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‘Inter Miami will be my last club,’ says 8-time Ballon d’Or winner Messi

INTER MIAMI will be the last club Argentina captain Lionel Messi plays for, the 36-year-old forward said on Wednesday, adding he feels “a little bit scared” at the thought of the day he decides to retire.

Mr. Messi, a World Cup winner with Argentina in 2022, has a contract with the Major League Soccer side until 2025 following his arrival last summer after a spell with French champions Paris St Germain.

“Inter Miami will be my last club. I love playing football. I enjoy everything even more because I am aware that there is less and less left,” Mr. Messi told ESPN.

“I’m not ready to leave football. I’ve done this all my life, I love playing football, I enjoy training, the day-to-day, the matches… And yes, there’s always a little bit of fear that it’s all over.”

The eight-time Ballon d’Or winner Mr. Messi is preparing with his national team to defend their Copa America title, with the tournament kicking off on June 20 in the United States.

Argentina will take on Canada in the opening match before facing Group A rivals Chile on June 25 and Peru four days later. — Reuters

Saudi Arabia’s Public Investment Fund holding talks to create boxing league

LONDON/RIYADH — Saudi Arabia’s Public Investment Fund (PIF) is in discussions with multiple boxing stakeholders to create a league, potentially reshaping the competitive landscape of the sport, people familiar with the matter told Reuters.

PIF is looking to invest in a joint venture with some of the sport’s stakeholders that would feature more boxing bouts, the people said, speaking on condition of anonymity.

A handful of leading promoters including Matchroom Boxing and Golden Boy Promotions are involved in the discussions that could result in a deal valuing the new entity between $4-5 billion, one of the people said. PIF wants to create a venture that would bring the main sport’s organizers together, in which it would take a minority stake, the person added.

Turki al-Sheikh, a close advisor to Crown Prince Mohammed bin Salman who has been heavily involved in the sports sector and is chairman of the Saudi General Entertainment Authority, was overseeing the final discussions around a potential deal about a month ago, a second person added.

Reuters could not establish the details around how a league would be structured.

PIF and Matchroom Boxing declined to comment and Golden Boy Promotions did not respond to requests for comment.

Currently the sport is made up of boxing organizations including the World Boxing Council, the International Boxing Federation, the World Boxing Association, and the World Boxing Organization, which each have their own rules for championship belts.

Saudi Arabia has poured billions of dollars into sport as it seeks to wean the kingdom off of oil dependency under de facto ruler Crown Prince Mohammed’s Vision 2030 program, which aims to bring in tourism, boost the private sector, and create jobs.

Boxing is the latest sport to attract possible investment from the PIF, which is chaired by the crown prince, after deals across golf, Formula 1, and football. The fund has also been considering an investment in a new cycling league, Reuters has reported. — Reuters

Mavs fate is sealed

It’s all over but the shouting. When the curtains fall on the 2024 National Basketball Association Finals, the Celtics will have an 18th banner in the TD Garden rafters. There’s a reason no zero-three deficit has been upended in pro hoops annals, and the Mavericks do not have nearly enough in their tank to overcome that reason. It’s an endeavor that would be Sisyphean in any case, but the fact that they’re up against ascendant opposition that appears to have all the counters to their strengths effectively ensures their failure.

To be sure, there’s no shame in the Mavericks adding to the streak of zero-three slates turned into best-of-seven series losses. Given their roster frailties, their heliocentric system simply isn’t up to the task of overcoming the complete Celtics. For all the capacity of wunderkind Luka Doncic to bend defenses at his will following a marked improvement in his touch from long range, he is nearing the end of a long campaign that first required him to improve the playoff seeding of the blue and white, and then to lead the charge against seemingly superior completion.

Not that the Mavericks will be throwing in the towel tomorrow. It’s a tribute to their character that they utterly refuse to lose regardless of circumstance. If anything, they become sharper precisely when they are told that their fate is sealed. Yesterday, for instance, they were down 21 with 10 minutes and change left in the match, but they kept on grinding — kept on moving uphill, kept on closing the gap — until they had a real chance of winning. And perhaps they would have completed the turnaround had Doncic not fouled out after committing two personals in a span of 26 seconds.

In the final analysis, however, speculation counts for squat. Which is why the Mavericks will need to be content with a bridesmaid finish when the battlesmoke clears. It’s a significant accomplishment in and of itself, especially since they failed to even get past the regular season last year, and appeared to be floundering heading into the trade deadline. And, clearly, Doncic will be all the better for his experience. Considering how otherworldly he already is, the thought should rightly scare the rest of the league. The sting that he feels in the meantime figures to propel him to even greater heights.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and human resources management, corporate communications, and business development.

How Europe’s far-right gained traction with many young voters

PEOPLE are silhouetted against the strong sun in Ronda, Spain, Aug. 11, 2023. — REUTERS

BERLIN/WARSAW/MADRID — From Germany and France to Poland and Spain, the far-right made inroads into the youth vote in key states in this European Union (EU) election — as a generation that has grown up amid constant crises seeks new answers and follows politicians fluent in TikTok and YouTube.

Young voters, traditionally perceived to be more left-wing, drove the wave of support for environmental parties at the last EU election in 2019, earning the nickname “Generation Greta” after the young Swedish climate activist Greta Thunberg.

But following the pandemic, the Ukraine war and cost of living crisis, many shifted their support this year towards far-right populist parties that tapped into their concerns, fueling their overall rise in the June 6-9 EU parliament poll.

With the leaders of Europe’s often upstart ethno-nationalist, anti-establishment movements mastering new social media better than their mainstream counterparts, they are earning cachet as a subversive counterculture among some young people.

They appeal in particular to young men who feel left behind and censored by an increasingly “woke” mainstream, analysts say.

“Germany is not going in a good direction and they were the only party with a really clear message, on migration,” said Christoph, 17, a trade school student in Berlin who declined to give his full name, who voted for the far-right Alternative for Germany.

Support for the AfD, which wants to curb migration and warns against what it calls the Islamization of Germany, was up 11 percentage points to 16% among under-25 year olds, according to an exit poll by Infratest dimap — more than double the 5-point rise among the broader population.

The shift, which helped the AfD achieve a historic second place nationwide, was notable in that Germany’s decision to allow 16-18 year-olds to vote for the first time had been expected to favor left-leaning parties.

Though the far-right did not do well everywhere among young voters — and they are a relatively small category in a continent with an ageing population — the trend will still worry mainstream parties, who face a snap election later this month in France, and federal elections next year in Germany.

ECONOMIC CONCERNS UP, CLIMATE DOWN
A recent survey of Germany’s youth showed that young people were increasingly worried about inflation, expensive housing and social divisions, and less about climate change. The Greens won just 11% of the youth vote on Sunday, down 23 percentage points. “There is no longer a sense that if they just work hard then the future will be better, and they are disappointed by the parties in power,” said study lead author Simon Schnetzer, noting that economic gloom was making them more receptive to the AfD’s anti-migration rhetoric. Christoph said his experiences led him to believe Germany’s more recent immigrants were more prone to violence and unwilling to integrate.

In France, the far-right National Rally (RN) took a 25% share of the vote among 18-24 year olds, according to pollster Ipsos, up 10 percentage points compared with an around 8-point gain overall to 31.4%. To be sure, most of the youth in the EU’s two top powers still back leftist parties, and many worry about the latest trend.

“It worries me because I saw the far-right wants to deport people even if they have German citizenship like me,” said Ensar Adanur, 17, a German of Turkish origin. “But Germany is home for me.”

In Poland, however, support for the far-right Confederation among 18-29 years old voters increased from 18.5% to 30.1%, making them the leading choice for that demographic.

Mainstream parties “no longer have any credibility for me, the previous government and the current one show it clearly”, said Paweł Rurkowski, 30, an IT specialist who voted for the Confederation.

SLICK ON SOCIALS
Far-right parties’ relative proficiency in young voters’ preferred channels of communication — video apps such as Tiktok and YouTube and messaging app Telegram — is a big factor behind their increasing success with that generation, analysts said.

The recent German youth study showed that 57% of young people get their news and politics through social media. But German Chancellor Olaf Scholz, like many mainstream politicians, only joined Tiktok a few months ago.

“If you are not on young peoples’ channels, you simply do not exist,” said Mr. Schnetzer.

Meanwhile social media platforms algorithms favour controversial messages that generate engagement over serious content, said Ruediger Maas, founder of the Institute for Generational Research in Augsburg.

The AfD’s lead candidate for the EU elections, Maximilian Krah, went viral on TikTok, for example, with dating tips for young men: “Don’t watch porn, don’t vote for the Greens, go out into the fresh air … Real men are right-wing.”

He has some 53,300 followers on Tiktok, compared with just 11,000 and 2,652 respectively for the lead candidates for the center-left Social Democrats and the Greens.

“My generation doesn’t really know about politics but we hear about the AfD all the time,” said AfD voter Christoph.

In Spain, social media influencer Alvise Perez clinched 6.7% of the youth vote, compared with 4.6% of the overall vote, after conducting his anti-immigration and anti-corruption maverick campaign almost exclusively on Instagram and Telegram.

Far-right party Vox, meanwhile, which was strong on Tiktok, garnered 12.4% of the vote among those under 25, compared with 9.6% overall.

“It seems to be the only party that really opposes the government when it comes to taboo subjects such as immigration or gender discourse,” said Xavier, a 22-year-old university student who cast his vote for Vox. — Reuters

From northwest to east China, parched and baking regions face drought

A WOMAN walks with cold patches on her forehead and neck amid a red alert for heatwave in Beijing, China, June 23, 2023. — REUTETRS

BEIJING — Weeks of scarce rainfall in parts of China, coupled with sweltering heat, has brought drought to several provinces, prompting alerts and actions from authorities to minimize impacts on agriculture, and water and energy supplies.

Temperatures this week are forecast to scale record highs in parts of China as countries across Asia brace themselves for another summer of extreme weather.

China’s Water Resources Ministry this week launched emergency responses to manage drought on in Gansu, Shaanxi, Shanxi, Henan and Shandong provinces, indicating various regions in the country spanning the northwest to the east are facing parched and scorching conditions.

With dwindling precipitation since May in areas around the Yellow River Basin, in combination with the onset of searing temperatures this month, drought is threatening cultivated land that were being prepared to be sown as well as sown crops, Xinhua reported.

The harsh weather conditions will feature until the end of next week, with drought expected to worsen, the official media said.

In some parts of Hebei, Henan and Shandong provinces, temperatures could reach 44 degrees Celsius or °C (111.2 degrees Fahrenheit), potentially breaking historical records for the month of June, state broadcaster CCTV said.

Surface temperatures could hit 70 °C in some localities including in Shanxi and Shaanxi, it added.

The emergency management ministry has alerted affected regions including northwestern Shaanxi, northern Hebei and Shanxi, eastern Anhui and Shandong as well as central Henan to protect water and food production.

China’s national forecaster predicted continuous heat wave conditions and warned about the need to prepare for emergency power supplies as well as fire prevention in forest areas, the People’s Daily reported.

Electricity demand typically soars in high temperatures as people crank up the air-conditioning to stay cool.

Rain, not heat, is the threat in southern China. Coastal Fujian’s provincial observatory raised a warning for wet weather and potential disasters after forecasting heavy rainfall until Saturday. — Reuters

Russia’s invasion of Ukraine caused huge emissions, study shows

Army soldier figurines are displayed in front of the Ukrainian and Russian flag colors background in this illustration taken, Feb. 13, 2022. — REUTERS/DADO RUVIC/ILLUSTRATION

KYIV — Russia’s invasion of Ukraine has directly caused or paved the way to the emission of 175 million tons of carbon dioxide (CO2) into the atmosphere, a joint report said on Thursday.

The report, published by Ukraine’s environment ministry and climate NGOs, said their estimate included both emissions that had been released and those that would be produced during repair work following the destruction caused by the February 2022 invasion.

It laid out some of the main carbon-emitting activities caused by fighting.

“Billions of liters of fuel used by military vehicles, nearly a million hectares of fields and forests set ablaze, hundreds of oil and gas structures blown up and vast amounts of steel and cement used to fortify hundreds of miles of front lines,” it said.

The 175 million tons estimate was the equivalent to the annual emissions produced by 90 million cars, or the whole of the Netherlands in a year, it said.

The war launched by Moscow has killed tens of thousands and displaced millions, but it has also caused vast environmental damage as two armies engage in the biggest European land war in 80 years.

The report, which seeks to quantify the war’s carbon footprint, was put together in cooperation by Ukraine’s environment ministry and climate researchers from Ukraine and other countries.

The report used a measure called the Social Cost of Carbon to calculate the approximate financial cost of the additional emissions.

“The total climate damage that the Russian Federation has caused after 24 months of the war amounts to more than USD 32 billion,” it said.

The report said that the war emissions could be divided approximately into three thirds: military activity, the steel and concrete needed to rebuild damaged infrastructure, and the final third being made up of several disparate factors including fires and movement of people.

“In the early months of the war, the majority of the emissions were caused by the large scale destruction of civilian infrastructure requiring a large post-war reconstruction effort,” the report said.

“Now, after two years of war, the largest share of emissions originate from a combination of warfare, landscape fires and the damage to energy infrastructure.”

Military activity was responsible for 51.6 million tons of CO2 equivalent emissions, the report said.

The majority of that number, 35.2 million tons of CO2 equivalent, was caused by the Russian military’s fuel consumption, with a further 9.4 million tons from the Ukrainian military’s use of fuel.

Among the world’s biggest consumers of fuel, militaries worldwide account for 5.5% of global greenhouse gas emissions, according to a 2022 estimate, opens new tab by international experts.

According to the report, the war has significantly increased the frequency of landscape fires in the affected areas.

It said a million hectares of land had been scorched by 27,000 war-related fires, causing the equivalent atmospheric damage of 23 million tons of CO2.

The report also calculated that the closure of airspace over Ukraine and some parts of Russia, as well as the restrictions on certain carriers’ use of Russia’s airspace, have created just over 24 million tons of CO2 of additional emissions.

“Restrictions or caution has largely cleared the skies above some 18 million km2 of Ukraine and Russia, adding hours to journeys between Europe and Asia that consume additional fuel,” it said. — Reuters

WHO says many people in Gaza facing ‘famine-like conditions’

PALESTINIANS wait to receive food cooked by a charity kitchen amid shortages of food supplies in Rafah in the southern Gaza Strip, Jan. 16, 2024. — REUTERS

GENEVA — The head of the World Health Organization (WHO) said on Wednesday that many people in Gaza were facing “catastrophic hunger and famine-like conditions.”

“A significant proportion of Gaza’s population is now facing catastrophic hunger and famine-like conditions,” said WHO Director-General Tedros Adhanom Ghebreyesus.

“Despite reports of increased delivery of food, there is currently no evidence that those who need it most are receiving sufficient quantity and quality of food.”

Mr. Tedros said there were more than 8,000 children under five years old who been diagnosed and treated for acute malnutrition, including 1,600 children with severe acute malnutrition.

“However, due to insecurity and lack of access, only two stabilization centres for severely malnourished patients can operate,” he added.

“Our inability to provide health services safely, combined with the lack of clean water and sanitation, significantly increases the risk of malnourished children.”

The war in Gaza began on Oct. 7 when militants led by Hamas killed 1,200 Israelis and took more than 250 hostage, according to Israeli tallies.

Israel’s response has caused the deaths of more than 37,000 Palestinians, according to the Gazan health ministry, displaced most of Gaza’s population of 2.3 million and caused widespread hunger and destruction.

A UN inquiry on Wednesday found that both Israel and Hamas had committed war crimes early in the Gaza war, and that Israel’s actions also constituted crimes against humanity because of the immense civilian losses.

Mr. Tedros also highlighted a separate health crisis in the West Bank, where he said healthcare had been targeted by nearly 500 attacks since Oct. 7.

“While the world’s focus has been on Gaza, there is also an escalating health crisis in the West Bank, where attacks on healthcare and restrictions on movement of people are obstructing access to health services,” he said.

“In most areas of the West Bank, clinics are only operating two days a week and hospitals are operating at about 70% capacity.” — Reuters

Bears firm up bets on Asian currencies as US rate cuts remain elusive: Reuters poll

ANALYSTS have solidified their bearish positions on most Asian currencies as higher-for-longer US interest rates and a resilient dollar are likely to continue to hurt the local units, a Reuters poll showed on Thursday.

The Indonesian rupiah and the Philippine peso (PHP) were the most shorted currencies in the region, with bearish bets on both at multi-week highs, a fortnightly poll of 10 analysts showed.

The responses were received before the United States’ May inflation report, which showed prices remained flat, and the Federal Reserve’s monetary policy meeting at which the central bank pushed out the start of rate cuts to as late as December. However, investors in contracts tied to the Fed’s benchmark rate kept bets of quarter-percentage-point reductions in September and December intact.

“We still see upside risks for the DXY (dollar index) given that we remain in an uncertain transitory period on (US) inflation and markets may continue to be cautious,” analysts at Maybank said in a note on Thursday.

“The Fed staying higher for longer is also going to do no favors for Asian FX with dot plots now indicating only one cut this year.”

The Indonesian rupiah, one of the worst-performing currencies in the region so far this year, has seen analysts build up their short bets throughout the year as external factors and corporate dividend outflows pressure the currency.

“We are more skeptical towards the THB (baht) and IDR (rupiah) in the near term because of ongoing dividend outflows,” analysts at HSBC said.

“As long as the IDR remains under pressure — which is quite likely in the near term, given dividend outflows until end-July, a narrowing trade surplus, and a lack of portfolio inflows — we cannot rule out more rate hikes by BI (Bank Indonesia).”

Short bets on the Philippine peso ticked higher as the local central bank remains of the view that interest rates could be cut as early as August despite an uptick in inflation.

“Signaling a rate cut ahead of the Fed will likely result in heightened depreciation pressure for the PHP,” HSBC analysts said.

Meanwhile, analysts have turned bearish on the Indian rupee, one of the top-performing currencies in the region so far this year, as external factors like high interest rates and Middle East geopolitical tensions put pressure on the currency.

Bearish views also ticked higher on the South Korean won, the Taiwan dollar, and the Singapore dollar, while being trimmed marginally on the Chinese yuan and the Thai baht.

The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and Thai baht.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long US dollars.

The figures include positions held through non-deliverable forwards (NDFs). — Reuters

About 4% of US adults age 65 and older have a dementia diagnosis, survey finds

STOCK PHOTO | Image by Gerd Altmann from Pixabay

Some 4% of US adults aged 65 and older say they have been diagnosed with dementia, a rate that reached 13% for those at least 85-years old, according to a report of a national survey released on Thursday.

The report issued by the US Centers for Disease Control and Prevention (CDC) was based on the 2022 National Health Interview Survey, a nationally representative sample of U.S. adults aged 18 and older. The survey in 2019 added the option to report dementia, including Alzheimer’s disease, to its questions on doctor-diagnosed health conditions.

The CDC said 1.7% of adults ages 65 to 74 reported a dementia diagnosis, a rate that increased with age. For those ages 75 to 84, the reported dementia rate was 5.7%

The agency conducted in-person or telephone interviews with 8,757 people age 65 and older who were asked whether they have been diagnosed with some form of dementia.

Ellen Kramarow, the report’s lead author, said dementia diagnosis estimates were in general similar from 2019 to 2022, adding that they “do not see this as a measure that is going to have large changes year to year.”

Alzheimer’s is the leading cause of dementia, which involves the loss of memory, language, problem-solving and other cognitive abilities severe enough to interfere with daily life, according to the Alzheimer’s Association.

The report accompanies the arrival of new treatments designed to slow progression of the mind-wasting disease, such as Biogen and Eisai’s Leqembi, which won US approval last July. Eli Lilly’s similar treatment, donanemab, was unanimously endorsed by an advisory panel to the U.S. Food and Drug Administration on Monday and is widely expected to be approved.

The CDC report showed dementia diagnoses were lowest among people with college degrees and highest among people with less than a high school education.

Several studies have suggested that people with higher levels of education have larger cognitive reserves that can temporarily delay dementia symptoms.

The overall estimates are similar to other national surveys, such as the 2021 Medicare Current Beneficiary Survey, which estimated that nearly 3% of Medicare beneficiaries not residing in nursing homes or long-term care facilities had a diagnosis of Alzheimer’s or another type of dementia. – Reuters

Japan’s Honda to start selling micro-sized electric vans in October

 – Honda Motor will start selling a micro-sized electric van targeted at Japan’s delivery industry in October, the Japanese automaker said on Thursday, joining an increasingly crowded part of the market.

The small electric commercial van will have a cruising range of 245 km (152 miles), the company said in a statement. It will be classed as a “kei” vehicle, which are low-powered, low-taxed domestic vehicles.

The launch of the new model comes as Japan’s second-biggest automaker by volume separately plans to start selling an electric kei passenger car next year.

Honda is a powerhouse in Japan’s substantial market of kei micro-sized cars. Its N-Box model has long topped the ranks of Japan’s kei passenger vehicle market.

Micro kei vehicles are hugely popular among businesses and households to deliver agriculture produce, parcels and other goods in urban areas and the countryside in Japan, in part due to their relatively cheap price.

The roll-out comes months after Toyota Motor delayed the launch of a small electric van that it is developing with Suzuki Motor and Daihatsu, following a safety test scandal at Daihatsu.

Mitsubishi Motors Corp. in December 2023 relaunched its own small commercial van, Minicab EV.- Reuters

Japan’s beloved cats get healthcare help from AI

STOCK PHOTO | Image by Gundula Vogel from Pixabay

 – Mayumi Kitakata frets about the health and wellbeing of Chi, her stoic housemate who enjoys treats, indulges a bit too much in the catnip, and about 14 is getting on in years for a feline.

Ms. Kitakata, 57, has had pet cats come and go over the years, and to help give Chi as many seasons as possible, she’s turned to artificial intelligence.

In March, Ms. Kitakata became an early adopter of CatsMe!, an AI-driven smartphone application that purports to tell when a cat is feeling pain. That cuts down on the guesswork of when it is necessary to embark on a stressful trip to the veterinarian.

“He is at an age where more and more diseases are going to appear,” said Ms. Kitakata, who is single and has a grown son. “So being able to consult the vet but still reduce the number of visits to the hospital is very important for him and for me.”

While pets are an integral part of many families around the world, these companions have an outsized role in Japan due to the ageing population and plummeting birth rate. The Japan Pet Food Association estimated there were almost 16 million pet cats and dogs in the country last year, more than the number of children under 15.

Tech startup Carelogy and researchers at Nihon University developed CatsMe! by training it on 6,000 pictures of cats, and the app has been used by more than 230,000 customers since its launch last year. The developers say it is more than 95% accurate and expect that degree to improve as the AI trains on more feline faces.

Nihon University professor Kazuya Edamura said vets like him can tell to a certain degree whether an animal is in pain or not, but it’s a harder task for owners.

“Our statistics show that more than 70% of elderly cats have arthritis or pain, but only 2% of them actually go to a hospital,” Mr. Edamura said. “So rather than a final diagnosis, we use (the app) as a tool to make owners aware of whether the situation is normal or not.”

Ms. Kitakata and Chi live in a central Tokyo apartment with the perfect feline napping spot near a balcony window which overlooks cherry trees five floors below. She monitors Chi’s toilet activity and uses the app to read its face each day.

Ms. Kitakata had cats since her mid-20s, including Soran, a brown-striped tom who died about six years ago from cancer at just eight years old.

“If I had noticed it, maybe we could have done cancer treatment earlier or something and it would have helped, but even the vet didn’t know,” she said, tears welling in her eyes. “I might have been able to save him.” – Reuters

Fed leaves rates unchanged, sees only one 2024 cut despite inflation progress

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 – The Federal Reserve held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December as policymakers sketched out their view of an economy that remains virtually unchanged across its major dimensions for years to come.

With growth and unemployment lodged at levels better than the US central bank considers sustainable in the long run, Fed Chair Jerome Powell said policymakers were content to leave rates where they are until the economy sends a clear signal that something else is needed – through either a more convincing decline in price pressures or a jump in the unemployment rate.

So far, Mr. Powell noted in a press conference after the end of a two-day policy meeting, inflation had fallen without a major blow to the economy, and he said there was no reason to think that can’t go on.

“These dynamics can continue as long as they continue,” Mr. Powell said. “We’ve got a good strong labor market. We think we’ve been making progress toward the price stability goal. We’re asking … is our policy stance about right? And we think yes, it’s about right.”

The result is the Fed accepting a slow expected decline in inflation back towards its 2% target, with the central bank’s preferred inflation measure – the personal consumption expenditures (PCE) price index – virtually unchanged at the end of this year from its current level and the number of rate cuts held to a single quarter-percentage-point reduction.

Those rate reductions are projected to gather pace next year, with Powell deferring on the timing.

“We don’t make decisions about future meetings until we get there,” he said. “Really, it’s going to be not just the inflation readings. It’s going to be the totality of the data, what’s happening in the labor market, what’s happening with the balance of risks, what’s happening with the forecasts, what’s happening with growth. You’re looking at all of that.”

Inflation data published hours before the release of the policy statement and updated projections showed the consumer price index (CPI) rose not at all on a month-to-month basis in May, causing some analysts to argue the latest projections were already “stale.”

Mr. Powell’s characterization of the inflation projections as “kind of conservative” indicated the Fed chief was “keeping the door very much open to a September cut” if inflation continues to weaken, said Krishna Guha, vice chairman of Evercore ISI.

Investors in contracts tied to the Fed‘s benchmark interest rate largely kept bets intact that the central bank would approve quarter-percentage-point reductions in September and December.

Mr. Powell himself said the decision about the rate path was a “close call” for many policymakers, and that to some degree the Fed had merely traded an earlier start to rate reductions this year by tacking an additional anticipated cut onto 2025.

Still, he called the decision to start policy easing “consequential,” and the drop in expectations for this year completes a broad swing in sentiment from just six months ago when policymakers in their December 2023 forecasts envisioned an imminent kickoff to three years of steady rate reductions.

Under the current projections, absent a surprise in upcoming inflation or jobs data, the cuts would likely not begin until December, moving the Fed‘s decision out of the Nov. 5 US presidential election cycle.

 

HIGHER NEUTRAL RATE

The policy statement issued on Wednesday combined an acknowledgement of “modest further progress” on inflation in recent months with a restatement of language that rate reductions won’t be appropriate until officials have “gained greater confidence” that price pressures will continue to ease.

The PCE price index increased at a 2.7% annual rate in April; the median projected by policymakers for the end of the year is 2.6%, with a full return to the 2% target in 2026.

The weak CPI number for May was “only one reading,” Powell said. “When we are (more confident), then we can look at loosening policy.”

The S&P 500 and Nasdaq Composite stock indices closed sharply higher on the day, while the US dollar and yields on US Treasuries fell.

“The market cares more than the economy does about whether there are two cuts this year or only one,” said Brian Jacobsen, chief economist at Annex Wealth Management. “The Fed is basically rearranging the rate-cut deck chairs” from 2024 to 2025.

The new Fed projections show the economy is still expected to grow at a slightly above-trend 2.1% this year despite a sluggish first quarter, and the unemployment rate will remain at its current 4% through the year.

“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low,” the Fed said in its statement, which was approved unanimously.

Along with trimming the number of rate cuts expected this year, the new rate projections raised the long-run “neutral” rate needed to keep inflation in check while maintaining steady growth to 2.8% from 2.6%.

The long-run rate has now moved up more than a quarter of percentage point over the Fed‘s last two sets of projections, a possible sign officials feel inflation will be harder to tame in the future.

Mr. Powell said the increase in the long-run rate did not necessarily influence officials’ short-run projections for the benchmark interest rate, but noted they were still mulling just how restrictive monetary policy had become.

The Fed raised rates aggressively in 2022 and 2023 to curb inflation that had surged to a 40-year high in the aftermath of the COVID-19 pandemic.

“We’re making policy with the economy that we have, with the distortions that we have,” Mr. Powell said. “The question of how restrictive this policy has become is one that everyone‘s asking … I think the evidence is pretty clear. This policy is restrictive and is having the effect we would hope for.” – Reuters