Government Borrowing

The Federal Reserve voted to hold its key interest rate steady, sending stocks tumbling, as US claimed to hit ‘dozens’ of Iranian targets. Plus the origins of Coca-Cola may have been found … in ItalyGood morning. US government borrowing costs have hit their highest level since 2007 after the Federal Reserve 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. Kevin Warsh, the Fed chair, said the bank would “not waver” in its commitment to tackling rising prices.The decision to leave rates on hold has spooked investors, who are worried about the US economy’s ability to absorb a rise inflation, triggered by Donald Trump’s war in Iran. US inflation cooled to an annual rate of 3.5% in June after Washington and Tehran agreed a brief ceasefire – but this has since ended. US stocks 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 was down 1.7%. Continue reading...

• Oil prices reached four-week highs and European shares declined following fresh US-Iran attacks and a blockade on Iranian shipping. • Simultaneously, the US is refunding $81 billion in tariffs after a Supreme Court ruling declared them illegal, with most payments occurring in May and June. • These events highlight the volatility of global markets in response to Middle East geopolitical tensions and the reversal of Trump-era trade policies.

Yields on 10-year debt reach highest since the 2008 financial crisis, raising concerns of faster interest rate risesUK government borrowing costs have risen above 5% amid an intensifying global bond market sell-off fuelled by the Iran war.The yield – or interest rate – on 10-year debt hit its highest level since the 2008 financial crisis, rising 13 basis points to 5.081%, as investors acted on concerns about the economic fallout from the conflict. Continue reading...