The Fed’s Latest Challenge: Keeping Benchmark Rate in Check
Central bank wants rate closer to middle of its range and has said it could make more tweaks if it doesn’t budge
The Federal Reserve recently tweaked how it sets short-term interest rates in an effort to keep them from drifting too high—but an increase in its benchmark raises questions about its ability to keep borrowing costs in check.
The Fed’s benchmark federal-funds rate, which sits in a target range of between 1.75% and 2%, is creeping closer to its ceiling despite an adjustment at the central bank’s last meeting that was designed to keep it closer to the middle. The benchmark now sits at 1.92%, and the Fed would like to see it…
