Monetary policy

As tech firms increasingly rely on debt to build out their artificial intelligence buildouts, long-dated U.S. Treasuries are facing heightened competition.

Federal Reserve Chair Kevin Warsh framed the central bank's move to increase interest rates as a moderate adjustment to rapid economic growth during his post-Federal Open Market Committee press conference.

Federal Reserve Chair Kevin Warsh's third Federal Open Market Committee meeting is likely to be his most pivotal, with markets overwhelmingly expecting a rate hike and bond market yields rising to historic highs.

While Federal Reserve Chair Kevin Warsh has sought to inject some mystery into the central bank's communications with markets, an American Banker analysis shows that officials other than the chair have been speaking more and more frequently over the last few decades.

Anxieties over AI drew attention from Democrats and Republicans during Treasury Secretary Scott Bessent's testimony at the House Financial Services Committee.

The consumer price index rose 0.4% last month, in line with July's reading. For a monetary policy committee that has been split on inflation, the inconclusive report will compel the Fed to make a call on whether to raise interest rates or stay put.

The U.S. economy added 162,000 jobs in August, bouncing back from a surprise decline in July. The Fed's next interest rate decision will still hinge on next week's inflation reading.

The Federal Reserve governor said an upcoming change to the personal consumption expenditures index could show ongoing improvement in prices, building the case for leaving interest rates unchanged.

Federal Reserve Bank of New York President John Williams said Wednesday that inflation expectations remain well anchored, suggesting a "wait-and-see" approach for monetary policy.

Markets are still pricing in an increase in the federal funds rate later this month, but Federal Reserve Gov. Michael Barr said his vote will depend on incoming unemployment and inflation data.

The Bureau of Economic Analysis reported that the personal consumption expenditures, or PCE, price index rose 3.7% from a year earlier, indicating that inflation remains above the Federal Reserve's target.

Treasury Secretary Scott Bessent said in an interview on CNBC Thursday that he and Office of Management and Budget Director Russell Vought have been tasked with developing a fiscal plan to reduce government spending.

Retail sales fell 0.6% in July despite a World Cup bump and the University of Michigan's consumer sentiment index declined to cap off a pivotal week of economic indicators.

The forces he sees at work include inflationary pressures from the AI buildout, exacerbated by tariffs, labor constraints and oil-price spikes.

The consumer price index ticked up last month, bolstering arguments about broad-based inflation and raising the odds of a rate hike next month.

One of three Federal Open Market Committee members to vote for a higher federal funds rate last month, the Cleveland Fed president is undeterred by the labor force decline in July.

Jeffrey Cleveland, Managing Director and Chief Economist at Payden & Rygel, will discuss the FOMC meeting, the new SEP and Chair Warsh's press conference.

The Federal Reserve governor said inflation is too high but said she ultimately voted last week to hold interest rates steady to give recent economic trends more time to play out.

Federal Reserve Chair Kevin Warsh acknowledged that his limited guidance might have been a factor in rising market rates, but said whatever increased volatility can be attributed to the changes is more than offset by the benefit of a more nimble central bank.

A hike would establish Warsh's inflation-fighting credibility, leading some, like Citadel Securities and PGIM, to assign a higher chance of an increase this week.