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US inflation rose 3.7% in September, more than economists expected and still well above the Federal Reserve’s 2% target, as the central bank weighs whether to hike interest rates again by year’s end.

The reading for the Consumer Price Index a closely watched measure of inflation that tracks changes in the costs of everyday goods and services matches the reading in August, and is slightly above the 3.6% advance that economists expected, according to data by the Bureau of Labor Statistics released Thursday.

On a monthly basis, inflation slowed to 0.4% from 0.6% in August, partly because of lower pressure from energy prices.

However, core CPI a number that excludes volatile food and energy prices and serves as a closely watched gauge among policymakers for long-term trends held steady at 0.3% month to month and rose 4.1% from a year ago, in line with expectations.

Though September’s CPI is also a cooldown from inflation’s 9.1% peak in June 2022, it still remains well above the Fed’s 2% goal. Stock futures dropped ahead of the market opening as traders increased their bets of another rate hike to around 50%, up from 30% earlier this week.

“The bigger picture is that the trend is still quite encouraging, but the fight continues,” said Olu Sonola, head of US regional economics at Fitch Ratings in New York. “They [Fed officials] may now want to extend the pause to December, given the recent increase in long-term rates.”

The gasoline index’s 2.1% advance was also a large contributor to the CPI, the data showed, though the federal agency said shelter’s 0.2% increase accounted for over half of the increase.

Gasoline experienced an eye-watering 10.6% increase last month, when AAA figures showed that the average price for a gallon of gas was $3.85.

As of Thursday, a gallon of gas in the US averages $3.65, according to AAA.

While many investors had been willing to look past the volatile energy numbers, a surprisingly resilient labor market has some worried that inflation could be more stubborn.

September’s employment report revealed that the US economy added a whopping 336,000 jobs last month — an unexpected surge that contradicts the notion the Fed may tamp down its aggressive tightening regime.

The blowout number was nearly double the 170,000 jobs economists had expected, and also sharply higher than an upwardly revised 227,000 jobs added in August, according to fresh data released by the Bureau of Labor Statistics last week.

The news sent yields on US Treasury bonds to their highest levels in 16 years and sent the Dow Jones Industrial Average into the red for 2023.

Since inflation hit a four-decade peak last summer, the central bank has worked to bring the stubborn figure down by hiking rates another 25 basis points to a 22-year high in August in hopes of an economic slowdown.

The benchmark federal funds rate currently sits between 5.25% and 5.5%. Last month, Fed officials unanimously decided to hold the record-high rate steady for the second time in six policy meetings so far this year.

But thanks to a strong labor market, the US economy has avoided a downturn, and even the Fed has said its no longer predicting the economy will slip into a recession by the end of the year.

“We must wait for more data to see if this is just a blip or if there is something more fundamental driving the increase such as higher rent increases in larger cities offsetting softer increases in smaller cities,” said US Bank of America Securities economist Stephen Juneau.

“When deciding whether to raise rates one last time this year, the FOMC will be asking whether inflation needs another nudge or if its getting to 2% on its own. Its increasingly looking like the latter,” NerdWallet data analyst Elizabeth Renter told The Post.

“The Fed, astheyreall too happy to remind us, is laser focused on getting inflation down to 2%.”

Fed Chair Jerome Powell has said central bankers will be taking a data-dependent approach moving forward, leaving more interest rate hikes before years end up in the air.

Markets were spooked ahead of the jobs report, falling more than 1% when the Labor Department released its Job Openings and Labor Turnover Summary, which showed job openings increased to 9.61 million in August up from 8.9 million in July.

With Post wires.

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Hungary bans Irish rap group Kneecap from entering country over ‘antisemitic hate speech’

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Hungary bans Irish rap group Kneecap from entering country over 'antisemitic hate speech'

Hungarian authorities have banned the Irish rap group Kneecap from entering the country, accusing them of engaging in “antisemitic hate speech” and “supporting terrorism”. 

Kneecap were set to perform at the Sziget Festival, taking place from 6 to 11 August in Budapest.

The Belfast-based band, which often shares pro-Palestinian messages during its shows, has attracted controversy in recent months after accusing the Israeli government of committing “genocide” in Gaza.

Hungarian government spokesman Zoltan Kovacs said on Thursday that the band’s members “repeatedly engage in antisemitic hate speech supporting terrorism and terrorist groups”.

“Hungary has zero tolerance for antisemitism in any form,” Kovacs said on X, adding that the band’s planned performance “posed a national security threat,” and the band has therefore been formally banned from entering Hungary for three years.

“If they enter, expulsion will follow under international norms,” Kovacs added.

Kneecap performing on the West Holts Stage during the Glastonbury Festival. Pic: Reuters
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Kneecap performing during the Glastonbury Festival in June. Pic: Reuters

Responding to the spokesman’s comments, Kneecap said “there is no legal basis” for Hungary’s decision and that “no member of Kneecap has ever been convicted of any crime in any country”.

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“It is clear that this is a political distraction and a further attempt to silence those who call out genocide against the Palestinian people,” the band said in a statement on X.

During Kneecap’s gig at Britain’s Glastonbury Festival in June, frontman Liam Óg Ó hAnnaidh, performing under the stage name Mo Chara, accused Israel of war crimes in Gaza.

Ahead of the gig, Prime Minister Keir Starmer said he doesn’t think Kneecap’s planned performance was “appropriate”.

Moglai Bap and Mo Chara of Kneecap perform at Glastonbury. Pic: Reuters
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Moglai Bap and Mo Chara of Kneecap perform at Glastonbury. Pic: Reuters

Following Kneecap’s performance at Glastonbury, a criminal investigation was launched into comments made on stage by the trio. However, police ultimately decided not to pursue further action, citing “insufficient evidence to provide a realistic prospect of conviction for any offence”.

Kneecap called the investigation “political policing intimidation”.

Mo Chara has been formally charged with a terrorism offence after allegedly displaying a flag in support of the militant group Hezbollah during a gig in November. He denies the offence.

Hezbollah is designated as a terrorist organisation by the UK and the US.

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Business

Lloyds Bank’s Charlie Nunn expects two more interest rate cuts in 2025

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Lloyds Bank's Charlie Nunn expects two more interest rate cuts in 2025

The head of the UK’s biggest mortgage lender has said he expects two more interest rate cuts this year, making borrowing cheaper.

Chief executive of Lloyds Banking Group Charlie Nunn told Sky News he expected the Bank of England to make the cuts two more times before 2026, likely bringing the base interest rate to 3.75%.

Two cuts are currently anticipated by investors, the first of which is due to be a 0.25 percentage point reduction next month.

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The banking group owns Halifax and Bank of Scotland, making it the biggest provider of mortgages.

Mr Nunn also forecast house price growth of between 2 and 3%.

“We helped 34,000 first-time buyers in the first half [of the year] alone, 64,000 last year. And of course, it was driven by the stamp duty changes in Q1 [the first three months of the year]. So Q2 [the second three months] was a bit slower, but we continue to see real strength in customers wanting to buy homes and take mortgages. So we think that will continue,” he said.

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Expect two more rate cuts this year, says Lloyds boss

It comes as the bank reported higher profits than City of London analysts had expected.

Half-yearly profit at the lender reached £3.5bn as people borrowed and deposited more.

The bank has benefited from high interest rates, set at 4.25% by the Bank of England to control inflation, which have made borrowing more expensive for households and businesses.

Over the last six months, the difference between what Lloyds earns on loans and what it pays out rose.

Mr Nunn told Sky News the profits were due to increased market share in mortgages and small business lending, as well as productivity improvements.

Despite this, Mr Nunn warned the chancellor against raising taxes on financial services, saying it was one of the highest taxed in the world.

Chancellor Rachel Reeves is expected to announce tax rises in the autumn as her vow to bring down debt has come under pressure due to the rising cost of borrowing and government spending U-turns.

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World

Inside Gaza’s Nasser Hospital – where there’s virtually no food for malnourished children

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Inside Gaza's Nasser Hospital - where there's virtually no food for malnourished children

In Nasser Hospital in southern Gaza, they have virtually nothing left to eat.

Warning: This article contains images that some readers may find distressing.

Huda has lost half her body weight since March, when Israel shut the crossings into Gaza, and imposed a blockade.

The 12-year-old girl knows she doesn’t look well.

“Before, I used to look like this,” Huda says, pointing to a picture on her tablet.

“The war changed me. Malnutrition has turned my hair yellow because I lack protein. You see here, this is how I was before the war.”

Her mother says her needs are simple: fresh fruit and vegetables, fish, maybe a little meat – but she won’t find it here.

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Huda can only wish for a brighter future now.

“Can you help me travel abroad for treatment? I want to be like you. I’m a child. I want to play and be like you,” she says.

Huda on her hospital bed
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Huda wishes for a brighter future

A children's ward in Nasser Hospital

Amir’s story

Three-year-old Amir was sitting in a tent together with his mother, father and his grandparents when it was hit by projectiles.

Medical staff carried out surgery on his intestines and were able to stop the bleeding – but they can’t feed him properly.

Instead, he’s given dextrose, a mixture of sugar and water which has no nutritional value.

Amir in hospital in Gaza
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Amir’s mother and siblings were killed in an attack that also left his father ‘in a terrible state’

Medical staff reassembled Amir's intestines
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Medical staff performed surgery on three-year-old Amir – but can’t feed him properly


Amir’s mother and his siblings were all killed in the attack and his father is no longer able to speak.

“His father is in a terrible state and won’t accept the reality. What did these children do? Tell me, what was their crime?” Amir’s aunt says.

The desperate scenes of hungry children in Gaza have not been caused by scarcity.

There’s plenty of food waiting at the crossings or held in warehouses within the territory. Israel claims the United Nations is failing to distribute it.

Pictures of Amir before
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Amir’s relative holds pictures of the toddler and his family before the war

Both Israel and the US have taken charge of the food distribution, with the UN’s hundreds of aid centres shut.

Instead, the UN tries to organise convoys but says it can’t obtain the necessary permits – and faces draconian restrictions on aid.

Sometimes food is made available at communal kitchens called ‘tikiya’.

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Malnourished girl: ‘The war changed me’

‘I want life to be how it was’

Everyone is desperate for whatever they can get – and many leave with nothing.

“It’s been two months since we’ve eaten bread,” one young girl says. “There’s no food, there’s no nutrition. I want life to go back to how it was, I want meat and flour to come in. I want the end of the tikiya.”

Read more:
Gazan doctor held in ‘inhumane’ conditions
Starvation ‘knocking on every door’ in Gaza

People wait at a soup kitchen

Dr Adil Husain, an American doctor who spent two weeks at Nasser Hospital, treated a three-year-old called Hasan while he was there.

Weighing just 6kg, Hasan should be 15kg at his age.

“He needs special feeds, and these feeds are literally miles away. They’re literally right there at the border, but it’s being blockaded by the forces, they’re not letting them in, so it’s intentional and deliberate starvation,” Dr Husain tells me.

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Hasan died two days after Dr Husain examined him.

“It’s just so distressing that this is something man-made, this is a man-made starvation, this is a man-made crisis,” he says.

Israel says it has not identified starvation, but this feels like a situation that is entirely preventable.

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