Fed Adds 25 Basis Point in 1st U.S. Rate Hike Since 2023


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- The Federal Reserve announced Wednesday (9/16) that it 
has raised U.S. interest rates by 25 basis points, bringing key U.S. lending 
rates to a range of between 3.75% and 4%.

   It was the first monetary tightening in three years by the central bank, 
with analysts expecting it to hike rates further in the near term as it tries 
to combat rising inflation. The Fed's next rate decision will be in December.

   "The Committee decided to raise the target range for the federal funds rate 
by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal 
Reserve's dual mandate," the Fed's Federal Open Market Committee said in a 
statement, referring to its objective of keeping rates sustainable while 
maximizing employment.

   Crude oil and fuel products' futures were down broadly in Wednesday's 
trading as energy markets responded to a paring of supply risks in the Middle 
East. The Fed rate hike also weighed as businesses expected higher capital 
costs in the near term, analysts said.

   By 2:04 p.m. ET, NYMEX WTI crude for October delivery fell $3.64, or 3.40%, 
to $102.19 bbl for its sharpest one-day drop in three weeks. The session low 
for WTI was $100.97.

   ICE Brent for November delivery moved down $3.27, or 3.03%, to $105.48 bbl. 
It reached a low of $104.00 earlier in the day.

   Downstream, NYMEX ULSD for October delivery eased $0.0638, or 0.98%, to 
$5.1982 gallon. It bottomed at $5.1227 during the session.

   RBOB for October retreated $0.0051, or 0.16%, to $3.4601 gallon. The low for 
the day was $3.3891.

   The U.S. dollar index gained 0.094 points to 99.435 against a basket of 
currencies.

    




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