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US Fed chair Jay Powell hails ‘considerable progress’ in tackling inflation

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US Fed chair Jay Powell hails ‘considerable progress’ in tackling inflation

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US Federal Reserve chair Jay Powell said the central bank had made “considerable progress” in its mission to beat back inflation but signalled that it was still not yet ready to cut interest rates from their 23-year high.

Powell, in written testimony to the US Congress released on Tuesday, was optimistic that the US economy was returning to better balance, as the Fed tries to drive inflation back to its 2 per cent target.

Recent inflation reports — one of which showed the Fed’s preferred gauge dropping to 2.6 per cent in May — were encouraging and showed “modest further progress”, said Powell. But “more good data would strengthen our confidence that inflation is moving sustainably toward 2 per cent”.

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“Over the past two years, the economy has made considerable progress” towards the Fed’s inflation target, he said, adding that labour market conditions “have cooled while remaining strong”.

Powell’s comments to the Senate finance committee underscored the central bank’s delicate balancing act as it debates when to lower the benchmark interest rate from between 5.25 and 5.5 per cent — a range it has held since last July.

Lowering rates too early could foil plans to tame inflation. Keeping them too high for too long could push more Americans into unemployment than is necessary.

Powell addressed the trade-off in his opening remarks, warning that a policy mis-step could stall or reverse recent progress on inflation. However, he added that “elevated inflation is not the only risk we face”, citing concerns that leaving borrowing costs too high for too long could “unduly” damage the economy.

Officials remain on edge after inflation flared up earlier this year, upsetting expectations that the Fed would begin slashing rates before the summer. It has left policymakers eager for more proof of disinflation before they cut borrowing costs.

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Recent signs of a cooling in the labour market have, however, bolstered expectations for a fall in borrowing costs after the summer. The unemployment rate now sits at 4.1 per cent, a level last registered in November 2021. These conditions pointed to a labour market that is “strong, but not overheated”, Powell said on Tuesday.

Officials recently emphasised — including in minutes from the most recent meeting in June — that a sudden weakening of the labour market could also push the Fed to lower rates.

Traders broadly do not expect the Fed to reduce borrowing costs when policymakers convene later this month, but are betting that a cut in September is more likely than not. As of June, officials themselves projected one interest rate reduction this year, although a large proportion also supported an additional move.

The September meeting marks the Fed’s last gathering before the presidential election in November, after which the central bank will meet twice more this year. Inflation and punishing borrowing costs are among the top issues for voters, weighing on President Joe Biden’s approval ratings.

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It Could Take Weeks Before Displaced L.A. Residents Can Go Home

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It Could Take Weeks Before Displaced L.A. Residents Can Go Home

The tens of thousands of people displaced by the devastating wildfires in the Los Angeles area are increasingly anxious to know when they can return home — or to what remains of their properties.

Officials say crews are working to reopen closed areas, snuffing out hot spots and clearing hazardous debris, but no timeline has been announced for lifting the evacuation orders.

Experts have warned that it could take weeks before people can return to the hardest-hit neighborhoods because of the amount of work needed to ensure the safety of residents.

Firefighters are still trying to contain the Palisades and Eaton fires, the biggest ones in the Los Angeles region, a prerequisite to allowing people to return. Both remained largely out of control on Wednesday evening, though their growth had slowed.

Captain Erik Scott of the Los Angeles Fire Department said the timeline for people returning to their neighborhoods can vary. It depends on the extent of the damage, which needs to be mapped and carefully assessed in every impacted community, he added. There is also the threat of hazardous materials, such as asbestos and chemicals.

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“We want people to have realistic expectations,” Mr. Scott said.

It took weeks in the aftermath of some previous destructive blazes for people to return. In 2018, the Camp fire destroyed most of Paradise in Northern California and killed 85 people. The final evacuation orders in that town were lifted more than a month after the fire started.

Similarly, after a devastating fire in Lahaina on the island of Maui killed more than 100 people in 2023, it was nearly two months before the first of the thousands of displaced residents could return to their properties.

The suppression of the fire is only one step in the process, according to fire officials. There are yet more safety and infrastructure issues to tackle. Workers need to clear and replace downed power lines, stabilize partially collapsed buildings and remove toxic ash from the ground.

“That’s why the orders are still in place,” said David Acuna, a battalion chief with Cal Fire. “It’s not just about the fire. There are all these other elements to address.”

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The grim search for human remains has further complicated efforts to clear neighborhoods. Officials are using cadaver dogs to comb through the thousands of structures damaged or destroyed in the fires to locate remains.

“We have people literally looking for the remains of your neighbors,” Sheriff Robert Luna of Los Angeles County said at a news conference on Monday. “Please be patient with us.”

Even for those whose homes survive, the lifting of evacuation orders does not necessarily mean they can return to live in them right away, warned Michael Wara, a climate policy expert at Stanford University.

“There’s going to be smoke damage,” he said. “There’s going to be the fact that you don’t have utilities.”

In Pacific Palisades, the recovery process was underway in its incinerated downtown. The air buzzed with the sound of jackhammers, bulldozers and tree shredders. Workers cleared debris, pulled down charred utility poles and ground up the skeletal limbs of burned eucalyptus trees.

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Ali Sharifi managed to inspect his lower Palisades home on Tuesday. Aside from a burned backyard fence, it was intact. Yet the destruction around it, including charred schools, churches and grocery stores, gave him second thoughts about returning.

“Who wants to live in a ghost town?” Mr. Sharifi said.

Erica Fischer, an associate professor at Oregon State University who studied the aftermath of the Camp fire, said that a fast recovery is not always a good one, especially if it means rebuilding in ways that contributed to the disaster.

Of the ongoing evacuation orders in California, she said, “I know it’s not convenient, and it’s disruptive, but it keeps people out of harm’s way.”

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Joe Biden says ‘oligarchy’ emerging in US in final White House address

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Joe Biden says ‘oligarchy’ emerging in US in final White House address

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US President Joe Biden has warned that an “oligarchy is taking shape in America” that risks damaging democracy, as he blasted an emerging “tech industrial complex” for delivering a dangerous concentration of wealth and power in the country.

Biden’s comments during a farewell address to Americans from the Oval Office on Wednesday night amount to a veiled attack on Donald Trump’s closest allies in corporate America, including tech billionaire Elon Musk, just five days before he transfers power to the Republican.

Biden said he wanted to warn the country of the “dangerous concentration of power in the hands of a very few ultra-wealthy people” and the danger that their “abuse of power is left unchecked”.

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He cited late president Dwight Eisenhower’s warning in his 1961 farewell address of a military-industrial complex and said the interaction between government and technology risked being similarly pernicious.

“I’m equally concerned about the potential rise of a tech-industrial complex that could pose real dangers for our country as well. Americans are being buried under an avalanche of misinformation and disinformation, enabling the abuse of power. The free press is crumbling. Editors are disappearing. Social media is giving up on fact checking,” Biden said.

Biden’s words were a reference to the world’s richest man, Musk, the owner of social media platform X and the founder of electric-vehicle maker Tesla, who gave massive financial backing to Trump’s campaign and has become one of his closest allies during the transition to Trump’s new administration.

Some of Silicon Valley’s top executives, from Jeff Bezos of Amazon to Mark Zuckerberg of Meta, have also embraced Trump since his electoral victory and are expected to have prime spots at the inauguration ceremony in Washington on Monday.

Biden also used his remarks to cast a positive light on his one-term presidency, which ended with the big political failure of him dropping his re-election bid belatedly in late July, passing the torch of the campaign against Trump to vice-president Kamala Harris — an effort that ended in a bitter defeat.

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Biden’s approval ratings have hit new lows as he bows out from the presidency and a political career in Washington that has spanned more than five decades. Just 36.7 per cent of Americans approve of his performance on the job, and 55.8 per cent disapprove, according to the FiveThirtyEight polling average.

Biden said he hoped his accomplishments would be judged more favourably in the future.

“It will take time to feel the full impact of all we’ve done together, but the seeds are planted, and they’ll grow and they’ll bloom for decades to come,” he said.

Biden has not only faced seething criticism from Republicans, but also rebukes from Democrats who blame him for seeking re-election despite his advanced age. He is now 82.

Biden’s presidency was defined by a record-breaking jobs market and a robust recovery from the Covid-19 pandemic, as well as a series of legislative accomplishments on the economy. But the pain of high inflation became a massive political vulnerability for him.

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In foreign affairs, he took credit for western support for Ukraine after Russia’s full-scale invasion of the country in 2022, but his response to conflict in the Middle East, including staunch support for Israel’s war in Gaza, drew a strong backlash from progressive Democrats, undermining the unity of his political coalition.

It was not until Wednesday, with five days to go before he left office, that Biden — with help from Trump aides — was able to broker a ceasefire deal to free hostages held by Hamas. 

“This plan was developed and negotiated by my team and will be largely implemented by the incoming administration. That’s why I told my team to keep the incoming administration fully informed, because that’s how it should be, working together as Americans,” he said at the start of his address.

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Biden touts major wins in farewell address

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Biden touts major wins in farewell address
Biden touts major wins in farewell address – CBS Texas

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In his farewell address, President Biden warned an “oligarch” of “ultrarich” threatens America’s future.

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