{"text":[[{"start":11.04,"text":"The Federal Reserve has raised rates for the first time since 2023 and signalled that it is prepared to take further steps to curb inflation sweeping the US as chair Kevin Warsh defies Donald Trump’s calls for low borrowing costs."}],[{"start":25.2,"text":"The Federal Open Market Committee voted unanimously on Wednesday to lift the benchmark federal funds rate by a quarter point to a range of 3.75 per cent to 4 per cent in line with Wall Street’s expectations."}],[{"start":38.2,"text":"The decision, just weeks before pivotal midterm elections, comes as rate-setters attempt to stop sharp price rises triggered by the Middle East conflict and the scramble for AI components from turning into a wider inflation crisis."}],[{"start":51.84,"text":"“The plain fact is that inflation is too high and has been for too long,” Warsh said at a press conference following the two-day meeting. “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”"}],[{"start":63.96,"text":"Warsh added: “I would be hard pressed to describe broad financial conditions as restrictive. This view was widely shared by the committee, so we removed a dose of accommodation.”"}],[{"start":75.6,"text":"Trump lashed out at the Fed following the rate rise, saying on his Truth Social platform that “Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR”."}],[{"start":86.2,"text":"“LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!” the president added."}],[{"start":91.8,"text":"Trump focused his ire on the Fed’s board of governors at large rather than Warsh, whom the president appointed as the central bank’s chair earlier this year."}],[{"start":100,"text":"“I told Kevin, I said, you might as well vote with the board because it’s just not going to matter. The board is very hostile,” he told reporters on Wednesday evening. “[The board is] raising that only for political reasons, and that’s a raise against Trump.”"}],[{"start":114.2,"text":"The president had previously called former Fed chair Jay Powell a “moron” and “stubborn mule” for not delivering sharp rate cuts."}],[{"start":121.521,"text":"Short-term US government bond yields, which are sensitive to monetary policy expectations, rose following the Fed meeting. The two-year yield jumped 0.07 percentage points to 4.74 per cent, leaving it up almost half a percentage point since the central bank’s last meeting in July."}],[{"start":139.774,"text":"The US dollar also rallied after the meeting, with an index tracking the currency against six peers climbing 0.74 per cent. Traders in the futures market priced in a nearly 90 per cent chance that the Fed will increase borrowing costs at least one more time before the end of this year, CME Group data shows."}],[{"start":157.92,"text":"Traders had begun ratcheting up bets on rate increases after the consumer price index reading for August, released last Friday, signalled progress on returning inflation back to the Fed’s goal had stalled."}],[{"start":null,"text":"
"}],[{"start":168.68,"text":"A separate measure, known as personal consumption expenditures inflation, is running at 3.7 per cent, almost double the Fed’s 2 per cent target. The central bank has not reached its goal in more than five years, something Warsh criticised before Trump nominated him to the top Fed job."}],[{"start":185.16,"text":"Warsh on Wednesday said: “We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed.”"}],[{"start":192.68,"text":"Projections released alongside Wednesday’s decision showed Fed policymakers are prepared to hoist borrowing costs higher in coming months."}],[{"start":200.2,"text":"A dozen Fed officials projected an additional quarter-point rate rise by the end of 2026. Another four expected two rate rises, with two anticipating borrowing costs will remain at their current level."}],[{"start":211.72,"text":"Subadra Rajappa, head of US research at Société Générale, said “the decision and the press conference were both hawkish . . . The focus was very much on inflation. I think the Fed is slowly moving its way out of accommodation.”"}],[{"start":224.8,"text":"Investors also homed in on Warsh’s upbeat assessment of the economy and labour market as a further indication that the central bank is prepared to take additional action to cool inflation."}],[{"start":233.76,"text":"“The American economy appears to be strengthening,” Warsh said. “New hiring, private sector earnings, business capital investment — each of these markers has improved in recent months and is pointing in a good direction.”"}],[{"start":null,"text":""}],[{"start":245,"text":"Robert Sockin, chief US economist at PGIM, said: “The distribution of risks shows almost no concern about activity, and ongoing elevated concerns about inflation — suggesting that risks remain tilted to the Fed doing more if inflation continues to run high.”"}],[{"start":261.44,"text":"But in a sign of the task that remains for the Fed, the committee’s projections indicated they did not anticipate inflation reaching the central bank’s 2 per cent goal until 2029."}],[{"start":272.68,"text":"Investors said the hawkish decision on Wednesday had bolstered Warsh’s credibility on inflation fighting, reversing worries following the July Fed meeting that he was not prepared to do enough to slow price growth."}],[{"start":283.36,"text":"“I think today allows us to move away from questions about Fed independence and credibility. We can move past that,” said Priya Misra, a portfolio manager at JPMorgan Asset Management."}],[{"start":300.28,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789612980_3086.mp3"}