Headline

Trump Goes To War With The Fed

Published

2 months ago

April 18, 2025

Donald Trump’s simmering discontent with the US Federal Reserve boiled over this week, with the president threatening to take the unprecedented step of ousting the head of the fiercely independent central bank.

Trump has repeatedly said he wants rate cuts now to help stimulate economic growth as he rolls out his tariff plans, and has threatened to fire Fed Chair Jerome Powell if he does not comply, putting the bank and the White House on a collision course that analysts warn could destabilise US financial markets.

“If I want him out, he’ll be out of there real fast, believe me,” Trump said Thursday, referring to Powell, whose second four-year stint as Fed chair ends in May 2026.

Powell has said he has no plans to step down early, adding this week that he considers the bank’s independence over monetary policy to be a “matter of law.”

“Clearly, the fact that the Fed chairman feels that he has to address it means that they are serious,” KPMG chief economist Diane Swonk told AFP, referring to the White House.

Stephanie Roth, chief economist at Wolfe Research, said she thinks “they will come into conflict,” but does not think “that the Fed is going to succumb to the political pressure.”

Most economists agree that the administration’s tariff plans will put upward pressure on prices and cool economic growth — at least in the short term.

That would keep inflation well away from the Fed’s long-term target of two per cent, and likely prevent policymakers from cutting rates in the next few months.

“They’re not going to react because Trump posted that they should be cutting,” Roth said in an interview, adding that doing so would be “a recipe for a disaster” for the US economy.

– Fed independence ‘absolutely critical’ –

Many legal scholars say the US president does not have the power to fire the Fed chair or any of his colleagues on the bank’s 19-person rate-setting committee for any reason but cause.

The Fed system, created more than a century ago, is also designed to insulate the US central bank from political interference.

“Independence is absolutely critical for the Fed,” said Roth. “Countries that do not have independent central banks have currencies that are notably weaker and interest rates that are notably higher.”

Moody’s Analytics chief economist Mark Zandi told AFP that “we’ve had strong evidence that impairing central bank independence is a really bad idea.”

– ‘Can’t control the bond market’ –

One serious threat to the Fed’s independence comes from a case brought by the Trump administration that seeks to challenge a 1935 Supreme Court decision denying the US president the right to fire the heads of independent government agencies.

The Humphreys Executor case could have serious ramifications for the Fed, given its status as an independent agency whose leadership believes they cannot currently be fired by the president for any reason but cause.

Even if the Trump administration succeeds in its case, it may soon run into the ultimate guardrail of Fed independence: The bond markets.

During the recent market turbulence unleashed by Trump’s tariff plans, US government bond yields surged and the dollar fell, signalling that investors may not see the United States as the safe haven investment it once was.

Faced with the sharp rise in US Treasury yields, the Trump administration paused its plans for higher tariffs against dozens of countries, a move that helped calm the financial markets.

If investors believed the Fed’s independence to tackle inflation was compromised, that would likely push up the yields on long-dated government bonds on the assumption that inflation would be higher, and put pressure on the administration.

“You can’t control the bond market. And that’s the moral of the story,” said Swonk.

“And that’s why you want an independent Fed.”

AFP

Headline

Bomb Scare Forces Emergency Landing Of Hajj Flight In Indonesia

Published

9 hours ago

June 17, 2025

Editor

A plane carrying hundreds of hajj pilgrims back from Saudi Arabia was diverted in Indonesia on Tuesday after an email bomb threat was sent to authorities, Indonesia’s aviation body said.

The Directorate General of Civil Aviation said it received a report from Indonesia’s airport operator “regarding a bomb threat sent by an unidentified person via electronic mail”.

The email at 07:30 am (0030 GMT) contained a threat to “blow up” Saudia Airlines flight SV 5276 which was flying from the Saudi city of Jeddah to the Indonesian capital Jakarta, it said in a statement.

After 10:00 am the pilot diverted the plane from its destination of Jakarta’s Soekarno-Hatta International Airport to Kualanamu International Airport in Medan, a city on Sumatra island in western Indonesia.

The flight was carrying 442 hajj pilgrims, including 207 men and 235 women, it added.

“Upon identifying security and safety threats, the pilot decided to divert the landing to the nearest airport,” said In Journey Airports, Indonesia’s airport operator.

A transport ministry official told AFP the plane was still in Medan and Flightradar24 showed the plane there.

The airport evacuated the pilgrims and a bomb disposal unit swept the plane for explosive devices, the aviation body said in its statement.

AFP

Headline

Russian Strikes Kill 16 In Kyiv

Published

9 hours ago

June 17, 2025

Editor

Russia launched dozens of drones and missiles at Kyiv in the early hours of Tuesday, killing at least 16 people and wounding dozens of others, as negotiations between Kyiv and Moscow broke down.

President Volodymyr Zelensky described the latest overnight barrage as “one of the most horrific attacks” on Kyiv since the Kremlin launched its brutal invasion of Ukraine more than three years ago.

Zelensky said a total of 440 drones and 32 missiles were launched in the strikes nationwide and urged the international community not to “turn a blind eye”.

“Russian President Vladimir Putin does this solely because he can afford to continue the war. He wants the war to go on,” he said.

AFP journalists saw smoke billowing over the capital’s skyline at dawn and a multiple-storey housing block gutted by the attack. Rescue workers were scrambling to find any survivors buried beneath the rubble.

“It was probably the most hellish night in my memory for our neighbourhood,” 20-year-old student Alina Shtompel told AFP.

“It is indescribably painful that our people are going through this right now.”

More than three years into its full-scale invasion of Ukraine, Moscow has stepped up attacks despite efforts by the United States to broker a ceasefire.

Talks have stalled. Moscow has rejected the “unconditional” truce demanded by Kyiv and its European allies, while Ukraine has dismissed Russia’s demands as “ultimatums”.

– Diplomatic ‘facade’ –

Zelensky had been hoping to speak with US leader Donald Trump on the sidelines of the G7 summit in Canada, but the US leader cut short his visit, amid the escalating conflict between Israel and Iran.

Russia hit some 27 sites in Kyiv overnight and some residents were left without electricity, officials said.

Tymur Tkachenko, the head of Kyiv’s military administration, updated an earlier toll of 14 dead, saying two people had been pulled from the rubble at the scene of one strike.

“The search continues, as there may still be people under the ruins,” he said.

One person was also killed and 10 wounded in the southern port city of Odesa, while attacks on the Sumy and Kherson regions later in the day killed two others, authorities said.

The Russian defence ministry said it had carried out precision strikes on “military-industrial facilities in the Kyiv region,” in a statement similar to those releases after major attacks.

Germany vowed in response to “increase the pressure” on Russia. The strike showed that “Russia is using diplomacy merely as a facade,” the foreign ministry wrote on X.

“Putin doesn’t want a solution, he wants capitulation.”

– US citizen dead –

Dozens of residents took shelter in a metro station in central Kyiv, sleeping on mats, exchanging information on attack or reassuring pets, AFP journalists reported, while drones buzzed and explosions echoed out over the city.

“I was asleep. There was a loud bang. The window was smashed, and glass rained down on me,” Sergii, another Kyiv resident, said.

Residential buildings, educational institutions and “critical infrastructure facilities” were all hit, Interior Minister, Igor Klymenko.

Kyiv’s mayor reported earlier that a 62-year-old US citizen had died in a Russian strike on the capital’s Solomyansky district.

Zelensky’s chief of staff, Andriy Yermak, said the new attacks showed Moscow was “continuing its war against civilians”.

Tens of thousands of soldiers have been killed on both sides since Russia invaded Ukraine in February 2022, according to independent monitors and Western intelligence agencies.

Russian forces have been steadily advancing across the sprawling front line even since the inauguration of Trump brought about an uptick in US efforts to secure a halt in fighting.

AFP

Headline

25-year-old Nigerian Arrested With N1.8bn Drugs In India Risks 20-year Jail

Published

12 hours ago

June 17, 2025

Editor

A 25-year-old Nigerian woman, Ifeoluwa Akinwunmi, risks up to 20 years jail in India after she was allegedly caught in possession of drugs worth over N1.8bn.

Akinwunmi, reportedly a hairstylist and nail artist, was arrested last Tuesday by operatives of the Anti-Narcotics Wing of the Central Crime Branch in Bengaluru.

She was apprehended at the Tarahunase village, along Rajanukunte Main Road, after arriving from Delhi with a suspicious bag.

According to The New Indian Express, which was cited in a report by The PUNCH on Monday, the bag contained 5.325 kilograms of MDMA crystals, a banned party drug.

The contraband was concealed among 11 new churidars — traditional Indian outfits.

“She is a courier. She had come to hand over the drugs to a group of African peddlers.

“We noticed four men on two scooters in the area, but they did not collect the parcel. Akinwunmi was arrested while standing with the bag,” a police officer involved in the operation was quoted as saying.

The suspect, who claimed she travelled to India to establish a beauty salon, is now facing charges under India’s Narcotic Drugs and Psychotropic Substances Act, 1985, and the Foreigners Act, 1946.

Section 23 of the NDPS Act stipulates severe penalties for those caught importing, exporting, or transhipping narcotic drugs and psychotropic substances.

According to the Indian legal code reviewed by The PUNCH, offenders found with a commercial quantity, such as the MDMA seized from Akinwunmi, face a minimum of 10 years and up to 20 years in prison, in addition to heavy fines.

The section reads in part, “Where the contravention involves commercial quantity, [the offender shall be punished] with rigorous imprisonment for a term which shall not be less than ten years but which may extend to twenty years and shall also be liable to a fine which shall not be less than one lakh rupees but which may extend to two lakh rupees.”

Under the Foreigners Act of 1946, the Indian government also has the authority to prosecute and deport foreigners involved in criminal activities.

Akinwunmi’s arrest comes just two days after another Nigerian national, Emmanuel Bediako, also known as Maxwell, was apprehended by the Telangana Anti-Narcotics Bureau for alleged drug trafficking.