Interest rates

Recent clashes over how much investors should get paid when borrowers switch to a new benchmark are a small part of a much larger struggle by global regulators to shift markets away from the scandal-tainted London interbank offered rate.

Wells Fargo cut hundreds more mortgage employees Thursday, the latest in a series of reductions across the industry after higher interest rates brought the pandemic-era home-lending boom to halt.

Federal Reserve officials at their meeting earlier this month concluded it would soon be appropriate to slow the pace of rate increases, signaling the central bank was leaning toward downshifting to a 50-basis-point hike in December.

While rising rates buoy revenue for the country's largest banks, in the short term they also force them to write down the value of assets they hold on their balance sheet, exacerbating a capital squeeze that's prompted most of them to halt buybacks.

The Federal Reserve appeared closer to moderating aggressive interest rate increases after welcome news on inflation, with three officials backing a downshift even as they stressed that policy needs to stay tight.

Federal Reserve officials signaled their aggressive campaign to curb inflation could be entering its final phase even as they delivered their fourth straight 75 basis-point interest-rate increase.

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.

The American consumer is "in good shape" and spending more this month than a year earlier, even amid inflation, jittery markets and international tensions, according to Bank of America Chief Executive Brian Moynihan.

Banks including Wells Fargo, Bank of America and JPMorgan Chase have pulled back on financing for offices and other commercial real estate following a record burst of lending in the first half of this year. 

Federal Reserve officials stressed the need to keep raising interest rates even as they reserved judgment on how big they should go at their meeting next month.

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.

Increased purchases among property investors and build-to-rent buyers is just part of what's driving competition these days.

Bank of America is keeping to its original hiring plans despite challenging economic conditions that have prompted others to pull back, Chief Executive Brian Moynihan said.

JPMorgan Chase is laying off hundreds of home-lending employees and reassigning hundreds more this week as rapidly rising mortgage rates drive down demand in what had been a red-hot housing market.

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 is about to start shrinking its $8.9 trillion balance sheet, deploying a second tool along side higher interest rates to curb inflation, though officials don’t know just how effective it will be.

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.

The Treasury’s latest tax collection may preview how the shrinking of the Federal Reserve’s $9 trillion balance sheet, or quantitative tightening, will unfold for the markets and global liquidity.

Federal Reserve Chair Jerome Powell said the central bank will take the “necessary steps” to get inflation down even if that means increasing interest rates more rapidly than currently anticipated and eventually to levels that slow the broader economy.

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.