The US Federal Reserve held US interest rates steady on Wednesday as firmer inflation expectations and uncertainty over the implications of President Donald Trump's agenda cast uncertainty over the central bank's future policy decisions.
Wednesday's decision by the rate-setting Federal Open Market Committee kept the Fed's benchmark interest rate target range unchanged at 4.25 to 4.50 per cent. The Fed had cut rates by a cumulative 100 basis points in its three previous meetings.
"That recalibration was appropriate in light of the progress on inflation. With our policy stance significantly less restrictive, we do not need to be in a hurry to adjust our policy stance," Fed chairman Jerome Powell told reporters.
Mr Powell said he wants to see "real progress" on inflation before further reducing rates: "We want to see serial readings that suggest that we're making further progress."
A rate-cut pause was seen as a near certainty in the weeks leading up to the Fed's first meeting this year as stubborn inflation, a booming economy and Mr Trump's policies add a new degree of uncertainty.
Fed officials have indicated in recent months that they were expecting to slow the pace of rate cuts in response to a robust jobs market and inflation remaining stubbornly above their 2 per cent target.
Nor did the FOMC's post-meeting statement offer any hints that it is contemplating another rate cut in the near future, Wells Fargo chief economist Jay Bryson wrote to clients.
The most recent economic projections released by the Fed – from its meeting last month – showed they anticipate only two quarter-point cuts this year, half the amount they projected in September.
With the Fed's preferred inflation metric at 2.4 per cent, some Fed officials have argued for a more cautious approach to cutting rates while others have indicated a willingness to continue supporting a reduction in monetary policy. The Fed's preferred inflation metric will be released on Friday.
Part of the reason for firmer inflation is a resilient US economy backed by strong consumer spending. The US GDP for the fourth quarter of last year is due to be released on Thursday.
Mr Powell anticipated 2024 GDP to be above 2 per cent, while the Fed's preferred inflation metric rose 2.6 per cent for the year.
But the Fed's first meeting of the year comes during a high period of uncertainty in large part because of Mr Trump, whose policies could further complicate Fed decisions.
In a reminder of his first term in office – during which he frequently hounded Mr Powell – Mr Trump last week demanded the central bank immediately lower interest rates. The president does not have any authority over the Fed's decisions.
Me Powell largely avoided answering questions on the new administration and said that he has not had any contact with Mr Trump.
Among the most uncertain aspects of Mr Trump's presidency is his trade agenda, whereby he has vowed to impose tariffs on Mexico and Canada as soon as next month, a harsher levy on China, and is still floating the possibility of universal tariffs.
"We don't know what will happen with tariffs, with immigration, with fiscal policy, regulatory policy," Mr Powell said. "This is no different than any other set of policy changes at the beginning of the administration."
Some Fed officials increased their inflation projections this year in part because of the potential inflationary effects that Mr Trump's policies will have on the US economy. Others have suggested they will be able to "see through" the tariffs, which will not have a substantial effect.
Regardless, the central bank anticipates it will take longer to bring inflation back down to the target point, resulting in a slower pace of rate cuts. Traders do not anticipate the Fed to begin cutting rates again until June, according to CME Group data.
It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
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What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
The years Ramadan fell in May
Jordan cabinet changes
In
- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
- Falah Abdalla Al Ammoush, Minister of Public Works and Housing
- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
- Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
- Mounir Moussa Ouwais, Minister of Water and Agriculture
- Dr Azmi Mahmud Mohafaza, Minister of Education
- Mokarram Mustafa Al Kaysi, Minister of Youth
- Basma Mohamed Al Nousour, Minister of Culture
Killing of Qassem Suleimani
RESULTS
6.30pm: Handicap (rated 100 ) US$175,000 1,200m
Winner: Baccarat, William Buick (jockey), Charlie Appleby (trainer)
7.05pm: Handicap (78-94) $60,000 1,800m
Winner: Baroot, Christophe Soumillon, Mike de Kock
7.40pm: Firebreak Stakes Group 3 $200,000 1,600m
Winner: Heavy Metal, Mickael Barzalona, Salem bin Ghadayer
8.15pm: Handicap (95-108) $125,000 1,200m
Winner: Yalta, Mickael Barzalona, Salem bin Ghadayer
8.50pm: Balanchine Group 2 $200,000 1,800m
Winner: Promising Run, Pat Cosgrave, Saeed bin Suroor
9.25pm: Handicap (95-105) $125,000 1,800m
Winner: Blair House, James Doyle, Charlie Appleby
10pm: Handicap (95-105) $125,000 1,400m
Winner: Oh This Is Us, Tom Marquand, Richard Hannon
The specs: 2017 Maserati Quattroporte
Price, base / as tested Dh389,000 / Dh559,000
Engine 3.0L twin-turbo V8
Transmission Eight-speed automatic
Power 530hp @ 6,800rpm
Torque 650Nm @ 2,000 rpm
Fuel economy, combined 10.7L / 100km
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
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Killing of Qassem Suleimani
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
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More on animal trafficking
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What's in the deal?
Agreement aims to boost trade by £25.5bn a year in the long run, compared with a total of £42.6bn in 2024
India will slash levies on medical devices, machinery, cosmetics, soft drinks and lamb.
India will also cut automotive tariffs to 10% under a quota from over 100% currently.
Indian employees in the UK will receive three years exemption from social security payments
India expects 99% of exports to benefit from zero duty, raising opportunities for textiles, marine products, footwear and jewellery
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Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
Essentials
The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.
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Stormy seas
Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.
We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice.
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The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
Sholto Byrnes on Myanmar politics
