Live updates: Massive Fed interest rate hike coming today. Here’s what you need to know.
consumers’ wallets, making it even more expensive for them to get a mortgage and pay off credit card debt.
The central bank is boosting rates to curb inflation, which hovers near a 40-year high. September’s consumer price index report showed that annual inflation fell slightly to 8.2% but rose by 0.4% on a monthly basis, exceeding economists’ expectations.
The Fed faces growing calls from lawmakers as well at the United Nations to stop hiking rates over concerns that it could ignite a painful recession. But it hasn’t signaled it will hit the pause button time any time soon, as it aims to bring inflation closer to its 2% target, even if it causes job losses.
labor market remains strong. Job openings are plentiful and unemployment is remarkably low. But economists don’t expect that to be the case in 2023, especially if the Fed continues lifting rates at an aggressive pace. If today’s hike comes in as expected – 75 basis points – it would mark the fourth straight increase at that high level.
Follow along for our coverage of today’s crucial interest rate decision:
What time is the Fed rate hike decision?
The Fed’s decision comes out at 2 p.m. ET on Wednesday.
— Elisabeth Buchwald
What time does Powell speak today?
Fed Chairman Jerome Powell’s media conference will begin at 2:30 p.m. ET on Wednesday. USA TODAY economics reporter Paul Davidson will cover the event in person.
— Elisabeth Buchwald
ever-changing housing market.
“Nobody saw this coming. We thought maybe a max of 5%, but not a 7% interest rate,” Nadia Evangelou, a senior economist and director of forecasting for the National Association of Realtors told USA TODAY. As a result, Evangelou said the realtors association has readjusted its forecast several times this year.
The current 30-year fixed-rate mortgage on Tuesday is 7.22%, a decrease of 8 basis points from a week ago, according to Bankrate.com. Bankrate said that the existing 15-year fixed-rate mortgage is 6.47%, a 3 basis points increase from last week.
adjustable-rate mortgage is a home loan with an interest rate that can fluctuate over time.
— Terry Collins
Most economists don’t believe the U.S. is in a recession, citing slowing but still-vibrant job growth. There’s little doubt, though, that the economy is losing steam as households and businesses curtail spending amid soaring inflation and the Federal Reserve’s aggressive interest rate hikes aimed at tempering the price increases.
— Paul Davidson
how to prepare for a recession.
Try to put aside just enough so you can scrape by on a strictly bare-bones budget for three months in case you lose your job, said Brian Robinson, a financial adviser and partner with SharpePoint.
Also, consider putting off “nice to have” purchases. For instance, if your refrigerator breaks, get it repaired or buy a new one. But if the blow dryer you’ve owned for five years still gets the job done, just not as good as a newer one, hold on to it – and your cash.
announced Tuesday that the rate on its inflation-protected I Bonds will fall to an annual rate of 6.89% for the next six months. Anyone can invest a minimum of $25 or a maximum of $10,000 each year.
— Jim Sergent
immediate effect varies significantly across individual goods and services.
— Elisabeth Buchwald and Paul Davidson
In all but one of the past five Fed rate hikes, the SP 500 closed at least 1% higher. The most recent hike, which occurred in late September, was the exception. Leading up to the decision, the index was higher but fell immediately after the Fed announced the 75-point hike. In the final trading hours, the SP 500 seesawed between positive and negative territory multiple times.
— Jim Sergent
Understanding why prices rise, what causes it and who it hurts most.
What is a recession?:The economic concept explained and what happens during one.
What does it mean when the Federal Reserve raises interest rates?
When the Fed raises interest rates it becomes more expensive for banks to borrow money from one another. Banks pass on these higher rates to consumers by making it more expensive for them to get a mortgage, a loan, pay off credit card debt and more.
On the flip side, Fed rate hikes increase the interest you earn on money in a savings account.
— Orlando Mayorquin
How will stock react to the Fed?:Here’s how the stock market has moved with all 5 of the Fed interest rate increases
I Bond rates:Why I chose I Bonds to protect my sons’ inheritance from 40-year-high inflation