-basis-point interest rate hike since 1994, a move economists say would be a last resort in case inflation further spirals out of control.

The Federal Reserve may need to raise interest rates “significantly” higher than it currently expects to cool an overheated U.S. economy, Goldman Sachs Chief Economist Jan Hatzius said.

Esther George, president of the Federal Reserve Bank of Kansas City, says changes in the office sector and monetary policy pose potential risks to property owners and their lenders.

The move away from the scandal-plagued London interbank offered rate is going smoothly, according to a new survey of lenders and corporate borrowers. But many customers still face operational challenges ahead of a mid-2023 deadline for switching older loans.

The company has agreed to pay at least $3.75 million to resolve allegations that it violated the District of Columbia’s 24% interest rate cap.

The Secured Overnight Financing Rate has benefited — amid the phaseout of Libor — from positive comments by regulators. Is a multirate environment, which some banks would prefer, still possible?

Just three months ago, U.S. banks were still using the expiring benchmark rate for the vast majority of their new loans. But regulators said Friday the transition to alternative rates has accelerated ahead of a year-end cutoff.

Forget the goods supply-chain crisis threatening global risk assets: the real test comes next year when a service-sector boom drives labor costs higher and pressures central banks to tighten policy more decisively.

Many banks are still making loans tied to the scandal-plagued benchmark despite years of preparation for its demise. The end of 2021 could prove hectic as bankers scramble to implement changes and explain them to commercial borrowers.

Federal Reserve Vice Chair Randal Quarles has made it clear that banks failing to make the transition away from the benchmark rate could face supervisory consequences.

Starting Thursday, firms should stop issuing new loans, bonds and securitizations tied to the discredited benchmark, according to the Bank of England.