Interest rates

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.

Legacy contracts using the London interbank offered rate — which is set to be phased out at the end of this year — were granted a reprieve to mid-2023. However, there is no wiggle room on when the rate will expire for new deals, said Federal Reserve Vice Chairman Randal Quarles.

Some of the world’s biggest banks are urging a U.S. judge not to immediately terminate Libor after a group of borrowers filed suit claiming the benchmark was the work of a “price-fixing cartel.”

Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.

The Consumer Financial Protection Bureau's overhaul of its Qualified Mortgage standard is alarming free-market advocates who say it will precipitate a return to easy credit and higher defaults and could disproportionately harm minorities.

The central bank said it would keep interest rates at current levels through at least to help the U.S. economy recover from the coronavirus pandemic.

The complaint filed by New York, California and Illinois argues that the regulation, issued in response to the 2015 Madden decision, undermines state laws intended to protect consumers.