{"id":551970,"date":"2026-07-30T21:53:12","date_gmt":"2026-07-30T21:53:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/551970\/"},"modified":"2026-07-30T21:53:12","modified_gmt":"2026-07-30T21:53:12","slug":"us-borrowing-costs-hit-19-year-high-as-fed-holds-interest-rates-us-interest-rates","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/551970\/","title":{"rendered":"US borrowing costs hit 19-year high as Fed holds interest rates | US interest rates"},"content":{"rendered":"

US government borrowing costs have hit their highest level since 2007 after the Federal Reserve<\/a> voted to hold its key interest rate steady, feeding fears that the central bank may not move fast enough to tame a rise in inflation.<\/p>\n

The yield \u2013 or interest rate \u2013 on the 30-year US Treasury bond rose 14 basis points to nearly 5.24%, a 19-year high, after the Fed announced its decision to hold its main rate at between 3.5% and 3.75%<\/a> for the fifth meeting in a row.<\/p>\n

Kevin Warsh, the Fed chair, said the bank would \u201cnot waver\u201d in its commitment to tackling rising prices. A prolonged period of high inflation meant that some Americans believed the central bank had an \u201cimplicit target\u201d above its 2% target, he added.<\/p>\n

\u201cThere is no soft implicit target: not on this committee\u2019s watch,\u201d Warsh said. \u201cThere\u2019s only a target and it\u2019s 2%. This Fed will not waver \u2026 Our credibility rests on performing our duties and delivering on our responsibilities.\u201d<\/p>\n

The decision to leave rates on hold has spooked investors who are worried about the US economy\u2019s ability to absorb a rise inflation, triggered by Donald Trump\u2019s war in Iran.<\/a><\/p>\n

US inflation cooled to an annual rate of 3.5% in June after Washington and Tehran agreed a brief ceasefire \u2013 but this has since ended, with both sides exchanging fire and sending oil prices climbing higher again.<\/p>\n

Felix Schmidt, a senior economist at the bank Berenberg, said Warsh had not \u201cconclusively answered the question of why the Fed did not hike\u201d.<\/p>\n

He noted that the Fed chair had implied at a press conference that an interest rate rise in the near term might not be necessary due to the rise in bond yields, which has already pushed up the cost of borrowing across the US economy<\/a>.<\/p>\n

\u201cPerhaps Warsh hopes that higher capital market interest rates will help fight inflation in the short term, while the US central bank under new leadership decides on its approach,\u201d Schmidt said.<\/p>\n

Before the Fed\u2019s meeting this week, financial markets had priced in a 30% chance of a rate rise and, in the absence of such a move, nearly a 100% chance of an increase at the Fed\u2019s September meeting.<\/p>\n

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After Wednesday, however, traders put the chance of a rate rise in September at about 57%, according to CME Group\u2019s FedWatch tool.<\/p>\n

US stocks also fell sharply on Wednesday, with the blue chip S&P 500 index closing down 1.5%. The Dow Jones industrial average fell 2.2% and the tech-heavy Nasdaq fell 1.7%.<\/p>\n","protected":false},"excerpt":{"rendered":"US government borrowing costs have hit their highest level since 2007 after the Federal Reserve voted to hold…\n","protected":false},"author":2,"featured_media":551971,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-551970","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/551970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=551970"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/551970\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/551971"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=551970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=551970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=551970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}