Daily News Brief

September 19, 2024

Top of the Agenda

The U.S. Federal Reserve’s closely watched decision yesterday to reduce interest rates by half a percentage point was the first of its kind since the COVID-19 pandemic. The Fed had until now brought interest rates to an over two-decade high in an effort to wrangle post-pandemic inflation, which has now been falling for months. 

Other central banks around the world carried out post-pandemic rate cuts before the Federal Reserve, in part reflecting slower growth in their economies. Those included the Bank of England, which cut rates in August and held them steady at a policy meeting today. Stocks in Europe and Japan rose today following the Federal Reserve’s move. Fed officials said yesterday that they expect to make another rate cut before the end of the year. (NYT, BBC, FT)

Analysis

“The Federal Reserve’s dual mandate of price stability and maximum employment certainly leads to some trade-offs. However, despite the trade-offs it necessitates occasionally, the dual mandate has allowed the Federal Reserve to maintain balance in the economy and the United States to build and continue the economic primacy it has to this day,” CFR expert Roger W. Ferguson Jr. writes for CFR’s Trade-Offs series.    

“Many economists had doubted [Fed Chair Jerome] Powell could tame price pressures without tipping the world’s largest economy into a recession. But two years since the peak of the inflation surge, it has been brought back almost to the Fed’s 2 per cent target while economic growth has remained solid,” the Financial Times’s Colby Smith writes.

The Federal Reserve Bank of New York’s John C. Williams spoke at CFR earlier this month about monetary policy and the economic outlook for the year ahead.

Middle East and North Africa

At least twenty people were killed and more than 450 injured in Lebanon after another wave of devices exploded yesterday, Lebanon’s health ministry said. It was the second day of attacks targeting Iran-backed militant group Hezbollah. Israel declined to comment directly on the two attacks or claim responsibility, but Israel’s defense minister said that the country was entering a “new era” of its war. (CNN)

In this video, CFR expert Adam Segal unpacks the pager war waged on Hezbollah.

Israel/Palestinian territories: The UN General Assembly passed a resolution 124–14, with 43 abstentions, saying that Israel should end its presence in “the Occupied Palestinian Territory” within twelve months. Yesterday’s resolution was based on a July advisory from the UN’s court that Israel was violating international law. The Palestinian ambassador called the vote a turning point in “our struggle for freedom and justice;” Israel’s called it “diplomatic terrorism.” The United States and Israel voted against the resolution. (BBC)

Pacific Rim

President-Elect Prabowo Subianto will be able to remove a thirty-four ministry cap and wield “flexibility to form ministries in line with national interest” under today’s passed law, the country’s administrative reform minister said. The incoming president is well supported by parties that hold 82 percent of legislative seats, and he’ll officially take office in October. (Bloomberg)

China/Japan: Tokyo requested an urgent explanation from Beijing after a ten-year-old Japanese boy was stabbed to death this morning in China’s Shenzhen, Japan’s prime minister said. Chinese authorities say a suspect has been detained, without giving much further detail. The incident has rattled bilateral ties and comes after a Chinese man injured a student and mother waiting for a bus to a Japanese school in Suzhou in June, killing a Chinese woman who tried to stop him. (Nikkei)

South and Central Asia

Despite protests from Moscow, India didn’t step in when artillery shells sold to European customers were diverted to Ukraine, unnamed Indian and European officials told Reuters. Indian regulations limit the use of weapons to the officially cited buyer. While the Kremlin has raised the issue in previous bilateral meetings with India’s government, India’s and Russia’s foreign and defense ministries have not yet issued public comments. (Reuters)

Myanmar/Thailand: Thailand has the backing of the Association of Southeast Asian Nations (ASEAN) and India to liaise with both sides of Myanmar’s conflict to repair a highway damaged in fighting, the country’s foreign minister said. He added that ASEAN chair Laos has asked Thailand to host a regional meeting on Myanmar before the end of the year to discuss peace “through constructive dialogue.” (Reuters)

This Backgrounder explains ASEAN’s role in the region. 

Sub-Saharan Africa

Sudanese General Abdel Fattah al-Burhan said he was committed to ending violence, while the head of its adversary, the Rapid Support Forces, also said it reaffirmed its commitment to cease-fire talks. U.S. President Joe Biden called for a cease-fire and return to talks on Tuesday; top U.S. and Egyptian diplomats meeting in Cairo echoed the appeal yesterday. Burhan is due to attend Sudan-related events on the sidelines of the UN General Assembly. (Reuters, White House, Sudan Tribune)

CFR’s Center for Preventive Action tracker monitors the civil war in Sudan. 

Cameroon/Nigeria: Planned release of water from a dam in Cameroon could unleash flooding in eleven Nigerian states, Abuja’s water agency warned. Recent floods in Nigeria’s north have affected more than four hundred thousand people, the United Nations said. West Africa has seen some of its most severe flooding in decades this year. (AP)

Europe

After Russian attacks, Ukraine’s energy shortfall this coming winter could be as much as six gigawatts, or almost a third of expected peak demand, the International Energy Agency (IEA) said. European Commission president Ursula von der Leyen said she would discuss support for Ukraine’s energy grid on a trip to Kyiv tomorrow. (CNN, AFP)

Russia: Europe’s particle physics laboratory, the European Organization for Nuclear Research (CERN), is preparing to expel hundreds of scientists affiliated with Russian institutions by November 30 if they do not switch their affiliations. CERN cut ties with Russia following its Ukraine invasion, but the lab plans to continue to work with scientists from the Russian-based intergovernmental Joint Institute for Nuclear Research. (Nature)

Americas

Seven people were named to the council, a member of Haiti’s transition government said. Two more are expected to be named in the coming days. Haiti’s last elected president, Jovenel Moïse, was assassinated in 2021 and the country has had interim governments ever since. (AP) 

Colombia: The government announced yesterday it was suspending peace talks with rebel group the National Liberation Army after a Tuesday attack by the group that killed two people. (Reuters)

U.S. Campaign 2024

In June and July, the hackers sent unsolicited emails to people associated with President Joe Biden’s reelection campaign that contained stolen content from former President Donald Trump’s campaign, three U.S. intelligence agencies said in a joint statement. They added there is no evidence the recipients replied. A spokesperson for Vice President Kamala Harris’s campaign said some people were targeted on their personal emails with what was considered a spam or phishing attempt, while a spokesperson for the Trump campaign called the revelations “further proof the Iranians are actively interfering in the election to help Kamala Harris and Joe Biden.” The FBI said it is tracking the activity and is working to pursue and disrupt those responsible. (FBI, NYT) 

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