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close video The Fed is keeping an open mind about rates, macroeconomy: San Francisco President Mary Daly

In an exclusive interview with FOX Business Edward Lawrence, Federal Reserve Bank of San Francisco President Mary Daly talks next rate decisions, keeping the economy in a good place and potential impacts from a second Trump administration.

Inflation ticked higher again in November as prices remained stubbornly high for consumers, leaving Federal Reserve policymakers with fresh data to consider ahead of their meeting next week when another interest rate cut may be announced.

The Labor Department on Wednesday said that the consumer price index (CPI) — a broad measure of how much everyday goods like gasoline, groceries and rent cost — rose 0.3% in November while ticking up to 2.7% on an annual basis.

Those figures were in line with the expectations of economists polled by LSEG. Both the headline rate and monthly price growth figures were up compared with October's readings, which were 2.6% and 0.2%, respectively.

So-called core prices, which exclude more volatile measurements of gasoline and food to better assess price growth trends, were up 0.3% on a monthly basis in November and 3.3% from a year ago — both of which were unchanged from last month's readings.

FED'S FAVORED INFLATION GAUGE SHOWED PRICE GROWTH PICKED UP IN OCTOBER

Inflation was up 2.7% on an annual basis in November. (Scott Olson/Getty Images / Getty Images)

The report showed that inflationary pressures in the U.S. economy remain persistent despite progress in bringing inflation closer to the Federal Reserve's 2% target over the past year.

High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. Price hikes are particularly difficult for lower-income Americans, because they tend to spend more of their already-stretched paycheck on necessities and have less flexibility to save money.

Housing costs accounted for nearly 40% of the headline CPI gain in November, as the index for shelter increased 0.3% on a monthly basis. Shelter prices are up 4.7% from last year.

MAJORITY OF AMERICANS LACK ECONOMIC SECURITY, STUDY FINDS

Energy prices also rose 0.2% in November after they were unchanged in the prior month, and were down 3.2% from a year ago. Gasoline prices rose 0.6% on a monthly basis but are down 8.1% from last year. Electricity costs declined by 0.4% in November but are up 3.1% on an annual basis.

Food prices were also higher for the month of November, up 0.4% for the month and 2.4% over the last year. The cost of food at home was up 0.5% on a monthly basis and 1.6% compared with a year ago. Food away from home rose 0.3% for the month and was up 3.6% from last year. 

Prices for meats, poultry, fish and eggs were up 1.7% for the month and 3.8% from a year ago. Egg prices rose 8.2% in November and are up 37.5% from last year due in part to a bird flu outbreak.

US ECONOMY ADDED 227K JOBS IN NOVEMBER, ABOVE EXPECTATIONS

Auto insurance prices are 12.7% higher than a year ago. (Keith Birmingham/MediaNews Group/Pasadena Star-News via Getty Images / Getty Images)

Prices for transportation services were flat on a monthly basis but are 7.1% higher than a year ago. Auto insurance is up 12.7% on an annual basis, though it rose just 0.1% compared with last month. Motor vehicle repair costs were up 0.5% on the month and are 7.8% higher than last year.

Postage and delivery services are up 9.8% from last year despite a decline of 0.1% in November. Postage costs are up 10.6% while delivery services are up 4.4% on an annual basis.

The data comes as the Federal Reserve is scheduled to meet next week when policymakers are expected to announce another 25 basis point cut to interest rates.

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Despite headline inflation rising relative to recent readings, markets don't anticipate that deterring the Fed from cutting. As of Wednesday morning, traders see a 97.9% probability of a 25 basis-point cut at the Fed's December meeting — up from 88.9% a day ago, according to the CME FedWatch tool.

"CPI was a bit higher than anticipated but the underlying details were more favorable," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "Higher prices for new and used vehicles point to lingering hurricane effects on demand and supply, while housing costs showed the smallest increase since 2021. The data have given the Fed the 'all clear' for next week, and today’s inflation data keep a January cut in active discussion."

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Chancellor insists Labour rebels ‘know the welfare system needs reform’ as they push for change

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Chancellor insists Labour rebels 'know the welfare system needs reform' as they push for change

Chancellor Rachel Reeves has insisted that rebelling Labour MPs “know the welfare system needs reform” as the government faces a growing backlash over planned cuts.

Sir Keir Starmer is under pressure from Labour MPs, with about 40 in the Red Wall – the party’s traditional heartlands in the north of England – warning the prime minister’s welfare plan is “impossible to support” in its current form.

Dozens have thrown their support behind a letter urging the government to “delay” the proposals, which they blasted as “the biggest attack on the welfare state” since Tory austerity.

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Ms Reeves on Friday reiterated her plans for reform, insisting that no-one, including Labour MPs and party members, “thinks that the current welfare system created by the Conservative Party is working today”.

She said: “They know that the system needs reform. We do need to reform how the welfare system works if we’re going to grow our economy.”

But, the chancellor added, if the government is going to lift people out of poverty “the focus has got to be on supporting people into work”.

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“Of course if you can’t work, the welfare state must always be there for you, and with this government it will be,” she said.

The reforms, announced ahead of Ms Reeves’s spring statement in March, include cuts to Personal Independence Payments (PIP), one of the main types of disability benefit, and a hike in the universal credit standard allowance.

Read more:
UK and US trade deal will save thousands of UK jobs – PM
Starmer faces rebellion from Labour MPs over welfare reforms

The government has claimed that changes to welfare will cut the budget by £4.8bn overall.

Separately, Downing Street refused on Friday to deny that Ms Reeves has consulted on potentially overhauling their winter fuel payment policy.

Labour’s unpopular decision to means-test the policy has taken the benefit away from millions of pensioners.

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Ministers have faced pressure from their own backbenchers to rethink the policy in the wake of last week’s local election results, which saw Labour lose the Runcorn by-election and control of Doncaster Council to Reform UK.

Asked if the chancellor has discussed the winter fuel payment in private, the prime minister’s spokesperson said they would not give a running commentary.

Pushed again, Number 10 said a “range” of discussions take place in government – which is not a denial.

However, it is worth noting that when reports emerged earlier this week that Downing Street was reviewing the policy, the government strongly pushed back on that suggestion.

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Ten explosions near international airport in India-administered part of Kashmir, officials say

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Ten explosions near international airport in India-administered part of Kashmir, officials say

Ten explosions have been heard near Srinagar International Airport in India-administered parts of Kashmir, officials have told Reuters news agency.

The blasts followed blackouts caused by multiple projectiles, which were seen in the sky above the city of Jammu earlier on Friday.

Explosions were also heard in the Sikh holy city of Amritsar, in the neighbouring Punjab state, according to Reuters.

An Indian military official told the agency that “drones have been sighted” and “they are being engaged”.

It comes as tensions between India and Pakistan across the line of control around the region of Kashmir have boiled over this week, leading to fears of a wider conflict.

Map of where explosions were reported in Kashmir and from where

On Wednesday morning, India carried out missile strikes in Pakistan and Pakistan-administered parts of the disputed region.

The retaliation came weeks after 26 people, mainly Indian tourists, were shot dead by gunmen in an India-administered part of Kashmir last month.

The government in India said it hit nine “terrorist infrastructure” sites, while Pakistan said it was not involved in the April attack and the sites were not militant bases.

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Explained: India-Pakistan conflict

Around 48 people have been killed since Wednesday, according to casualty estimates on both sides – which have not been independently verified.

India also suspended its top cricket tournament, the Indian Premier League, as a result of rising tensions, while the Pakistan Super League moved the remainder of its season to the United Arab Emirates.

Meanwhile, White House press secretary Karoline Leavitt said at a conference on Friday that the US is in constant contact with both India and Pakistan.

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World

Russia’s Victory Day parade felt more like a celebration of war than peace

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Russia's Victory Day parade felt more like a celebration of war than peace

Standing on Red Square, this was an intimidating sight, which felt much more like a celebration of war rather than peace.

I could feel the ground shake as the tanks rolled past, their caterpillar tracks on the ancient cobbles providing a deafening clatter.

The hairs on the back of my neck stood up in fear as the phalanxes of troops roared “Hurrah” in response to their commander in chief.

And the sight of combat drones being paraded on their launchers was actually quite sickening. Weapons that have been at the forefront of Russia’s invasion of Ukraine were paraded in a show of pomp and patriotism.

Russian President Vladimir Putin and his Chinese counterpart Xi Jinping
Image:
Xi Jinping and Vladimir Putin watch the procession. Pic: Reuters

Ukraine war latest: Putin welcomes Xi at Victory Day parade

For the rest of Europe, the 80th anniversary of the end of the Second World War has been a celebration of peace, but this felt much more like a celebration of war.

And it wasn’t just military hardware on display here, but the very identity of modern Russia.

A general view shows Red Square during a military parade on Victory Day, marking the 80th anniversary of the victory over Nazi Germany in World War Two, in central Moscow, Russia, May 9, 2025. Vladimir Astapkovich/Host agency RIA Novosti/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.
Image:
Pic: Reuters

For this is a country that is now defined by its military and its memory. The glory and sacrifice of 1945 have been weaponised to give credence to Russia’s current course and to make people believe that victory is their right.

For Russians, it served as a rallying cry and there was applause when the troops who have fought against Ukraine marched past.

But for those watching in Kyiv and other European capitals, it was an overt warning that Moscow has no intention of backing down.

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Putin hails sacrifice of Russian troops

The parade was considerably larger in scale than in recent years, when units and hardware have been needed on the battlefield. I think it was a deliberate attempt to project an image of confidence, and so was Vladimir Putin‘s positioning of his guests.

China’s Xi Jinping was given a prime position on the Kremlin leader’s right-hand side. It was no surprise given the economic lifeline Beijing has provided, but it felt like a particularly pointed gesture to the West – that they were looking at a new world order.

Despite that appearance of confidence, there were signs of Moscow’s unease that the parade could be disrupted.

There were snipers on every rooftop. Security was extremely tight. And the mobile internet signal across the city centre was completely shut down for fear of Ukrainian drone attacks, meaning none of the international media that had gathered could broadcast any live transmissions.

After the parade finished, Putin saluted the crowds as they spontaneously erupted into rhythmic shouts of “Rus-si-ya” at the sight of him.

Another PR coup complete without interruption, he will have departed as a very happy man.

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