Interest rates

Federal Reserve officials held interest rates near zero while signaling they expect two increases by the end of 2023, pulling forward the date of liftoff and projecting a faster-than-anticipated pace of tightening as the economy recovers.

Members of the Financial Stability Oversight Council are trying to light a fire under banks to adopt an alternative to the foundational reference rate.

The pace of the U.S. recovery picked up somewhat in the past two months, sparking price pressures as businesses contended with worker scarcity and rising costs, the Federal Reserve said.

Rising inflation could lead to a rate hike, bolstering lenders' profits in 2022. Improved credit quality and an economic rebound are also fueling investment in the sector.

There’s so much spare cash sloshing around U.S. funding markets that investors are choosing to park almost half a trillion dollars at the central bank — earning absolutely nothing.

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.

Bank of America and JPMorgan Chase struck the first swaps trade tied to the Bloomberg Short Term Bank Yield index Friday, as Wall Street tests new benchmarks meant to help replace Libor.

Zions Bancorp. CEO Harris Simmons says the Secured Overnight Financing Rate is more suited for derivative traders than regional banks as a replacement for Libor. His bank this week became the largest to say it would use the alternative developed by the American Financial Exchange.

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.

Under a proposed rule change, credit unions would no longer need to seek pre-approval from the regulator before entering into interest rate swaps, speeding up transactions for some of the industry’s biggest institutions that already hold over 80% of total assets.

It is the 18th state to pass a law imposing rate caps on all consumer loans, including payday and car title loans.

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.”

The Federal Deposit Insurance Corp.’s latest report on the industry’s health had positive news about the earnings recovery last quarter, but it also showed that low interest rates amid continuing economic uncertainty are putting downward pressure on asset yields.

The credit union regulator has held back in allowing the use of derivatives but has released a proposal that would remove red tape for some larger institutions.

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.

Regulators in the spring temporarily eased a key benchmark of balance-sheet strength to allow institutions to help customers navigate the pandemic, but Federal Reserve Vice Chairman Randal Quarles said it would be “premature” right now to suspend it for good.

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.

Federal Reserve Bank of Boston President Eric Rosengren said the long period of low interest rates before the coronavirus pandemic is contributing to the depth of the current recession.

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.