Finance & economics | Delayed reaction

Strangely, America’s companies will soon face higher interest rates

Even though the Federal Reserve is about to loosen monetary policy

Jerome Powell takes a question from a reporter during a news conference at the William McChesney Martin Jr. Federal Reserve Board Building in Washington, DC. on July 31st 2024
Photograph: Getty Images

Between early 2022 and mid-2023 the Federal Reserve tightened monetary policy at the fastest pace since the early 1980s, lifting America’s policy interest rate from 0-0.25% to 5.25-5%. When the central bank’s policymakers next meet on September 17th and 18th, they will almost certainly start cutting rates. Investors even wonder whether they will begin with a 0.5-percentage-point reduction, in response to cooler-than-expected economic data.

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This article appeared in the Finance & economics section of the print edition under the headline “As the Fed cuts”

From the September 14th 2024 edition

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