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close video Powell has ‘made it clear’ Fed will not ‘pivot’ on rates: Sica

Circle Squared Alternative Investments CEO Jeff Sica joins “Varney & Co.” to share his market outlook and breaks down his predictions for how the Federal Reserve will handle rate hikes going forward.

The consumer price index (CPI) rose 6.4% in January on an annual basis, hotter than expected, but remained steady compared to last month. 

The latest read presents more challenges for Federal Reserve Chair Jerome Powell who has hinted that disinflation is underway.

Still, elevated costs for everyday staples remain stubbornly high.

A cashier checks out a customer at a Publix grocery store. (Jeffrey Greenberg / UCG / Universal Images Group via Getty Images / File / Getty Images)

The Labor Department reported that the CPI, a broad measure of the price of everyday goods that includes gasoline, groceries and rents, rose 0.5% on the month in January after a surprise decline of 0.1% in December. 

JANUARY RENTS HAD THE SMALLEST INCREASE SINCE MAY 2021

Annually prices remain above 6% but are down sharply from the 9.1% surge in June, which marked the highest inflation rate in almost 41 years.

Customers shop in a store in Queens, New York, on Dec. 23, 2022. (Ziyu Julian Zhu / Xinhua via Getty Images / File / Getty Images)

Still, inflation is expected to remain roughly three times higher than the pre-pandemic average on an annualized basis, underscoring the persistent financial burden placed on millions of U.S. households by high prices.

JAMIE DIMON WARNS IT'S TOO EARLY TO DECLARE VICTORY AGAINST INFLATION

When factoring out volatile food and energy costs, the core consumer price index rose 0.4% in January, slightly above December’s 0.3% increase. Annually, core CPI ticked up 5.6% in January, more than expected. 

It's still lower than September’s 6.6% increase, which was the highest in 40 years.

Federal Reserve Board Chairman Jerome Powell (Julia Nikhinson / Getty Images / File / Getty Images)

Powell has previously acknowledged that disinflation has begun, but the Fed chairman also says there is still a long way to go to reach the central bank’s desired 2.0% inflation rate. 

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The markets initially welcomed this message, sending risk assets like stocks higher. But recent concerns that the Fed will keep rates higher for longer have investors worried about a policy mistake.

FOX Business' Charles Brady and Megan Henney contributed to this report.

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Elon Musk could act as middleman between China and Trump in possible global trade war

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Elon Musk could act as middleman between China and Trump in possible global trade war

Drive an hour outside China’s commercial capital Shanghai, and you’ll reach Elon Musk’s Tesla gigafactory.

It manufactures almost one million Tesla cars a year and produces more than half of all its cars worldwide.

But with US president-elect Donald Trump preparing to move into the White House, the relationship between his new buddy Elon Musk and the leadership of China‘s Communist Party is in sharp focus.

Tesla’s Shanghai ‘gigafactory’
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Tesla’s Shanghai gigafactory. Pic: Lex Ramsay

Shanghai has been the key to Tesla’s success, largely thanks to the city’s former Communist Party secretary, now China’s premier, Li Qiang.

Chief executive of Shanghai-based Auto Mobility Limited, Bill Russo, says: “Qiang is China’s number two person. His position in Shanghai made everything possible for Tesla.”

He added: “In 2017, China adjusted its policy guidelines for the automotive industry to allow foreign companies to own their factories in China.

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Musk, Trump and China explained

“Tesla signed its deal in 2018, broke ground in 2019, and started producing the Model 3 in 2020.”

The factory opened at breakneck speak and in record time.

In April, Musk met Qiang in Beijing, later posting on X: “Honoured to meet with Premier Li Qiang. We have known each other now for many years, since early Shanghai days.”

In this photo released by Xinhua News Agency, visiting Tesla CEO Elon Musk, left, meets with Chinese Premier Li Qiang in Beijing, Sunday, April 28, 2024. Musk met with a top government leader in the Chinese capital Sunday, just as the nation's carmakers are showing off their latest electric vehicle models at the Beijing auto show. (Wang Ye/Xinhua via AP)
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Elon Musk met Chinese premier Li Qiang in Beijing in April 2024. Pic: AP

The Musk-China ties go all the way to the top.

When China’s President Xi Jinping visited the US in November 2023 he met Musk, who posted: “May there be prosperity for all” – echoing the language often used by China’s government.

Read more:
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Inside a Tesla showroom in Shanghai
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Inside a Tesla showroom in Shanghai. Pic: Lex Ramsay

Musk has previously weighed into the debate over the status of Taiwan. Two years ago, he suggested tensions could be eased by giving China some control over Taiwan.

This comment incensed Taiwan’s leaders.

Chinese commentator Einar Tangen, from the Taihe Institute in Beijing, says: “If Musk had said anything else, he could face action against the Shanghai plants. He’s not going to endanger that. He’s playing both sides for his own advantage.”

What’s in it for China?

Musk needs China, and in the months to come, China may need Musk.

He could act as a well-connected middleman between the Chinese Communist Party and Trump, in the face of a potential global trade war.

“Like it or not, we are living in a world where China is the dominant player in the race to an electric future,” says Russo.

Musk pioneered the EV industry in China, but is now struggling to compete with local car brands like BYD and Nio.

President-elect Donald Trump greets Elon Musk before the launch of the sixth test flight of the SpaceX Starship rocket Tuesday, Nov. 19, 2024 in Boca Chica, Texas. (Brandon Bell/Pool via AP)
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Elon Musk’s support helped propel Donald Trump to a second term in the White House. Pic: AP

The relationship between Musk and Trump could become volatile, but for now, Musk stands to benefit.

“Donald Trump has never had a problem giving exceptions to friends,” Tangen says.

“It fits his personality, that he can grant pardons and give favours to the people and companies he chooses.”

Musk ‘the pioneer’

Musk is well regarded as a pioneer in China and most people speak of him highly.

Strolling along the Bund waterfront area in Shanghai, Benton Tang says: “Tesla really impacted the entire industry here.

“It pushed people to develop and improve the quality, the design and especially the price.”

Chinese vehicle manufacturers like BYD provide stiff competition for Tesla
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Chinese vehicle manufacturers like BYD provide stiff competition for Tesla. Pic: Lex Ramsay

Interest in the Musk family has also gripped China’s online community.

His mother, Maye Musk, frequently visits the country, where she has a huge social media following as a senior-age celebrity fashion icon and endorses several Chinese products including a mattress brand.

Her book, A Woman Makes A Plan, has been translated into Chinese and is a bestseller here.

The 76th Cannes Film Festival - Screening of the film "Asteroid City" in competition - Red Carpet Arrivals - Cannes, France, May 23, 2023. Maye Musk poses. REUTERS/Gonzalo Fuentes
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Maye Musk. Pic: Reuters

Meanwhile, as the countdown to Trump’s inauguration gains pace, the spotlight on the president-elect’s coterie of advisers intensifies.

In the middle of the glare is Elon Musk.

China waits to see what that will mean for them.

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Did New Orleans authorities fail the victims of the New Year terror attack?

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Did New Orleans authorities fail the victims of the New Year terror attack?

Did the authorities fail the victims of the New Orleans terror attack? It’s barely in question, surely.

And yet, consider the response of Superintendent Anne Kirkpatrick of New Orleans police when I asked if she’d let them down by not having an appropriate security plan.

“That’s not correct, we would disagree with that.”

“It has to be a security failure?” I suggested.

Tributes for the New Orleans attack victims. Pic: Reuters
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Pic: Reuters

“We do know that people have lost their lives,” she responded. “But if you were experienced with terrorism, you would not be asking that question.”

With that, she was escorted away from gathered journalists by her media handlers.

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How much of a threat does ISIS pose?

Superintendent Kirkpatrick had been holding a short news conference at the end of Bourbon Street to herald its re-opening. It was just yards from the spot where a terrorist was able to drive through a gap in a makeshift line of obstructions and accelerate towards New Year crowds.

More on New Orleans Attack

Invoking “experience with terrorism” is something to ponder. What experience told authorities they had adequate protection against a vehicle attack?

What experience told them it was appropriate to have a car’s width gap in makeshift street barricades?

What experience told them to contradict the security protocols of major cities around the world when it comes to large public gatherings?

Read more on this story:
What we know about the suspect

Brother of attack victim reveals last words
The victims who have been named so far

A man helps prepare a makeshift memorial, following an incident in which people were killed by a man driving a truck in an attack during New Year's celebrations, in New Orleans, Louisiana, U.S., January 2, 2025. REUTERS/Eduardo Munoz
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Pic: Reuters

To many, the answer shouldn’t be talk of experience – it should be, simply: “Sorry.” Notably, it has seemed to be the hardest word in a series of briefings by authorities who have bristled at the notion of security failings.

I asked Jack Bech for his view. He lost his brother Martin, or ‘Tiger’ in the Bourbon Street attack. He told Sky News he watched the final moments of his brother’s life on a FaceTime call to an emergency room as doctors tried, but failed, to save him.

It’s one heartbreaking story among dozens in this city.

Pic: Jack Bech
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Tiger Bech (left) and Jack Bech (right). Pic: Jack Bech

On security, he said: “You can’t blame them. That dude easily could have been walking through the crowd with a jacket on and a bomb strapped to his chest.”

True. But the least that might be expected is an acknowledgement of failure to stop the man who drove his weapon into the crowd because he was able to. They certainly can’t claim success.

A measure of contrition would, perhaps, help the healing in this city. Experience should tell them that, if nothing else.

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Israel confirms it is holding Gaza hospital director Dr Hussam Abu Safiya

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Israel confirms it is holding Gaza hospital director Dr Hussam Abu Safiya

Israel has confirmed it is holding the director of one of the last functioning hospitals in northern Gaza following reports of his arrest last week.

Dr Hussam Abu Safiya was held along with dozens of other staff and taken to an interrogation centre during a raid on the Kamal Adwan Hospital on 27 December.

The Israeli military said they targeted the hospital as it was being used a command centre by Hamas militants.

Now, the Israel Defense Forces (IDF) have confirmed the doctor is being held on suspicion of “involvement in terrorist activities” and accused him of “holding a rank” in Hamas, but have not disclosed his whereabouts.

This is believed to be one of the last photos taken of Dr Hussam Abu Safiya before he was detained, walking towards Israeli tanks
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This is believed to be one of the last photos taken of Dr Hussam Abu Safiya before he was detained, walking towards Israeli tanks

He is “currently being investigated” by Israeli security forces, the statement said.

Human rights campaigners have raised concerns for Dr Abu Safiya’s welfare, with the Euro-Med Human Rights Monitor organisation saying it had received information his health had deteriorated.

It said Physicians for Human Rights – Israel, another human rights group, had submitted a request for information and a lawyer’s visit on behalf of the hospital director’s family.

Following the raid on the hospital, Sky News spoke to patients who said they were forced outside in cold weather and told to strip.

Confirmation of Dr Abu Safiya’s detention comes as Israeli strikes killed at least 30 people in Gaza, including children, overnight, according to staff at al Aqsa Martyrs, another hospital in the enclave.

The Israeli army again said in a statement that it had struck Hamas gathering points and command centres.

Earlier this week, a new report from the UN Human Rights Office said Gaza’s health system was being brought “to the brink of total collapse” by Israel’s attacks on and around hospitals in the region.

At least 10 hospitals have been attacked by Israeli forces since the start of the war, some multiple times, the report said.

The Kamal Adwan Hospital has been hit multiple times over the past three months.

The Israel-Hamas war was sparked after Hamas launched an attack on Israel on 7 October 2023.

Militants killed around 1,200 people, mostly civilians, and abducted about 250. Around 100 hostages are still inside Gaza, with at least a third believed to be dead.

Israel’s retaliation has killed more than 45,500 Palestinians, more than half of them women and children, and wounded more than 108,000 others, according to the Hamas-run Palestinian health ministry, which does not distinguish between civilians and combatants.

Israel’s military says it only targets militants. The army says it has killed 17,000 militants, without providing evidence.

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