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."
Migrants will have to live in the UK for a decade before they can apply for citizenship under plans to reduce reliance on foreign workers.Â
The change from five to 10 years will come with exceptions for people who make a “high contribution” to the economy or society, who will able to be fast-tracked for permanent settlement rights.
It comes on top of new English language requirements across every visa route, which will extend to adult dependents for the first time.
The measures will be announced by Sir Keir Starmer today ahead of the Immigration White Paper, which will set out further reforms to bring net migration down.
At a press conference later, the prime minister will say: “This is a clean break from the past and will ensure settlement in this country is a privilege that must be earned, not a right.
“And when people come to our country, they should also commit to integration and to learning our language.
“Lower net migration, higher skills and backing British workers – that is what this White Paper will deliver.”
Net migration – the difference between the number of people immigrating and emigrating to a country – soared when the UK left the EU in January 2020.
It reached 903,000 in the year to June 2023 before falling to 728,000 in mid-2024. But that is still well above its pre-Brexit high of 329,000 in the year up to June 2015.
The government is under pressure to tackle legal migration, as well as illegal immigration, amid Reform UK’s surge in the polls.
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9:47
Reform: Immigration ‘should be frozen’
However, experts have questioned whether some of the changes announced by Sir Keir today will have much of an impact, at least in the short term.
Currently, migrants have to live in the UK for five years to get indefinite leave to remain, or “settled status” if they are from the EU. They can then use this to apply for British citizenship, usually 12 months after settlement.
There were 162,000 grants of settlement in 2024, up 35% from 2023, and 270,000 grants of citizenship in 2024, up nearly a third on the previous year.
‘Contributions-based’ citizenship model
The new “contributions-based model” means people must spend a decade in the UK before applying to stay, unless they can show a “real and lasting contribution to the economy and society”.
Image: Sir Keir Starmer at a summit in Oslo. Pic: PA
The Home Office said this will include “high-skilled” and “high-contributing” individuals like nurses, doctors, engineers and AI leaders.
The details are still being fleshed out and will be put to consultation later this year rather than in the white paper, Sky News understands.
However, the thinking is that those who pay higher taxes or who work in a priority sector will be eligible to be fast-tracked. Home Secretary Yvette Cooper is also keen for discounts to apply to those who make an “outstanding contribution” to society, such as community leaders, it is understood.
English language requirements
The government also plans to raise English language requirements across every immigration route, so foreign workers speak a higher standard of English.
For the first time, this will also extend to all adult dependents by requiring them to demonstrate a basic understanding of English, which the government says will help people integrate and find employment.
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Dr Madeleine Sumption, director of the Migration Observatory at the University of Oxford, told Sky News that extending the amount of time people need to be in the UK to get permanent settlement rights is unlikely to significantly affect migration levels, as there is “no evidence” this affects their decision about whether to migrate.
Any impact would be seen in five to ten years, “when people get to that point of the visa journey”, she said, adding that the main effect of this policy would be to “bring in more visa-fee revenue to the Home Office” and “to make it harder for migrants to settle in”.
She said that language requirements “are more likely to have an impact on the number of visas granted”, as more than half of skilled worker visas over the past couple of years have gone to dependents.
“However, there’s no data on how many of them would have passed a language test so it is hard to say how big,” Dr Sumption added.
The Home Office has not put a figure on what sort of reduction these policies could achieve, with Ms Cooper to give more details in parliament on Monday afternoon.
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16:59
Minister reveals new immigration plans
On Sunday, she told Sky News’s Trevor Phillips that plans to close the care worker visa route and change the skilled visa threshold to require a graduate qualification would cut the number of overseas workers by about 50,000 this year.
However, she refused to put a target on the overall levels of net migration the government is aiming for, saying that approach “failed” under the Conservatives.
The Tories have admitted making mistakes in office, but are still calling for a binding immigration cap and want to repeal the Human Rights Act for immigration issues.
Shadow Home Secretary Chris Philp said Labour has “overseen the worst ever start to a year for illegal immigrants crossing the channel” adding: “The idea that Starmer is tough on immigration is a joke.”
Donald Trump’s tour of the Middle East this week has taken on a new importance after a series of surprising developments on the wars in Ukraine and Gaza, and on trade between the US and China.
After a diplomatic flurry over the weekend, it seemed like steps were being taken towards some form of possible peace in both Gaza and Ukraine.
Alongside that, Washington claimed it had made “substantial progress” in trade talks with China, with treasury secretary Scott Bessent going as far as to say a deal had been agreed to cut the US trade deficit. But there was no mention of reducing tariffs.
Image: Scott Bessent and Jamieson Greer speak to the media after trade talks with China in Geneva, Switzerland. Pic: Reuters
Mr Trump is due to travel to the Middle East later today on the first major foreign trip of his second presidency, visiting Saudi Arabia and then Qatar and the UAE.
It will coincide with a possible meeting between Ukraine’s Volodymyr Zelenskyy and Russia’s Vladimir Putin, in person in Turkey, and comes after Hamas said it would release a hostage, an Israeli soldier who holds American citizenship.
This leaves Mr Trump facing challenges on three fronts as he visits some of the richest nations in the world.
Zelenskyy and Putin to meet?
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The US president previously claimed he could end the war in Ukraine in one day – something he has not done.
On Sunday, he put pressure on Mr Zelenskyy to sit down and meet with Mr Putin in person after Moscow put forward the proposal for talks in Istanbul.
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11:51
Putin’s call for peace talks genuine?
Thursday could see a potential first in-person meeting between the two leaders since Moscow’s invasion began.
It could mark an extraordinary moment in the ongoing war in Ukraine, however, the countries are seemingly still a long way from actual peace.
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After Mr Trump declared war on the existing global trade system in April, hitting allies and foes alike with tariffs, it left many reeling and triggered an escalation with China, which slapped Washington with reciprocal measures.
While those are still in place, the US said on Sunday that the two have agreed a deal to cut the US trade deficit.
However, despite confidence from the US side, China’s vice premier He Lifeng described the meeting as an “important first step” that created a foundation only.
No mention was made of reducing tariffs and this would do little good elsewhere where tariffs continue to add friction to previously freer global trade.
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In Gaza, previous efforts to achieve a ceasefire collapsed and Israel implemented a total ban on aid going into the enclave to try to pressure Hamas back to the negotiating table.
With charities warning that the 2.3 million Palestinians in Gaza face a humanitarian crisis, the militant group has said it will release Edan Alexander, an Israeli soldier who holds US citizenship.
It comes after Israel announced it intends to occupy the entire enclave, threatening years of more war.
Image: Yael Alexander holds a poster of her son, Edan, who was taken hostage by Hamas militants.
Pic: AP
No exact date was given, but Hamas said it would release the 21-year-old as part of ongoing efforts to achieve a permanent ceasefire with Israel.
His expected release has been described as a “gesture of goodwill” by Steve Witkoff, Mr Trump’s special envoy to the Middle East.
The previously agreed ceasefire failed over disagreement on the transition from phase one onwards.
While Hamas wanted to progress to phase two, where work would be done towards Israel’s permanent withdrawal from Gaza and peace, Israel wanted to extend phase one and release more hostages.
Israel agreed to a framework proposed by the US that would see Hamas release half of the remaining hostages, its main bargaining chip, in exchange for a ceasefire extension and a promise to negotiate a lasting truce.
While Mr Alexander is only one hostage, it will be seen as a promising sign that Hamas returned to the negotiating table and Mr Trump will be in Qatar, the key mediator in so-far unsuccessful peace efforts.
Migrants will have to live in the UK for a decade before they can apply for citizenship under plans to reduce reliance on foreign workers.Â
The change from five to 10 years will come with exceptions for people who make a “high contribution” to the economy or society, who will able to be fast-tracked for permanent settlement rights.
It comes on top of new English language requirements across every visa route, which will extend to adult dependents for the first time.
The measures will be announced by Sir Keir Starmer today ahead of the Immigration White Paper, which will set out further reforms to bring net migration down.
At a press conference later, the prime minister will say: “This is a clean break from the past and will ensure settlement in this country is a privilege that must be earned, not a right.
“And when people come to our country, they should also commit to integration and to learning our language.
“Lower net migration, higher skills and backing British workers – that is what this White Paper will deliver.”
Net migration – the difference between the number of people immigrating and emigrating to a country – soared when the UK left the EU in January 2020.
It reached 903,000 in the year to June 2023 before falling to 728,000 in mid-2024. But that is still well above its pre-Brexit high of 329,000 in the year up to June 2015.
The government is under pressure to tackle legal migration, as well as illegal immigration, amid Reform UK’s surge in the polls.
Please use Chrome browser for a more accessible video player
9:47
Reform: Immigration ‘should be frozen’
However, experts have questioned whether some of the changes announced by Sir Keir today will have much of an impact, at least in the short term.
Currently, migrants have to live in the UK for five years to get indefinite leave to remain, or “settled status” if they are from the EU. They can then use this to apply for British citizenship, usually 12 months after settlement.
There were 162,000 grants of settlement in 2024, up 35% from 2023, and 270,000 grants of citizenship in 2024, up nearly a third on the previous year.
‘Contributions-based’ citizenship model
The new “contributions-based model” means people must spend a decade in the UK before applying to stay, unless they can show a “real and lasting contribution to the economy and society”.
Image: Sir Keir Starmer at a summit in Oslo. Pic: PA
The Home Office said this will include “high-skilled” and “high-contributing” individuals like nurses, doctors, engineers and AI leaders.
The details are still being fleshed out and will be put to consultation later this year rather than in the white paper, Sky News understands.
However, the thinking is that those who pay higher taxes or who work in a priority sector will be eligible to be fast-tracked. Home Secretary Yvette Cooper is also keen for discounts to apply to those who make an “outstanding contribution” to society, such as community leaders, it is understood.
English language requirements
The government also plans to raise English language requirements across every immigration route, so foreign workers speak a higher standard of English.
For the first time, this will also extend to all adult dependents by requiring them to demonstrate a basic understanding of English, which the government says will help people integrate and find employment.
Spreaker
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To show you this content, we need your permission to use cookies.
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You can change your settings at any time via the Privacy Options.
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Dr Madeleine Sumption, director of the Migration Observatory at the University of Oxford, told Sky News that extending the amount of time people need to be in the UK to get permanent settlement rights is unlikely to significantly affect migration levels, as there is “no evidence” this affects their decision about whether to migrate.
Any impact would be seen in five to ten years, “when people get to that point of the visa journey”, she said, adding that the main effect of this policy would be to “bring in more visa-fee revenue to the Home Office” and “to make it harder for migrants to settle in”.
She said that language requirements “are more likely to have an impact on the number of visas granted”, as more than half of skilled worker visas over the past couple of years have gone to dependents.
“However, there’s no data on how many of them would have passed a language test so it is hard to say how big,” Dr Sumption added.
The Home Office has not put a figure on what sort of reduction these policies could achieve, with Ms Cooper to give more details in parliament on Monday afternoon.
Please use Chrome browser for a more accessible video player
16:59
Minister reveals new immigration plans
On Sunday, she told Sky News’s Trevor Phillips that plans to close the care worker visa route and change the skilled visa threshold to require a graduate qualification would cut the number of overseas workers by about 50,000 this year.
However, she refused to put a target on the overall levels of net migration the government is aiming for, saying that approach “failed” under the Conservatives.
The Tories have admitted making mistakes in office, but are still calling for a binding immigration cap and want to repeal the Human Rights Act for immigration issues.
Shadow Home Secretary Chris Philp said Labour has “overseen the worst ever start to a year for illegal immigrants crossing the channel” adding: “The idea that Starmer is tough on immigration is a joke.”