Benchmark interest rates rise

<p>Kia ora,</p><p>Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news it is all about the fast-rising benchmark interest rates and steeper curves today. And higher rates may be here to stay. We should remember that in the decade prior to the GFC, which ushered in 'lower for longer', the benchmark UST 10yr rate average 4.52%. We could well be a 'higher for longer' period now.</p><p>The US Fed kicked off the shift in rates with its 'hawkish hold' yesterday and strong signal that it will raise rates again before the end of the year. But overnight there were many other central banks with policy decisions. The Philippines and Indonesia kept their rates unchanged as expected. So did the Swedes. Switzerland was expected to raise its rate by +25 bps, but in the end it didn't, leaving it at 1.75%. But the <a href="https://www.norges-bank.no/tema/pengepolitikk/Rentemoter/2023/september-2023/" target="_blank"><strong>Norwegians</strong></a> did, taking their rate up +25 bps to 4.25%. The Taiwanese left theirs at 1.875% unchanged, as did Hong Kong. And the <a href="https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2023/september-2023" target="_blank"><strong>English</strong></a> (5.25%) and South Africans (8.25%) both held. For the English it was a close-run thing, a 5-4 vote to not raise. And <a href="https://www.tcmb.gov.tr/wps/wcm/connect/tr/tcmb+tr/main+menu/duyurular/basin/2023/duy2023-35" target="_blank"><strong>Turkey</strong></a> raised their rate by another eye-watering +500 bps to 30%. Now that's a 'real' move up.</p><p>The US Fed's hawkishness was bolstered by more strong signals from their labour market. <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20232056.pdf" target="_blank"><strong>Initial US jobless claims</strong></a> stayed very low at +176,000 last week and an eight month low with