US Federal Reserve officials held interest rates near zero but signalled they expect two increases by the end of 2023, pulling forward the date of lift-off as the economy recovers.
Officials sped up their expected pace of policy tightening amid optimism about the labour market and heightened concerns for inflation.
Fed Chair Jerome Powell told a press conference Wednesday after a meeting with officials that they would begin a discussion about scaling back bond purchases used to support financial markets and the economy during the pandemic.
New forecasts were released showing two interest-rate increases expected by the end of 2023 — sooner than many thought — and upgraded estimates for inflation for the next three years.
“The economy has clearly made progress,” Mr Powell said after the two-day gathering.
“You can think of this meeting as the talking-about-talking-about meeting, if you like,” he added, referring to the discussion about tapering purchases.
The central bank held the target range for its benchmark policy rate unchanged at zero to 0.25 per cent – where it has been since March 2020 – and pledged to continue asset purchases at a $120 billion monthly pace until “substantial further progress” had been made on employment and inflation.
The quarterly projections showed 13 of 18 officials favoured at least one rate increase by the end of 2023, versus seven in March.
Eleven officials saw at least two increases by the end of that year, while seven of them saw a move as early as 2022, up from four.
“The dots should be taken with a big grain of salt,” Mr Powell said, referring to the interest rate forecasts. He cautioned that discussions about raising rates would be “highly premature".
The dollar rose, stocks declined and yields on 10-year Treasuries jumped following the news.
The US economic recovery is gathering strength as business restrictions lift and social activity increases across the country.
“Progress on vaccinations has reduced the spread of Covid-19 in the United States,” the Federal Open Market Committee said in a statement.
“Amid this progress and strong policy support, indicators of economic activity and employment have strengthened.”
"As the reopening continues, shifts in demand can be large and rapid, and bottlenecks, hiring difficulties and other constraints could continue to limit how quickly supply can adjust – raising the possibility that inflation could turn out to be higher and more persistent than we expect."
Robust demand from consumers and businesses alike has outstripped capacity, leading to bottlenecks in the supply chain, longer lead times and higher prices. At the same time, employment growth has disappointed over the past couple of months.
The Fed marked up its inflation forecasts through the end of 2023. Officials see their preferred measure of price pressures rising 3.4 per cent in 2021 compared with a March projection of 2.4 per cent. The 2022 forecast rose to 2.1 per cent from 2 per cent, and the 2023 estimate was raised to 2.2 per cent from 2.1 per cent.
Consumer-price pressures, on the other hand, have proven hotter than expected. Labour Department figures showed a 0.8 per cent jump in prices in April and a 0.6 per cent rise in May, marking the two biggest monthly increases since 2009.
“As the reopening continues, shifts in demand can be large and rapid, and bottlenecks, hiring difficulties and other constraints could continue to limit how quickly supply can adjust – raising the possibility that inflation could turn out to be higher and more persistent than we expect,” Mr Powell said.
Labour Department reports on employment published since the last gathering of the US central bank’s committee in late April have disappointed relative to forecasters’ expectations.
The US unemployment rate was still elevated at 5.8 per cent in May, with total employment still millions of jobs below pre-pandemic levels.
“I am confident that we are on a path to a very strong labour market,” Mr Powell told reporters. “We learnt during the course of the last very long expansion, the longest in our history, that labour supply during a long expansion can exceed expectations.”
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Lampedusa: Gateway to Europe
Pietro Bartolo and Lidia Tilotta
Quercus
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Company%20profile
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UAE currency: the story behind the money in your pockets
How to increase your savings
- Have a plan for your savings.
- Decide on your emergency fund target and once that's achieved, assign your savings to another financial goal such as saving for a house or investing for retirement.
- Decide on a financial goal that is important to you and put your savings to work for you.
- It's important to have a purpose for your savings as it helps to keep you motivated to continue while also reducing the temptation to spend your savings.
- Carol Glynn, founder of Conscious Finance Coaching
Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
Secret Pigeon Service: Operation Colomba, Resistance and the Struggle to Liberate Europe
Gordon Corera, Harper Collins
THE DETAILS
Director: Milan Jhaveri
Producer: Emmay Entertainment and T-Series
Cast: John Abraham, Manoj Bajpayee
Rating: 2/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
The 15 players selected
Muzzamil Afridi, Rahman Gul, Rizwan Haider (Dezo Devils); Shahbaz Ahmed, Suneth Sampath (Glory Gladiators); Waqas Gohar, Jamshaid Butt, Shadab Ahamed (Ganga Fighters); Ali Abid, Ayaz Butt, Ghulam Farid, JD Mahesh Kumara (Hiranni Heros); Inam Faried, Mausif Khan, Ashok Kumar (Texas Titans
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Killing of Qassem Suleimani
Killing of Qassem Suleimani
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Results
1. Lewis Hamilton (Mercedes) 1hr 32mins 03.897sec
2. Max Verstappen (Red Bull-Honda) at 0.745s
3. Valtteri Bottas (Mercedes) 37.383s
4. Lando Norris (McLaren) 46.466s
5.Sergio Perez (Red Bull-Honda) 52.047s
6. Charles Leclerc (Ferrari) 59.090s
7. Daniel Ricciardo (McLaren) 1:06.004
8. Carlos Sainz Jr (Ferrari) 1:07.100
9. Yuki Tsunoda (AlphaTauri-Honda) 1:25.692
10. Lance Stroll (Aston Martin-Mercedes) 1:26.713,
COMPANY%20PROFILE
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