Fed Chair Powell says ‘time has come’ for shift toward interest rate cuts
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(WASHINGTON) — Federal Reserve Chair Jerome Powell on Friday indicated that the central bank would soon begin cutting interest rates.
Speaking at an annual gathering in Jackson Hole, Wyoming, Powell said the “time has come” for the Fed to adjust its interest rate policy. The announcement comes after a yearslong effort to fight inflation with highly elevated interest rates.
At previous meetings, Powell said the Fed needed to be confident that inflation had begun moving sustainably downward to its target rate of 2% before instituting rate cuts. On Friday, Powell appeared to indicate that the Fed had achieved that objective.
“My confidence has grown that inflation is on a sustainable path down to 2%,” Powell said.
Price increases have slowed significantly from a peak of more than 9%, but inflation remains nearly a percentage point higher than the Fed’s target rate of 2%.
In recent months, the labor market has slowed alongside cooling inflation. That trend was highlighted last month by a weaker-than-expected jobs report that raised concern among some economists that the U.S. may be headed toward a recession.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.
Recent economic developments have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy labor market, Powell said. The unemployment rate has ticked up this year from 3.7% to 4.3%.
“A cooldown in the labor market is unmistakable,” Powell said.
The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.
Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut. The tool indicates a roughly 60% chance of a quarter-point cut and a 40% chance of a half-point cut.
“Powell has rung the bell for the start of the cutting cycle,” Seema Shah, chief global strategist at investment firm Principal Asset Management, told ABC News in a statement. “Make no mistake, if the labor market shows signs of further cooling, the Fed will cut with conviction.”
Wall Street rallied in early trading on Friday after the remarks from Powell. Each of the major stock indexes climbed more than half a percentage point on the news.
President Joe Biden delivers remarks at the 77th Session of the United Nations General Assembly, Wednesday, September 21, 2022, at the United Nations Headquarters in New York. (Official White House Photo by Adam Schultz)
(NEW YORK) — President Joe Biden delivered his farewell address to world leaders at the United Nations General Assembly on Tuesday, seeking to burnish his foreign policy legacy amid international turmoil.
“This is the fourth time I’ve had the great honor speaking to this assembly as president of the United States,” Biden said as he began his remarks. “It will be my last. I’ve seen a remarkable sweep of history.”
Biden also took a moment, near the end of his speech, to poignantly reflect on his decision to end his campaign for reelection.
“There’s so much more I want to get done,” Biden said. “As much as I love the job, I love my country more. I decided after 50 years of public service, it’s time for a new generation of leadership to take my nation forward.”
“My fellow leaders, let us never forget, some things are more important than staying in power. It’s your people,” he said, prompting applause. “It’s your people that matter the most. Never forget, we are here to serve the people, not the other way around.”
Even though Biden came into office with decades of foreign policy experience, he leaves behind a mixed record.
Biden touted his administration’s rebuilding of alliances, saying when he came into office he was “determined to rebuild my country’s alliances and partnerships to a level not previously seen.”
“We did just that,” Biden said.
But the two wars that started under his administration have no clear end in sight.
His presidency is winding down as the conflict in Ukraine continues to rage and the risk of an all-out war between Israel and Lebanon increases.
The president has said a top priority before the end of his administration is to end Israel’s war against Hamas in Gaza, but negotiations to achieve a cease-fire have stalled.
Tuesday’s speech marked one of his last high-profile chances to rally world leaders.
“Will we sustain our support to help Ukraine win this war and preserve its freedom, or walk away, let aggression be renewed and a nation be destroyed? I know my answer,” Biden said. “We cannot grow weary. We cannot look away and we will not let up on our support for not Ukraine.”
Both Biden and Vice President Kamala Harris will meet separately with Ukraine’s President Volodymyr Zelensky at the White House later this week. Harris will not be at UNGA.
With nearly 500 people killed in Lebanon on Monday alone from Israeli strikes, the escalating tensions in the Middle East and the threat of an all-out war between Israel and Hezbollah, will surely overshadow other topics at the U.N.
Speaking on the escalation, Biden warned in his speech that “full-scale war is not in anyone’s interest.”
“A diplomatic solution is still possible,” he said. “In fact, it remains the only path to lasting security to allow the residents of both countries to return to their homes on the border safely. That’s what we’re working tirelessly to achieve.”
A senior administration said this meeting will allow for a range of officials to be in the same room to talk about the situation.
“This is one of the advantages of U.N. General Assembly. You literally have the whole world here. So, when you do have crises of the day, they’ll be addressed. And I have no doubt that the situation in the Middle East will be an important theme in a lot of a lot of the meetings, not just that the president has, but other senior U.S. officials who will be convening to talk about — about various aspects of the crisis and what we can do to stabilize the situation,” the official said.
“I think it’s an opportunity to talk about what we have achieved and what we what we still need to do, given a situation that is just heartbreaking where hostages have not been returned, the humanitarian situation in Gaza, and as you know, just such a sensitive issue, and such a delicate and dangerous situation between Israel and Lebanon right now,” the official said.
The president “should’ve been more outspoken from the beginning about what Israel is doing,” said Ian Bremmer, president and founder of Eurasia Group, adding that “Netanyahu constantly bites the hand that feeds him.”
Notably, even though Israel’s Prime Minister Benjamin Netanyahu will be at UNGA, there are currently no plans for Biden and Netanyahu to meet on the sidelines.
Where Biden has made strides is in stabilizing relations with China and strengthening alliances in the Indo-Pacific region: Biden launched a new security partnership with Australia, the U.K. and U.S. (AUKUS); he brought together Japan and South Korea — two countries with a rocky history — to work with the U.S. on defense and economic cooperation; Vietnam upgraded the U.S. to its highest level of diplomatic relations. (Biden is meeting with Vietnam’s general secretary this week.)
All of those relationships are part of Biden’s strategy to counter China’s influence in the region.
“These partnerships are not against any nation,” Biden said at UNGA. “They’re building blocks for a free, open, secure, peaceful Indo-Pacific.”
(WASHINGTON) — On the presidential debate stage, Donald Trump was given an opportunity to acknowledge he lost the 2020 election. He did not take it.
ABC News moderator David Muir read aloud recent quotes from the former president in which he appeared to admit being defeated by President Joe Biden, including last week when he said he “lost by a whisker.”
“I said that?” Trump responded. He went on to say that such remarks were sarcastic and that he did not, in fact, accept his loss.
Trump’s false claims and grievances about the 2020 race have long been a central theme of his third campaign for the White House. But recently, his rhetoric’s escalated to threats to prosecute election workers and attempts to sow doubt on the 2024 outcome before a single vote has been cast.
In a social media post over the weekend, Trump pledged to jail election workers, donors, lawyers and others “involved in unscrupulous behavior” related to voting in the 2024 election if he wins. They’d be prosecuted, he said, under his scrutiny and “at levels, unfortunately, never seen before in our Country.”
Election officials and law experts condemned the statement as irresponsible and damaging at a time when public servants charged with overseeing elections face increased threats and harassment.
“The remarks are despicable and dangerous,” Richard Hasen, a law professor at the University of California, told ABC News.
“The continued claims of cheating are unsupported by any reliable evidence — but they will cause millions of people to continue to believe the false claims that U.S. elections are rigged,” Hasen said. “After Jan. 6, 2021, a responsible person would be more circumspect with rhetoric about elections and cheating. Donald Trump is doubling down.”
Arizona Secretary of State Adrian Fontes, a Democrat whose state was an epicenter of false claims of fraud in 2020, similarly worried about the impact of Trump’s statements.
“It makes me concerned that this will set other people off. I think the one thing that we’ve seen before is that words have consequences and meaning,” Fontes told ABC News. “And while we are concerned, we are also prepared. Elections officials across the country have been working with local, state and federal law enforcement agencies to monitor and track threats, to make sure we’re keeping our voters safe and make sure we’re keeping our elections officials safe.”
Michigan Secretary of State Jocelyn Benson, a Democrat who experienced protests at her home after Trump’s 2020 loss, said her duty is to “rise above the noise and continue to ensure our elections are fair, secure, accessible, and that the results are accurate.”
The Pennsylvania Department of State, noting it conducts two audits after every election, told ABC News it was “confident in the integrity of county officials and election administrators across the Commonwealth, despite irresponsible statements that are not based in fact or supported by evidence.”
Several secretaries of state, including Benson and Fontes, were on Capitol Hill on Wednesday to testify on their 2024 election preparations.
Asked for comment on the concern from officials, Trump campaign spokesperson Karoline Leavitt said, “President Trump believes anyone who breaks the law should be prosecuted to the fullest extent of the law, including criminals who engage in election fraud. Without free and fair elections, you can’t have a country. Ask Venezuela.”
Trump’s allegations of fraud in the 2020 election were debunked by his own administration officials. Dozens of legal challenges brought by his campaign or his allies in battleground states failed in the courts.
But the impact of the efforts to overturn results were tangible on election officials and poll workers.
Lawrence Norden, vice president of elections and government at the Brennan Center for Justice, earlier this year reported a survey of local election officials across the U.S. found 38% reported experiencing threats, harassment or abuse. Fifty-four percent said they were concerned about the safety of their colleagues. In some cases, Norden said, offices reported installing bullet proof glass or provided extra security training to staff. Some have left their positions altogether.
Norden said it was “very frustrating” to see Trump’s comments after the steps taken by election workers to bring down the temperature these past four years, including efforts to combat misinformation and to improve transparency.
“Any political leader, and certainly somebody running for president of the United States, implying that election officials could be prosecuted is potentially doing two things,” he said. “It’s not going to change the behavior of any election worker or election official, but it’s potentially encouraging further threats or violence, and it is laying the groundwork to potentially undermine or question election results that you don’t like later on.”
In addition to his threat to prosecute election workers, Trump has repeatedly accused Democrats of staging a “coup” in nominating Vice President Kamala Harris after Biden dropped out of the race. He’s sent mixed messaging on voting methods, at times encouraging his supporters to vote in any way possible and at other times baselessly claiming mail-in ballots are ripe for abuse, despite using a mail ballot in Florida’s 2020 primary. He’s said a focus of his campaign is to make sure Democrats don’t “cheat.”
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When asked during the CNN debate in June if he would commit to accepting the November outcome, he only said: “If it’s a fair and legal and good election, absolutely.”
(WASHINGTON) — Postmaster General Louis DeJoy on Thursday said former President Donald Trump and others are “wrong” to question the Postal Service’s ability to deliver ballots ahead of the presidential election.
Asked by a reporter, at a virtual preview of the 2024 election, to respond specifically to Trump’s claim that the Postal Service might deliberately misplace mail-in ballots, DeJoy responded tersely: “My response is like my response to everyone who says that we’re not prepared for the election — it’s that they’re wrong,” he said. “I don’t know that I need to comment any more than that. They’re wrong.”
At the top of his prepared remarks, DeJoy pushed back on those engaging in rhetoric that undermines the public confidence in the Postal Service, which, DeJoy reminded reporters, had been delivering ballots since 1864.
“We recognize that election officials are under an extreme amount of pressure, and will remain so for at least the next two months,” he said. “We also recognize that the American public will become increasingly alarmed if there is ongoing dialogue that continues to question the reliability of the Postal Service for the upcoming elections.”
“Let me be clear,” DeJoy continued. “The Postal Service is ready to deliver the nation’s mail in ballots.”
DeJoy said the Postal Service delivered 99.89% of ballots from voters to election officials in the 2020 election, which he called a “highly sensitive, sensationalized environment.”
In an interview with right-wing outlet Real America’s Voice from Las Vegas last week, former President Donald Trump escalated false and baseless claims about mail-in voting, even suggesting a possible lawsuit.
“I read the post office is saying how bad it is. The post office is critiquing themselves, saying we’re really in bad shape. We can’t deliver the mail. And they’re not even talking about mail in ballots, right? We’re going to dump millions and millions of dollars,” Trump said, repeating false claims that the last election was “rigged” and that the U.S. voting system is “bad.”
