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The Federal Reserve decided to keep its benchmark interest rate unchanged, maintaining it within a range of 5.25% to 5.5%. Although inflation has slowed down, concerns persist regarding the bond market sell-off, oil prices, and the tight labor market. The central bank has not ruled out the possibility of a rate increase at its upcoming meeting in December.
In October, all of America’s stock markets experienced declines, marking the third consecutive month of losses and the longest losing streak since the beginning of the COVID-19 pandemic in 2020. The S&P 500 dropped by 2.2% during the month, the NASDAQ composite by 2.8%, and the Dow Jones industrial average by 1.4%. Investors are adjusting to a world of higher interest rates, which diminish the present value of future earnings.
The Bank of Japan has relaxed its policy of capping long-term interest rates for the second time in three months. It will now allow the yield on ten-year Japanese government bonds to exceed 1%, considering this level as a “reference” rather than an absolute limit. Ueda Kazuo, the governor of the bank, attributed this decision to the significant increase in American Treasury yields. The Bank of Japan remains the only central bank in the world with a negative policy interest rate of -0.1%.
2023-11-02 09:17:57
Source from www.economist.com
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