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The U.S. Federal Reserve decided to keep its benchmark interest rate unchanged at 4.25-4.50% following its March 2026 meeting, citing progress on inflation toward the 2% target but persistent economic uncertainties. Chair Jerome Powell noted that recent data shows inflation cooling to 2.4% annually, while unemployment remains low at 4.1%. The statement opened the door to possible rate cuts later this year if inflation continues to moderate.
The U.S. Federal Reserve decided to keep its benchmark interest rate unchanged at 4.75-5% following its March 2026 meeting, citing progress in cooling inflation to 2.1% while monitoring labor market strength. Chair Jerome Powell noted that recent data supports a soft landing but emphasized caution against premature rate cuts amid lingering supply chain risks. Markets reacted positively, with the S&P 500 rising 1.2% post-announcement.
Researchers at the National Bureau of Economic Research conducted an event study and fixed-effects regression using U.S. corporate bond data from 2010 to 2025, matched with detailed hurricane damage assessments. They found that firms with higher physical climate risk exposure experience 25 basis points higher bond yields immediately after hurricane events, with this premium persisting for up to two years. The yield increase grows larger when aligned with climate projections for 2050, indicating markets price in long-term risks. This reveals how physical climate events directly elevate corporate financing costs, potentially reshaping investment in vulnerable sectors.
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