The US central bank has raised expectations that interest rate cuts are around the corner, but also signalled it wants more evidence that easing inflation is sustainable.
The Federal Reserve kept its core interest rate range steady between 5.25-5.5% following the first meeting of its Federal Open Market Committee in 2024.
Its statement to accompany the decision showed it had dropped a longstanding reference to possible further hikes in borrowing costs.
It said: “The committee judges that the risks to achieving its employment and inflation goals are moving into better balance”, signalling an improvement in conditions towards a rate cut.
But crucially it added: “The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2% – its target rate.”
At a news conference, Fed chair Jay Powell told reporters: “We do have confidence but we want to get greater confidence” that cooling inflation data is sending “a true signal”.
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Image: Federal Reserve Chairman Jerome Powell remains cautious on the prospects for rate cuts in the short term. Pic: AP
The remarks saw a shift in financial market expectations for the first rate cut.
The majority of opinion moved to May from March.
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The Fed’s tightening cycle began in March 2022 when price pressures were ramping up in the wake of Russia’s invasion of Ukraine.
Inflation peaked at a 40-year high several months later and the headline rate has eased at a faster pace than in Europe since.
US stocks fell following the release of the Fed’s statement while the dollar rose against many currencies though not versus the pound.
That could be a consequence of expectations that the Bank of England will take a harder line on the prospect of rate cuts.
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December: ‘Too early to speculate on interest rate cut’
UK rate-setters are widely tipped to leave the Bank rate at 5.25% – the level it has sat at since August last year – on Thursday.
While inflation has also eased sharply from the peak above 11% witnessed in 2022, it remains more stubborn than across the Atlantic.
The pace of price increases in the economy remains double the Bank of England’s 2% target rate, above 4%.
It was for that reason that policymakers including governor Andrew Bailey have stuck to a script since December that it is too early to think about rate cuts.
Financial markets currently see four reductions in 2024, beginning in May.
The Bank’s latest thinking will be revealed in the minutes of the Monetary Policy Committee (MPC) meeting and the accompanying Monetary Policy Report.
Mr Bailey hosts a news conference shortly after the information is released.
The first clue towards any shift in the ‘hold’ stance will come from the voting among the nine members of the MPC.
Three backed a rate increase in December while the other six won the day by backing no change.
A powerful 8.8-magnitude earthquake has struck off Russia’s far eastern Kamchatka Peninsula, causing a tsunami.
A tsunami of up to four metres (13 feet) was recorded in Kamchatka Peninsula, leading to evacuations and damaging buildings, officials said.
Tsunami warnings have been issued for Japan, the Philippines, Hawaii and parts of Alaska in the US.
The Honolulu Department of Emergency Management in Hawaii has called for the evacuation of some coastal areas, writing on X: “Take Action! Destructive tsunami waves expected.”
The first waves in Hawaii are expected to hit at 7pm local time (6am UK time).
The Pacific Tsunami Warning Center has said waves of one to three meters (three to 10 feet) above tide level were possible along some coastal areas of Hawaii, Chile, Japan and the Solomon Islands.
Kamchatka Governor Vladimir Solodov had earlier said: “Today’s earthquake was serious and the strongest in decades of tremors.”
Several people in the region sought medical assistance following the quake, Oleg Melnikov, regional health minister told Russia’s Tass state news agency.
“Unfortunately, there are some people injured during the seismic event. Some were hurt while running outside, and one patient jumped out of a window. A woman was also injured inside the new airport terminal,” Mr Melnikov said.
Russia’s Tass news agency reported from the biggest city nearby, Petropavlovsk-Kamchatsky, that many people ran out into the street, while cabinets toppled inside homes, mirrors were broken, cars swayed on roads and balconies on buildings shook noticeably.
Power outages and mobile phone service failures were also reported in the capital of the Kamchatka region.
The first tsunami wave hit the coastal area of Severo-Kurilsk, the main settlement on Russia’s Kuril Islands in the Pacific, according to the local governor Valery Limarenko.
He said residents were safe and staying on high ground until the threat of a repeat wave was gone.
A regional branch of Russia’s geophysical service has said that “significant, noticeable” aftershocks with magnitudes of up to 7.5 after expected to continue for at least another month.
Japan issued a tsunami warning, saying it expects waves as high as three metres to arrive along large coastal areas along the Pacific Ocean.
Image: Waves off the coast of the Hokkaido Prefecture in Japan after the tsunami warning was issued. Pic: AP
It has ordered the evacuation of some areas.
The National Tsunami Warning Center, based in Alaska, issued a tsunami warning for parts of the Alaska Aleutian Islands.
A tsunami warning also was extended to the US state of Hawaii, with the National Weather Service’s Pacific Tsunami Warning Center saying a tsunami from the quake had been generated that could cause damage along the coastlines of all the Hawaiian islands.
A tsunami “watch” was issued for portions of the West Coast, including California, Oregon, and Washington.
The US Geological Survey said the earthquake was shallow at a depth of 19.3 km (12 miles), and was centred about 125 km (80 miles) east-southeast of Petropavlovsk-Kamchatsky, a city of 165,000 along the coast of Avacha Bay. It revised the magnitude up twice from 8.0 and 8.7 to 8.8 earlier.
Meanwhile, New Zealand’s disaster management agency has warned that the country’s coastal areas could expect “strong and unusual currents and unpredictable surges at the shore”.
In a national advisory alert, Civil Defence New Zealand said there was no immediate need to evacuate but said citizens should stay away from beaches and shore areas.
This breaking news story is being updated and more details will be published shortly.
Donald Trump has claimed billionaire paedophile Jeffrey Epstein “stole” prominent accuser Virginia Giuffre and other young women from his Mar-a-Lago resort in Florida.
Ms Giuffre became a household name after she sued Prince Andrew for sexual abuse in August 2021 – saying he had sex with her when she was 17 and had been trafficked by his friend Epstein.
Mr Trump made his remarks about Ms Giuffre as his administration has faced growing pressure in recent weeks, including from within his “MAGA” base, to release files related to Epstein after he promised to do so during his 2024 presidential campaign.
The US president was speaking to reporters on Tuesday when he was asked about comments he made over the weekend about a falling-out with Epstein over employees taken from his business.
“He took people that worked for me. And I told him, ‘Don’t do it anymore.’ And he did it,” Mr Trump told reporters while on board Air Force One as he returned to the US from Scotland.
“I said, ‘Stay the hell out of here’,” the US president added.
Image: Prince Andrew and Virginia Giuffre in 2001. Pic: Shutterstock
Pressed about whether any of the employees he referred to were young women, Mr Trump said many of them worked in the spa at Mar-a-Lago.
“The answer is yes, they were in the spa,” he said. “I told him, I said, ‘Listen, we don’t want you taking our people, whether it was spa or not spa.’ … And he was fine. And then not too long after that, he did it again.”
Asked if Ms Giuffre was one of the employees poached by Epstein, the US president replied: “I think she worked at the spa… I think so. I think that was one of the people. He stole her, and by the way, she had no complaints about us, as you know, none whatsoever.”
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1:09
Trump dismisses Epstein ‘witch hunt’
The White House said in a statement last week that Mr Trump banned Epstein from Mar-a-Lago because he was acting like a “creep”.
Epstein took his own life in a Manhattan prison cell in August 2019 as he awaited trial on sex trafficking charges.
On Tuesday, lawyer’s for his former girlfriend Ghislaine Maxwell, who is serving 20 years in prison for recruiting young girls for the financier, said that they are open to her answering more questions from US Congress if she is granted immunity from future prosecution.
However a spokeswoman for the House Oversight Committee, which requested the interview with Maxwell, said the panel would not consider granting the immunity she requested.
Image: Undated picture of Ghislaine Maxwell with Jeffrey Epstein. File pic: US Department of Justice
The former British socialite was interviewed inside a Florida courthouse by US Deputy Attorney General Todd Blanche last week.
Officials have not publicly disclosed what she said.
Mr Blanche had earlier said that Maxwell would be interviewed because of Mr Trump’s directive to gather and release any credible evidence about others who may have committed crimes in relation to the Epstein case.
Separately, Maxwell’s lawyers have urged the Supreme Court to review her conviction, saying she did not receive a fair trial.
They also say that one way she would testify “openly and honestly, in public”, is in the event of a pardon by Mr Trump, who has told reporters that such a move is within his rights but that he has not been not asked to make it.
Image: Virginia Giuffre in 2019. File pic: AP
What had Ms Giuffre said about Mar-a-Lago?
Ms Giuffre, who took her own life in April, claimed Maxwell spotted her while she was working as a spa attendant at Mar-a-Lago when she was a teenager in 2000.
She added that Maxwell hired her as Epstein’s masseuse, which led to sexual abuse.
She accused Epstein of pressuring her into having sex with powerful men.
Why is the Epstein case such a problem for Trump?
Rumours have circulated since Epstein’s death about who he may have supplied underage girls to and who visited his private island.
Some of those rumours quickly spiralled into conspiracy theories, which Mr Trump fanned the flames of during his campaign for a second term.
Mr Trump promised to release more Epstein files to the public if he was elected president for a second time – but is now facing a backlash from his voter base after carrying out a complete U-turn on the move.
Disgraced hip hop mogul Sean “Diddy” Combs has asked a judge to release him on a $50m bond as he waits to be sentenced for prostitution-related offences.
Combs’s lawyer has argued that conditions at the Metropolitan Detention Centre in Brooklyn are dangerous and noted that others convicted of similar offences were typically released before sentencing.
“Sean Combs should not be in jail for this conduct,” Marc Agnifilo said in a court filing on Tuesday.
“In fact, he may be the only person currently in a United States jail for being any sort of John, and certainly the only person in jail for hiring adult male escorts for him and his girlfriend.”
A “John” in the US is a slang term for somebody who hires a prostitute.
A spokesperson for the US attorney’s office in Manhattan did not immediately respond to a request for comment.
Prosecutors have previously insisted he remains a flight risk and should therefore not be granted bail.
The 55-year-old, one of the most influential hip-hop producers of all time, faces up to a decade in prison after he was convicted earlier this month of two counts of transportation to engage in prostitution.
The charges relate to how he flew people around the US, including his girlfriends and male sex workers, for sexual encounters.
Image: Combs knelt at his chair and appeared to pray after the verdicts
Combs was cleared of three more serious charges – two for sex trafficking and one for racketeering conspiracy – following his landmark trial in New York.
A conviction on one of those charges could have put him in prison for life.
Immediately after he was acquitted of those charges on 2 July, Mr Agnifilo had asked that Combs be released on bond.
But Judge Arun Subramanian denied it, saying Combs at the time had not met the burden of showing by clear and convincing evidence a “lack of danger to any person or the community”.
Combs is the latest celebrity inmate to be locked up at MDC Brooklyn, the only federal jail in New York City, joining a list that includes R Kelly, Ghislaine Maxwell and cryptocurrency fraudster Sam Bankman-Fried.