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<ul><li>After a rate cut in February, the mandate of the central bank was clear: it wants to boost lending and thereby stimulate economic growth. </li><li>However, the country’s commercial lenders have been slow to pass on the rate cut to consumers. </li><li>As a result, the governor of the Reserve Bank of India, <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword>, met with the CEO’s of the country banks to do so. The banks complained that they didn’t have much room to cut rates but said they would try their best. </li></ul>After <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">a rate cut </a>in February, the mandate of the central bank was clear: it wants to boost lending and thereby stimulate economic growth as the country heads into national elections. And now it wants Indian banks to follow suit. However, the country’s commercial lenders have been slow to pass on the rate cut to consumers in the form of cheaper small business loans, home loans and car loans. As a result, the governor of the Reserve Bank of India, Shaktikanta Das, met with the CEO’s of the country banks - such as Punjab National Bank, ICICI Bank, Kotak Bank, Bank of Baroda etc - yesterday to exhort them <a href="https://www.business-standard.com/article/finance/rbi-governor-das-asks-bankers-to-pass-on-rate-cut-benefits-to-consumers-119022101292_1.html">to cut lending rates</a> for customers so as to encourage consumer confidence and investment. While the banks’ response was mostly non-committal, they said they would <a href="https://www.thehindu.com/business/will-try-to-pass-on-rate-cut-banks/article26333312.ece">try their best to cut rates</a> on home loans and personal loans. They have complained in the past of their high borrowing costs and shrinking margins - both of which are a consequence of their stock of bad loans. They also pointed to a lack of liquidity in the banking system, as consumers are hoarding cash ahead of elections. After the rate cut decision, wherein the base lending rate was cut by 25 basis points to 6.25%, the State Bank of India only cut home loan rates by <a href="https://economictimes.indiatimes.com/markets/stocks/news/sbi-cuts-interest-rate-on-home-loan-by-5-bps/articleshow/67910450.cms">a mere 5 basis points</a>. The only other bank to do the same was Bank of Maharashtra - by the same measly amount. Earlier this week, the chairman of State Bank of India, Rajnish Kumar, said that banks did not <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/headroom-to-cut-rates-does-not-exist-sbi-chairman/articleshow/68044675.cms">have the room to cut lending rates</a> because it would need to cut its deposit rates first. And it couldn’t do this unless other banks did so as well, because otherwise its customers would park their money in banks with higher deposit rates. SEE ALSO: <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">India’s central bank cuts interest rate to give growth a chance</a> <a href="https://www.businessinsider.in/rbi-pays-interim-dividend-central-government/articleshow/68057230.cms">The Modi administration’s overspending gets rewarded with an interim dividend from the central bank</a>

India’s central bank is calling on the country’s lenders to lower rates

<ul class="summary-list"><li>The <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> just raised <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates" source="Orion">interest rates</keyword> again in an effort to stifle sky-high inflation.</li><li>The hikes raise borrowing costs throughout the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>, from car loans to credit-card debt.</li></ul>Buying a house or racking up credit card debt will get more expensive in the coming weeks thanks to the Federal Reserve's latest <keyword id="12895633" type="UNKNOWN" weightage="60" keywordseo="interest-rate-hike" source="Orion">interest rate hike</keyword>.The central bank <a href="https://www.businessinsider.com/federal-reserve-hikes-interest-rates-july-credit-loans-inflation-recession-2022-7">raised rates again on Wednesday</a>, issuing a 0.75 percentage point hike in its latest move to crush inflation. The increase aims to slow price growth by raising borrowing costs throughout the economy and easing Americans' strong demand. That means all kinds of debt will be more expensive to pay off, from mortgages to credit card balances.When the <keyword id="11894209" type="UNKNOWN" weightage="60" keywordseo="fed" source="Orion">Fed</keyword> lowers rates, payments on loans fall. Conversely, recent hikes made borrowing more expensive. The average rate on a 30-year fixed-rate mortgage reached 5.54% on July 21, up nearly 2.5 percentage points from the level seen at the end of 2021. Bank card rates have also swung higher, meaning holders are paying more interest on their balances. The increases aren't all bad news for Americans. Apart from having a cooling effect on inflation, higher rates mean that those holding their cash in savings accounts will make slightly more in monthly interest.The rate rally is set to continue through the rest of the year. The Federal Open Market Committee — the body that makes rate decisions — expects that "ongoing increases in the target range will be appropriate" in the months ahead, the central bank said in a statement. Projections published by the Fed in June signaled that <keyword id="11918137" type="UNKNOWN" weightage="60" keywordseo="fomc" source="Orion">FOMC</keyword> members expect rates to climb by about one more percentage point by the end of the year to a range of 3.25% to 3.5%.Rate increases serve as the Fed's weapon of choice for fighting inflation. Low rates tend to spur demand and spending, and the central bank lowered its benchmark rate to record lows in early 2020 to buoy the economy during the first lockdowns. Yet low rates can also lift demand well above supply, leading to an imbalance that pushes prices sharply higher.That's certainly been the case over the past 18 months. Year-over-year inflation <a href="https://www.businessinsider.com/inflation-cpi-price-growth-june-2022-7">hit a four-decade high of 9.1%</a> in June, according to the Consumer Price Index, boosted by supply-chain snags and Russia's invasion of Ukraine. That's significantly higher than the 2% target the Fed targets and is the main reason for the central bank's larger-than-usual rate hikes through 2022. There's a good chance the pace of those increases will slow. Gas prices have fallen significantly since peaking in mid-June, signaling the July inflation report will show a significant easing in the one-year rate. Commodity prices have also fallen over the past month, offering relief to Americans paying up for necessities like food and heating.The Fed's benchmark rate also sits in a much better position for addressing high inflation. The current range of 2.25% to 2.5% is broadly viewed by FOMC members as "neutral," meaning it neither stimulates nor restricts the economy. Though the Fed is likely to push rates to restrictive levels later this year, Chair Jerome Powell hinted Wednesday that the speed that it continues to raise rates won't be as telegraphed as past hikes."While another unusually large increase could be appropriate at our next meeting, that is a decision that'll depend on the data we get between now and then," he said. "We think it's time to go to a meeting-by-meeting basis and not provide the kind of clear guidance we provided on the way to neutral."This post has been updated to reflect the most recent Fed interest rate decision.

Mortgages, car loans, and credit card debt are about to get more expensive

Mumbai (Maharashtra) [India], August 18 (ANI): <keyword id="6354335" type="General" weightage="100" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> on Friday said regulated entities (REs) have the freedom and they must offer all categories of retail loans either on a fixed or <keyword id="1104583" type="General" weightage="20" keywordseo="floating-interest-rates" source="Orion">floating interest rates</keyword> basis. At the time of sanction of EMI-based floating rate personal loans, RBI said regulated entities are required to take into account the repayment capacity of borrowers to ensure that adequate headroom or margin is available for elongation of tenor and or increase in EMI, in the scenario of a possible increase in the external benchmark rate during the tenor of the loan. In the wake of rising <keyword id="6371181" type="General" weightage="20" keywordseo="interest-rates" source="Orion">interest rates</keyword>, RBI said it had received several grievances from consumers related to the elongation of loan tenor and or increase in EMI amount, without proper communication with and or consent of the borrowers. "In order to address these concerns, the REs are advised to put in place an appropriate policy framework meeting the following requirements for implementation and compliance," RBI said. As a part of the new rules, the central bank said: At the time of sanction, regulated entities shall clearly communicate to the borrowers about the possible impact of change in benchmark interest rate on the loan leading to changes in EMI and/or tenor or both. Subsequently, any increase in the EMI or tenor or both on account of the above shall be communicated to the borrower immediately through appropriate channels.At the time of reset of interest rates, regulated entities shall provide the option to the borrowers to switch over to a fixed rate as per their Board approved policy. The policy, inter alia, may also specify the number of times a borrower will be allowed to switch during the tenor of the loan. The borrowers shall also be given the choice to opt for enhancement in EMI or elongation of tenor or for a combination of both options; and, to prepay, either in part or in full, at any point during the tenor of the loan. All applicable charges for switching of loans from floating to fixed rate and any other service charges/ administrative costs incidental to the exercise of the above options shall be transparently disclosed in the sanction letter and also at the time of revision of such charges/ costs by the regulated entities from time to time. REs shall ensure that the elongation of tenor in case of floating rate loan does not result in negative amortisation. RBI said regulated entities shall ensure that these instructions are extended to the existing as well as new loans suitably by December 31, 2023. All existing borrowers shall be sent a communication, through appropriate channels, intimating the options available to them, RBI said. (ANI)

Banks must allow retail borrowers to switch between fixed and floating rates: RBI

<ul class="summary-list"><li>The <keyword id="106488" type="UNKNOWN" weightage="60" keywordseo="bank-of-england" source="Orion">Bank of England</keyword> hiked its main interest rate for the second meeting running Thursday, from 0.25% to 0.5%.</li><li><keyword id="11962842" type="UNKNOWN" weightage="60" keywordseo="central-banks" source="Orion">Central banks</keyword> around the world are grappling with red-hot inflation, which is running at a 30-year high in the UK.</li></ul>The Bank of England has hiked UK <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates" source="Orion">interest rates</keyword> for the second meeting in a row, as it tries to tackle the strongest inflation in 30 years.The <keyword id="6538058" type="UNKNOWN" weightage="60" keywordseo="boe" source="Orion">BoE</keyword>'s monetary policy committee raised its main interest rate by 25 basis points from 0.25% to 0.5%, in a decision announced Thursday. It followed a 15 basis point hike in December, which was the first upward move since 2018.It comes as global investors brace for the US Federal Reserve to <a href="https://origin.markets.businessinsider.com/news/stocks/federal-reserve-hints-raise-interest-rates-inflation-fomc-meeting-january-2022-1">hike its main rate</a> in March for the first time since December 2018.Central banks are dialing back the huge monetary stimulus they injected to support economies in 2020 and 2021.Inflation is soaring in many economies around the world, as global supply chains struggle to keep up with a sharp rebound in demand.In the UK, inflation hit a 30-year high of 5.4% year-on-year in December. The Bank of England, like other central banks such as the Fed, had played down the chances such red-hot price rises.But the BoE said Thursday: "Given the current tightness of the labour market and continuing signs of greater persistence in domestic cost and price pressures, the committee judges that an increase in bank rate of 0.25 percentage points is warranted at this meeting."Read more: <a href="https://www.businessinsider.com/stock-market-strategy-2022-big-investing-themes-to-profit-bofa-2022-1?r=US&amp;IR=T">Bank of America lays out the 10 key investing themes its vast team of strategists and economists are watching closely — and reveals how investors can profit from each of them</a>Many strategists think the BoE will continue hiking interest rates in 2022. There's uncertainty about the pace and magnitude of increases, however.<a href="https://www.cmegroup.com/trading/interest-rates/bank-of-england-watch-tool.html">Market prices</a> suggest traders on average expect the BoE to gradually raise interest rates to around 1.5% by the end of the year."We still expect two to three hikes in 2022, though recent strength in data now makes three more likely," Peder Beck-Friis, portfolio manager at PIMCO, said in a note before the meeting. "That would bring the policy rate to 1% by year end." The <keyword id="6441867" type="UNKNOWN" weightage="60" keywordseo="pound" source="Orion">pound</keyword> rose after the announcement, and was up 0.3% against the dollar at $1.3614.<a href="https://markets.businessinsider.com/news/stocks/why-are-stocks-down-explained-federal-reserve-earnings-ukraine-tech-2022-1">Global stocks have fallen</a> in 2022 so far as investors come to terms with a new reality in which central banks are no longer supporting economies and <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>.The Fed last month all but confirmed it will raise interest rates in March, with traders expecting the federal funds target range to increase to 0.25% to 0.5%.

The Bank of England just hiked interest rates again, as central banks get serious about red-hot inflation

<ul><li>The <keyword id="6355253" type="UNKNOWN" weightage="60" keywordseo="federal-reserve">Federal Reserve</keyword> remains averse to <keyword id="741038" type="PERSON" weightage="60" keywordseo="negative-interest-rates">negative interest rates</keyword> despite the gloomy economic backdrop, Chairman <keyword id="1727754" type="PERSON" weightage="60" keywordseo="Jerome-Powell">Jerome Powell</keyword> said Wednesday.</li><li>The US economic trajectory is still "highly uncertain and subject to significant downside risks," and additional aid is likely necessary stage a recovery, Powell added in a <a href="https://www.youtube.com/watch?v=tuPIJvLhQmc&amp;feature=emb_titleitle">videoconference</a> with the Peterson Institute for International Economics.</li><li>The refusal to push rates lower comes one day after President Donald Trump <a href="https://markets.businessinsider.com/news/stocks/trump-again-calls-negative-interest-rates-us-tweet-gift-fed-2020-5-1029193284">renewed his call for negative interest rates in the US</a>.</li><li><a href="https://www.businessinsider.com/?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest">Visit the Business Insider homepage for more stories</a>.</li></ul>The Federal Reserve may need to act further to pull the US <keyword id="34412" type="ORGANIZATION" weightage="60" keywordseo="economy">economy</keyword> out of its slump, but negative <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates">interest rates</keyword> are still out of the question, Chairman Jerome Powell said Wednesday.Potential for the unconventional policy tool resurfaced on Tuesday after President Donald Trump praised the "<a href="https://markets.businessinsider.com/news/stocks/trump-again-calls-negative-interest-rates-us-tweet-gift-fed-2020-5-1029193284">gift</a>" and called on the US to adopt such rates. Even as the current downturn grows "significantly worse than any recession since World War II," the <keyword id="6358156" type="ORGANIZATION" weightage="60" keywordseo="central-bank">central bank</keyword> hasn't changed its stance on pushing its <keyword id="37018" type="PERSON" weightage="60" keywordseo="interest-rate">interest rate</keyword> lower, Powell said."The committee's view on negative rates has not changed. This is not something we're looking at," he said in a <a href="https://www.youtube.com/watch?v=tuPIJvLhQmc&amp;feature=emb_titleitle">videoconference</a> with the Peterson Institute for International Economics.Read more: <a href="https://www.businessinsider.com/stock-picks-to-buy-25-cheap-small-cap-acquisition-targets-2020-5">These 25 under-the-radar companies have been neglected for years — but BTIG says that makes them tempting M&amp;A targets with big stock upside</a>While Powell stopped at detailing what additional actions the <keyword id="45672" type="ORGANIZATION" weightage="60" keywordseo="Fed">Fed</keyword> may take, he noted the US economic rebound will likely be more chaotic than first expected. The nation's path forward remains "highly uncertain and subject to significant downside risks," the chair warned in his prepared remarks."There is a sense that the recovery may come more slowly than we would like, but it will come. And that may mean that it's necessary for us to do more," Powell added in a question-and-answer portion.Powell's bleak tone immediately shook US <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword>. Equities <a href="https://markets.businessinsider.com/news/stocks/stock-market-news-today-index-reaction-fed-powell-economy-stimulus-2020-5-1029197793">erased early gains and opened lower on Wednesday</a> as the Fed chief detailed his view of the current economic backdrop.Read more: <a href="https://www.businessinsider.com/stocks-picks-to-buy-investing-strategy-for-inflation-morgan-stanley-2020-5">MORGAN STANLEY: Buy these 20 stocks built to profit from a mounting inflation comeback that will alter the investing landscape</a>The Fed's refusal to drag rates below zero could be a blessing in disguise for long-term investors, Seema Shah, chief strategist at Principal Global Investors, said. Any short-term benefits such policy would bring the US would likely give way to long-term market dislocation, she added."What's more, experience outside the United States suggests that slashing rates has distorted financial markets, crippled bank lending and threatened pensions systems worldwide," Shah said. "Indeed, central banks have been reconsidering the wisdom of negative policy rates, with the Swedish Riksbank exiting negative rates altogether."The central bank is more likely to boost its asset purchases and lending programs before considering negative rates, the strategist noted. The Fed <a href="https://markets.businessinsider.com/news/stocks/federal-reserve-emergency-corporate-bond-etf-purchases-coronavirus-policy-economy-2020-5-1029191923">began its corporate-bond ETF purchases on Tuesday</a>, opening the first of its credit facilities for companies struggling through the virus-induced collapse.The Fed's interest rate sits at a range of 0% to 0.25%, a historic floor last implemented during the 2008 financial crisis.Read the original article on <a href="https://www.businessinsider.com/negative-interest-rates-not-considered-federal-reserve-policy-jerome-powell-2020-5">Business Insider</a>

The Fed won't use negative interest rates to counteract the coronavirus recession, chairman Jerome Powell says

<div class="image-container float_right"><div class="image"><a href="http://www.flickr.com/photos/67945918@N00/4623729915/">Flickr / Tom Raftery</a></div></div>Quick heads up: <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates">Interest rates</keyword> keep rising.
The yield on 10-year German bunds hit 2.0% at one point this morning, a level not seen since early 2012.
And US 10-year rates are up to 2.95%, which is a new high for the recent cycle.
The debate about whether this is the result of "tapering" fears or mere normalization after the crisis-inspired plunge inr ates is something others can debate.

Interest Rates Are On The Rise This Morning

<ul><li>A "big setback" such as a second wave of virus infections could force the <keyword id="6355253" type="UNKNOWN" weightage="60" keywordseo="federal-reserve">Federal Reserve</keyword> to reconsider <keyword id="741038" type="PERSON" weightage="60" keywordseo="negative-interest-rates">negative interest rates</keyword>, <a href="https://markets.businessinsider.com/stocks/gs-stock">Goldman Sachs</a> strategist Zach Pandl said Thursday.</li><li><keyword id="45672" type="ORGANIZATION" weightage="60" keywordseo="Fed">Fed</keyword> chief <keyword id="1727754" type="PERSON" weightage="60" keywordseo="Jerome-Powell">Jerome Powell</keyword> reiterated Wednesday that <a href="https://markets.businessinsider.com/news/stocks/negative-interest-rates-not-considered-federal-reserve-policy-jerome-powell-2020-5-1029198208">such policy wasn't on the table</a>, but "policymakers are going to want to try new things" if the economy tanks further, Pandl told <a href="https://www.cnbc.com/2020/05/14/coronavirus-goldman-sachs-on-federal-reserve-negative-interest-rates.html">CNBC</a>.</li><li>The strategist warned that pushing rates below zero could do more harm than good, and that additional fiscal relief will likely arrive before the Fed reverses course.</li><li><a href="https://www.businessinsider.com/?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest">Visit the Business Insider homepage for more stories</a>.</li></ul>The Federal Reserve could reverse its course on negative interest rates if the US economic recovery falters, a <a href="https://markets.businessinsider.com/stocks/gs-stock">Goldman Sachs</a> strategist said Thursday.The central bank has already issued relief policy of record scope and size to defend against the coronavirus pandemic, but chief Jerome Powell reiterated Wednesday that negative rates <a href="https://markets.businessinsider.com/news/stocks/negative-interest-rates-not-considered-federal-reserve-policy-jerome-powell-2020-5-1029198208">were still out of the picture</a>. Where other nations have either implemented such policy or appeared open to doing so, Powell's stance has held strong.Zach Pandl, Goldman's co-head of global foreign exchange, rates, and emerging <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> strategy, still sees a future where the US benchmark rate slides below zero. "If the economy has another big setback ... where you have a second wave of infections and it would really take the recovery off course, then I do think that that opens up a possibility of a range of additional actions," Pandl told <a href="https://www.cnbc.com/2020/05/14/coronavirus-goldman-sachs-on-federal-reserve-negative-interest-rates.html">CNBC's</a> "Street Signs Asia."Read more: <a href="https://www.businessinsider.com/real-estate-investment-strategy-for-generating-cash-flow-accumulating-units-2020-5">A real-estate investor who generates $342,000 of annual cash flow shares his unique spin on a popular investment strategy that's helped land him 114 units</a>Additional fiscal aid from Congress will likely arrive before the Fed takes any additional action, Pandl added, and even then, negative rates serve as a last resort. Cutting the <keyword id="37018" type="PERSON" weightage="60" keywordseo="interest-rate">interest rate</keyword> further could even exacerbate the economic slump, as such policy is relatively untested and could weaken other forms of monetary relief."Policymakers are going to want to try new things if the economy is really struggling for a period of time," the strategist said. "So in that scenario, perhaps they can consider it; otherwise I think it's pretty low probability at this point."<a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan</a> analysts made similar claims on Tuesday, warning that any immediate benefits gained from negative rates could quickly give way to long-term dislocations. The bank said it views a negative US rate as "<a href="https://markets.businessinsider.com/news/stocks/negative-interest-rate-us-jpmorgan-benefits-may-outweigh-cost-fed-2020-5-1029198085">unlikely</a>," and cautioned that even "mildly negative" rates could bring a net negative to the US economy in as little as two years.Still, the prospect of negative US rates isn't without its fans. President Donald Trump <a href="https://markets.businessinsider.com/news/stocks/trump-again-calls-negative-interest-rates-us-tweet-gift-fed-2020-5-1029193284?utm_source=markets&amp;utm_medium=ingestgest">revived calls for such policy</a> on Tuesday, calling negative interest rates a "gift" to participating countries and urging the US to adopt them.Now read more markets coverage from Markets Insider and Business Insider:<a href="https://markets.businessinsider.com/news/stocks/trump-accuses-investors-talking-stock-market-down-short-selling-gains-2020-5-1029198713">Trump alleges 'rich guys' intentionally talk the stock market lower for short-position profits</a><a href="https://markets.businessinsider.com/news/stocks/hsbc-lost-millions-one-day-global-gold-price-market-chaos-2020-5-1029197169">HSBC lost nearly $200 million in a single day amid gold-market turbulence</a><a href="https://www.businessinsider.com/stock-picks-to-buy-25-cheap-small-cap-acquisition-targets-2020-5">BTIG says to buy these 25 under-the-radar stocks that have been neglected for years because they're tempting M&amp;A targets with big upside</a>Read the original article on <a href="https://www.businessinsider.com/negative-interest-rates-possible-coronavirus-cases-federal-reserve-goldman-sachs-2020-5">Business Insider</a>

A 2nd wave of coronavirus cases could force the Fed to reconsider negative interest rates, Goldman Sachs says

<ul><li>Federal Reserve Vice Chairman <keyword id="5695972" type="PERSON" weightage="60" keywordseo="Richard-Clarida">Richard Clarida</keyword> told Bloomberg on Wednesday that the central bank will not raise <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates">interest rates</keyword> until it sees <keyword id="9955999" type="UNKNOWN" weightage="60" keywordseo="2-inflation">2% inflation</keyword> for at least a few months and full employment is reached. </li><li>"We're not going to even begin to think about lifting off," until then, said Clarida. </li><li>He added that he is projecting a "pretty impressive return" to very low unemployment in the US within three years. </li></ul><ul><li><a href="https://www.businessinsider.com/?hprecirc-bullet?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingesttm_medium=ingest">Visit Business Insider's homepage for more stories</a>.</li></ul>Federal Reserve Vice Chairman Richard Clarida <a href="https://www.bloomberg.com/news/videos/2020-09-23/fed-won-t-consider-raising-rates-until-inflation-hits-2-clarida-video">told Bloomberg</a> that the central bank won't raise interest rates until it sees 2% <keyword id="22195" type="COMPANY" weightage="60" keywordseo="Inflation">inflation</keyword> for at least a few months and full employment is reached. "We're not going to even begin to think about lifting off, we expect, until we actually get observed inflation — and we measure it on a year-over-year basis, equal to 2%," he said. "Also we want our labor market indicators to be consistent with maximum employment." In a Wednesday interview, Clarida reiterated the message the FOMC delivered last week: <keyword id="3024189" type="PERSON" weightage="60" keywordseo="the-fed">The Fed</keyword> will keep interest rates at near-zero through 2023. Read more: <a href="https://www.businessinsider.com/hedge-fund-investing-strategy-stocks-to-buy-for-recovery-bofa-2020-9">BANK OF AMERICA: Hedge funds just made a decisive shift into corners of the market that benefit from a recovery — and these 9 sectors are the best-suited to take advantage of it</a>Clarida also said that the US economy has taken the most severe hit since the Great Depression, but his projections indicate that within three years the country will be back to a "very low unemployment rate" and inflation at the 2% objective. "In the prior economic downturn that took nine years, so we actually see relative to historical experience a pretty impressive return in our baseline projection," he said. But he said that the pandemic has placed the nation in a "deep hole," and additional fiscal stimulus support from Congress will likely be necessary to help climb out.

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India’s central bank is calling on the country’s lenders to lower rates

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Mortgages, car loans, and credit card debt are about to get more expensive

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Banks must allow retail borrowers to switch between fixed and floating rates: RBI

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The Bank of England just hiked interest rates again, as central banks get serious about red-hot inflation

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The Fed won't use negative interest rates to counteract the coronavirus recession, chairman Jerome Powell says

Ben Winck

Interest Rates Are On The Rise This Morning

Joe Weisenthal

A 2nd wave of coronavirus cases could force the Fed to reconsider negative interest rates, Goldman Sachs says

Ben Winck

Fed Vice-Chair Clarida says central bank won't raise interest rates from near-zero until it sees 2% inflation for months

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