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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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Alleged Madeleine McCann family stalker left voicemails saying ‘I believe I’m really her’

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Alleged Madeleine McCann family stalker left voicemails saying 'I believe I'm really her'

A woman accused of stalking the parents of Madeleine McCann allegedly left voicemails asking the mother of the missing girl for a DNA test, a court heard.

Jurors heard voicemails left by Julia Wandelt, 24, from Lubin, Poland, in which she was audibly upset.

She allegedly left the messages last year, over a period of months, and at one point asked: “What if I’m her?”

Co-defendant Karen Spragg, 61, began crying today at Leicester Crown Court and had to leave the dock when the voicemails were played.

Wandelt, whose head was down while jurors were listening, was heard saying: “I know you probably think Madeleine‘s dead. Well she is not. I really believe I’m her.

“Help me. Don’t think Madeleine is dead. This is a chance. Please, I beg you. The police don’t want to help me, they don’t want to help Madeleine. It’s all corrupt.

“I promise you that I will prove who I am because I know you love Madeleine.”

In another message, she said: “You probably believe Madeleine is not alive anymore.

Madeleine McCann went missing during a family holiday to Portugal in 2007. Pic: PA
Image:
Madeleine McCann went missing during a family holiday to Portugal in 2007. Pic: PA

“What if I am her? What if there’s a small chance that I’m her?”

Jurors also heard that, one night, Wandelt sent a message to Mrs McCann at 1am, saying: “I don’t understand why you don’t want to do a DNA test.”

Prosecutors allege that Wandelt, a Polish national, falsely claimed she was Madeleine while stalking parents Kate and Gerry McCann by sending emails, making calls and turning up at their address between June 2022 and February this year.

The court previously heard that Wandelt called and messaged Mrs McCann more than 60 times in a single day in April last year. This included alleged memories of Madeleine’s abduction.

Madeleine went missing during a family holiday to Praia da Luz in Portugal, in May 2007.

Wandelt and Spragg, of Caerau Court Road in Caerau, Cardiff, both deny one count of stalking.

The trial continues.

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Tommy Robinson refused to give phone pin to police as he drove his Bentley to Benidorm, court hears

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Tommy Robinson refused to give phone pin to police as he drove his Bentley to Benidorm, court hears

Tommy Robinson refused to hand over his phone pin when police stopped his Bentley on the way to Benidorm, a court has heard.

He allegedly told officers “Not a chance, bruv” and said he was a journalist when they pulled him aside at the Channel Tunnel at Folkestone in July 2024.

Robinson, real name Stephen Yaxley-Lennon, is accused of “frustrating” counter-terrorism powers by refusing to give access to the phone.

He denies the charge.

The right-wing political activist was flanked by security guards as he arrived at Westminster Magistrates Court for the opening of the trial on Monday.

The 42-year-old faces three months in prison and/or a £2,500 fine if found guilty.

Robinson had £13,000 and 1,900 euros on him when he was stopped and told police he was going to Benidorm in Spain for a few days, said prosecutor Jo Morris.

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He allegedly refused to give the pin as he claimed the phone had sensitive “journalist material” on it.

He’s said to have told police: “It’s my work, I’m a journalist,” claiming it contained information about “vulnerable girls”.

The court heard Robinson was stopped in his silver Bentley SUV because he gave “short, vague replies” about what he was doing and “made no eye contact”.

PC Mitchell Thorogood told the court it was also “unusual” he bought tickets on the day rather than in advance and was in an expensive car not registered in his name.

Pic: PA
Image:
Pic: PA

When police took Robinson into an interview room and demanded his phone, he allegedly told them: “Not a chance bruv… you look like a c*** so you ain’t having it.”

Officers said they recognised Robinson when they stopped him and his lawyer, Alisdair Williamson KC, suggested the stop may have been “discriminatory” against his political beliefs.

Police can stop anyone at a UK port and hold them for six hours if they suspect they may be involved in planning or committing acts of terrorism.

They are legally obliged to answer questions and must give access to their electronic devices or face a criminal charge.

In a video on X before the hearing, Robinson said Elon Musk had “picked up the legal bill” for “this absolute state persecution”.

The case comes a month after Robinson led a huge rally in central London under the banner ‘Unite the Kingdom’.

The trial continues.

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UK played ‘vital role’ in Gaza peace deal, says Trump aide, after minister branded ‘delusional’

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UK played 'vital role' in Gaza peace deal, says Trump aide, after minister branded 'delusional'

Steve Witkoff, the US special envoy to the Middle East, has claimed the UK played a “vital role” in helping negotiate the Gaza peace deal, smoothing over a potential diplomatic row between London and Washington.

Witkoff took to X on Monday, ahead of meeting President Donald Trump in Israel, to praise the UK.

“I would like to acknowledge the vital role of the United Kingdom in assisting and coordinating efforts that have led us to this historic day in Israel,” Witkoff wrote.

“In particular, I want to recognise the incredible input and tireless efforts of National Security Advisor Jonathan Powell.”

His comments came 24 hours after education secretary Bridget Phillipson was branded “delusional” by Mike Huckabee, the US ambassador to Israel, for claiming that Sir Keir Starmer’s presence at a signing ceremony for today’s ceasefire deal in Egypt “demonstrates the key role that we [Britain] have played”.

The minister made her remarks on Sunday Morning With Trevor Phillips but did not say exactly what the UK’s role in the ceasefire, largely attributed to Donald Trump, is or was.

Politics latest: Phillipson announces crackdown on antisemitism at UK universities

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Phillipson added: “We have played a key role behind the scenes in shaping this.

“It’s right that we do so because it’s in all of our interest, including our own national interest, that we move to a lasting peace in the region.

“These are complex matters of diplomacy that we are involved in. But we do welcome and recognise the critical role that the American government played in moving us to this point.”

Her comments prompted Mr Huckabee to repost the Sky News clip on social media, claiming: “I assure you she’s delusional.”

He added: “She can thank Donald Trump anytime just to set the record straight.”

Mr Huckabee was part of the negotiating team for the peace deal, with Mr Trump calling the former Arkansas governor “AMAZING” as he said he “worked so hard, and did so much, to bring about peace in the Middle East”.

In August, Mr Huckabee said the UK and other European nations that said they would declare a Palestinian state were “having the counterproductive effect that they probably think that they want”.

Israel: UK did not play key role in peace deal

Israel’s deputy foreign affairs minister, Sharren Haskell backed Huckabee, telling Sky News the UK played “the opposite” of a key role in the peace deal after recognising the Palestinian state.

“The message that the UK government has sent Hamas was the message that: the longer they continue this war, they will be rewarded.

“I mean, you must understand that when a terrorist organisation is thanking you. You are on the wrong side of history.”

It is understood the prime minister has underlined Mr Trump’s key role in securing this deal throughout the process. Publicly, he praised Mr Trump twice in his press conference in India on Thursday.

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Hamas official thanks Donald Trump for ceasefire deal

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Final preparations for hostages in Israeli hospital

Ms Phillipson stood by the September decision to declare a Palestinian state, saying it was “the right thing to do”.

Husam Zomlot, the Palestinian ambassador to the UK, told Sky News it was a “moment of leadership” for the UK to declare a Palestinian state, and a “responsibility to begin to correct a century of the gravest historic injustices committed against our people”.

He added: “That moment three weeks ago, when the UK did recognise, is a moment when we can say that the wheels of history are turning in a different direction.”

No plans for British troops on the ground

The education secretary also told Sky News the government has “no plans” to put British troops into Israel or Gaza as part of a stabilisation force after the ceasefire.

The US military will help establish a multinational force in Israel, known as a civil-military coordination centre, which is likely to include troops from Egypt, Qatar, Turkey and the UAE.

Tens of thousands of Palestinians have walked back to Khan Younis in southern Gaza. Pic: AP
Image:
Tens of thousands of Palestinians have walked back to Khan Younis in southern Gaza. Pic: AP

On Friday, US officials said up to 200 US troops already based in the Middle East will be moved to Israel to help monitor the ceasefire in Gaza.

The day before, President Trump announced Israel and Hamas had “signed off on the first phase” of a peace plan he unveiled last week.

Pic: Reuters
Image:
Pic: Reuters

Aid trucks have been gathering in Egypt to cross into Gaza after months of warnings by aid groups of famine in parts of the territory.

In Israel, the remaining hostages are due to be returned from Gaza by Hamas on Monday under the first phase of the peace plan. Twenty are believed to still be alive, 26 have been declared dead, while the fate of two is unknown.

The ceasefire agreement has been made two years after Hamas stormed Israel on 7 October 2023, killing 1,200 people and taking 251 hostages.

Israel’s military offensive has killed more than 67,000 Palestinians in Gaza, according to the Hamas-run health ministry, which the UN deems reliable.

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