US interest rates held after inflation fell to less than half UK’s rate
The Federal Reserve, which is the US central bank, has held interest rates after 10 consecutive rises.
The decision was announced a day after official figures showed US inflation was 4% – less than half the UK’s current level of 8.7%.
Latest data from the Bureau of Labor Statistics said prices rose 4% in May, the lowest pace of increases in more than two years.
Following the Fed’s announcement, US interest rates will continue to be at 5% to 5.25%, a high not previously seen since 2007.
The Fed had been increasing rates in an effort to dampen economic activity and bring price rises down to the regulator’s 2% target.
In the UK, however, inflation stood at 8.7% in April.
The slow reduction from double digit inflation and a labour market with low unemployment and rising wages has led to market expectations that the Bank of England will hike the interest rate to 5.75%.
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The Bank of England in May raised its base rate up 0.25 percentage points to 4.5%.
That expected increase has led to banks and building societies increasing their mortgage rates and pulling some mortgage products from the market in preparation for higher rates.
New information about inflation in the UK will be released by the Office for National Statistics (ONS) next Wednesday.
In the US, the interest rate is a range, rather than a single percentage – unlike the UK – because the Fed is not permitted to set a specific figure. The figures are a target rate, set to guide lenders.
Once again the Fed said the US banking system is “sound and resilient”.
“Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain,” it added.
Further rises were not ruled out.
“In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the [rate-setting federal open market] committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the committee said.
Police in Tennessee have discovered 14 improvised explosive devices in a man’s home as they were arresting him, the local sheriff’s office said.
Officers were executing a warrant in the home of Kevin Wade O’Neal in Old Fort, about 45 miles (70km) east of Chattanooga, after he had threatened to kill public officials and law enforcement personnel in Polk County.
After arresting the 54-year-old, officers noticed “something smouldering” in the bedroom where he was found.
Kevin Wade O’Neal. Pic: Polk County Sheriff’s Office
On closer inspection, they discovered an improvised explosive device and evacuated the house until bomb squad officers arrived at the scene.
Fourteen devices were found inside the property – none of which detonated.
Improvised explosive devices were found in Kevin Wade O’Neal’s home. Pic: Polk County Sheriff’s Office
Kevin Wade O’Neal’s home in Old Fort, Tennessee. Pic: Polk County Sheriff’s Office
O’Neal was charged with 11 counts of attempted first-degree murder, corresponding to nine officers and two other people inside the property when the suspect tried to detonate the devices.
He also faces 14 counts of prohibited weapons and one count of possession of explosive components.
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O’Neal is being held at the Polk County jail and his bond is yet to be determined.
Donald Trump says he has ordered two nuclear submarines to be positioned in the “appropriate regions” in a row with former Russian president Dmitry Medvedev.
It comes after Mr Medvedev, who is now deputy chair of Russia‘s Security Council, told the US president on Thursday to remember Moscow had Soviet-era nuclear strike capabilities of last resort.
On Friday, Mr Trump wrote on social media: “Based on the highly provocative statements of the Former President of Russia, Dmitry Medvedev, who is now the Deputy Chairman of the Security Council of the Russian Federation, I have ordered two Nuclear Submarines to be positioned in the appropriate regions, just in case these foolish and inflammatory statements are more than just that.
“Words are very important, and can often lead to unintended consequences, I hope this will not be one of those instances. Thank you for your attention to this matter!”
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Trump: ‘We’re going to protect our people’
Speaking outside the White House later in the day, Mr Trump was asked about why he had moved the submarines and replied: “We had to do that. We just have to be careful.
“A threat was made and we didn’t think it was appropriate, so I have to be very careful. So I do that on the basis of safety for our people. A threat was made by a former president of Russia and we’re going to protect our people.”
The spat between Mr Trump and Mr Medvedev came after the US president warned Russia on Tuesday it had “10 days from today” to agree to a ceasefire in Ukraine or face tariffs, along with its oil buyers.
Moscow has shown no sign that it will agree to Mr Trump’s demands.
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On Thursday, Mr Medvedev reminded Mr Trump that Russia possessed a Soviet-era automated nuclear retaliatory system – or “dead hand”.
Mr Medvedev, a close ally of Russian President Vladimir Putin, was referring to a secretive semi-automated Soviet command system designed to launch Russia’s missiles if its leadership was taken out in a decapitating strike.
He made the remarks after Mr Trump told him to “watch his words” after Mr Medvedev said the US president’s threat of hitting Russia and its oil buyers with punitive tariffs was “a game of ultimatums” and added that “each new ultimatum is a threat and a step towards war” between Russia and the US.
Dmitry Medvedev. Pic: Reuters
Mr Medvedev served as Russia’s president from 2008 and 2012, when Mr Putin was barred from seeking a third consecutive term, but then stepped aside to let him run again.
As deputy chair of Russia’s Security Council, he has become known for his provocative and inflammatory statements since Moscow invaded Ukraine in 2022.
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