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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.

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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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Federal Reserve Chairman Jerome Powell Pic: AP
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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.

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.

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Prince Andrew accuser Virginia Giuffre leaves hospital after saying she had ‘four days to live’ following car crash

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Prince Andrew accuser Virginia Giuffre leaves hospital after saying she had 'four days to live' following car crash

Prince Andrew accuser Virginia Giuffre has reportedly left hospital after recently saying she had “four days to live”.

Her representative said she was discharged on Monday, according to US celebrity website People.

Photos in Australian media on Wednesday are said to show Ms Giuffre being driven in a vehicle north of Perth.

The 41-year-old appeared with a bruised face last week when she posted an Instagram video saying her car had been hit by a speeding school bus as she slowed for a turn.

She said: “I’ve gone into kidney renal failure, they’ve given me four days to live, transferring me to a specialist hospital in urology.

“I’m ready to go, just not until I see my babies one last time…”

Police said they had received a report of a “minor crash” between a school bus and a car in Neergabby, about 12 miles from Perth, on 24 March.

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“The collision was reported by the bus driver the following day,” said a spokeswoman. “There were no reported injuries as a result of the crash.”

A few days after the Instagram video, it emerged Ms Giuffre had been charged with allegedly breaching a family violence restraining order.

Ms Giuffre is reported to have separated from her husband.

The case was due back in court today (9 April).

File pic: AP
Image:
Ms Giuffre reached a settlement with the duke in 2022. File pic: AP

Ms Giuffre sued the Duke of York for sexual abuse in August 2021, saying Andrew had sex with her when she was 17 and had been trafficked by his friend, the billionaire paedophile Jeffrey Epstein.

The duke has repeatedly denied the claims, and he has not been charged with any criminal offences.

In March 2022, it was announced Ms Giuffre and Andrew had reached an out-of-court settlement – believed to include a “substantial donation to Ms Giuffre’s charity in support of victims’ rights”.

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What China could do next as Trump’s tariff war ramps up

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What China could do next as Trump's tariff war ramps up

The severity cannot be overstated, if an additional 50% tariffs are levied on all Chinese goods it will decimate trade between the world’s two biggest economies.

Remember, 50% would sit on top of what is already on the table: 34% announced last week, 20% announced at the start of US President Donald Trump’s term, and some additional tariffs left over from his first term in office.

In total, it means all Chinese goods would face tariffs of over 100%, some as high as 120%.

It’s a price that makes any trade almost impossible.

China is really the only nation in the world at the moment that is choosing to take a stand.

While others are publicly making concessions and sending delegations to negotiate, China has clearly calculated that not being seen to be bullied is worth the cost that retaliation will bring.

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Tariffs: Xi hits back at Trump

The real question, though, is if the US does indeed impose this extra 50% tomorrow, what could or would China do next?

It has said it will “fight to the end”, but what does that mean?

In reality, there are few good options.

There are some obvious measures that China will almost certainly enact.

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Further export controls on rare earth minerals (crucial for the development of high-tech products) are one example. China controls a huge proportion of the world’s supply, but the US would likely find workarounds in time.

Hiking tariffs on high-impact US products such as agricultural goods is another option, but there is only so far this could go.

The potentially more impactful options have significant drawbacks for Beijing.

It could, for instance, target high-profile American companies such as Apple and Tesla, but this isn’t ideal at a time when China is trying to attract more foreign investment, and some devaluation of the currency is possible, but it would also come with adverse effects.

Other options are more political and come with the risk of escalation beyond the economic arena.

In an opinion piece this morning, the editor of Xinhua, China’s state news agency, speculated that China could cease all cooperation with the US on the war against fentanyl.

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This has been a major political issue for Mr Trump, and it’s hard to see it would not constitute some sort of red line for him.

Other options touted include banning the import of American films, or perhaps calling for the Chinese public to boycott all American products.

Anything like this comes with a sense that the world’s two most powerful superpowers might be teetering on the edge of not just a total economic decoupling, but cultural separation too.

There is understandably serious nervousness about how that could spiral and the precedent it sets.

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Donald Trump’s 104% tariffs on China – and other levies on ‘worst offenders’ – in effect this mornong

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Donald Trump's 104% tariffs on China - and other levies on 'worst offenders' - in effect this morning

Donald Trump’s trade tariffs on what he calls “the worst offenders” come into effect at 5am UK time, with China facing by far the biggest levy.

The US will hit Chinese imports with 104% tariffs, marking a significant trade escalation between the world’s two largest superpowers.

At a briefing on Tuesday, White House press secretary Karoline Leavitt said Donald Trump “believes that China wants to make a deal with the US,” before saying: “It was a mistake for China to retaliate.

“When America is punched, he punches back harder.”

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White House announces 104% tariff on China

After Mr Trump announced sweeping levies last week – hitting some imported goods from China with 34% tariffs – Beijing officials responded with like-for-like measures.

The US president then piled on an extra 50% levy on China, taking the total to 104% unless it withdrew its retaliatory 34% tariff.

China’s commerce ministry said in turn that it would “fight to the end”, and its foreign ministry accused the US of “economic bullying” and “destabilising” the world’s economies.

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‘Worst offender’ tariffs also in effect

Alongside China’s 104% tariff, roughly 60 countries – dubbed by the US president as the “worst offenders” – will also see levies come into effect today.

The EU will be hit with 20% tariffs, while countries like Vietnam and Cambodia see a 46% levy and 49% rate respectively.

The UK was not included on this list, and instead saw a “baseline”, worldwide 10% tariff on imported goods in effect from last Saturday.

At the weekend, Sir Keir Starmer promised the government was ready to “shelter British businesses from the storm”.

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What’s going on with the US and China?

Since the tariffs were announced last Wednesday, global stock markets have plummeted, with four days of steep losses for all three of the US’ major indexes.

As trading closed on Tuesday evening, the S&P 500 lost 1.49%, the Nasdaq Composite fell 2.15%, and the Dow Jones Industrial Average dropped 0.84%.

According to LSEG data, S&P 500 companies have lost $5.8tn (£4.5tn) in stock market value since last Wednesday, the deepest four-day loss since the benchmark was created in the 1950s.

New York Stock Exchange on 8 April 2025. Pic: AP
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Global stock markets have been reeling since Trump’s tariff announcement last week. Pic: AP

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What China could do next as Trump’s tariff war ramps up
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Trump signs coal orders

Meanwhile, the US president signed four executive orders to boost American coal mining and production.

The directives order:
• keeping some coal plants that were set for retirement open;
• directing the interior secretary to “acknowledge the end” of an Obama-era moratorium that paused coal leasing on federal lands;
• requiring federal agencies to rescind policies transitioning the US away from coal production, and;
• directing the Department of Energy and other federal agencies to assess how coal energy can meet rising demand from artificial intelligence.

Read more:
The good, the bad and the ugly in Trump’s coal plans

At a White House ceremony, Mr Trump said the orders end his predecessor Joe Biden’s “war on beautiful clean coal,” and miners “will be put back to work”.

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