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Takeaways from Fed Chair Powell's speech at Jackson Hole

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Takeaways from Fed Chair Powell's speech at Jackson Hole

WASHINGTON (AP) — Federal Reserve Chair Jerome Powell all but proclaimed victory in the fight against inflation and signaled that interest rate cuts are coming in a much-anticipated speech Friday in Jackson Hole, Wyoming.

Under Powell, the Fed raised its benchmark rate to the highest level in 23 years to subdue inflation that two years ago was running at the hottest pace in more than four decades. Inflation has come down steadily, and investors now expect the Fed to start cutting rates at its next meeting in September — an expectation that essentially got Powell’s endorsement Friday.

Declaring Victory

“My confidence has grown that inflation is on a sustainable path back to 2%,” Powell said in his keynote speech at the Fed’s annual economic conference in Jackson Hole.

He noted that inflation, according to the Fed’s preferred gauge, had fallen to 2.5% last from a peak of 7.1% two years ago. Measured by the better known consumer price index, inflation has dropped from a peak 9.1% in mid-2022 to 2.9% last month. Both are edging closer to the Fed’s 2% target.

Powell sounded confident that the Fed would achieve a so-called soft landing — containing inflation without causing a recession. “There is good reason to think that the economy will get back to 2% inflation while maintaining a strong labor market,’’ he said.

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Higher rates contributed to progress against inflation, as did the easing of supply chain bottlenecks and worker shortages that caused shipping delays and higher prices as the economy bounded back with unexpected strength from COVID-19 lockdowns.

Signaling Rate Cuts

Powell suggested Friday that rate cuts are all but inevitable. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he said.

Last year, the Fed had predicted that it would trim rates three times this year. But the cuts kept getting pushed back as the progress against inflation faltered early in 2024. Since then, the steady drop in inflation has resumed, giving the Fed more confidence that victory was in sight.

Abandoning the Good Ship “Transitory’’

Powell acknowledged that he and his Fed colleagues misjudged the inflationary threat when it emerged in early 2021. At the time, they expected the flareup of higher prices to be short-lived — the temporary consequence of pandemic-related supply chain disruptions. The pressure, they thought, would fade “fairly quickly without the need for a monetary policy response — in short, that the inflation would be transitory.’’

They weren’t alone in their optimism. “The good ship Transitory was a crowded one,’’ Powell said, ”with most mainstream analysts and advanced-economy central bankers on board.’’

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But the word “transitory″ came back to haunt the Fed as inflation proved more intractable than expected. It spread from goods that were subject to supply chain backlogs into services, where it is harder to dislodge without raising rates and risking severe economic pain in the form of layoffs and higher unemployment. The Fed proceeded to raise rates 11 times in 2022 and 2023.

A Little Humility

Powell admitted that policymakers and economists have struggled to understand and respond to an economy that has been unpredictable since COVID-19 hit in early 2020. First, the pandemic shut down commerce and companies collectively slashed millions of jobs. Then the economy roared back with unexpected vigor, setting off inflationary pressures that been dormant since the early 1980s. When the Fed belated responded with aggressive rate hikes, economists predicted the hiring borrowing costs would cause a painful recession. But it didn’t.

“The limits of our knowledge — so clearly evident during the pandemic — demand humility and a questioning spirit focused on learnings lessons form the past and applying them flexibly to our current challenges,’’ Powell said.

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Rubio designates Afghanistan as ‘state sponsor of wrongful detention’: ‘Despicable tactics’

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Rubio designates Afghanistan as ‘state sponsor of wrongful detention’: ‘Despicable tactics’

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U.S. Secretary of State Marco Rubio designated Afghanistan as a “state sponsor of wrongful detention,” accusing the Taliban of “unjustly” detaining Americans and other foreign nationals.

In his announcement on Monday, Rubio said the Taliban continues to use “terrorist tactics” that he insisted “need to end.”

“I am designating Afghanistan as a State Sponsor of Wrongful Detention,” Rubio said in a statement. “The Taliban continues to use terrorist tactics, kidnapping individuals for ransom or to seek policy concessions. These despicable tactics need to end.”

The secretary also called on the terror group to free a pair of Americans who are “unjustly detained” in Afghanistan.

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IRAN REGIME CITED AS TRUMP ADMIN SET TO DESIGNATE SUDAN’S MUSLIM BROTHERHOOD A TERROR GROUP

U.S. Secretary of State Marco Rubio designated Afghanistan as a “state sponsor of wrongful detention.” (Alex Wong/Getty Images)

“It is not safe for Americans to travel to Afghanistan because the Taliban continues to unjustly detain our fellow Americans and other foreign nationals,” he said. “The Taliban needs to release Dennis Coyle, Mahmoud Habibi, and all Americans unjustly detained in Afghanistan now and commit to cease the practice of hostage diplomacy forever.”

Coyle, 64, was detained more than a year ago without charges by the Taliban General Directorate of Intelligence, according to his family, noting that he still has not been charged. His family said he was legally working to support Afghan language communities as an academic researcher.

Habibi, a 38-year-old American citizen who was born in Afghanistan, was taken along with his driver from their vehicle in the capital of Kabul in August 2022 by the Taliban General Directorate of Intelligence, according to the State Department.

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The FBI said Habibi was previously Afghanistan’s director of civil aviation and worked for the Kabul-based telecommunications company Asia Consultancy Group. The FBI said the Taliban detained 29 other employees of the company but has released most of them.

Secretary of State Marco Rubio said the Taliban continues to use “terrorist tactics” that he insisted “need to end.” (J. Scott Applewhite/AP Photo)

Habibi has not been heard from since his arrest, and the Taliban has not disclosed his whereabouts or condition, according to the State Department and FBI. The Taliban has previously denied it detained Habibi.

The U.S. is also calling for the return of the remains of Paul Overby, an author who was last seen close to Afghanistan’s border with Pakistan in 2014, according to Reuters, citing two sources familiar with the situation.

The State Department could restrict the use of U.S. passports for travel to Afghanistan if the Taliban does not meet the U.S. government’s demands, the sources told the outlet.

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A passport restriction of this kind is currently only in place for North Korea.

The Taliban called the decision by Rubio to designate Afghanistan a “state sponsor of wrongful detention” regrettable, adding that it wanted to resolve the matter through dialogue.

STATE DEPARTMENT DEFENDS ‘PROACTIVE’ EVACUATION EFFORTS AGAINST DEMS’ CLAIMS OF DIPLOMATIC CHAOS

The Taliban called the decision to designate Afghanistan a “state sponsor of wrongful detention” regrettable. (Reuters/Ali Khara)

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The Taliban took control of Afghanistan in 2021 during the U.S. military’s chaotic withdrawal from the country that ended the 20-year war in the region.

Rubio gave the “state sponsor of wrongful detention” designation to Iran late last month, just one day before the U.S.-Israeli strikes on the country. He warned that the U.S. could restrict travel to Iran over its detention of U.S. citizens, but there have not been any restrictions yet.

“The Iranian regime must stop taking hostages and release all Americans unjustly detained in Iran, steps that could end this designation and associated actions,” Rubio said at the time.

Reuters contributed to this report.

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Von der Leyen ‘acting outside of competence,’ Araud tells Euronews

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Von der Leyen ‘acting outside of competence,’ Araud tells Euronews

Gérard Araud, the highly connected former French ambassador to the United States, said Ursula von der Leyn is exceeding the powers of her mandate by tapping into foreign policy while pushing a German-like approach in an interview with Euronews.

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From Ukraine peace negotiations to the ongoing war in Iran, von der Leyen has managed to grow her role closer to that of a head of state in a move not without controversy.

Von der Leyen was the first EU official to call for a political transition in Iran in line with the goals of the United States and Israel, who have openly called for regime change in Tehran, and have urged the bloc to seek a more pragmatic approach to foreign policy.

“She’s [acting outside of] her competence,” Araud said on Euronews’ interview programme 12 Minutes With on Tuesday, a day after von der Leyen addressed a conference of EU ambassadors in which she declared the world order conceived after the Second World War to be over and never to return.

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**”**The Treaties of the European Union, which is the basis of the EU, do not give her any special competence in foreign policy,” he added, calling her remarks “surprising.”

In the same conference, von der Leyen made headlines in Brussels after she suggested the EU would always defend the rules-based system, but it can “no longer be a custodian of the old-world order” or assume its rules will shelter Europe in the future.

Araud said her comments are problematic as the EU seeks to cement new partnerships across the world by presenting itself as the last bastion of international rules and respect for fundamental values in a brutal, increasingly chaotic world.

“Europeans are the last flag bearers of international law,” he said. “It’s a bit like someone committing adultery while saying ‘I am in favour of the principles of marital fidelity’.’

In 2019, as von der Leyen assumed her first mandate, she vowed to make the European Commission a geopolitical actor. But her power moves into foreign policy have not gone unnoticed across European capitals, with relations with Israel becoming a point of tension between EU member states, seen as supportive, critics and the Commission.

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Her complicated relationship with Kaja Kallas, the European foreign policy chief and EU High Representative, has also led to a cacophony of views when it comes to foreign policy, an area where the EU historically struggles to unite 27 voices.

Her positioning since the start of the war in Iran “is not in line with Spain, and it’s not in line with France, it’s a German line,” Araud said.

Araud, who made a name for himself in European diplomatic circles after a stint as French ambassador in the US from 2014 to 2019, said Trump has miscalculated the ramifications of attacking Iran, which he described as far more complicated than Venezuela, where the US was easily able to swap the leadership to a more friendly one.

“What is the goal of this operation? At the beginning, it was regime change, then it was the nuclear programme, and now it’s a question of destroying the Iranian military apparatus,” Araud said. “He thought he would encounter a situation closer to Venezuela, but that hasn’t worked…Iran has made the choice of waiting.”

The former French ambassador to Israel said he also worries Prime Minister Benjamin Netanyahu has “dragged the US” into a war without a clear plan and cautioned that Israel will not stop in its main objective of becoming the main player in the region, even if that means another round of military escalation and broader conflict in the region.

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“There is a trauma after October 7th. For Israel, it cannot go back to the (scenario) that existed before that, and now it is about a new regime in the Middle East. Until now, they have been successful. But the biggest obstacle remains Iran.”

Asked how the war could end, he said Trump could play the TACO card — an acronym for Trump Always Chickens Out — which could see the US President declaring victory and settling for a half-cooked resolution. Still, Araud said he does not believe Israel will leave its objectives incomplete when it comes to Iran. “I don’t think they will stop,” he said.

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Paramount’s Jeff Shell Accused in Lawsuit of Leaking UFC, WBD Info

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Paramount’s Jeff Shell Accused in Lawsuit of Leaking UFC, WBD Info

A professional gambler and FBI informant has made good on his threat to take legal action against Paramount Skydance president Jeff Shell, as attorneys for Robert “R.J.” Cipriani have filed a 67-page complaint against the media exec in Los Angeles County Superior Court.

Among the allegations Cipriani has brought against Shell are breach of oral contract and fraud, charges related to a reformatted Spanish-language TV show that never got off the ground. The court document claims that Shell broke “a clear promise to help [the] plaintiff develop an English-language version” of Roku Channel’s four-part series Serenata de las Estrellas, which was co-produced by Cipriani in 2023.

Cipriani is suing Shell for $150 million in damages.

“This case arises from the oldest form of fraud: A powerful man took everything a less powerful man had to offer, promised to repay him, lied to him when he asked about it and then refused to compensate him at all,” the second paragraph of the complaint states.

Cipriani claims he had provided Shell with what amounts to 18 months of “sophisticated, high-value crisis communications services,” all of which went uncompensated. Shell allegedly agreed to develop Star Serenade, an adaptation of Serenata, in exchange for these services, but did not follow through.

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The legal document also includes allegations that Shell had disclosed sensitive information about the Paramount’s bid to acquire the Warner Bros. Discovery assets. Cipriani states that Shell in a Feb. 2 meeting had told him that PSKY “intended to enhance and ‘sweeten’ its pending hostile tender offer … to $30 per share in cash,” information that was not made public until Feb. 10. (Cipriani claimed that Shell during that same meeting referred to WBD CEO David Zaslav as a “suck-up.”)

Cipriani went on to state that Shell told him, “We’re paying way too much for Warner Bros. If we could just wait another year, we could get it a whole lot cheaper.”

Paramount and WBD formally entered a $111 billion merger agreement on Feb. 27. Should the deal be met with regulatory approval, the combined CBS Sports/TNT Sports portfolio will bring the rights to the NFL, NHL, MLB, college football, the UFC, the Masters and March Madness under one roof. Shell did not participate in the briefing Paramount convened with analysts the following Monday.

A few pages deeper into the complaint, Cipriani stated he had filed a complaint with the Securities and Exchange Commission related to disclosures Shell had made to him regarding the then-pending $7.7 billion Paramount-UFC deal. Cipriani claims Shell told him about the pact 26 days before it went public. Shell is said to have shared details of the negotiations with Cipriani despite the fact that “even UFC president Dana White did not yet know of the transaction.” (Oddly enough, Cipriani’s complaint alleges that Shell characterized the talks as “very hush hush” while he was spilling the beans.)

The legal complaint includes a screen shot of what appears to be a WhatsApp conversation between Cipriani and Shell, in which the latter states, “We are buying ALL of the UFC rights for the next 7 years for Paramount.”

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When a draft of Cipriani’s complaint began circulating last month, an attorney representing Shell said the document was “riddled with clear errors of fact and law.” With the complaint now filed, Shell will have to opportunity to formally rebut Cipriani.

Shell is currently the subject of an internal Paramount investigation related to Cipriani’s claims and is expected to remain on the sidelines until the inquiry is complete. That said, no official action has been taken, and he remains on the job as of Tuesday afternoon.

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