Stock Markets
Global central banks begin policy shift as inflation cools
© Reuters. FILE PHOTO: European Central Bank (ECB) President Christine Lagarde speaks to the media following the Governing Council’s monetary policy meeting at ECB headquarters in Frankfurt, Germany, July 27, 2023. REUTERS/Kai Pfaffenbach/File Photo
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By Howard Schneider and Francesco Canepa
WASHINGTON/FRANKFURT (Reuters) – Top central banks continued with another round of interest rate hikes this week despite cooling inflation, but have now switched in unison to a more cautious posture about further moves in a sign that a year-long round of global monetary tightening could be at an end.
The U.S. Federal Reserve and the European Central Bank delivered quarter-percentage-point rate increases this week, as expected, and left open the option of further hikes if inflation didn’t continue a decline that has started to come faster than expected on both sides of the Atlantic.
The Bank of England is expected to raise rates again next week following similar positive inflation news, while the Bank of Japan, which meets on Friday, is expected to at least open debate on plans to bring its ultra-loose policies to an end.
Yet the hike-first rhetoric, common among top policymakers since last year, has now been coupled with a broader view of how prices are evolving alongside the economy as a whole, a more comprehensive approach that could allow slower job and economic growth to serve as its own evidence that inflation will continue to fall.
That’s a switch from policymakers’ insistence over the past year that they needed to see actual declines in the pace of price rises to know progress was being made, and one that could inject what Fed Chair Jerome Powell described as a dose of patience into the debate over whether more rate hikes are needed.
The Fed’s benchmark overnight interest rate now stands in the 5.25%-5.50% range, while the ECB’s main rate is 3.75%.
“Given how far we’ve come, we can afford to be a little patient as well as resolute as we let this unfold,” Powell said in a press conference on Wednesday following the Fed’s decision to raise rates for the 11th time in its last 12 meetings. “We want to see economic growth running at moderate or modest levels to help ease inflationary pressures. We want to see continued restoration of supply and demand balance, particularly in the labor market … We see those pieces of the puzzle coming together.”
‘OPEN MIND’
For the ECB, President Christine Lagarde said a slight wording change in its latest policy statement was “not just random or irrelevant,” but meant to communicate that after nine straight rate increases a pause would be on the table at the central bank’s meeting in September, just as it will be for the U.S. central bank.
“We have an open mind as to what the decision will be in September and subsequent meetings,” Lagarde said. “We might hike. We might hold … I hope it is very clear that we are not in the domain of forward guidance.”
New U.S. gross domestic product data on Thursday showed the path to a global pause is far from clear in an economy that continues to confound.
The economy grew at a faster-than-anticipated 2.4% annual rate in the second quarter, well above the 1.8% annual rate that Fed officials regard as the approximate trend consistent with their 2% inflation target. Yet quarterly inflation data came in weaker than expected.
While bond markets took a cue from the faster growth, and pushed yields on Treasuries higher, the days of coordinated global tightening may be numbered.
Though there was “material risk” inflation may still require further hikes, wrote Evercore ISI Vice Chairman Krishna Guha, “in the base case, the ECB – like the Fed – is done raising rates.”
Stock Markets
Gaza population down by 6% since start of war – Palestinian statistics bureau
JERUSALEM (Reuters) – The population of Gaza has fallen 6% since the war with Israel began nearly 15 months ago as about 100,000 Palestinians left the enclave while more than 55,000 are presumed dead, according to the Palestinian Central Bureau of Statistics (PCBS).
Around 45,500 Palestinians, more than half of them women and children, have been killed since the war began but another 11,000 are missing, the bureau said, citing numbers from the Palestinian Health Ministry.
As such, the population of Gaza has declined by about 160,000 during the course of the war to 2.1 million, with more than a million or 47% of the total children under the age of 18, the PCBS said.
It added that Israel has “raged a brutal aggression against Gaza targeting all kinds of life there; humans, buildings and vital infrastructure… entire families were erased from the civil register. There are catastrophic human and material losses.”
Israel’s foreign ministry said the PCBS data was “fabricated, inflated, and manipulated in order to vilify Israel”.
Israel has faced accusations of genocide in Gaza because of the scale of death and destruction.
The International Court of Justice (ICJ), the United Nations’ highest legal body, ruled last January that Israel must prevent acts of genocide against Palestinians, while Pope Francis has suggested the global community should study whether Israel’s Gaza campaign constitutes genocide.
Israel has repeatedly rejected accusations of genocide, saying it abides by international law and has a right to defend itself after the Hamas attack on Oct. 7, 2023 killed 1,200 Israelis and precipitated the current war.
The PCBS said some 22% of Gaza’s population currently faces catastrophic levels of acute food insecurity, according to the criteria of the Integrated Food Security Phase Classification, a global monitor.
Included in that 22% are some 3,500 children at risk of death due to malnutrition and lack of food, the bureau said.
Stock Markets
Venezuela economy grew over 9% in 2024, president says
CARACAS (Reuters) -Venezuela’s economy grew over 9% in 2024, President Nicolas Maduro said, according to a transcript of an interview published by Mexican media outlet La Jornada on Wednesday.
“In 2023, we had 5.5% (growth). In 2024, according to all scientific, statistical, and technical data, we will surpass 9% growth in gross domestic product, with a very high level of growth in the real economy, as well as in the hydrocarbons sector,” Maduro told Spanish journalist Ignacio Ramonet.
Venezuela’s economy in recent years has experienced a prolonged crisis marked by triple-digit inflation and the exodus of millions of Venezuelans seeking better opportunities elsewhere.
In 2019, the government loosened controls on the private sector, allowing for an informal dollarization, which provided a lifeline to key sectors of the economy.
However, analysts believe the strategy has not been sufficient for a full economic recovery.
The interview with Maduro is set to air on Venezuelan state television on Wednesday evening.
Stock Markets
Driver kills 10 ramming truck into New Orleans crowd in New Year’s Day attack
By Brian Thevenot
NEW ORLEANS (Reuters) -A driver crashed his pickup truck into a crowd celebrating New Year’s Day in New Orleans’ French Quarter and opened fire, killing 10 people and injuring more than 35, in an early morning attack the FBI said was a potential act of terrorism.
The suspect, described by one city leader as being in “full military gear,” died after a shootout with police, law enforcement officials said.
“This man was trying to run over as many people as he could,” Police Chief Anne Kirkpatrick said at a televised press conference on Wednesday. “He was hell-bent on creating the carnage and the damage that he did.”
The incident occurred at 3:15 a.m. (0915 GMT) at the intersection of Canal and Bourbon Streets, a historic tourist destination in the city’s French Quarter known for attracting large crowds with its music and bars.
Kirkpatrick said the driver, who swerved around barricades, fired at police and struck two police officers from the vehicle after it crashed. The officers were in stable condition, she added.
“We know the perpetrator has been killed,” said New Orleans City Councilman Oliver Thomas. “As we search for a motive, remember there is no making sense of evil.”
Officials did not immediately name the suspect.
NBC News, citing three unnamed senior law enforcement sources, identified the suspect as Shamsud Din Jabbar, 42.
NOLA.com, citing one unidentified law enforcement source, reported that same suspect was carrying an ISIS flag in the truck. Reuters was unable to verify the reports and the U.S. Army did not immediately respond to a request for comment.
More than 300 officers were on duty at the time of the incident, police said. The city hosts the Sugar Bowl, a classic American college football game, each New Year’s Day, and will also be the site of the NFL Super Bowl on Feb. 9.
New Orleans Mayor LaToya Cantrell called the incident a terrorist attack.
The FBI said in a statement that it was investigating the incident as an act of terrorism. Initially, Alethea Duncan, an assistant special agent in charge of the FBI’s New Orleans field office, had said it was not a terrorist event.
Duncan said a suspected improvised explosive device was found but provided no further details.
“From what I understand, there is a potential that other suspects could be involved in this, and all hands on deck on determining who these individuals are and finding them,” New Orleans City Council President Helena Moreno told 4WWLTV.
“Information that I received is that this individual was in full military gear, that he is apparently not local, and that he was prepared, and that he was very prepared to inflict horrific pain on the people on Bourbon Street,” Moreno said.
‘HORRIFIC ACT’
Verified video taken by an onlooker shows at least two twisted bodies in the street, with one of them lying in what appears to be a puddle of blood. A bystander is seen kneeling over one of the bodies as a group of uniformed military personnel in green uniforms and carrying firearms runs past.
The injured were taken to at least five hospitals, according to NOLA Ready, the city’s emergency preparedness department.
A couple told CBS News that they heard crashing noises coming from down the street and then saw a white truck slam through a barricade “at a high rate of speed”.
Zion Parsons (NYSE:), 18, told NOLA.com that he and his two friends were leaving a Bourbon Street eatery when they heard a commotion and saw a white car barreling toward them.
He said he dodged the vehicle, but one of his friends was struck, with her leg “twisted and contorted above and around her back.”
“You can just look and see bodies, just bodies of people, just bleeding, broken bones,” he said.
Louisiana U.S. Senator Bill Cassidy said on CNN that despite the attack, law enforcement in New Orleans was ready for the Sugar Bowl on Wednesday night. “The Superdome has been locked down,” he said.
In response to vehicle attacks on pedestrian malls around the world, New Orleans was in the process of removing and replacing the steel barriers known as bollards that restrict vehicle traffic in the Bourbon Street pedestrian zone. The project’s status was unclear at the time of Wednesday’s attack.
Construction began in November 2024 and was scheduled to continue through February 2025, according to a city website.
Last month in Germany, a 50-year-old man was charged with multiple counts of murder and attempted murder after police said he plowed a car through crowds at a Christmas market in Magdeburg, killing five people and injuring scores.
President Joe Biden called the city’s mayor to offer full federal support. President-elect Donald Trump said his incoming administration would help New Orleans as it investigates and recovers from what he called an act of pure evil.
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