Federal Reserve holds interest rates, defying Trump’s demand to lower them
The US Federal Reserve kept interest rates on hold, but signaled it might make two cuts this year, as Donald Trump continues to break with precedent and demand lower rates,Policymakers at the American central bank lifted their projections for inflation this year, as the US president stands by his controversial tariff plans, and downgraded their estimates for economic growth,Uncertainty has faded, they said, but remains significant,The Fed chair, Jerome Powell, cautioned that officials expect tariffs imposed by Trump to increase prices over the course of the summer,“Increases in tariffs this year are likely to push up prices and weigh on economic activity,” Powell told reporters.
“The effects on inflation could be short-lived, reflecting a one-time shift in the price level,It’s also possible that the inflationary effects could be more persistent,”Avoiding persistent inflation “will depend on the size of the tariff effects” and how long it takes them to affect prices, Powell added,Hours before the central bank announced its latest decision, Trump called Powell “stupid” and accurately predicted rates would be maintained on Wednesday,“He’s a political guy who’s not a smart person, but he’s costing the country a fortune,” Trump, whose attacks have raised questions over the Fed’s independence, claimed of Powell.
The central bank has repeatedly stressed it makes decisions based on economic data, rather than political interventions,Policymakers at the central bank expect inflation to increase by a median rate of 3% this year, according to projections released alongside its latest decision on Wednesday, up from a previous estimate of 2,7% – and highlighting how far the US remains from the Fed’s inflation target of 2%,As Trump’s aggressive tariffs agenda continues to disrupt the global economy, and raises concern about price growth, officials at the Fed have repeatedly warned of an uncertain road ahead,They expect the US economy to grow by a median rate of 1.
4% this year, down from March’s 1.7% estimate, which itself was a significant downgrade from the previous 2.1% estimate in December.As the Fed confirmed on Wednesday that a targeted federal funds rate had been held at a range of 4.25% to 4.
5% following its rate-setting open market committee’s latest two-day meeting, it said: “Uncertainty about the economic outlook has diminished but remains elevated,”A closely watched “dot plot”, which shows policymakers’ predictions for the trajectory of rates, indicated that most expect to cut rates at least twice in 2025, with further cuts in future years,But officials do not universally agree on the path ahead,Seven of the nineteen officials on the committee do not expect to cut rates at all this year,“We have a pretty healthy diversity of views on the committee,” Powell told reporters, citing differences in economics predictions and views on how the Fed should respond.
“Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace,” the committee said in a statement.“The unemployment rate remains low, and labor market conditions remain solid.Inflation remains somewhat elevated.”The central bank has so far defied Trump’s attacks on its decisions, holding firm on its independence from the White House.After Powell spoke with the US president last month, the Fed said that he had made clear that its actions “will depend entirely on incoming economic information and what that means for the outlook”.
Wall Street rose after the announcement on Wednesday, but later slipped back,By mid-afternoon in New York both the benchmark S&P 500 and the Dow Jones industrial average were broadly flat,Ryan Sweet, chief US economist at Oxford Economics, said: “The Federal Reserve’s crystal ball is still clouded and feeds into its bias toward being reactionary, rather than preemptive,”Looking ahead, Powell expressed concern over cuts to US statistical agencies that produce data on the economy,While he stressed the Fed was still able to do its job, he warned of “more volatility” in surveys as a result of layoffs.
“The United States has been a leader for many, many years in this whole project of measuring, and understanding what’s happening in our very large and dynamic economy,” he said.“And I hate to see us cutting back on that, because it is a real benefit to the general public.”
Federal Reserve holds interest rates, defying Trump’s demand to lower them
The US Federal Reserve kept interest rates on hold, but signaled it might make two cuts this year, as Donald Trump continues to break with precedent and demand lower rates.Policymakers at the American central bank lifted their projections for inflation this year, as the US president stands by his controversial tariff plans, and downgraded their estimates for economic growth.Uncertainty has faded, they said, but remains significant. The Fed chair, Jerome Powell, cautioned that officials expect tariffs imposed by Trump to increase prices over the course of the summer.“Increases in tariffs this year are likely to push up prices and weigh on economic activity,” Powell told reporters
John Lewis tells some head office staff to work in office at least three days a week
John Lewis is asking some head office staff to spend at least three days a week in the office or out on the road in the latest shift away from working from home.The department store group said members of its commercial teams – which include those working in buying and merchandising – should work no more than two days a week from home from July. Previously they were allowed to work up to three days a week at home.The change at the employee-owned group, which is renowned for its good treatment of workers, including access to holiday homes and a generous pension scheme, comes amid a broader shift among businesses ranging from the retailer Boots to Amazon and JP Morgan, which have told staff they must return five days a week.Last month, HSBC told staff in its UK high street banks that it may cut their bonuses if they did not work in the office at least 60% of the time
Israel-linked group hacks Iranian cryptocurrency exchange in $90m heist
An Israel-linked hacking group has claimed responsibility for a $90m (£67m) heist on an Iranian cryptocurrency exchange.The group known as Gonjeshke Darande, Farsi for Predatory Sparrow, said on Wednesday it had hacked the Nobitex exchange, a day after claiming it had destroyed data at Iran’s state-owned Bank Sepah.Elliptic, a consultancy specialising in crypto-related crime, said it had so far identified more than $90m in cryptocurrency sent from Nobitex crypto wallets to hacker addresses.The hackers appear to have in effect “burned” those funds, rendering them inaccessible by storing them in “vanity addresses” for which they do not have the cryptographic keys, Elliptic said.Tom Robinson, Elliptic’s co-founder, told the Guardian it would take current computer technology “billions of years” to create the cryptographic key pairs that match the vanity addresses
OpenAI boss accuses Meta of trying to poach staff with $100m sign-on bonuses
The boss of OpenAI has claimed that Mark Zuckerberg’s Meta has tried to poach his top artificial intelligence experts with “crazy” signing bonuses of $100m (£74m), as the scramble for talent in the booming sector intensifies.Sam Altman spoke about the offers in a podcast on Tuesday. They have not been confirmed by Meta. OpenAI, the company that developed ChatGPT, said it had nothing to add beyond its chief executive’s comments.“They started making these giant offers to a lot of people on our team – $100m signing bonuses, more than that comp [compensation] per year,” Altman told the Uncapped podcast, which is presented by his brother, Jack
Lakers to be sold to Dodgers owner at $10bn valuation, per reports
The Buss family is entering an agreement to sell a majority stake in the Los Angeles Lakers at a $10bn valuation, ESPN reported on Wednesday, marking the end of an era for one of the NBA’s most influential families.Mark Walter, the CEO and chair of holding company TWG Global, is set to take the majority ownership under the agreement, ESPN’s NBA insider Shams Charania said in a post on X. Walter was already a minority owner in the Lakers and is also primary owner and chair of the Los Angeles Dodgers of Major League Baseball, and the Los Angeles Sparks of the WNBA.The Lakers did not immediately respond to a request for comment.The late Jerry Buss bought the Lakers in 1979 and turned it into one of the most popular and valuable franchises in all of professional sports, winning five championships during their now-iconic “Showtime” era in the 1980s
Marcus Smith at full-back against Argentina as Lions aim to ‘set tone’ for tour
Maro Itoje will captain the British & Irish Lions for the first time against Argentina in Dublin on Friday after the head coach, Andy Farrell, included him and eight other Englishmen in the starting XV for the warm-up match for the upcoming tour of Australia.England’s other starters include Marcus Smith at full‑back along with Alex Mitchell and Fin Smith at half‑backs. Ireland’s Tadhg Furlong will be given the chance to prove his fitness after struggling with a calf injury that ruled him out of Leinster’s United Rugby Championship final win against the Bulls last weekend. Furlong is included on a bench that also features the hooker Ronan Kelleher, the only player to be involved against Argentina six days after taking part in the end-of-season finale.Farrell’s injury list looks like being clear by next week – it will most likely be clouded somewhat by the final whistle against the Pumas – but for now it is a good place to be
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