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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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Ted Cruz blasts ‘mafioso’ threats over Jimmy Kimmel suspension

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Ted Cruz blasts 'mafioso' threats over Jimmy Kimmel suspension

American Senator Ted Cruz has broken ranks with fellow US conservatives and
hit out at talk show host Jimmy Kimmel’s suspension, saying it was “mafioso” behaviour.

Disney-owned ABC has been widely criticised after it pulled the long-standing host of Jimmy Kimmel Live following comments in his show about the alleged gunman charged with right-wing activist Charlie Kirk’s murder.

Kimmel implied the suspect was a Maga Republican, despite the man’s mother telling police he had “started to lean more to the left”.

As a result, Federal Communications Commission chair Brendan Carr threatened Disney and local broadcasters with investigations and regulatory action if they aired Kimmel’s show – which led to dozens of local TV stations affiliated with ABC pulling it.

US President Donald Trump, who appointed Carr, lauded the decision.

But Mr Cruz criticised the threats as “dangerous as hell”.

“I got to say that’s right out of ‘Goodfellas’,” he said, evoking the Martin Scorsese gangster movie. “That’s right out of
a mafioso coming into a bar going, ‘Nice bar you have here.

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“It would be a shame if something happened to it’.”

Senator Ted Cruz. Pic: AP
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Senator Ted Cruz. Pic: AP

Explainer: What did Jimmy Kimmel say about Charlie Kirk?

The senator, a former constitutional lawyer, then adopted a broad mafioso accent to quote Mr Carr’s comments about broadcasters this week: “We can do this the easy way, or we can do this the hard way.”

Mr Trump fired back, telling reporters in the Oval Office on Friday that he disagreed with Mr Cruz – one of the most
powerful Republicans in Congress – and calling Mr Carr “an incredible American patriot with courage.”

Demonstrations against his suspension have sprung up. Pic: AP
Image:
Demonstrations against his suspension have sprung up. Pic: AP

The Texas senator’s remarks are a rare example of a prominent member of the president’s own party publicly
criticising the actions of the administration, highlighting deepening concerns over free-speech rights and Mr Trump’s threatened crackdowns.

Prominent Democrats and civil rights groups condemned the Trump administration’s pressure to punish Kimmel and others who speak negatively of the president.

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US talk show titans speak out

Kimmel’s fellow late-night hosts have rallied around him, as did former US president Barack Obama, who wrote on X: “After years of complaining about cancel culture, the current administration has taken it to a new and dangerous level by routinely threatening regulatory action against media companies unless they muzzle or fire reporters and commentators it doesn’t like.

Barack Obama on Jimmy Kimmel Live in 2016. Pic: Susan Walsh/AP
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Barack Obama on Jimmy Kimmel Live in 2016. Pic: Susan Walsh/AP

“This is precisely the kind of government coercion that the First Amendment was designed to prevent, and media companies need to start standing up rather than capitulating it.”

Conservative activists had been angered by Kimmel’s comments on his show that they were using the assassination to score “political points”.

Right-wing influencer Charlie Kirk was shot dead on 10 September as he took part in a public debate at a college campus in Utah .

Tyler Robinson, 22, was charged with aggravated murder, weapon, and obstruction of justice offences.

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Prosecutors: Witness in Miami murder case found

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Prosecutors: Witness in Miami murder case found

Florida prosecutors confirmed in a hearing Friday that their key witness in the murder case of a former University of Miami football player is alive and was contacted Thursday by officers where he lives in Kentucky.

ESPN reported Thursday that, despite prosecutors stating July 17 that they tried every effort to locate 81-year-old Paul Conner and had a report from a commercial database he was dead, journalists found Conner alive at his apartment in Louisville.

Conner is the only eyewitness in the case against former Miami football player Rashaun Jones, who is facing second-degree murder charges in the 2006 shooting of teammate Bryan Pata. Jones, who was arrested in 2021, has pleaded not guilty.

Miami assistant state attorney Cristina Diamond told Florida 11th Circuit Court Judge Cristina Miranda that, after the ESPN story was published, her lead detective reached out to police in Louisville and asked them to go to Conner’s last-known address — where ESPN reporters had found him.

“They were able to make contact with Paul Conner. So at this time, what I can tell the court is that Paul Conner is alive,” Diamond said, adding that she had reviewed the officer’s body camera footage. “I think the state needs to do a little bit of further investigation. It appears that he was very confused and is not certain what the case is about.”

When ESPN reporters interviewed Conner on Aug. 25, he said he did not remember details about the case. Miranda had ruled in July that, assuming Conner was dead, the state could present jurors a videotape of prior testimony he gave in 2022 in a bond hearing in the case in lieu of having him testify in person.

If a determination is made that Conner is not competent to testify, she said, “we may still be in the same situation.”

Conner first spoke to police shortly after the Nov. 7, 2006, shooting, and he picked Jones out of a police lineup. Police reinterviewed him in 2020. Conner also recounted what he saw at the 2022 bond hearing and in a 2023 deposition with attorneys.

At the time of the shooting, Conner lived in the same apartment complex as Pata. He said during his 2022 testimony that he heard a “pop” and saw someone “jogging” away from the parking lot entrance near where Pata, a likely high pick in the 2007 NFL draft, was shot once in the head.

How the confirmation of Conner’s status affects the case, which is scheduled for trial Oct. 6, is to be determined after attorneys argued in court Friday about what steps to take next regarding questioning Conner and going over the evidence of the state’s prior efforts to find him.

Jones’ attorney Sara Alvarez told Miranda that she wanted to request a hearing to determine if prosecutors violated the rules of evidence, saying she thought the false conclusion of Conner’s death “may have been intentional.”

Diamond rebutted that accusation, saying Miami-Dade officers made multiple attempts to reach Conner.

“This is our key witness in the case. This is somebody we want,” Diamond told the judge. “The defense is accusing me of making misrepresentations to the court. Every representation made to the court was based upon a conversation with an officer who I was prepared to have testify.”

Diamond was referring to officers from the Louisville Police Department who she said went to Conner’s address over the summer and “spoke to someone but believed it was not the witness.” She said she had a copy of the body camera footage as well. She said those officers told her they also spoke to someone with the apartment’s leasing office who did not find Conner in their records.

She said they did not locate a death certificate in Kentucky but relied on the third-party commercial database that stated Conner was deceased. Jones’ counsel asked for a copy of that report along with other records that would verify the state’s efforts.

The Louisville officers did not testify Friday, as the judge decided to give the attorneys some time to correspond with each other and decide how they wanted to proceed.

ESPN had asked for records or information from the Louisville Police Department regarding efforts to locate Conner, and a department spokesman said there were no records of any officer going to Conner’s address this summer prior to a July 22 request from a former colleague who had called for a welfare check on Conner after being contacted by ESPN reporters.

ESPN made multiple requests to police and the Miami-Dade State Attorney for records of their efforts to find Conner. After initially saying they had no documents, they eventually provided an email exchange in which lead detective Juan Segovia wrote that he left 15 voicemail messages with Conner since May. Segovia added that he also sent emails to an address that officers had used with him previously. They also provided a copy of a June 6 letter addressed to Conner at his Louisville address that asked him to contact their office.

They provided an email exchange with a Louisville police officer, but it had no information about Conner or efforts to find him, and they provided a copy of a subpoena for the officer to testify. ESPN reached back out to Louisville police with the name of the officer and a request for further information and is waiting on a response.

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Sources: MSU set to have top WR, RB vs. USC

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Sources: MSU set to have top WR, RB vs. USC

Michigan State wide receiver Nick Marsh and leading rusher Makhi Frazier are expected to play at USC on Saturday night, sources told ESPN’s Pete Thamel on Friday.

Marsh had a leg injury in last week’s win against Youngstown State, and Frazier suffered a lower-body injury. Both are cleared and in line to play in the Spartans’ Big Ten opener, sources said.

Through three games, Marsh has caught 16 passes for 194 yards and three touchdowns, which is tied for second among Big Ten wide receivers.

Frazier began his sophomore season by rushing for 103 yards and a touchdown on 14 carries in Michigan State’s win over Western Michigan. Through three games, he has totaled 206 rushing yards and two touchdowns.

Both Frazier and Marsh will face off against a USC team that is also 3-0 and boasts a defense that has forced seven turnovers this season.

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