Happy Thursday and welcome to your morning wrap of the latest business and political news from around the world.
First up this morning, the Federal Reserve has held interest rates steady as the economic outlook for the world’s largest economy improves.
In a move that was widely anticipated, the Federal Open Market Committee voted 10-2 to hold interest rates at between 3.5% and 3.75%. The dissenting votes came from Christopher Waller, and Donald Trump’s appointee to the FOMC, Stephen Miran.
In its statement, the Fed said the available indicators suggested that economic activity had been expanding at a solid pace. “Job gains have remained low, and the unemployment rate has shown some signs of stabilisation. Inflation remains somewhat elevated.”
The S&P 500 touched an intraday high in early trading but walked back those gains as traders awaited the Fed’s decision. Wall Street’s other main indices were flat ahead of the decision.
Staying with the Fed, CNBC reported that it had not yet complied with grand jury subpoenas issued as part of a criminal investigation of chair Jerome Powell by federal prosecutors.
Citing a source who was familiar with the situation, it said the probe was continuing. It was not clear when the deadline was for the Fed to turn over documents demanded by subpoena.
Powell announced on January 11 that he was under a criminal investigation, which he said was a consequence of the Federal Reserve not following Donald Trump’s preferences for monetary policy.
In other news, the prospect of a war between the United States and Iran has increased after Trump threatened Tehran with a major attack and warned that “time is running out” for it to make a deal on its future nuclear regime, the ABC reported.
The US president has warned that any strike by American forces will be “far worse” than its last round of attacks six months ago. He said a “massive armada” was moving quickly towards the country.
His comments on the social media platform Truth Social follow weeks of tension between the two countries, after Trump hinted the US would attack Iran following a violent crackdown on anti-regime protesters by Iranian security forces. The crackdowns are suspected to have killed thousands of people.
Iran’s Mission to the UN responded to Trump’s threat on X, saying it was ready for a dialogue “based on mutual respect and interests,” but if pushed, it would defend itself and respond like never before. “Last time the US blundered into wars in Afghanistan and Iraq, it squandered over $7 trillion and lost more than 7000 American lives,” it said.
In recent days, countries in the Middle East have expressed concerns about potential military intervention.
Both the United Arab Emirates and Saudi Arabia have warned they will not allow their airspace to be used in any military action against Iran.
US President Donald Trump.
Back to the US now, where Treasury Secretary Scott Bessent has pushed against speculation that officials could step into currency markets as the American dollar hits multi-year lows, CNBC reported.
The US dollar index, which tracks the greenback against a basket of foreign peers, fell 1.3% yesterday, marking its biggest one-day slide since April. It also dipped to its lowest level since 2022, but has since picked up.
Reuters reported a week ago that the New York Federal Reserve had reviewed dollar-to-yen rates with dealers. A rate check, in which officials ask dealers what price they would get if they entered the market, is something monetary authorities can use to signal their readiness to do so.
Bessent, in a sit-down interview with CNBC overnight, said he had no comment on the report, besides reiterating that the US had a "strong dollar policy".
“If we have sound policies, the money will flow in,” he added. “We are bringing down our trade deficits, so ... automatically that should lead to more dollar strength over time.”
The Japanese yen has fallen 1% against the dollar since Bessent’s comments.
In business news, German prosecutors have raided Deutsche Bank’s headquarters in Frankfurt, as well as one of its offices in Berlin, as part of an investigation into suspected money laundering, Deutsche Welle reported.
Roman Abramovich.
The raid comes one day before the company is due to release its FY25 annual results.
The probe is being carried out by Frankfurt state prosecutors in cooperation with the federal police. It is believed to be linked to the bank’s previous dealings with foreign companies that are themselves suspected of money laundering.
According to the Süddeutsche Zeitung newspaper, the foreign companies in question are linked to Russian billionaire Roman Abramovich, who has been sanctioned by the European Union.
Finally, Amazon said it planned to eliminate about 16,000 corporate jobs in its second round of mass job cuts since October, CNN reported.
In a blog post, the company said it needed to cut red tape to increase its decision-making speed.
“We’ve been working to strengthen our organisation by reducing layers, increasing ownership, and removing bureaucracy,” Amazon’s senior vice president of people, Beth Galetti, said.
The company announced in October it was cutting 14,000 corporate roles, following a directive from its chief executive, Andy Jassy, who wants Amazon to operate like the world’s biggest start-up.
The company is the second-largest private employer, behind Walmart, in the United States, with over 350,000 corporate employees, according to a 2024 survey filed with the US Equal Employment Opportunity Commission.
