Image copyrightAFP/GETTYImage captionMr Powell says gradual rate increases are the best way to balance risks
Wall Street shares have risen sharply after the US central bank indicated there may not be as many future interest rate rises.
In a speech, Federal Reserve Chair Jerome Powell said interest rates are "just below" a neutral level that neither hastens nor slows growth.
Last month, he had said the bank had a "long way" to go before reaching that level.
His remarks come after repeated attacks by President Donald Trump.
Mr Trump blames the Fed's recent rate rises for recent stock market declines and has described future rate increases as the biggest risk to the US economy.
The president, who selected Mr Powell to lead the bank last year, has also said he is not happy with his pick.
Mr Powell, who was speaking at the Economic Club in New York, did not address the criticism directly.
But he appeared to soften his tone about future rate rises while continuing to defend the Fed's plans for gradual increases.
"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy - that is, neither speeding up nor slowing down growth," he said.
He added: "There is no preset policy path. We will be paying very close attention to what incoming economic and financial data are telling us."
The Dow and the Nasdaq indexes both jumped more than 2% after the comments, while the S&P 500 gained 1.7%.
Balancing two risks
The US economy has enjoyed a healthy expansion this year, spurred in part by increased government spending and a major tax cut.
Job creation has been strong and gross domestic product (GDP) grew at an annualised rate of 3.5% in the most recent quarter.
However, many economists expect that pace to slow next year as the effects of the stimulus fade.
In his speech, Mr Powell said he viewed gradual increases as the best way to balance the risks of causing problems by raising rates too fast or too slowly.
"Our path of gradual increases has been designed to balance these two risks, both of which we must take seriously," he said.
Mr Powell said the overall risks to financial stability remain "moderate", but he flagged rising levels of corporate debt as one area of concern.
He also said disruption caused by events such as Brexit might trigger economic distress.
South Africa will introduce new oil and gas laws after elections next year, Mineral Resources Minister Gwede Mantashe said.
“We will make sure that it will be one of the first laws to be processed in the new parliament after the elections,” he said in Cape Town on Thursday.
The process of approval of exploration applications will be completed in terms of the current mineral and petroleum law. The oil and gas sector must advance black economic empowerment, especially at the operational level, he said.
All forms of Brexit will make the UK worse off but Theresa May's plan is the best available, says Philip Hammond.
Analysis of the prime minister's Brexit deal shows the economy will be "slightly smaller" after 15 years, he told BBC Radio 4's Today programme.
But it was not just about the economy, the chancellor added - her plan would deliver "political benefits" as well.
It comes as the government is due to publish its economic analysis on the long-term effects of Brexit on the UK.
The Treasury will set out various scenarios - with the Daily Telegraph saying it will predict £150bn in lost output over 15 years under no deal - compared with if the UK stayed in the EU - with Theresa May's plan costing £40bn.
With two weeks until MPs vote on the deal, Mr Hammond said: "We're going to go out and we're going to sell this deal."
He said if the deal was not voted through Parliament, Mrs May's cabinet would sit down and "decide how best to proceed", looking at how MPs had voted before deciding their next move.
Under any scenario, in a "purely economic sense" the UK would be worse off than if it stayed in the EU, as exiting would created "impediments to our trade", said the chancellor.
But he argued that staying in the EU was not politically "viable" and, he added, Mrs May's planned Brexit deal combined most of the economic benefits of remaining in the EU with the political benefits of leaving the EU.
Asked if the UK would be poorer under Mrs May's deal, Mr Hammond said: "The economy will be slightly smaller in the prime minister's preferred version of the future partnership."
He said Mrs May's deal would reduce to "an absolute minimum the economic impact of leaving the EU, while delivering the political benefits" such as being able to do trade deals outside the EU and "having control of our fishing waters".
Veteran Conservative Eurosceptic Sir Bill Cash said Mr Hammond was effectively arguing for the UK to stay in the European Union in his "extraordinary" statement.
He said the chancellor had ignored potential economic benefits of leaving the EU, asking: "What about the trade deals which could give us the most enormous opportunities throughout the world, if we are able to strike them?"
Under Mrs May's deal, the UK would be able to negotiate trade deals during the transition period after 29 March's Brexit day, but would not be able to implement them until the end of the planned 21 month transition period, which could itself be extended.
Sir Bill, who is among the MPs to have submitted a letter of no-confidence in Theresa May in a bid to remove her as prime minister, said this would keep the UK tied to the EU "indefinitely" with no say over its rules.
The chancellor's comments were seized on by MPs campaigning for another EU referendum, with Labour's Chris Bryant saying on Twitter: "Philip Hammond effectively conceded that the so-called deal is going nowhere and that after 11/12 all options should be on the table. That sounds like we are inching towards #PeoplesVote."
MPs are due to vote on Mrs May's Brexit deal, which she insists is the only option, on 11 December.
According to the Daily Telegraph, the Treasury analysis will show that under Mrs May's deal, the UK's GDP will be between 1% and 2% lower over 15 years than if it stayed in the EU, compared with 7.5% lower under a no deal situation.
The Department for Exiting the EU said it does not comment on leaks.
The prime minister is heading to Scotland, where she is expected to tell workers in a factory near Glasgow she believes her deal provides an "unprecedented economic relationship that no other major economy has" and certainty for employers and their staff.
She will also say that moving away from the EU's common fisheries policy (CFP) "which has so tragically failed Scotland's coastal communities" will leave the UK "free to decide for ourselves who we allow to fish in our waters".
The UK sells nearly £1bn of fish produce to the EU every year, and a number of EU countries are insisting that tariff-free trade of that kind can continue only if EU fishing boats continue to get access to UK waters.
The SNP claims the industry will be "sold out".
The party says access to UK waters for EU boats will be used as a "bargaining chip" to secure a good post-Brexit trade deal.
Media captionNicola Sturgeon said that no Scottish government could possibly accept a deal which left the country poorer
And Scottish First Minister Nicola Sturgeon has unveiled analysis the SNP claims shows Scotland would be left poorer by the deal.
Her party, which has 35 MPs, along with the leadership of Labour, the Lib Dems and Democratic Unionists have all said they will reject Mrs May's deal.
Many Tories have also said publicly they are opposed to Mrs May's deal.
Meanwhile, a row is brewing after the Labour Party demanded the government publish its full legal advice on the Brexit deal this week.
The government has only said it will publish a "full reasoned position statement" laying its out political and legal position on the withdrawal agreement.
BBC Newsnight political editor Nick Watt said a source says the full advice provides a "very stark warning" that there is no way the UK, on its own, would be able to get out of the so-called Northern Ireland backstop.
The backstop - the plan to create a temporary single customs territory to prevent the return of customs posts at the Irish border in the event no EU-UK trade deal comes into force - is controversial because Brexiteers fear it would keep the UK tied to EU rules indefinitely.
Chancellor Philip Hammond said Downing Street will not be publishing the full legal advice because it would be "impossible for the government to function" if such confidential material was made public.
"There's a very important principle here, that the Government must be able to commission impartial legal advice which absolutely tells it like it is to enable it to shape its decisions, while always complying with its legal obligation in the negotiations," he told Today.
by Amy Caren Daniel (Reuters) - U.S. stocks declined on Tuesday after President Donald Trump’s threat to move ahead with additional tariffs on Chinese goods dampened hopes of resolving the trade spat at the upcoming G20 Summit.
Ahead of a meeting where the leaders of the world’s two largest economies are widely expected to enter a trade deal, Trump told the Wall Street Journal he expects to raise tariffs on $200 billion in Chinese imports to 25 percent, calling it “highly unlikely” that he would accept China’s request to hold off on the increase.
“The market remains in a fragile state and because of that anytime tariffs come into the picture you have worries,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Investors are looking for some positive news out of the G20, but until there is a concrete announcement on tariffs, investors will remain jittery."
Apple Inc (AAPL.O) fell 1.6 percent and led the declines in the technology sector .SPLRCT after Trump said tariffs could also be placed on laptops and iPhones imported from China.
Chipmakers, which have the highest revenue exposure to China among S&P 500 companies, also declined, with the Philadelphia SE Semicoductor index .SOX losing 0.79 percent.
Shares of Boeing, the single largest U.S. exporter to China, fell 1.2 percent and fellow Dow component Caterpillar fell 1.6 percent, weighing on industrial stocks .SPLRCI.
The downbeat mood comes after Wall Street started off the week on a high note, partly helped by retail stocks gaining on the hopes of a robust holiday season.
At 9:39 a.m. EDT the Dow Jones Industrial Average .DJI was down 171.84 points, or 0.70 percent, at 24,468.40, the S&P 500 .SPX was down 12.37 points, or 0.46 percent, at 2,661.08 and the Nasdaq Composite .IXIC was down 49.99 points, or 0.71 percent, at 7,031.86.
United Technologies Corp (UTX.N) tumbled nearly 6 percent, the most on the benchmark S&P 500 index. The industrial conglomerate was up in premarket trading after it announced plans to separate into three companies.
All the major S&P sectors were in the red, with the technology sector’s 0.95 percent drop leading the slide.
Federal Reserve Vice Chairman Richard Clarida said the central bank should continue to gradually raise interest rates, but it is “especially important” to closely monitor new economic data as monetary policy is getting close to a neutral stance.
Fed Chairman Jerome Powell is scheduled to speak on Wednesday and his commentary will be closely watched for further clues on the path of interest rate hikes and signs of slowing economic growth in the face of rising trade tensions.
Declining issues outnumbered advancers for a 2.04-to-1 ratio on the NYSE and for a 2.37-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and one new lows, while the Nasdaq recorded six new highs and 49 new lows.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur
Torched homes, gutted shopfronts and fields of rotting corn greeted Laker Betty as she returned to the town in South Sudan’s breadbasket she fled in terror a year ago.
She’s one of thousands of civilians tentatively returning to the East African nation after a war that at its height rivaled Syria for the dubious title of the world’s worst conflict, claiming almost 400,000 lives. As President Salva Kiir prepares to welcome rebels into a new government, South Sudan’s pillaged towns and villages show the scale of the challenge in rebuilding even a country endowed with sub-Saharan Africa’s third-biggest oil reserves.
Refugees from South Sudan receive food in Uganda.
Photographer: Isaac Kasamani/AFP via Getty Images
“There is nothing to eat here, the soldiers cleaned up everything,” said Betty, a 30-year-old mother of three whose looted home in Pajok once sported the relative luxuries of a solar-power system, TV and refrigerator. “What they did here in Pajok has reduced us to zero.”
Spared for much of the half-decade civil war that unleashed a refugee crisis, Pajok was overwhelmed by the violence last April, with soldiers rampaging through its streets and residents racing for shelter in nearby Uganda. What they left behind is little more than ashes and ruins -- testimony to a scorched-earth policy waged mostly by pro-government forces.
Not Safe Yet
As many as 125,000 South Sudanese are reported as returning in the past year from neighbors including Uganda, Kenya and Ethiopia, according to the United Nations Refugee Agency, although the organization has verified only a 10th of that figure. While the influx increased after August’s peace deal, the UN doesn’t yet consider the country safe.
You don’t have to stray far from Pajok to see why. Rebels are camped less than 2 miles away, though -- unlike in the country’s north -- fighting hasn’t been reported since the peace deal. The main insurgent leader, Riek Machar, is due to join South Sudan’s transitional government in May.
The president is seeking to build an inclusive government to help the transition to peace. Machar will be one of five vice presidents; the cabinet will be expanded to 45 ministers and deputies, and the parliament in the capital Juba will grow to 550 lawmakers, all for a population of some 13 million.
Big government comes at a price, and much of the cost will come from pumping more oil. South Sudan took three-quarters of the oil reserves when it seceded from Sudan in 2011, but the civil war that uprooted some 4 million people also took a toll on output: BP Plc estimates the country pumped about 40 million barrels in 2017. That figure would have brought slightly more than half the revenue of 2013, the year the war began.
‘Zero Development’
With government poised to expand -- amid a collapse in crude prices -- there’s likely to be little left for rebuilding public services, according to Marial Awou Yol, dean of the school of economics at the University of Juba.
Amalgamating opposition forces and demobilizing others, on top of the government’s running costs, will mean “almost zero development activities,” Yol said. Even so, the picture will improve after the three-year transition. “We forego services today in order to have better and even peaceful services in the future,” he said.
Kiir last week said corruption in government institutions has robbed public services of funding. “I didn’t get people who work, but I got those who eat,” he said in an address broadcast on state radio.
For now, the plight of Pajok, about 185 kilometers (115 miles) southeast of Juba, shows the dire straits some of South Sudan’s most productive areas have fallen into. Once home to 50,000 people, the farming town produced corn and beans that were sold across the country. Now it needs food aid, and urgently.
The main street is all-but abandoned; overgrown bushes sprout from single-story shacks whose iron sheeting, doors and windows have been ripped out.
Many returnees recount a wave of indiscriminate attacks by government forces in April 2017, violence also reported by the UN and Human Rights Watch. The army denies targeting non-combatants, although Kiir himself has urged the police and army to stop killing civilians.
Some 6,500 of Pajok’s residents fled to Uganda, others to the nearby bush. The town’s main chief, Simon John Otto, says 2,000 have since returned, many of them heads of households preparing for families.
Multiple Challenges
“The challenges here right now are many -- people can’t get things to eat, there are no medical personnel and teachers are lacking,” he said.
When Lucy Acan returned in September she found her home in charred ruins and spent days scouring neglected farmland for food. “I basically have nothing left,” said the 27-year-old, who left her three children in a Uganda refugee camp. “The security situation is better now, but our prayers are that this peace deal holds so that we can rebuild our lives.”
Charles Okumu -- a corn-farmer before his homestead was razed -- runs a shop in an abandoned building, selling sodas, cookies and soap. He can afford one meal a day.
Yet the 30-year-old, who lives in the home of a friend he says was killed, remains optimistic about his future, and plans to rebuild his farm.
“Even with this state of things, I won’t give up in my life,” he said. “I can’t give up.”
(Updates with comment from president in third paragraph after Zero Development subheadline. An earlier version of this story corrected oil production estimates.)
Image copyrightAFPImage captionItaly's PM Giuseppe Conte and his two deputies are facing pressure from Brussels
The European Commission has taken the first step towards sanctioning Italy over its national budget in an ongoing row over the country's finances.
In October, the EU executive body rejected Italy's draft budget and told it to make changes - an unprecedented event in European politics.
Italy, however, said it would stick to its high-spending goals.
On Wednesday, the Commission said formal proceedings that could bring financial sanctions were "warranted".
Its report cited a "particularly serious non-compliance with the fiscal recommendation for 2019", and Commission Vice-President Valdis Dombrovskis said: "With what the Italian government has put on the table, we see a risk of the country sleepwalking into instability."
He said that the EU's disciplinary measure known as "excessive deficit procedure" (EDP) was now appropriate.
Italy's populist-led government had already been told by the Commission to revise its budget, because of the high level of national debt, which eurozone officials worry could cause instability for the entire bloc.
But the Rome government failed to make significant changes, putting the country on a collision course with Brussels.
However, the process could take a long time, and Mr Dombrovskis said he was still open to talks with Italy on how to address the disagreement.
Italy's deputy prime minister, Matteo Salvini, told reporters he remained convinced about his government's budget plans. Prime Minister Giuseppe Conte said he would meet Commission President Jean-Claude Juncker on Saturday to highlight the budget's "solidity and effectiveness".
How did we get here?
Italy's current government took office in June 2018 and is a coalition of the anti-establishment Five Star Movement and right-wing League.
Widely seen as a populist coalition, the first national budget of new government was hammered out in September,
The problem for EU officials was its high cost for a country facing massive debts. The government planned to rack up a budget deficit of 2.4% of GDP to finance its plans.
The Commission had hoped for a lower budget cost as the previous government's plans were for a 0.8% deficit.
Italy is the third-largest economy in the eurozone, but has more than two trillion euros in debt - which is 131% of the country's entire economic output.
To put that in context, it is second only to Greece (178%), and far higher than the UK (88%) or Germany (64.1%). The debt is equivalent to about €37,000 for every person in Italy.
The government argues that additional investment is needed to kick-start the sluggish Italian economy, which has still not recovered from the financial crisis of a decade ago.
Italy's statistics agency Istat forecast on Wednesday that the economy would grow by 1.3% in 2019, and 1.1% in 2018.
While it said the budget would help boost demand in the Italian economy, its 2019 estimate is below the government's figure of 1.5%.
Shortly before the League-Five Star government came to power, Istat forecast a growth figure of 1.4% for 2018, and it said on Wednesday that growth was slowing in comparison with 2017.
Why is Italy's budget so expensive?
Italy's government hailed the budget as one that would "end poverty".
The draft budget included the fulfilment of election promises, such as reversing plans to raise the retirement age and a guaranteed basic income of €780 (£700; $890) for poor families. Those two plans alone were expected to total about 0.7% of Italy's GDP.
AFP/GETTY
