Federal Reserve chairman Jerome Powell gave a clear signal he is inclined to pause interest-rate increases next month, taking command of the policy debate after several officials suggested they wanted to keep hiking.
“We’ve come a long way in policy tightening and the stance of policy is restrictive and we face uncertainty about the lagged effects of our tightening so far and about the extent of credit tightening from recent banking stresses,” Mr Powell told a Fed conference on Friday in Washington.
“Having come this far, we can afford to look at the data and the evolving outlook to make careful assessments,” he said.
Investors pared bets on a rate hike next month to around 13 per cent after Mr Powell’s comments compared with 33 per cent before he spoke.
Mr Powell’s remarks reinforce similar guidance this week from other members of his leadership team, including New York Fed President John Williams and Governor Philip Jefferson, recently nominated as vice chairman pending Senate confirmation.
“His comments indicate his baseline view is to pause in June to assess incoming data,” said Kathy Bostjancic, chief economist at Nationwide Life Insurance. But she cautioned that if economic data before the next meeting, including a fresh reading on consumer prices, come in above expectations, the Fed chairman could still lead a hike because “the guidance he is offering is limited”.
Officials raised rates by a quarter percentage point earlier this month to a target range of 5 per cent to 5.25 per cent and signalled they could hold rates steady when they next meet June 13-14.
The US central bank has increased interest rates 5 percentage points in little more than a year, undertaking its most aggressive tightening campaign in decades to quell high inflation.
Some officials, including Governor Michelle Bowman and Cleveland Fed President Loretta Mester, have suggested the Fed should keep raising rates because they’ve not seen convincing evidence that price pressures are cooling fast enough.
But Mr Powell signalled that he isn’t in that camp, citing headwinds to the economy stemming from the recent collapse of four regional US banks.
“While the financial stability tools helped to calm conditions in the banking sector, developments there on the other hand are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation,” Mr Powell said. “As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals. Of course, the extent of that is highly uncertain.”
Policymakers in March projected rates peaking at 5.1 per cent according to their median outlook – the level reached earlier this month – though seven other officials forecast they would need to go higher.
With the labour market and economic growth more resilient than many expected and inflation still high, officials could revise up their outlook for rate projections they submit in June.
The conference, held at the Fed’s headquarters in Washington, honours the memory of former Fed economist Thomas Laubach, who died in 2020 at the age of 55.
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
UAE currency: the story behind the money in your pockets
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek independent legal advice.
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
The Transfiguration
Director: Michael O’Shea
Starring: Eric Ruffin, Chloe Levine
Three stars
UAE currency: the story behind the money in your pockets
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Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
UAE currency: the story behind the money in your pockets
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Mohammed bin Zayed Majlis
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
UAE currency: the story behind the money in your pockets
