The Federal Reserve raised interest rates by 25 basis points on Wednesday in a unanimous decision, a move ITR Economics senior economist Lauren Saidel-Baker called an inflection point in interest rate policy because it marks the start of a raising cycle rather than the cuts discussed as recently as January. Saidel-Baker told NYSE Live that the unanimous vote shows Fed Chair Kevin Warsh succeeded in building consensus on the committee, and that the vast majority of voting members project at least one more rate hike, possibly two, this year, with the tightening path potentially extending into 2027 and 2028. She said the inflation fight is not finished at just 25 basis points, citing an expanding money supply, lingering tariff pressures and heavy capital expenditure in the data center and AI segment, and flagged declining real incomes as the critical metric because they determine whether consumers can keep spending. With roughly two-thirds of GDP driven by consumer spending, she said households may increasingly draw on savings or credit as real incomes fall, and noted the 10-year Treasury yield hitting 5% matters because market-set borrowing costs, not the federal funds rate, drive mortgage and credit card rates. Separately, Saidel-Baker commented on Warren Buffett's announcement that he is stepping down as chair of Berkshire Hathaway, calling his legacy a major mark on value investing and philanthropy.
Berkshire Hathaway IncFed raised rates 25bp and signaled more hikes, pushing the effective federal funds rate higher.
Article notes the 10-year Treasury yield hitting 5% amid the Fed's tightening cycle, implying higher yields.
