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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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Marjorie Taylor Greene: Former Trump ally turned critic announces sudden resignation

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Marjorie Taylor Greene: Former Trump ally turned critic announces sudden resignation

Marjorie Taylor Greene – a one-time MAGA ally who has turned into a fierce critic of Donald Trump – has unexpectedly announced she is resigning from Congress.

Her relationship with the president has deteriorated in recent months, and she had vocally campaigned for the justice department to release all of its files concerning the convicted paedophile Jeffrey Epstein.

Mr Trump has been fiercely critical about Ms Greene on Truth Social – describing her as a “lunatic”.

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‘MAGA meltdown going on because of Epstein’

In a statement posted on X, she wrote: “Standing up for American women who were raped at 14, trafficked and used by rich powerful men, should not result in me being called a traitor and threatened by the President of the United States, whom I fought for.”

Ms Greene went on to confirm her last day in office will be on January 5.

The hard-right Republican was one of the most aggressive spokespeople for the Make America Great Again movement – and had become infamous for her combative encounters with journalists, including Sky’s Martha Kelner.

She was known for her susceptibility to conspiracy theories, and was widely denounced for comparing COVID-19 masks and vaccinations to the persecution of Jews during the Holocaust.

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On social media, she had made posts advocating violence against Democrat opponents – and casting doubt on the 9/11 terror attacks and the school mass shootings at Parkland and Sandy Hook.

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March: Greene clashes with Sky correspondent

The bond between Ms Greene and Mr Trump started to break down after she lambasted his foreign policy – describing it as “America Last”.

Last week, the president had announced that he was withdrawing his support and endorsement for the 51-year-old, who had been expected to run for re-election in Georgia’s 14th congressional district next November.

Her statement added: “I have too much self-respect and dignity, love my family way too much, and do not want my sweet district to have to endure a hurtful and hateful primary against me by the president we all fought for, only to fight and win my election while Republicans will likely lose the midterms.”

Read more US news:
Trump says Ukraine will have to accept peace plan
President orders release of Jeffrey Epstein files

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‘Shame on everyone that protected Epstein’

A few days ago, Ms Greene had warned the breakdown in relations with the White House had led to her construction company receiving a pipe bomb threat.

She had written on X: “President Trump’s unwarranted and vicious attacks against me were a dog whistle to dangerous radicals that could lead to serious attacks on me and my family.”

Ms Greene went on to warn his inflammatory rhetoric “puts blood in the water and creates a feeding frenzy that could ultimately lead to a harmful or even deadly outcome”.

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Pras Michel: Fugees rapper ‘who betrayed US for money’ is jailed for 14 years

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Pras Michel: Fugees rapper 'who betrayed US for money' is jailed for 14 years

A Grammy-winning rapper who “betrayed his country for money” has been sentenced to 14 years in prison.

Prakazrel “Pras” Michel, who was part of 1990s hip-hop group The Fugees, was convicted of illegally funnelling millions of dollars in foreign contributions to Barack Obama’s re-election campaign in 2012.

The Justice Department had accused the 53-year-old of accepting $120m (£92m) from Malaysian financier Low Taek Jho, who wanted to gain political influence in the US.

The Fugees after winning Grammys in 1997. Pic: Reuters
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The Fugees after winning Grammys in 1997. Pic: Reuters

Prosecutors said Michel “lied unapologetically and unrelentingly to carry out his actions” – and sought to deceive the White House, senior politicians and the FBI for almost a decade.

In 2018, it is claimed he urged the Trump administration and the justice department to drop embezzlement investigations against Low.

Michel was convicted of 10 counts by a federal jury in 2023 – and last month, he was ordered to forfeit about $65m (£50m) for his role in the scheme.

Hollywood star Leonardo DiCaprio testified at the trial, and Low was a primary financier in his 2013 film The Wolf Of Wall Street.

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The Oscar-winning actor said the businessman’s funding and legitimacy had been carefully vetted before they entered a partnership.

Low Taek Jho. AP file pic
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Low Taek Jho. AP file pic

Prosecutors had been seeking a life sentence to “reflect the breadth and depth of Michel’s crimes, his indifference to the risks to his country, and the magnitude of his greed”.

However, the rapper’s lawyer Peter Zeidenberg has argued that the 14-year term is “completely disproportionate to the offence” – and is vowing to appeal.

Last year, a judge rejected Michel’s request for a new trial after claiming that one of his lawyers had used AI during closing arguments.

Read more from Sky News:
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The Stone Roses bassist Mani dies aged 63

Wyclef Jean, Lauryn Hill and Pras Michel formed The Fugees in the 1990s
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Wyclef Jean, Lauryn Hill and Pras Michel formed The Fugees in the 1990s

Low Taek Jho has been accused of having a central role in the 1MDB scandal, amid claims billions of dollars were stolen from a Malaysian state fund.

The 44-year-old is a fugitive but has maintained his innocence, with his lawyers writing: “Low’s motivation for giving Michel money to donate was not so that he could achieve some policy objective.

“Instead, Low simply wanted to obtain a photograph with himself and then President Obama.”

Michel, who was born in Brooklyn, was a founding member of The Fugees with childhood friends Lauryn Hill and Wyclef Jean – selling tens of millions of records.

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Trump peace plan: We could all pay if Europe doesn’t step up and guarantee Ukraine’s security

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Trump peace plan: We could all pay if Europe doesn't step up and guarantee Ukraine's security

The Donald Trump peace plan is nothing of the sort. It takes Russian demands and presents them as peace proposals, in what is effectively for Ukraine a surrender ultimatum.

If accepted, it would reward armed aggression. The principle, sacrosanct since the Second World War, for obvious and very good reasons, that even de facto borders cannot be changed by force, will have been trampled on at the behest of the leader of the free world.

The Kremlin will have imposed terms via negotiators on a country it has violated, and whose people its troops have butchered, massacred and raped. It is without doubt the biggest crisis in Trans-Atlantic relations since the war began, if not since the inception of NATO.

The question now is: are Europe’s leaders up to meeting the daunting challenges that will follow. On past form, we cannot be sure.

Vladimir Putin, President of Russia. Pic: Sputnik/Gavriil Grigorov via Reuters
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Vladimir Putin, President of Russia. Pic: Sputnik/Gavriil Grigorov via Reuters

The plan proposes the following:

• Land seized by Vladimir Putin’s unwarranted and unprovoked invasion would be ceded by Kyiv.

• Territory his forces have fought but failed to take with colossal loss of life will be thrown into the bargain for good measure.

Ukraine will be barred from NATO, from having long-range weapons, from hosting foreign troops, from allowing foreign diplomatic planes to land, and its military neutered, reduced in size by more than half.

Donald Trump meeting Vladimir Putin in Alaska in August, File pic: Reuters
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Donald Trump meeting Vladimir Putin in Alaska in August, File pic: Reuters

And most worryingly for Western leaders, the plan proposes NATO and Russia negotiate with America acting as mediator.

Lest we forget, America is meant to be the strongest partner in NATO, not an outside arbitrator. In one clause, Mr Trump’s lack of commitment to the Western alliance is laid bare in chilling clarity.

And even for all that, the plan will not bring peace. Mr Putin has made it abundantly clear he wants all of Ukraine.

He has a proven track record of retiring, rallying his forces, then returning for more. Reward a bully as they say, and he will only come back for more. Why wouldn’t he, if he is handed the fortress cities of Donetsk and a clear run over open tank country to Kyiv in a few years?

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US draft Russia peace plan

Since the beginning of Trump’s presidency, Europe has tried to keep the maverick president onside when his true sympathies have repeatedly reverted to Moscow.

It has been a demeaning and sycophantic spectacle, NATO’s secretary general stooping even to calling the US president ‘Daddy’. And it hasn’t worked. It may have made matters worse.

A choir sing in front of an apartment building destroyed in a Russian missile strike in Ternopil, Ukraine. Pic: Reuters
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A choir sing in front of an apartment building destroyed in a Russian missile strike in Ternopil, Ukraine. Pic: Reuters

The parade of world leaders trooping through Sharm el-Sheikh, Egypt, lavishing praise on his Gaza ceasefire plan, only encouraged him to believe he is capable of solving the world’s most complex conflicts with the minimum of effort.

The Gaza plan is mired in deepening difficulty, and it never came near addressing the underlying causes of the war.

Read more:
Ukraine war latest: Putin welcomes peace plan
Trump’s 28-point Ukraine peace plan in full

Most importantly, principles the West has held inviolable for eight decades cannot be torn up for the sake of a quick and uncertain peace.

With a partner as unreliable, the challenge to Europe cannot be clearer.

In the words of one former Baltic foreign minister: “There is a glaringly obvious message for Europe in the 28-point plan: This is the end of the end.

“We have been told repeatedly and unambiguously that Ukraine’s security, and therefore Europe’s security, will be Europe’s responsibility. And now it is. Entirely.”

If Europe does not step up to the plate and guarantee Ukraine’s security in the face of this American betrayal, we could all pay the consequences.

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