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US interest rates are now at their highest since the global financial crisis as the US central bank has again imposed an increase as it seeks to lower inflation.

The Federal Reserve, known as the Fed, has imposed a 0.50 percentage points rise in interest rates.

The widely-expected rise will mean more expensive borrowing for the likes of American mortgage holders and those paying credit card debt.

Following the increase, US interest rates stand at 4.25% to 4.5%, up from 3.75% to 4% since the last increase in November.

In the US, the interest rate is a range, rather than a single percentage – as in the UK – because the Fed is not permitted to set a specific number. A target rate is instead set as a guide for banks to follow.

The increase is less than the four previous hikes of 0.75 percentage points, indicating the Fed is slowing down in its fight against inflation.

It had embarked on the programme of interest rate rises to bring inflation down to its target of 2%.

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That pace of rate rises has reduced as inflation in the world’s largest economy appears to be slowing. Prices increased 7.1% in the year up to November, the US Department of Labor announced on Tuesday, down from a 40-year high of 9.1% in June.

After announcing the latest rate increase, the Fed was firm that it was not letting up in its campaign of rises.

Speaking after the decision, the chair of the Fed, Jerome Powell, said he expected there would be ongoing increases and a sustained period when the interest rate is kept high.

In response to continuing high inflation, rates are likely to reach 5.1% by the end of next year, he said, a half percentage point higher than projected in September.

It will take time for inflation to be affected by higher interest rates, he warned, adding: “We are seeing the effects on demand in the most interest sensitive sectors of the economy such as housing. It will take time, however, for the full effects of monetary restraint to be realised, especially on inflation.”

Despite this, he acknowledged the US economy has “slowed significantly”.

He projected GDP growth, a measure of economic output, will be small, just 0.5% this year and next.

The US labour market, however, remains “extremely tight” with the unemployment rate near a 50-year low and job vacancies “still very high”, and wage growth elevated.

Mr Powell recognised the pain inflation was causing US households. But it will not reduce to that 2% target for a further two years, he said.

Inflation will be 5.6% this year, 3.1% next year, 2.5% in 2024 before falling to 2.1% in 2025, the Fed forecast.

“We understand that our actions affect communities, families and businesses across the country. Everything we do is in service to our public mission,” he said.

A similar decision on interest rates is to be announced by the Bank of England on Thursday. The Bank is also expected to increase the cost of debt in an effort to depress economic activity and rein in inflation.

Central banks had been asked not to increase rates by the United Nations Conference on Trade and Development.

A recession worse than that experienced after the global financial crisis could result from monetary regulators tightening policy and hiking interest rates, it warned.

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Donald Trump says he is awarding Rudy Giuliani the Presidential Medal of Freedom

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Donald Trump says he is awarding Rudy Giuliani the Presidential Medal of Freedom

Donald Trump has announced he will award Rudolph Giuliani the Presidential Medal of Freedom, a day after the former New York mayor and political ally was seriously injured in a traffic accident.

The medal is the nation’s highest civilian honour.

In a statement on social media on Monday, Mr Trump described Mr Giuliani as “the greatest mayor in New York City’s history and an equally great American patriot”.

Mr Giuliani has been celebrated for his leadership after the September 11 attacks but has also drawn controversy for his strong support of Mr Trump.

As the president’s lawyer, he became a central figure in efforts to overturn the 2020 election.

Rudy Giuliani attended Donald Trump's inauguration ceremony in January. Pic: Julia Demaree Nikhinson/Pool via Reuters
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Rudy Giuliani attended Donald Trump’s inauguration ceremony in January. Pic: Julia Demaree Nikhinson/Pool via Reuters

On Sunday, Mr Giuliani was taken to hospital after a car crash in New Hampshire, a spokesperson for the former mayor said.

He suffered “a fractured thoracic vertebrae, multiple lacerations and contusions, as well as injuries to his left arm and lower leg”, according to Michael Ragusa, Mr Giuliani’s head of security.

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His vehicle was struck from behind while driving on a highway near Manchester, New York, on Saturday evening.

“He sustained injuries but is in good spirits and recovering tremendously,” Mr Ragusa said in a statement on X, adding: “This was not a targeted attack.”

Mr Giuliani was in a rental car and “no one knew it was him”, according to Mr Ragusa.

Rudy Giuliani has drawn controversy over his efforts to overturn the 2020 election. Pic: Ted Shaffrey/AP
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Rudy Giuliani has drawn controversy over his efforts to overturn the 2020 election. Pic: Ted Shaffrey/AP

His head of security said the former mayor had been “flagged down by a woman who was the victim of a domestic violence incident” and contacted police on her behalf. The crash was “random and unrelated” to the domestic violence incident, Mr Ragusa said.

Mr Giuliani, 81, is expected to be released from hospital in a few days.

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His son, Andrew Giuliani, thanked people for reaching out after hearing about his father’s accident, writing on X: “Your prayers mean the world.”

“As a son, I can tell you that I’m honored to have a Dad that I can call the toughest SOB I’ve ever seen,” he added.

Turbulent years

The crash on Saturday comes after several turbulent years for Mr Giuliani, who earned the nickname “America’s mayor” for his leadership in New York following the 9/11 attacks in 2001.

He sought the Republican nomination for the 2008 presidential election but ultimately dropped out and endorsed John McCain.

Mr Giuliani re-emerged as Mr Trump’s personal lawyer in 2018 and later backed his unfounded claims of fraud in the 2020 election, which was won by Democrat Joe Biden.

However, Mr Trump’s legal team lost numerous lawsuits alleging fraud, and multiple recounts, audits, and reviews of the 2020 election uncovered no evidence of significant wrongdoing or error.

Two Georgia election workers won a defamation lawsuit against Mr Giuliani after he falsely accused them of helping to rig the presidential election. He was ordered to pay $148m (£118m) in damages.

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Burning Man: Dead body found ‘in a pool of blood’ at festival

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Burning Man: Dead body found 'in a pool of blood' at festival

A man has been found dead “in a pool of blood” at the Burning Man festival in Nevada, officials say.

The man’s body, described as a white adult, was found “lying on the ground” after 9pm on Saturday at the art and music festival in the Black Rock Desert, roughly 110 miles north of Reno, the Pershing County Sheriff’s Office said.

They said he was discovered while the festival’s large wooden effigy of a man at the centre of the festival was engulfed in flames – a tradition during the annual event.

Officials said a festival goer flagged down a sheriff’s deputy and reported seeing “a male subject lying in a pool of blood”.

The sheriff’s office set up a perimeter at the scene and has been treating it as a homicide, interviewing several participants.

The body, which has not been identified, was taken to a medical examiner’s office, while the festival continues until 6pm local time on Monday (2am Tuesday UK time).

“Although this act appears to be a singular crime, all participants should always be vigilant of their surroundings and acquaintances,” the sheriff’s office said.

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Officials say the crime scene is being preserved, but that the case is a “complicated investigation” as the makeshift Black Rock City where the event is located will be gone by the middle of the week.

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Burning Man organisers said they were cooperating with law enforcement and asked participants not to interfere with their investigation.

“The safety and well-being of our community are paramount,” their statement said, adding that support services, including a crisis support team, were available and participants had access to free Wi-Fi if they need to communicate with loved ones.

Burning Man is a celebration of self-expression that culminates in the ceremonial burning of its towering 40ft effigy.

Its origins can be traced back to the incineration of an eight-foot wooden “man” on San Francisco’s Baker Beach in 1986, which eventually evolved into an annual gathering in the Black Rock Desert.

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Will America ever put down its guns?

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Will America ever put down its guns?

Another week, another mass shooting in the US – a country with more guns than people.

Will anything stop the annual mass murder of sons, daughters, mothers, and fathers by firearm?

Martha Kelner speaks to a survivor of the 2016 Pulse nightclub mass shooting that killed 49 people. And then she speaks to one of the most conservative politicians in the country – who wants more guns in circulation and doesn’t feel gun laws are loose enough.

You can also watch all episodes on our YouTube channel.

Email us on trump100@sky.uk with your comments and questions.

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