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Interest rates could rise further in 2027 as the Fed fights inflation. Here’s what could drive rate hikes and what investors should watch.

America’s economic ambition should reach well beyond slowing price increases. We should be expanding what this country can produce and what its people can achieve. The Federal Reserve should hold interest rates steady in October while it assesses September’s increase. Before making capital more expensive again, officials must account for the businesses, homes and opportunities […]

Peak earnings season, plus a Fed meeting and fresh inflation data.

The US Federal Reserve appears set to hold interest rates steady at its meeting next week, analysts say, despite stubbornly high inflation and with markets pricing in at least one rate hike before year-end.The central bank's Federal Open Market Committee (FOMC) will meet...

The latest group of megacap earnings, a Federal Reserve meeting and a key inflation report are all on deck.

A resurgence in oil prices dragged down stocks and bonds, stoking concerns about inflation just days ahead of the next Fed decision. Brent crude topped $116 as a flare-up in Middle East violence threatened global supply. The S&P 500 saw back-to-back losses, even as selling pressure on tech firms abated. Yields rose after the market’s best day in more than a year. Joe Weisenthal, Bloomberg ‘Odd Lots’ Podcast Co-Host, joins to wrap up the week in markets ahead of the next Fed decision and more tech earnings. Jayati Bharadwaj, Head of FX Strategy at TD Securities, weighs in on a rush to safe haven trades. Plus, Bloomberg News AI Infrastructure Reporter Dina Bass joins to discuss her reporting on Blackstone's bet on chips driving a debt boom. Finally, Zscaler CEO Jay Chaudhry on internet security in light of new PHP vulnerabilities across the web. (Source: Bloomberg)

Housing data deteriorated further in September, according to separate reports Tuesday.

The AI boom is sucking up all the capital. The Federal Reserve is raising rates to try to cool inflation. And one sector is bearing the brunt of the pain from both: housing . The big picture: The situation is lose-lose for both homebuilders and homebuyers. Builders are facing more expensive capital and bidding for scarce construction-related resources. Would-be buyers are being quoted some of the highest mortgage rates of this century. New September housing starts data out Tuesday morning puts an exclamation point on what has been a slow-moving disaster for a sector that plays an outsized role in the economic cycle and in Americans' basic living standards. By the numbers: The number of housing units started by builders fell 5.2% last month, the Census Bureau said , to 1.22 million. It's down 7.4% year over year and near post-pandemic lows. Starts of single-family homes fell 4.6% to their lowest level since March 2023. Pending home sales fell 7.3% last month, the National Association of Realtors said Tuesday morning, to the lowest since the data was tracked going back to 2001. Homebuilder sentiment fell this month to its lowest level since 2012, the National Association of Home Builders said Monday. State of play: The average 30-year fixed-rate mortgage rate was 7.4% earlier this month, Freddie Mac said in its most recent weekly reading. The rate was briefly higher than that in 2023, but has not been consistently above that level since the fall of 2000. That has kept homebuyers on the sidelines — while a parallel rise in borrowing costs for developers has made it harder for new projects to pencil out. In effect, the bottomless demand for capital from AI hyperscalers and the U.S. government has to squeeze something, and that something has been the housing sector. Residential investment has subtracted from overall GDP for five of the last six quarters. Zoom out: Housing affordability is the crux of Americans' broader dissatisfaction with economic conditions, and all signs point to it getting worse, not better. For all the bipartisan emphasis on increasing housing supply — most prominently in the passage of a law to encourage more building earlier this year — conditions are weighted against a building boom. Housing developers are competing with data center builders for labor and materials like copper, concrete and HVAC equipment. Of note: Restrictionist immigration policy has also crimped the supply of construction workers . "Nationwide, more than one-third of builders reported immigration enforcement activity in their market areas during the past month, causing construction delays and discouraging legal workers from reporting to work," said NAHB chairman Bill Owens, an Ohio homebuilder, in the sentiment release . Between the lines: An unfortunate side effect of relying on Fed interest rate policy for macroeconomic stabilization is that interest-sensitive sectors, particularly housing, take it on the chin when the economy shows signs of overheating. It's particularly problematic now, when persistent undersupply of housing is a defining economic challenge of our age. The bottom line: The current alignment of interest rates, housing supply and construction costs isn't making anybody happy. Builders can't afford to build, buyers can't afford to buy, and even the people sitting pretty with pre-2022 mortgages can't afford to move.

AI giants keep borrowing as rates rise, blunting the central bank’s main tool against inflation.