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.
The controversial assisted dying bill is still very much alive, having received a second reading in the House of Lords without a vote.
But that doesn’t tell the whole story. Day two of debate on the bill in the Lords was just as passionate and emotional as the first, a week earlier.
And now comes the hard part for supporters of Labour MP Kim Leadbeater’s Terminally Ill Adults (End of Life) Bill, as opponents attempt to make major changes in the months ahead.
The Lords’ chamber was again packed for the debate, which this time began at 10am and lasted nearly six hours. In all, during 13 hours of debate over two days, nearly 200 peers spoke.
According to one estimate, over both days of the debate only around 50 peers spoke in favour of the bill and considerably more than 100 against, with only a handful neutral.
The bill proposes allowing terminally ill adults in England and Wales with fewer than six months to live to apply for an assisted death. Scotland’s parliament has already passed a similar law.
Image: Pro-assisted dying campaigners outside parliament earlier this month. Pic: PA
In a safeguard introduced in the Commons, an application would have to be approved by two doctors and a panel featuring a social worker, senior lawyer and psychiatrist.
The bill’s sponsor in the Lords, Charlie Falconer, said while peers have “a job of work to do”, elected MPs in the Commons should have the final decision on the bill, not unelected peers.
One of the most contentious moments in the first day of debate last Friday was a powerful speech by former Tory prime minister Theresa May, who said the legislation was a “licence to kill” bill.
That claim prompted angry attacks on the former PM when the debate resumed from Labour peers, who said it had left them dismayed and caused distress to many terminally ill people.
The former PM, daughter of a church of England vicar, had claimed in her speech that the proposed law was an “assisted suicide bill” and “effectively says suicide is OK”.
But opening the second day’s debate, Baroness Thornton, a lay preacher and health minister in Tony Blair’s government, said: “People have written to me in the last week, very distressed.
“They say things such as: ‘We are not suicidal – we want to live – but we are dying, and we do not have the choice or ability to change that. Assisted dying is not suicide’.”
Throughout the criticism of her strong opposition to the bill, the former PM sat rooted to her seat, not reacting visibly but looking furious as her critics attacked her.
Please use Chrome browser for a more accessible video player
3:06
Assisted Dying: Reflections at the end of life
There was opposition to the bill, too, from grandees of the Thatcher and Major cabinets. Lord Deben, formerly John Gummer and an ex-member of the Church of England synod, said the bill “empowers the state to kill”.
And Lord Chris Patten, former Tory chairman, Hong Kong governor and Oxford University chancellor, said it was an “unholy legislative mess” and could lead to death becoming the “default solution to perceived suffering”.
Day two of the debate also saw an unholy clash between Church of England bishops past and present, with former Archbishop of Canterbury George Carey claiming opponents led by Archbishop of York Stephen Cottrell were out of touch with public opinion.
While a large group of bishops sat in their full robes on their benches, Lord Carey suggested both the Church and the Lords would “risk our legitimacy by claiming that we know better than both the public” and the Commons.
“Do we really want to stand in the way of this bill?” he challenged peers. “It will pass, whether in this session or the next. It has commanding support from the British public and passed the elected House after an unprecedented period of scrutiny.”
But Archbishop Cottrell hit back, declaring he was confident he represented “views held by many, not just Christian leaders, but faith leaders across our nation in whom I’ve been in discussion and written to me”.
And he said the bill was wrong “because it ruptures relationships” and would “turbocharge” the agonising choices facing poor and vulnerable people.
Image: A campaigner in opposition of the bill. Pic: PA
One of the most powerful speeches came from former Tory MP Craig Mackinlay, awarded a peerage by Rishi Sunak after a dramatic Commons comeback after losing his arms and legs after a bout of sepsis.
He shocked peers by revealing that in Belgium, terminally ill children as young as nine had been euthanised. “I’m concerned we want to embed an option for death in the NHS when its modus operandi should be for life,” he said.
And appearing via video link, a self-confessed “severely disabled” Tory peer, Kevin Shinkwin, was listened to in a stunned silence as he said the legislation amounted to the “stuff of nightmares”.
He said it would give the state “a licence to kill the wrong type of people”, adding: “I’m the wrong type. This bill effectively puts a price on my head.”
Please use Chrome browser for a more accessible video player
2:09
Assisted Dying vote: Both sides react
After the debate, Labour peer and former MP Baroness Luciana Berger, an opponent of the bill, claimed a victory after peers accepted her proposal to introduce a special committee to examine the bill and report by 7 November.
“The introduction of a select committee is a victory for those of us that want proper scrutiny of how these new laws would work, the massive changes they could make to the NHSand how we treat people at the end of their lives,” she told Sky News.
“It’s essential that as we look at these new laws we get a chance to hear from those government ministers and professionals that would be in charge of creating and running any new assisted dying system.”
After the select committee reports, at least four sitting Fridays in the Lords have been set aside for all peers – a Committee of the whole house – to debate the bill and propose amendments.
Report stage and third reading will follow early next year, then the bill goes back to the Commons for debate on any Lords amendments. There’s then every chance of parliamentary ping pong between the two Houses.
Kim Leadbeater’s bill may have cleared an important hurdle in the Lords. But there’s still a long way to go – and no doubt a fierce battle ahead – before it becomes law.
The UK and Irish governments have agreed a new framework to address the legacy of the Northern Ireland Troubles.
The framework, announced by Northern Ireland Secretary Hilary Benn and the Irish deputy prime minister, Simon Harris, at Hillsborough Castle on Friday, replaces the controversial Legacy Act, introduced by the Conservative government.
“I believe that this framework, underpinned by new co-operation from both our governments, represents the best way forward to finally make progress on the unfinished business of the Good Friday Agreement,” said Mr Benn.
He added that it would allow the families of victims killed during violence in Northern Ireland between the 1960s and 1990s, to “find the answers they have long been seeking”.
The proposed framework includes a dedicated Legacy Commission to investigate deaths during the Troubles, a resumption of inquests regarding cases from the conflict which were halted by the Legacy Act.
There will also be a separate truth recovery mechanism, the Independent Commission on Information Retrieval, jointly funded by London and Dublin.
“Dealing with the legacy of the Troubles is hard, and that is why it has been for so long the unfinished business of the Good Friday Agreement,” said Mr Benn.
More on Politics
Related Topics:
Mr Harris described the framework as a “night and day improvement” on the previous act. Scrapping the Legacy Act, introduced in 2023, was a Labour government pledge.
What this means
A section of the Legacy Act offered immunity from prosecution for ex-soldiers and militants who cooperate with a new investigative body. This provision was ruled incompatible with human rights law.
The 2023 law was opposed by all political parties in Northern Ireland, including pro-British and Irish nationalist groups.
Image: The agreement replaces a controversial law. (Pic: PA)
The Irish government, which brought a legal challenge against Britain at the European Court of Human Rights, also opposed it.
Both governments said the new plans will ensure it is possible to refer cases for potential prosecutions.
Image: Sir Keir Starmer’s Labour government had pledged to improve relations with Ireland. (Pic: PA)
It will ‘take time’ to win families’ confidence
Irish Foreign Minister, Simon Harris, said in a statement that the framework could deliver on Ireland’s two tests of being human rights-compliant and securing the support of victims’ families, if implemented in good faith.
He added that winning the confidence of victims’ families would take time.
Dublin will revisit its legal challenge against Britain if the tests are met, it said.
Restoring strained relations
The UK’s Labour government had sought to reset relations with Ireland, after they were damaged by the process of Britain leaving the European Union.
The Conservative government had defended its previous approach, arguing prosecutions were unlikely to lead to convictions, and that it wanted to draw a line under the conflict.
A number of trials have collapsed in recent years, but the first former British soldier to be convicted of an offence since the peace deal was given a suspended sentenced in 2023.
An elderly British couple who have been freed after being detained by the Taliban earlier this year have been reunited with their daughter.
Barbie Reynolds, 76, and her husband Peter, 80, were detained by the Taliban’s interior ministry on 1 February as they travelled to their home in Bamyan province, central Afghanistan.
In March, they were moved to a maximum security prison in Kabul where they had been held without charge.
In the final stages of negotiations they were transferred to Kabul’s central prison.
They were safely released from detention on Friday and flown to Doha following mediation led by Qatar.
As they touched down in Doha, Sky correspondent Sally Lockwood said she saw the “joy” on Mrs Reynolds’ face as her daughter Sarah hugged her on the tarmac.
She told Lockwood it was “wonderful” to have arrived in Qatar.
Image: Peter Reynolds, who was released from Taliban detention in Afghanistan, hugging his daughter Sarah. Pic: Ruters
Image: Peter and Barbie Reynolds walk after disembarking from a plane, in Doha, Qatar. Pic: Reuters
Earlier, Sky correspondent Cordelia Lynch was at Kabul Airport as the freed couple arrived and departed.
Mr Reynolds told her: “We are just very thankful.”
Please use Chrome browser for a more accessible video player
0:36
Detained British couple speak to Sky News
His wife added: “We’ve been treated very well. We’re looking forward to seeing our children.
“We are looking forward to returning to Afghanistan if we can. We are Afghan citizens.”
Asked by Lynch if they had a message for family and friends, Mrs Reynolds replied: “My message is God is good, as they say in Afghanistan.”
Image: Peter and Barbie Reynolds after their release
Image: Qatari and British diplomats with Barbie and Peter Reynolds on the flight to Doha
Prime Minister Sir Keir Starmer welcomed the news in a statement thanking Qatar.
“I welcome the release of Peter and Barbara Reynolds from detention in Afghanistan, and I know this long-awaited news will come as a huge relief to them and their family,” he said.
“I want to pay tribute to the vital role played by Qatar, including The Amir, His Highness Sheikh Tamim bin Hamad al Thani, in securing their freedom.”
Image: Peter Reynolds was visited by Qatari diplomats last month
Richard Lindsay, the UK’s special envoy to Afghanistan, told Lynch it remained “unclear” on what grounds the couple had been detained.
He said they were “very relieved to be going home and delighted to be reunited with their family”.
Asked about the state of their health, he said: “I am not a doctor, but they are very happy.”
He added the British government’s travel advice to the country was clear. “We advise British nationals not to travel to Afghanistan. That remains the case and will remain the case,” he said.
Abdul Qahar Balkhi, a spokesperson at the Talibangovernment’s foreign ministry, said in a statement posted on X that the couple “violated Afghan law” and were released from prison after a court hearing.
He did not say what law the couple were alleged to have broken.
Image: Pic: Sarah Entwistle
Image: Pic: Reynolds family
Qatar, the energy-rich nation on the Arabian Peninsula that mediated talks between the US and the Taliban before the American withdrawal, helped in releasing the Reynolds.
Mirdef Ali Al-Qashouti, acting charge d’affaires at the Qatar Embassy in Kabul, told Lynch that Qatari officials ensured the couple were kept in “comfortable” conditions during talks.
He told Lynch the Reynolds’ release was because of “continuous efforts by my government to keep our policy in helping releasing hostages and our mediation and diplomacy”.
“Throughout their eight months in detention – during which they were largely held separately – the Qatari embassy in Kabul provided them with critical support, including access to their doctor, delivery of medication, and regular communication with their family,” a Qatari official told Reuters news agency.
Couple filled with emotion but alert and composed after time in Afghan jail
At Kabul International Airport, we watched as a string of Afghan, Qatari and British officials walked into a building by the runway, alongside doctors.
On the runway a plane waited, the steps ready for what appeared to be an imminent departure. We had heard from our sources about the possible release of Peter and Barbie Reynolds, the elderly British couple detained in February, but we had no official confirmation yet.
Then, from behind a double door, I caught the eye of Barbie. The 76-year old smiled at me – her face seemingly bright with relief. Her husband, Peter, 80, then stepped into frame. A tall gentle looking man, his eyes looked filled with emotion.
Their relief and gratitude was immediately apparent. It was of course impossible to know what state their health was in, but they appeared alert and composed, despite nearly eight months in detention.
The couple’s son, Jonathan, had previously said his father had been suffering serious convulsions and his mother was “numb” from anaemia and malnutrition. The UN had also described their conditions as “inhumane”. But today, as he prepared to leave the country, Peter wouldn’t be drawn on the conditions he faced. “We’re just very thankful, very thankful,” he told me.
Barbie, who spent part of her detention in a separate facility, looked strikingly calm – a graceful and understated demeanour. “We’ve been treated very well,” she said as she made her way to the plane. Taliban officials maintained they received adequate medical care in prison and their human rights were respected.
Hamish Falconer, minister for the Middle East, Afghanistan and Pakistan, said in a statement: “The UK has worked intensively since their detention and has supported the family throughout.
“Qatar played an essential role in this case, for which I am hugely grateful.”
The couple have lived in Afghanistan for 18 years and run an organisation called Rebuild, which provides education and training programmes.
They have been together since the 1960s and married in the Afghan capital in 1970.
Their son, Jonathan, told Sky News in April his parents had “never heard one accusation or one charge”.
He said the British government had offered to evacuate them when the Taliban took over, to which they replied: “Why would we leave these people in their darkest hour?”
Mr and Mrs Reynolds are now on their way home, where they will be reunited with their family.
Speaking to Sky News from Wyoming in the United States following their release, Jonathan said he was “excited” to be seeing his parents again, and joked: “I’m a little bit jealous of my dad’s beard.”
“They look really well to me,” he said, “which I’m just delighted about”.
“I am looking forward to putting my arms around them and giving them a big hug, as all of my siblings will be.”
He offered his “special thanks” to all the British and Qatari diplomats involved in his parents’ release.
Please use Chrome browser for a more accessible video player
7:40
‘I’m just so excited to see my parents’
He said the grounds for their detention remained a mystery as they were given no explanation for their arrest.
“They were investigated for all kinds of things but everything came up with no evidence of any wrongdoing,” he said.
“One of them, the original arrest, they said something about flying a drone – my parents don’t own a drone. It’s hard enough trying to get them to know how to use certain new technologies, let alone a drone.
“So, yeah, bizarre things, but I think they were just people of interest and then got caught up in a big, big mess of a situation, and no one knew what to do. But I’m just happy they are home.”
Asked about their desire to return to Afghanistan, he said: “It’s probably not wise to go back to a place where they are not welcome, and I would say, clearly they are not welcome there.”
“They are going to arrive back in the UK with the clothes on their backs. They have sold everything… all of their possessions,” he said, when asked what the future held for his parents.
“Knowing my mum she has probably written a few books in her mind whilst she’s been in captivity.
“We have heard great reports from schools across Afghanistan that the programmes they set up are running really, really well, so they will probably want to continue those,” he added.