One Source of Inflation: The Fed’s Own Payment Services

Prices for the central bank’s Fedwire payment service went up 18% this year

Soft inflation reports may have been a factor preventing the Federal Reserve from raising interest rates Wednesday. But one place there has been plenty of pricing pressure is in payment services run by the central bank itself.

The Fed last October approved an 18% price increase in a critical payment service called Fedwire, which took effect this year. Banks use the service to transfer U.S. Treasury bonds and other securities electronically across Wall Street in real time.