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Ford is recalling more than 355,000 pickup trucks across the U.S. after a dashboard instrument display failure was found that may prevent drivers from...
The U.S. Federal Reserve left its benchmark interest rate unchanged on Wednesday at 4.25%–4.50%, while maintaining its projection for two rate cuts by the end of 2025.
However, Fed Chair Jerome Powell warned that the economic outlook is becoming increasingly uncertain due to rising inflation pressures, particularly from planned import tariffs.
Powell emphasized the data-dependent nature of future decisions, noting that although recent inflation readings have improved, the Trump administration’s tariff agenda could reverse that progress.
“Everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs,” Powell said.
“Ultimately, the cost of the tariff has to be paid, and some of it will fall on the end consumer,” he added.
Inflation, Growth Revised
The Fed now projects:
Despite holding rates steady for now, policymakers expect to cut rates by a total of 0.5% points in 2025, consistent with earlier forecasts, followed by smaller cuts into 2026 and 2027. However, seven out of 19 Fed officials now see no cuts needed this year — a sign of growing internal division.
Tariffs Driving Uncertainty
Powell attributed much of the revised inflation outlook to Trump’s proposed tariffs, set to begin as early as next month. While the full impact is not yet known, Powell said the Fed is prepared to “wait a couple of months” to evaluate how the cost burden is passed through the economy.
Political Tensions
Trump, who has pressured the Fed for deep rate cuts, reacted sharply to the decision, calling Powell “stupid” and suggesting he should install himself as Fed Chair. The Fed’s independence remains a cornerstone of its policymaking, and officials have repeatedly said their focus is solely on meeting inflation and employment targets.
Markets Steady
Despite the Fed's warnings, markets reacted calmly. Stock indexes were flat, the 10-year Treasury yield was steady, and futures pricing continued to point to September as the likely window for the next cut.
Powell added that geopolitical risks — including the ongoing Israel-Iran conflict — are being closely monitored. However, he said energy price shocks tend to be temporary and are unlikely to shift policy unless sustained.
“We are well positioned to wait to learn more about the likely course of the economy,” Powell said.
Outlook
The Fed remains cautious but open to easing if inflation moderates or the economy weakens further. However, tariff-related cost pressures and geopolitical uncertainty could complicate the timing and extent of rate cuts in the months ahead.
A powerful eruption at Japan’s Shinmoedake volcano sent an ash plume more than 3,000 metres high on Sunday morning, prompting safety warnings from authorities.
According to the German Research Centre for Geosciences (GFZ), a magnitude 5.7 earthquake struck the Oaxaca region of Mexico on Saturday.
The UK is gearing up for Exercise Pegasus 2025, its largest pandemic readiness test since COVID-19. Running from September to November, this full-scale simulation will challenge the country's response to a fast-moving respiratory outbreak.
Kuwait says oil prices will likely stay below $72 per barrel as OPEC monitors global supply trends and U.S. policy signals. The remarks come during market uncertainty fueled by new U.S. tariffs on India and possible sanctions on Russia.
All NATO members are expected to meet the longstanding target of spending 2% of GDP on defence this year, but only three currently reach a new, higher target set by alliance leaders in June, according to NATO data released Thursday.
Mexico’s postal service, Correos de México, has temporarily halted package deliveries to the United States as the exemption on low-value tariffs, known as the “de minimis” exemption, is set to end on Friday.
Israel has carried out an airborne landing on a former air defence base in southwest Damascus during a series of strikes, Syrian army sources told Reuters on Wednesday.
U.S. Secretary of State Marco Rubio met with Israeli Foreign Minister Gideon Saar in Washington on Wednesday, discussing security issues in Gaza, Lebanon, and Syria.
Argentine President Javier Milei was attacked by protesters while campaigning near Buenos Aires on Wednesday, as his convoy was pelted with stones, bottles, and plants. Milei and his security team were unharmed.
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