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American2Day

News and opinion for Michigan, Eaton County, and the Mulliken area

American2Day

News and opinion for Michigan, Eaton County, and the Mulliken area

Money

Fed signals possible September rate hike as Treasury seeks lower long-term yields

A2D News Desk

Federal Reserve Chairman Kevin Warsh said inflation remains above target even as the labor market stays reasonably strong, increasing market expectations of an interest-rate hike in September. Higher short-term rates could raise costs for business loans, mortgages and other consumer borrowing.

Treasury Secretary Scott Bessent is pursuing the opposite direction for long-term rates. The Treasury plans to at least double its purchases of long-term government bonds for two months starting Sept. 9, using short-term debt to help reduce longer-term borrowing costs.

The contrasting approaches have drawn criticism as investors weigh whether rising government debt is driving up Treasury yields. Total U.S. government debt crossed $40 trillion on Aug. 19, according to the material provided.

Read the full story at The Christian Science Monitor.

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