2023 Events Affecting Interest Rates


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2023 Timeline

Key Interest Rate Events | Market Reaction

March 07 2023


Powell’s March 7th Remarks

“There is little sign of disinflation thus far in the category of core services excluding housing, which accounts for more than half of core consumer expenditures. To restore price stability, we will need to see lower inflation in this sector, and there will very likely be some softening in labor market conditions.” 

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated”

“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”


Market response to Powell’s statements was swift. Major indexes fell more than 1% and the 2-year Treasury note jumped to its highest mark since 2007. Nasdaq lost 1.3%.

There is a 61.6% probability the Fed will raise its benchmark rate by 50 basis points on March 22, according to the CME FedWatch tool tracking fed funds futures pricing.

Investors increasingly anticipate the Federal Open Market Committee will beef up its rate increase after hiking by 25 basis points at its last meeting and 50 basis points before that. The slowdown followed four straight increases of 75 basis points.

March 08-12 2023


SVB Bank Crisis

Silicon Valley Bank (SVB) sells $21 billion bond portfolio to fund withdrawals.

This action creates a $1.8 billion loss, forcing SVB’s parent company, SVB Financial Group (SVBFG) to solicit for additional capital.

Employees receive annual bonuses hours before the bank is seized.

SVB shut down by the California Department of Financial Protection & Innovation. FDIC (Federal Deposit Insurance Corporation) appointed as receiver.


Signature Bank Fails

Friday March 10th, Signature Bank customers withdrew more than $10 billion in deposits in reaction to the sudden collapse of SVB. This led to the third-largest bank failure in U.S. history as regulators announced two days later that Signature was being seized by the NY State Dept of Financial Services with the FDIC appointed as receiver, to protect depositors and the stability of the U.S. financial system.

Signature Bridge Bank, N.A. created by the FDIC, transferring assets from Signature Bank.

March 10 2023


March 10th Jobs Report

The report shows higher than expected payroll increases for an 11th straight month, and more people joined the workforce.  Employers added 504,000 jobs in January, and 300,000+ in February as the US labor market continued to show strength–but there were some signs of atrophy. While job opportunities are still historically high, they waned in January, and the level of layoffs rose to the highest since the end 2020.


Impacted By Banking Crisis

U.S. stocks “got smoked” after a crucial jobs report came in warmer than expected and jitters over the stunning failure of Silicon Valley Bank (SIVB) rattled investors.

The S&P 500 (^GSPC) plunged 1.4%, while the Dow Jones Industrial Average (^DJI) declined by 1.1%. Contracts with the technology-heavy Nasdaq Composite (^IXIC) slid by 1.8%. The plunges Friday added to a brutal week for Wall Street. All three indexes had their worst weeks since November 2022.

March 14 2023


March 14th CPI Report

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in February on a seasonally adjusted basis, after increasing 0.5% in January, per the U.S. Bureau of Labor Statistics.

Over the last 12 months, the all items index increased 6.0% before seasonal adjustment. The index for all items less food and energy rose 0.5% in February, after rising 0.4% in January.

  • Shelter: The largest contributor to the monthly all items increase, accounting for over 70% of the increase
  • Food: The food index increased 0.4% over the month with the food at home index rising 0.3%.
  • Energy: This index decreased 0.6% over the month as the natural gas and fuel oil indexes both declined.

Other categories seeing an increase in February include recreation, household furnishings and operations, and airline fares.


February Inflation Data

Inflation eased on an annual basis but rose in February over the prior month.

The annual inflation rate in the US reached 6% in February of 2023, slowing for an eighth straight month and marking the lowest level since September of 2021. The reading came in line with market forecasts, and compares to 6.4% in January. The energy index increased 5.2%, and the food index increased 9.5%. Core inflation also edged lower to 5.5% from 5.6%. Compared to the previous month, the CPI rose 0.4%, following a prior 0.5% gain and also matching forecasts. The index for shelter was the largest contributor, accounting for over 70% of the increase. The core rate however, edged higher to 0.5% from 0.4% in January, compared to forecasts of a 0.4%.

While a half point interest rate increased is the presumed outcome of its next meeting, the Federal Reserve is now tasked with deciding whether to continue raising interest rates while U.S. banking system is in turmoil.

March 13th-21st 2023


Banking Turmoil Game Changer

Release of the Inflation Report and CPI was overshadowed by banking turmoil news and analysts changed their predictions as a result. Phil Rosen of the Insider reported:

Nadia Evangelou, Sr. Economist & Director of Forecasting at NAR altered her 2023 outlook. On March 11th Evangelou said she anticipated home prices and sales to dip this year, with a rebound in 2024. On March 16th, her predictions revised:

“We had expected mortgage rates to come down to the lower range of 6% sometime in the second half of 2023, but now we may see that level in the coming weeks. The housing sector reacts immediately to changes in mortgage rates.”

Evangelou’s long-term outlook on a housing rebound hasn’t changed, mortgage rates look set to fall faster than previously expected, which could allow more Americans to enter the housing market.

Evangelou’s long-term outlook on a housing rebound hasn’t changed, mortgage rates look set to fall faster than previously expected, which could allow more Americans to enter the housing market.

Rates have fallen in the wake of the SVB collapseand the number of people applying for mortgages jumped 6.5% compared to a week ago, according to Mortgage Bankers Association data.

Evangelou remarked: “If mortgage rates dip to around 6%, more people would be comfortable purchasing a home compared to when it’s around 6.7% or higher.”

At the Fed’s meeting next week, Evangelou expects policymakers to moderate their aggressive policy.

“The previous week I could see the Fed hiking 50 basis points, but now I think 25 basis points is the highest hike that they may take,” she said.

Many traders agree with her. CME’s FedWatch Tool tells us that markets think the odds of whether the Fed makes a quarter-point move or no move at all amount to basically a coin toss.

March 21st 2023


March 21 Housing Report

The rebound in U.S. existing home sales was stronger than expected, as lower mortgage rates and the first year-on-year decrease in prices in 11 years drew buyers into the market.

The jump in sales of previously owned homes, reported by the National Association of Realtors (NAR), was the largest in more than 2-1/2 years and ended 12 straight monthly declines in sales, the longest such stretch since 1999.

  • Existing home sales jump 14.5% in February
  • Median house price falls 0.2% to $363,000 from year ago
  • Supply increases 15.3% year-on-year to 980,000 units

It was the largest monthly percentage increase since July 2020. NAR reported month-over-month sales rose in all four major U.S. regions.

Total existing-home sales increased 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February, though year-over-year sales were still down 22.6%.

NAR Chief Economist Lawrence Yun said:

“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines. Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”


March 21 Housing Report

Total housing inventory for February was 980,000 units, unchanged from January and up 15.3% from 2021. There is a  2.6-month supply of homes at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.

“Inventory levels are still at historic lows,” Yun commented. “Consequently, multiple offers are returning on a good number of properties.”

February Highlights:

  • First-time buyers represented 27% of buyers, down from 31% in January 2023 and 29% in February 2022, showing the impact of higher rates and tightening credit;
  • 28% of sales were all-cash, mostly unchanged from 29% in January and up from 25% in February 2022, showing that cash buyers are taking advantage of weaker market conditions relating to higher interest rates;
  • 57% of respondents reported that properties sold in less than one month. This is up from 54% a month ago and down from 84% in February 2022;
  • Due to the lack of housing inventory, the pace of the market, and the use of technology, 7% of buyers purchased a home based only on a virtual tour, showing, or open house without physically seeing the home. This metric rose from January and dropped from one year ago.

March 22nd 2023


March 21st-22nd FOMC Meeting

Collapse of SVB Financial–the biggest bank failure since 2008–and additional bank woes involving Credit Suisse and First Republic–increased concerns that higher interest rates are threatening lenders.

At the U.S. Federal Reserve meeting March 21-22, bank failures were reviewed, along with the retail sales report and reports on producer prices, housing starts and industrial production for February as a decision was weighed on another rate increase.


Fed Rate Decision

The Fed’s decision on an interest rate increase was announced following deliberations over the banking crisis and new inflation data: A raise of 25 basis points, rather than a pause, and a change in guidance–specifically that some additional adjustments will be likely required–in lieu of continuing adjustments. Interest rate changes are to be made meeting to meeting.

Many experts anticipated an increase of a 50 basis points, but revised their expectations to 25 basis points prior to the Fed’s announcement as a result of banking turmoil.

April 12 2023



April 12th CPI Report

From CNBC:

  • The consumer price index rose 0.1% in March and 5% from a year ago, below estimates.
  • Excluding food and energy, core CPI accelerated 0.4% and 5.6%, both as expected.
  • Energy costs fell and food prices were flat. Used vehicle prices also declined.
  • A 0.6% increase in shelter costs was the smallest gain since November, but still resulted in prices rising 8.2% on an annual basis.


Slowing Inflation

The month of March saw cooling Inflation as fallout from banking turmoil and the Federal Reserve’s continued interest rate increases impacted the economy.

The Consumer Price Index CPI), measuring the costs for goods and services in the U.S. economy, rose 0.1% for the month against a Dow Jones estimate for 0.2%, and 5% from a year ago versus the estimate of 5.1%.

Excluding food and energy, core CPI increased 0.4% and 5.6% on an annual basis (as expected).

The data shows that inflation, while well above where the Fed wants it, is showing continuing signs of decelerating. Policymakers target inflation around 2% as a healthy and sustainable growth level. The headline increase for CPI was the smallest since June 2021.

April 24 2023


Fed Inflation “Nowcast” April 24, 2023
Month CPI Core CPI PCE Core PCE Updated
April 2023 0.59 0.46 0.46 0.37 04/24
March 2023 0.08 0.35 04/24
Note: If the cell is blank, it implies that the actual data corresponding to the month for that inflation measure have already been released.
Quarter CPI Core CPI PCE Core PCE Updated
2023:Q1 3.93 4.74 04/24
2023:Q2 3.89 5.37 3.26 4.44 04/24
If the cell is blank, it implies that the actual data corresponding to the quarter for that inflation measure have already been released.
Month CPI Core CPI PCE Core PCE Updated
April 2023 5.17 5.56 4.37 4.65 04/24
March 2023 4.10 4.58 04/24
Note: If the cell is blank, it implies that the actual data corresponding to the month for that inflation measure have already been released.v


May 1 – 2nd 2023


More Regional Bank Woes
From CNBC:
May 1 2023

JPMorgan Chase, already the largest U.S. bank by several measures, emerged as winner of the weekend auction for First Republic. It will get all of the ailing bank’s deposits and a “substantial majority of assets,” the New York-based bank said.

The FDIC estimates the deal will cost the Deposit Insurance Fund roughly $13 billion. The final cost will be determined once the FDIC terminates receivership.


Drops In Bank Stock Prices

From Yahoo Finance:

MAY 2 2023

PacWest (PACW) and Western Alliance (WAL) plunged May 2nd with stock drops of more than 20% in morning trading come one day after JPMorgan Chase (JPM) absorbed First Republic (FRC), in a deal designed to restore stability to the banking system after two months of turmoil.

Other regional banks also plummeted, including Zions (ZION), Comerica (CMA) and Key (KEY).

May 4 2023


FED Meeting Rate Decision

May 4 2023

The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on reserve balances to 5.15 percent, effective May 4, 2023. in a target range of 5 to 5-1/4 percent. rate of 5.25 percent and with an aggregate operation limit of $500 billion




MAY 3 2023

  • Markets already priced in the near-100% probability of a quarter percentage point increase. The question is how the central bank proceeds next.
  • Economic and market crosscurrents will lead the Fed to signal a policy pivot this week, according to Goldman Sachs.
  • While the market is anticipating a “dovish” Fed inclined to halt rate hikes and start cutting later this year, stubbornly high prices could change that.

May 23 2023



FED Rate Pause

May 23 2023

St. Louis Fed President James Bullard said that the central bank will need to raise interest rates two more times this year to stamp out inflation.

Bullard, who’s always leaned more hawkish on policy, has been a proponent for aggressive rate hikes since last year.

“I think we’re going to have to grind higher with the policy rate in order to put enough downward pressure on inflation and to return inflation to target in a timely manner,” Bullard said at an event in Florida on Monday.

“I’m thinking two more moves this year — exactly where those would be this year I don’t know — but I’ve often advocated sooner rather than later.”

In 10 consecutive rate hikes, policymakers have raised the benchmark rate from near zero to the 5%-5.25% range.

The last three moves have been quarter-point hikes, and the banking turmoil that started in March has led Powell to claim that tighter lending conditions could do some of the Fed’s job for it.

But Bullard still wants to keep a foot on the gas.

“As long as the labor market is so good it’s a great time to fight inflation,” he said. “Get it back to target. Get this problem behind us and not replay the 1970s.”




MAY 23 2023

Minneapolis Fed President Neel Kashkari said Monday that it’s tough to know whether to pause rate hikes or keep going in June.

“I think right now it’s a close call, either way, versus raising another time in June or skipping,” Kashkari said in a CNBC interview. “What’s important to me is not signaling that we’re done.”

Waiting for more information on prices and payrolls could be key, and Powell said last week that they could “afford” to take time to assess the impact of rate hikes.

As of now, fed fund futures are implying about a 74% chance of a pause at the next meeting.

To economists at Pantheon Macroeconomics, any additional hikes bode poorly for the economy.  They think it’s time for central bankers to recognize that they’ve already done enough.

“Raising rates further — actually, not cutting rates very soon — will amount to overkill,” the experts said Monday.

Given that they’ve just embarked on the steepest hiking cycle in four decades. The group expects inflation to keep falling whether the Fed hikes or not.

As far as recession risks go, Pantheon maintained that policymakers pushing for a June rate hike are “playing with fire.”

July 23 2023


FED Meeting Rate Decision
July 27 2023

The Committee decided to raise the target range for the federal funds rate to 5-1/4 to 5-1/2%. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.

In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.

The Committee is strongly committed to returning inflation to its 2 percent objective.


Record Levels


JUL 26 2023


  • The Federal Reserve approved a much-anticipated interest rate hike that takes benchmark borrowing costs to their highest level in more than 22 years.
  • The quarter percentage point increase will bring the fed funds rate to a target range of 5.25%-5.5%.
  • While policymakers indicated at the June meeting that two rate hikes are coming this year, markets are pricing in a better-than-even chance that there won’t be any more moves this year.
  • Chair Jerome Powell said the central bank will make data-driven decisions on a “meeting-by-meeting” basis.

“Markets initially bounced following the meeting but ended mixed. The Dow Jones Industrial Average continued its streak of higher closings, rising by 82 points, but the S&P 500 and Nasdaq Composite were little changed. Treasury yields moved lower.”

“It is time for the Fed to give the economy time to absorb the impact of past rate hikes,” said Joe Brusuelas, U.S. chief economist at RSM. “With the Fed’s latest rate increase of 25 basis points now in the books, we think that improvement in the underlying pace of inflation, cooler job creation and modest growth are creating the conditions where the Fed can effectively end its rate hike campaign.”

October  25 2023



U.S. Mortgage Rates Peak For 2023
OCT 25 2023

The interest rate on the most popular U.S. home loan last week jumped to the highest since September 2000, marking its seventh straight weekly increase and driving mortgage applications to a 28-year low, a survey showed on Wednesday.

The 7.9% average contract rate for a 30-year fixed-rate mortgage during the week ended Oct. 20 was up 20 basis points from the prior week, the Mortgage Bankers Association said.


New Home Sales

NOV 27 2023

  • New home sales drop 5.6% to a rate of 679,000 units
  • Median house price plunges 17.6% to $409,300 from year ago

Sales of new U.S. single-family homes fell more than expected in October as higher mortgage rates squeezed out buyers even as builders cut prices, but the setback is likely temporary amid a persistent shortage of previously owned houses on the market.

The decline in sales reported by the Commerce Department on Monday was in line with a recent deterioration in homebuilder sentiment, which came as the rate on the popular 30-year fixed-mortgage approached 8%, leaving builders anticipating slower buyer traffic.

November 10, 2023



FED Rate Pause

November 08, 2023

The 30-year fixed-rate mortgage (FRM) saw its second week of declines, this week averaging 7.5%, down from 7.76% last week, according to the latest Primary Mortgage Market Survey® (PMMS®) released by Freddie Mac.

  • 30-year fixed-rate mortgage averaged 7.5% as of November 9, 2023, down from last week when it averaged 7.76%. A year ago at this time, the 30-year FRM averaged 7.08%.
  • 15-year fixed-rate mortgage averaged 6.81%, down from last week when it averaged 7.03%. A year ago at this time, the 15-year FRM averaged 6.38%.

“As Treasury yields decline, the 30-year fixed-rate mortgage dropped a quarter of a percent, the largest one-week decrease since last November,” said Sam Khater, Freddie Mac’s chief economist. “Incoming data show that household debt continues to rise, primarily due to mortgage, credit card and student loan balances. Many consumers are feeling strained by the high cost of living, so unless mortgage rates decrease significantly, the housing market will remain stagnant.”


Increased Activity

From MPA

NOV 08 2023

Mortgage applications saw a modest rise of 2.5% for the week ending November 3, marking a slight rebound in borrower activity after mortgage rates posted the largest single-week decline since July 2022.

The upswing was recorded across both refinancing and home purchase applications, with the Mortgage Bankers Association’s purchase index edging up by 3% on a seasonally adjusted basis and the refinance index improving by 2% from the week before.

Joel Kan, MBA’s deputy chief economist, noted a significant drop in mortgage rates, contributing to the increase in applications.

“The 30-year fixed mortgage rate dropped by 25 basis points to 7.61%, the largest single-week decline since July 2022,” said Kan, attributing the decline to several factors, including the latest Treasury issuance update, a dovish stance from the Federal Reserve, and signs of a slowing job market.

Rate pauses continued throughout end 2023. In 2024, another bumpy ride…

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