American News
Fed cuts US interest rates again despite ‘flying blind’
The US Federal Reserve pushed forward with an interest rate cut as inflation fears continue to take a backseat to concerns about a stalling labour market.
It came despite the US government shutdown, nearing its one-month mark, which delayed official data and left central bankers “flying blind” about the job market, economists said.
The US central bank said on Wednesday it was lowering the target for its key lending rate by 0.25 percentage points, putting it in a range of 3.75% to 4%.
The Fed last month cut interest rates for the first time since last December. Economists expected the move to jump-start further reductions, but the data drought means the trajectory for future cuts looks murky.
Two voting members on the Fed’s committee opposed the central bank’s decision on Wednesday.
Stephen Miran, who is on leave from his post leading US President Donald Trump’s Council of Economic Advisers, voted for a larger 0.5 percentage point cut. Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, voted to hold rates steady.
The Fed’s latest cut brings the target for its key lending rate down to its lowest level in three years, easing borrowing costs across the US.
A slowdown in job hiring prompted the Fed to restart its rate cutting cycle in September. In a policy statement on Wednesday, the central bank reiterated that “job gains have slowed this year” and that the unemployment rate, though still low through the end of summer, has now “edged up”.
At a press conference following the cut, Fed chair Jerome Powell called the labour market “less dynamic and somewhat softer” than earlier this year, pointing in part to lower immigration.
Still, he said weakness in the job market does not appear to be accelerating.
But the ongoing government shutdown has stalled the release of the official monthly jobs report for September, limiting central bankers’ insight into how the labour market has fared since their last meeting.
Alternative sources including private-sector data have pointed to an ongoing trend of sluggish hiring. The US economy lost 32,000 jobs in September, according to data from the payroll firm ADP.
The Labor Department did release inflation data for September last week. The figure, at 3% year-over-year, was slightly lower than economists had predicted, reinforcing the likelihood that rate-setters would vote to lower borrowing costs again.
Fears about tariff-driven inflation had taken centre stage earlier this year when Trump pushed forward with sweeping tariffs on many of the country’s largest trading partners.
Inflation is still above the Fed’s 2% target. But while tariffs appear to be boosting some consumer prices, the milder-than-expected inflation reading for September allowed the Fed to focus on boosting the labour market by lowering rates, economists at Bank of America noted.
“Inflation away from tariffs is actually not so far from our 2% goal,” Powell told reporters. He said the hope among central bankers is that tariffs only lead to one-time price increases for certain consumer products.
The Fed on Wednesday also said it will stop shrinking its balance sheet – its portfolio of government debt and mortgage-backed securities – on 1 December.
For more than three years, the central bank has undertaken a process to unwind its purchases during the pandemic and previous financial crises, when it aimed to boost the economy and bring down interest rates. That unwinding process is now poised to end, as widely anticipated, amid signs of stress in financial markets.
‘Strongly differing views’ on a December cut
Wall Street had been betting on another quarter-point interest rate cut from the central bank at its last meeting of the year in December.
But those bets fell after Powell on Wednesday stressed that a December cut is “not to be seen as a foregone conclusion – in fact, far from it”.
“Future moves are becoming more contentious,” said Michael Pearce, deputy chief US economist at Oxford Economics. “We expect the Fed to slow the pace of cuts from here.”
A lot might still change before the Fed’s next meeting. It could receive three new jobs reports, which could “significantly change perceptions of the labour market for better or worse”, Michael Feroli, chief US economist at JP Morgan, wrote in a note.
At the same time, if the government shutdown persists and continues to limit the availability of government data, that could also encourage the Fed to sit on its hands at the end of the year.
“What do you do if you’re driving in the fog? You slow down,” Powell said.
He told reporters that “there were strongly differing views about how to proceed” among members of the Fed’s committee, and the decision will ultimately depend on incoming economic data.
“We’re going to collect every scrap of data we can find,” Powell said.
The Fed chair has been under pressure from President Trump, who has repeatedly called on him to lower interest rates.
Trump on Monday floated the possibility that he will announce a replacement for Powell, whose term ends next May, by end the end of this year.
American News
Trump celebrates as Democrats face fallout from end of shutdown
After 43 days, the longest US government shutdown in history is coming to an end.
Federal workers will start receiving pay again. National Parks will reopen. Government services that had been curtailed or suspended entirely will resume. Air travel, which had become a nightmare for many Americans, will return to being merely frustrating.
After the dust settles and the ink from President Donald Trump’s signature on the funding bill dries, what has this record-setting shutdown accomplished? And what has it cost?
Senate Democrats, through their use of the parliamentary filibuster, were able to trigger the shutdown despite being a minority in the chamber by refusing to go along with a Republican measure to temporarily fund the government.
They drew a line in the sand, demanding that the Republicans agree to extend health insurance subsidies for low-income Americans that are set to expire at the end of the year.
When a handful of Democrats broke ranks to vote to reopen the government on Sunday, they received next to nothing in return – a promise of a vote in the Senate on the subsidies, but no guarantees of Republican support or even a necessary vote in the House of Representatives.
Since then, members of the party’s left flank have been furious.
They’ve accused Senate Democratic leader Chuck Schumer – who didn’t vote for the funding bill – of being secretly complicit in the reopening plan or simply incompetent. They’ve felt like their party folded even after off-year election success showed they had the upper hand. They feared that the shutdown sacrifices had been for nothing.
Even more mainstream Democrats, like California’s Governor Gavin Newsom, called the shutdown deal “pathetic” and a “surrender”.
“I’m not coming in to punch anybody in the face,” he told the Associated Press, “but I’m not pleased that, in the face of this invasive species that is Donald Trump, who’s completely changed the rules of the game, that we’re still playing by the old rules of the game.”
Newsom has 2028 presidential ambitions and can be a good barometer for the mood of the party. He was a loyal supporter of Joe Biden who turned out to defend the then-president even after his disastrous June debate performance against Trump.
If he is running for the pitchforks, it’s not a good sign for Democratic leaders.
For Trump, in the days since the Senate deadlock broke on Sunday, his mood has gone from cautious optimism to celebration.
On Tuesday, he congratulated congressional Republicans and called the vote to reopen the government “a very big victory”.
“We’re opening up our country,” he said at a Veteran’s Day commemoration at Arlington Cemetery. “It should have never been closed.”
Trump, perhaps sensing the Democratic anger toward Schumer, joined the pile-on during a Fox News interview on Monday night.
“He thought he could break the Republican Party, and the Republicans broke him,” Trump said of the Senate Democrat.
Although there were times when Trump appeared to be buckling – last week he berated Senate Republicans for refusing to scrap the filibuster to reopen the government – he ultimately emerged from the shutdown having made little in the way of substantive concessions.
While his poll numbers have declined over the last 40 days, there’s still a year before Republicans have to face voters in the midterms. And, barring some kind of constitutional rewrite, Trump never has to worry about standing for election again.
With the end of the shutdown, Congress will get back to its regularly scheduled programming. Although the House of Representatives has effectively been on ice for more than a month, Republicans still hope they can pass some substantive legislation before next year’s election cycle kicks in.
While several government departments will be funded until September in the shutdown-ending agreement, Congress will have to approve spending for the rest of the government by the end of January to avoid another shutdown.
Democrats, licking their wounds, may be hankering for another chance to fight.
Meanwhile, the issue they fought over – healthcare subsidies – could become a pressing concern for tens of millions of Americans who will see their insurance costs double or triple at the end of the year. Republicans ignore addressing such voter pain at their own political peril.
And that isn’t the only peril facing Trump and the Republicans. A day that was supposed to be highlighted by the House government-funding vote was spent dwelling on the latest revelations surrounding the late convicted sex offender Jeffrey Epstein.
Later on Wednesday, Congresswoman Adelita Grijalva was sworn in to her congressional seat and became the 218th and final signatory on a petition that will force the House of Representatives to hold a vote ordering the justice department to release all its files on the Epstein case.
It was enough to prompt Trump to complain, on his Truth Social website, that his government-funding success was being eclipsed.
“The Democrats are trying to bring up the Jeffrey Epstein Hoax again because they’ll do anything at all to deflect on how badly they’ve done on the Shutdown, and so many other subjects,” he wrote.
It was all a very clear reminder that the best-laid plans and political strategies can be derailed in a flash.
American News
BBC faces fresh claim of misleading Trump edit
The BBC was accused of a misleading edit of Donald Trump’s 6 January 2021 speech two years before the Panorama sequence that led to the resignation of the director-general.
The clip aired on Newsnight in 2022, and a guest on the live programme challenged the way it had been cut together, the Daily Telegraph reported.
On Monday the BBC apologised for an “error of judgement” over an edited portion of the same speech that aired last year on Panorama.
The fallout saw the resignations of the BBC’s director-general Tim Davie and head of news Deborah Turness, and a legal threat from the US President.
Lawyers for Trump have written to the BBC saying he will sue for $1bn (£759m) in damages unless the corporation issues a retraction, apologises and compensates him for the Panorama broadcast.
In response to Thursday’s story in the Telegraph, a BBC spokesperson said: “The BBC holds itself to the highest editorial standards. This matter has been brought to our attention and we are now looking into it.”
In Trump’s speech on 6 January 2021, he said: “We’re going to walk down to the Capitol, and we’re going to cheer on our brave senators and congressmen and women.”
More than 50 minutes later in the speech, he said: “And we fight. We fight like hell.”
In the Panorama programme, the clip shows him as saying: “We’re going to walk down to the Capitol… and I’ll be there with you. And we fight. We fight like hell.”
In the Newsnight programme the edit is a little different.
He is shown as saying: “We’re going to walk down to the Capitol. And we’re going to cheer on our brave senators and congressmen and women. And we fight. We fight like hell. And if you don’t fight like hell, you’re not gonna have a country anymore.”
This was followed by a voiceover from presenter Kirsty Wark saying “and fight they did” over footage from the Capitol riots.
Responding to the clip on the same programme, former White House chief of staff Mick Mulvaney, who quit a diplomatic post and became a critic of Trump after describing the 6 January riots as an “attempted coup”, said the video had “spliced together” Trump’s speech.
“That line about ‘we fight and fight like hell’ is actually later in the speech and yet your video makes it look like those two things came together,” he said.
The Telegraph also reported that a whistleblower told the newspaper that a further discussion the following day was also shut down.
Last week, a leaked internal BBC memo claimed Panorama had misled viewers by splicing two parts of Trump’s 6 January 2021 speech together, making it appear as though he was explicitly urging people to attack the US Capitol after his election defeat.
The documentary aired days before the US presidential election in November 2024.
Speaking to Fox News, Trump said his 6 January 2021 speech had been “butchered” and the way it was presented had “defrauded” viewers.
American News
President Donald Trump is asking the US Supreme Court to review the $5m (£3.6m) civil case that found he defamed and sexually abused writer E Jean Carroll.
He has repeatedly claimed that the judge who oversaw the civil trial, Lewis Kaplan, improperly allowed evidence to be presented that hurt how the jury viewed Trump.
A federal appeals court agreed with the jury’s verdict last year and said Kaplan did not make errors that would warrant a new trial.
A New York jury awarded Ms Carroll damages over her civil claim that Trump sexually assaulted her in the 1990s, and then branded the incident a hoax on social media. He denied the allegations.
The Supreme Court is now Trump’s last hope of overturning the unanimous jury’s verdict. Whether the top US court will take the case up is unclear.
A federal appeals court declined to rehear Trump’s challenge to it in June.
Trump’s comments about the jury’s findings in the case led a separate jury to order him to pay Ms Carroll $83m for defaming her. A panel of federal judges denied his appeal of that decision in September, and Trump has now taken the next step in trying to have it overturned by asking the full bench of judges at a federal appeals court to review the case.
In the petition to the Supreme Court, Trump’s lawyers argued Kaplan should not have let jurors see the 2005 Access Hollywood tape that showed the president saying he groped and kissed women.
“There were no eyewitnesses, no video evidence, and no police report or investigation,” they wrote about Ms Carroll’s allegations.
“Instead, Carroll waited more than 20 years to falsely accuse Donald Trump, who she politically opposes, until after he became the 45th president, when she could maximize political injury to him and profit for herself.”
Roberta Kaplan, Ms Carroll’s attorney, told the BBC she had no comment on the Supreme Court appeal.
While Trump was found to have defamed and sexually abused Ms Carroll, the jury rejected her claim of rape as defined in New York’s penal code.
Ms Carroll, a former magazine columnist who is now 81, sued Trump for attacking her in the mid-1990s in a department store dressing room in Manhattan. The defamation stemmed from Trump’s post on his Truth Social platform in 2022 denying her claim.
Trump has said Ms Carroll was “not my type” and that she lied.
-
Europe News9 months agoChaos and unproven theories surround Tates’ release from Romania
-
American News8 months agoTrump Expels Zelensky from the White House
-
American News8 months agoTrump expands exemptions from Canada and Mexico tariffs
-
American News9 months agoZelensky bruised but upbeat after diplomatic whirlwind
-
Art & Culture8 months agoThe Indian film showing the bride’s ‘humiliation’ in arranged marriage
-
Art & Culture8 months agoInternational Agriculture Exhibition held in Paris
-
Politics9 months agoUS cuts send South Africa’s HIV treatment ‘off a cliff’
-
Politics8 months agoWorst violence in Syria since Assad fall as dozens killed in clashes
