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US rate hike could force Bank of England's hand
A Federal Reserve rate increase ahead of US midterm elections could reshape global monetary policy and drag the Bank of England into political territory.
In brief
A Federal Reserve rate increase ahead of US midterm elections could reshape global monetary policy and drag the Bank of England into political territory. If the Fed raises rates despite political pressure from Trump, it may force the Bank of England to follow suit, prioritizing inflation control over political…
Warsh faces his first real test
Kevin Warsh arrived as Federal Reserve chairman to end battles with Trump's White House. Today's rate decision will show whether central bank independence has truly been restored.
Trump wants the world's lowest rates
The president argued this week the US should have the lowest interest rates globally. Instead, ten-year Treasury yields hit 5.04 percent, the highest in two decades.
Bond markets fear Trump's spending plans
If Republicans perform well in midterm elections, Trump's proposed five thousand dollar cheque for every American could become reality, costing one point two trillion dollars.
Inflation still stubbornly high
Consumer price inflation sits at 3.4 percent. Rising bond yields and persistent inflation may force the Fed's Open Market Committee to raise rates by a quarter percentage point.
Rate hike before midterm elections
Raising rates ahead of November 3 midterm elections would be politically sensitive. Traders' bets on a rate rise have climbed from 50 percent to 90 percent in recent days.
Volcker's precedent haunts Warsh
Late Fed chairman Paul Volcker's decision to sharply raise rates before the 1980 presidential election helped oust Jimmy Carter. History suggests rate hikes can topple presidents.
Bank of England could follow suit
If the Fed raises rates despite political pressure, it might provoke a late change of thinking at the Bank of England, forcing it to prioritize inflation control over political convenience.
UK jobs market crumbles for youth
Payrolls fell by 26,000 in August. Young people face 16.4 percent joblessness, with 981,000 not in education, employment or training. Labour's tax rises and employment law changes are blamed.
Ben and Jerry's dispute continues
Unilever's spinoff of Magnum ice cream to Amsterdam avoided inheriting Ben and Jerry's fractious dispute over selling intellectual property rights in Israel. The row dates to 2021.
The headline
If the Fed raises rates despite political pressure from Trump, it may force the Bank of England to follow suit, prioritizing inflation control over political convenience.
