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The US economy’s strength and continued tight labor markets could warrant further Federal Reserve interest rate increases, Fed Chair Jerome Powell said on Thursday in remarks that appeared to push back against market expectations that the central bank’s rate hikes had reached an end.

“We are attentive to recent data showing the resilience of economic growth and demand for labor. Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said in remarks to the Economic Club of New York.

For inflation to durably return to the Fed’s 2% target, it “is likely to require a period of below-trend growth and some further softening in labor market conditions,” Powell said.

Since the Fed began raising interest rates in March of 2022 the unemployment rate has varied little from the current 3.8%, below the level most Fed officials feel is noninflationary, and overall economic growth has generally remained above the 1.8% annual growth rate Fed officials see as the economy’s underlying potential.

The Fed is “proceeding carefully” in evaluating the need for any further rate increases, Powell said, likely leaving intact current expectations that the Fed will leave its benchmark policy rate steady at the current 5.25% to 5.5% range at the upcoming Oct. 31-Nov. 1 meeting.

There is evidence the labor market is cooling, Powell said, with some important measures approaching levels seen even before the pandemic.

Powell also noted a number of fresh “uncertainties and risks” that need to be accounted for as the Fed tries to balance the threat of allowing inflation to rekindle against the threat of leaning on the economy more than is necessary.

Those include new geopolitical risks to the economy from the “horrifying” attack on Israel by the Palestinian militant Hamas group, Powell said.

“Our institutional role at the Federal Reserve is to monitor these developments for their economic implications, which remain highly uncertain,” Powell said. “Speaking for myself, I found the attack on Israel horrifying, as is the prospect for more loss of innocent lives.”

He also noted recent market-driven increases in bond yields that have helped to “significantly” tighten overall financial conditions.

“Persistent changes in financial conditions can have implications for the path of monetary policy,” Powell said, with higher market-based interest rates, if sustained, doing the same job as Fed rate increases.

But the Fed chair also voiced what has become a lingering theme at the central bank: That despite steady progress on lowering inflation, the battle isn’t over, with further rate increases still a possibility and the duration of tight monetary conditions still to be determined.

“Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said, citing the progress made since inflation peaked last year but also noting that one of the Fed’s main measures of inflation remained at 3.7% through September, nearly twice the central bank’s target.

“We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters,” Powell said. “The path is likely to be bumpy and take some time…My colleagues and I are united in our commitment to bringing inflation down sustainably to 2%.”

The weeks since the Fed’s September meeting have been unusually turbulent, with worries about regional war in the Middle East rising and bond markets driving market interest rates higher, tightening the financial conditions faced by businesses and households somewhat independent of the Fed.

Data since the Fed’s last meeting also has shown US job growth reaccelerating unexpectedly, retail sales defying predictions of a slowdown and varying measures of prices offering inconsistent signals about whether inflation is on track to return to the Fed’s 2% target in a timely manner.

Powell’s appearance comes less than 48 hours before the beginning of the traditional quiet period ahead of the rate-setting Federal Open Market Committee’s meeting on Oct. 31-Nov. 1. While a handful of other Fed officials have appearances later on Thursday and Friday before blackout begins on Saturday, it is Powell’s remarks that will set the tone for policy expectations heading into that meeting.

Should they leave rates unchanged in two weeks as is now widely expected, it would mark the first back-to-back meetings with no rate increase since the Fed kicked off its hiking campaign in March 2022.

A Reuters poll of more than 100 economists published on Wednesday showed more than 80% expect no rate hike at the next meeting, and most also believe the Fed is done with rate hikes even though a majority of policymakers at their September meeting projected one more quarter-point increase was likely to be needed by year end.

Many in the poll offered the caveat that if progress on inflation stalls out or reverses, the Fed would not hesitate to resume raising rates.

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Hamas releases last hostages included in first phase of ceasefire – as hundreds of Palestinian prisoners are freed

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Hamas releases last hostages included in first phase of ceasefire - as hundreds of Palestinian prisoners are freed

Hamas has handed the last four Israeli hostage bodies that were included in the first phase of the ceasefire deal to the Red Cross.

The bodies of four Israeli men have been handed over in exchange for the release of more than 600 Palestinian prisoners.

A Red Cross convoy carrying dozens of released prisoners has been seen leaving Israel’s Ofer prison in the West Bank before arriving in the Palestinian city of Ramallah.

The group got off the bus to cheers from hundreds congregated outside, with some of the released men – clad in green jackets and keffiyehs – hoisted aloft by the crowd.

It was not immediately clear when the next detainees would be released.

Meanwhile, the office of Israeli Prime Minister Benjamin Netanyahu confirmed the country had received the four bodies.

It said in a statement: “The coffins were handed over to the IDF at the Kerem Shalom crossing through Egyptian mediation. An initial identification process has now begun on Israeli territory.

“The families of the abductees are being continuously updated on the situation and will be given an official notification at the end of the full identification process.

“The public is asked to respect the families’ privacy and refrain from spreading rumours and information that is not official and well-founded. We will continue to update with reliable information in the future.”

The handover would complete both sides’ obligations under the Gaza ceasefire’s first phase, during which Hamas agreed to return 33 hostages, including eight bodies, in exchange for nearly 2,000 Palestinian prisoners.

Palestinian prisoners released from West Bank
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Palestinian prisoners released from West Bank

Hours before the four bodies were transferred on Wednesday, the family of hostage Tsachi Idan said in a statement: “Our family has received with great sadness Hamas’s announcement that our beloved Tsachi is no longer alive and that his body will be returned to Israel during the night.”

It continued: “Since Tsachi was kidnapped, we received several signs of life, and in the previous deal last November, Tsachi was alive and expected to be released.

“We appreciate the tremendous love and support we are receiving from the citizens of Israel, the media, and the Nahal Oz community.”

The body of Tsachi Idan has been handed over. Pic: Bring Them Home
Image:
The body of Tsachi Idan has been handed over. Pic: Bring Them Home

Egyptian mediators had earlier confirmed that they secured a breakthrough that would allow the handover of the final four hostage bodies due in the first phase of the deal after a days-long impasse.

Hamas said an agreement had been reached for the exchange of hostages for prisoners, but said their release would be conducted under a new mechanism.

It said the European Hospital in Khan Younis in southern Gaza was preparing to receive prisoners after their release.

Israel had previously refused to release more than 600 Palestinian prisoners and detainees on Saturday after accusing Hamas of breaching the ceasefire deal by staging what it considered an offensive public handover of hostages in Gaza.

The staged ceremonies in which living hostages and coffins containing hostage remains were displayed on stage before a crowd in Gaza drew strong criticism, including from the United Nations.

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Gaza hostage family mourned in Israel

Days earlier, the ceasefire deal which came into effect on 19 January was held up briefly when Hamas handed over the remains of an unidentified woman instead of mother-of-two Shiri Bibas before delivering the correct body the next day.

With the 42-day truce due to expire on Saturday, it also remains unclear whether an extension will be agreed or whether negotiations can begin on a second stage of the deal, which would see the release of the final 59 hostages left in Gaza.

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Hamas said that, so far, it had not received any proposal for the second stage.

Despite numerous hiccups, the ceasefire deal has so far held up.

But moving to a second phase would require agreements on issues that have proved impossible to bridge in the past, including the post-war future of Gaza and Hamas, which Israel has vowed to eliminate as a governing force.

Underlining the precariousness of the ceasefire, the Israeli military said a projectile was fired from Gaza but fell within
the enclave. It said it was investigating the incident.

The exchange comes on the same day as the funeral for Ms Bibas and her two sons – four-year-old Ariel, and nine-month-old Kfir – who came to symbolise the trauma felt by many Israelis after the 7 October attack.

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UK

Sir Keir Starmer arrives in Washington for talks with President Trump – and repeats calls for security guarantee for Ukraine

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Sir Keir Starmer arrives in Washington for talks with President Trump - and repeats calls for security guarantee for Ukraine

Prime Minister Sir Keir Starmer brushed aside growing tensions between the White House and Europe over Ukraine on Wednesday, saying he trusted Donald Trump and wanted the “special relationship” to go “from strength to strength”.

Speaking to reporters ahead of a crucial meeting at the White House, Sir Keir insisted that the UK was working “in lockstep” with the president on the matter of Ukraine.

Asked if he could trust President Trump in light of what has happened in recent weeks, the prime minister replied “yes”.

“I’ve got a good relationship with him,” Sir Keir said.

“As you know, I’ve met him, I’ve spoken to him on the phone, and this relationship between our two countries is a special relationship with a long history, forged as we fought wars together, as we traded together.

“And as I say, I want it to go from strength to strength.”

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The prime minister has now arrived in Washington, but even before he touched down, the choreography of the trip hit a little turbulence as President Trump appeared to pour cold water on the prospect of a US military backstop for Ukraine as part of any peace deal – a key UK and European demand.

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Can Starmer ‘win’ in Washington?

“I’m not going to make security guarantees beyond very much,” Mr Trump said at his first cabinet meeting on Wednesday.

“We’re going to have Europe do that because Europe is the next-door neighbour.”

His remarks seemed at odds with those made by the prime minister on the way to Washington as he reiterated how important a US military backstop was for Ukraine.

“We all want a peaceful outcome,” the prime minister said.

“It’s got to be a lasting peace, and that requires us to put in place an effective security guarantee.

“Exactly what the configuration of that is, exactly what the backstop is, is obviously the subject of intense discussion.”

He added: “But the reason I say the backstop is so important is that the security guarantee has to be sufficient to deter Putin from coming again because my concern is if there is a ceasefire without a backstop, it will simply give him the opportunity to wait and to come again because his ambition in relation to Ukraine is pretty obvious, I think, for all to see.”

Read more:
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While European allies such as the UK and France are preparing to put peacekeeping troops on the ground to police the Ukraine-Russian borders, leaders have been clear that US support is essential to containing President Putin and securing that support is the key purpose of the prime minister’s trip to Washington.

President Zelenskyy has also demanded that clear guarantees of US military backing and security be part of his deal with the US on critical minerals, but a framework agreed this week by both sides did not include an explicit reference to any such support.

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Putin is ‘very cunning’

Ahead of the trip to Washington, the prime minister pledged to increase UK defence spending – a key ask of all NATO members by President Trump – and reiterated his commitment to putting British boots on the ground in Ukraine as he attempts to lower tensions between Europe and the US and demonstrate to President Trump that the UK is willing to play its part.

“When it comes to defence and security, we have for decades acted as a bridge because of the special relationship we have with the US and also our allegiance to our European allies,” Sir Keir said.

“I’ve been absolutely resolute that we’re not going to choose between one side of the Atlantic and the other. We will work with the US, we will work with our European allies, that’s what we’ve done for decades, and it’s what we’ll do whilst I’m prime minister.”

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Sir Keir also gave the British public a “message of reassurance” after his decision to accelerate defence spending in the face of Russian aggression, saying he had done it to “ensure their safety” and increased investment would bring opportunities.

“I want to reassure the British public that what we’re doing is to ensure their safety, their security and defence of our country.

“I want to also be clear that this is an opportunity because, as we increase defence spending, then that gives an opportunity for our industrial strategy, for jobs across the UK, good well-paid jobs in defence.”

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Environment

Honda’s $99 Prologue EV lease offer is too good to be true, but it’s still a crazy deal right now

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Honda's  Prologue EV lease offer is too good to be true, but it's still a crazy deal right now

A nearly $50,000 electric SUV for just $99 a month? If that sounds too good to be true, it’s because it kind of is. One Honda dealer is promoting a Prologue lease offer for just $99 for 24 months, but you may have a hard time getting your hands on one.

Honda Prologue EV listed for lease at just $99 per month

Honda’s electric SUV is already one of the most popular EVs in the US. In December, it was the third top-selling electric vehicle trailing only the Tesla Model Y and Model 3.

Since the first models hit the streets last March, the Prologue climbed to become the seventh best-selling EV in 2024, beating out Chevy’s new Equinox EV and even the Rivian R1S.

Although Honda, like most, is offering generous discounts to clear inventory, one dealer is taking it to the extreme.

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Buena Park Honda in California is promoting a Honda Prologue lease deal for just $99 for 24 months (plus taxes) with a $3,977 down payment. The crazy low offer is for the 2024 Prologue EX FWD with 10,000 miles a year, but there’s a catch.

Honda-$99-Prologue-offer
Honda Prologue listed for lease at just $99 per month (Source: Buena Park Honda)

For one, there’s only one model listed in its inventory, and it’s the Elite trim, listed at $51,850 (MSRP of $59,350 minus the $7,500 federal EV tax credit). You will also need a trade-in vehicle, including a 2014 or newer Honda or competitor brand.

A salesperson from the dealership told online auto research firm CarsDirect that the EX models are out of stock because they are “really hard to get your hands on.”

Honda-$99-Prologue-offer
2024 Honda Prologue Elite (Source: Honda)

Also, if you factor in the down payment and $595 acquisition fee, the effective cost is $295 per month. That’s only slightly better than the official $239 for a 24-month lease offer Honda is promoting. With just $1,499 due at signing, the effective rate is $301 per month, or just $6 more.

2024 Honda Prologue trim Starting Price
(w/o $1,395
destination fee)
Starting price after
tax credit

(w/o $1,395
destination fee)
Starting price after
tax credit

(with $1,395
destination fee)
EPA Range
(miles)
EX (FWD) $47,400 $39,900 $41,295 296
EX (AWD) $50,400 $42,900 $44,295 281
Touring (FWD) $51.700 $44,200 $45,595 296
Touring (AWD) $54,700 $47,200 $48,595 281
Elite (AWD) $57,900 $50,400 $51,795 273
2024 Honda Prologue prices and range by trim

Although this is offered in California and other CARB emissions states, the Prologue is on sale in different regions for just $209 for 24 months. With $2,699 due at signing, the effective rate is still just $321 per month.

Honda says the Prologue “delivers the same level of quality, reliability, and performance” you expect from the brand.

Honda-$99-Prologue-EV-offer
2024 Honda Prologue Elite interior (Source: Honda)

Based on GM’s Ultium platform, the electric SUV has an EPA-estimated range of up to 296 miles. Although it shares GM’s tech, Honda fine-tuned the Prologue with an added multi-link front and rear suspension to give it a more “sporty” drive.

The Prologue has more interior space, with 111.7 cu ft of passenger volume, than the Honda CR-V (106 cu ft). It also features an 11.3″ touch-screen infotainment system with built-in Google, Apple CarPlay, and Android Auto support, something GM has moved away from.

Ready to find deals in your area? Although it may not be $99, these offers are hard to pass up for a nearly $50,000 electric SUV. Check out our link to find deals on the Honda Prologue near you today.

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