Soaring debt and deficits causing worry about threats to the economy and markets

A view shows the U.S. Capitol in Washington, U.S., May 9, 2024. 

Kaylee Greenlee Beal | Reuters

Government debt that has swelled nearly 50% since the early days of the Covid pandemic is generating elevated levels of worry both on Wall Street and in Washington.

The federal IOU is now at $34.5 trillion, or about $11 trillion higher than where it stood in March 2020. As a portion of the total U.S. economy, it is now more than 120%.

Concern over such eye-popping numbers had been largely confined to partisan rancor on Capitol Hill as well as from watchdogs like the Committee for a Responsible Federal Budget. However, in recent days the chatter has spilled over into government and finance heavyweights, and even has one prominent Wall Street firm wondering if costs associated with the debt pose a significant risk to the stock market rally.

“We’re running big structural deficits, and we’re going to have to deal with this sooner or later, and sooner is a lot more attractive than later,” Fed Chair Jerome Powell said in remarks Tuesday to an audience of bankers in Amsterdam.

While he has assiduously avoided commenting on such matters, Powell encouraged the audience to read the recent Congressional Budget Office reports on the nation’s fiscal condition.

“Everyone should be reading the things that they’re publishing about the U.S. budget deficit and should be very concerned that this is something that elected people need to get their arms around sooner rather than later,” he said.

Uncharted territory for debt and deficits

Surging budget deficits have been driving the debt, and the CBO only expects that to get worse.

The agency forecasts a $1.6 trillion shortfall in fiscal 2024 — it is already at $855 billion through the first seven months — that will balloon to $2.6 trillion by 2034. As a share of GDP, the deficit will grow from 5.6% in the current year to 6.1% in 10 years.

“Since the Great Depression, deficits have exceeded that level only during and shortly after World War II, the 2007–2009 financial crisis, and the corona­virus pandemic,” the report stated.

In other words, such high deficit levels are common mostly in economic downturns, not the relative prosperity that the U.S. has enjoyed for most of era following the brief plunge after the pandemic declaration in March 2020. From a global perspective, European Union member nations are required to keep deficits to 3% of GDP.

The potential long-term ramifications of the debt were the topic of an interview JPMorgan Chase CEO Jamie Dimon gave to London-based Sky News on Wednesday.

“America should be quite aware that we have got to focus on our fiscal deficit issues a little bit more, and that is important for the world,” the head of the largest U.S. bank by assets said.

“At one point it will cause a problem and why should you wait?” Dimon added. “The problem will be caused by the market and then you will be forced to deal with it and probably in a far more uncomfortable way than if you dealt with it to start.”

Similarly, Bridgewater Associates founder Ray Dalio told the Financial Times a few days ago that he is concerned the soaring U.S. debt levels will make Treasurys less attractive “particularly from international buyers worried about the US debt picture and possible sanctions.”

So far, that hasn’t been the case: Foreign holdings of U.S. federal debt stood at $8.1 trillion in March, up 7% from a year ago, according to Treasury Department data released Wednesday. Risk-free Treasurys are still seen as an attractive place to park cash, but that could change if the U.S. doesn’t rein in its finances.

Market impact

Taxes will have to go up eventually to tackle the deficit, says Wolfe Research's Tobin Marcus

Net interest on the debt, which totals government debt payments minus what it gets from investment income, have totaled $516 billion this fiscal year. That’s more than government outlays for national defense or Medicare and about four times as much as it has spent on education.

The presidential election could make some modest differences in the fiscal situation. Debt has soared under President Joe Biden and had escalated under his Republican challenger, former President Donald Trump, following the aggressive spending response to the pandemic.

“The election could change the medium-term fiscal outlook, though potentially less than one might imagine,” Goldman Sachs economists Alec Phillips and Tim Krupa said in a note.

A GOP sweep could lead to an extension of the expiring corporate tax cuts Trump pushed through in 2017 — corporate tax receipts have about doubled since then — while a Democratic win might see tax increases, though “much of this would likely go toward new spending,” the Goldman economists said.

However, the biggest issue with the budget is spending on Social Security and Medicare, and “under no scenario” regarding the election does reform on either program seem likely, Goldman said.

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Walgreens tops quarterly revenue estimates, but narrows profit outlook in ‘challenging’ economy

A person rides past a Walgreens truck, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York City, U.S., November 26, 2021. 

Andrew Kelly | Reuters

Walgreens on Thursday reported fiscal second-quarter sales that beat Wall Street’s expectations, but lowered the high end of its full-year adjusted earnings outlook in part due to a “challenging” retail environment in the U.S.

The company also posted a steep net loss for the quarter as it recorded a hefty nearly $6 billion charge related to the decline in value of its investment in primary-care provider VillageMD. Walgreens has closed 140 VillageMD clinics amid financial woes for the business, which it sees as critical to its ongoing push to transform from a major drugstore chain into a large health-care company.

But Walgreens does not believe the VillageMD charge “will have a significant impact on our financial position, or our ability to invest across businesses going forward,” Walgreens global CFO Manmohan Mahajan said during an earnings call Thursday.

The results come as Walgreens’ new CEO, Tim Wentworth, works to slash costs and steer the company out of a rough spot with a slate of new executives. Shares of Walgreens fell 30% last year as the company faced weakening demand for Covid products, low pharmacy reimbursement rates, an unsteady push into health care and a challenging macroeconomic environment. 

In a release Thursday, the company said it is confident it will meet its goal of saving $1 billion during fiscal 2024 through its ongoing cost-cutting program. Walgreens has laid off employees, closed unprofitable stores and used artificial intelligence to make its supply chain more efficient, among other efforts.

Here’s what Walgreens reported for the quarter, compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: $1.20 adjusted vs. 82 cents expected
  • Revenue: $37.05 billion vs. $35.86 billion expected

Walgreens narrowed its fiscal 2024 adjusted earnings guidance to between $3.20 and $3.35 per share. That compares with the company’s previous outlook of $3.20 to $3.50 per share. Analysts surveyed by LSEG expect full-year adjusted earnings of $3.24 per share.

Walgreens said the new guidance reflects the hurdles facing retailers in the U.S. and an early wind-down of its sales-leaseback program. It also takes into account lower earnings due to Walgreens’ forward sale of shares of drug distributor Cencora, formerly known as AmerisourceBergen.

The company said a stronger performance in its pharmacy services segment and a lower adjusted effective tax rate helped to offset the factors dragging on its earnings. 

But Mahajan said Walgreens expects the current economic backdrop will “continue to negatively impact our U.S. retail sales in the short term.”

Wentworth noted on the call that the company is “exploring innovative ways to boost profitability and growth” in its retail pharmacy division, such as through new pharmacy reimbursement models.

The company did not give a new revenue forecast for the fiscal year. Walgreens has not provided that guidance since October, when it said it sees $141 billion to $145 billion in sales. 

The company reported a net loss of $5.91 billion, or $6.85 per share, for the quarter. That compares with a net income of $703 million, or 81 cents per share, for the same period a year ago. a

Excluding certain items, including the $5.8 billion non-cash charge related VillageMD, adjusted earnings per share were $1.20 for the quarter.

The company booked sales of $37.05 billion in the quarter, a roughly 6% jump from the same period a year ago. 

Walgreens sees growth across all divisions

The company said that increase reflects sales growth across its three business segments. But Walgreens’ U.S. health-care division stood out as sales jumped about 33% in the fiscal second quarter compared with the same period a year ago. 

Revenue for the segment came in at $2.18 billion.

The company said the higher sales reflect VillageMD’s acquisition of multispecialty care provider Summit Health and growth across all businesses in the segment on a pro-forma basis.

VillageMD sales grew 20% due to same-clinic growth, among other factors. Sales from the segment’s specialty pharmacy company, Shields Health Solutions, grew 13%, due to new contracts and expansions of current partnerships.

Specialty pharmacies are designed to deliver medications with unique handling, storage and distribution requirements, often for patients with complex conditions such as cancer and rheumatoid arthritis.

Walgreens and VillageMD

Source: Walgreens

Meanwhile, Walgreens’ U.S. retail pharmacy segment generated $28.86 billion in sales in the fiscal second quarter, an increase of almost 5% from the same period last year.

That segment operates more than 8,000 drugstores across the U.S., which sell prescription and nonprescription drugs as well as health and wellness, beauty, personal care, and food products. 

Walgreens said pharmacy sales for the quarter rose 8.2% compared with the year-ago quarter. Comparable sales climbed 8.7% due to price inflation in brand medications and “strong execution” in pharmacy services, largely driven by the company’s vaccine portfolio.

Total prescriptions filled in the quarter including immunizations totaled 305.7 million, a more than 2% increase from the same period a year ago. 

Retail sales for the quarter fell 4.5% from the prior-year quarter, and comparable retail sales declined 4.3%. The company pointed to a challenging retail environment and a weaker respiratory season, among other factors. 

Walgreens’ international segment, which operates more than 3,000 retail stores abroad, posted $6.02 billion in sales in the fiscal second quarter. That’s an increase of more than 6% from the year-ago period. 

The company said sales from its U.K. subsidiary, Boots, grew 3%.

When asked on the call about Eli Lilly‘s new direct-to-consumer website aimed at expanding access to its weight loss drug Zepbound, Wentworth did not comment on the program specifically.

But he noted that the company is a “natural partner” for pharmaceutical companies that may “want to go directly to patients for a particular product, where the normal supply chain, reimbursement model, et cetera isn’t working effectively.”

As an example, Wenworth pointed to GLP-1s, a new class of weight loss and diabetes drugs that includes Zepbound. Those drugs must be taken chronically but carry hefty price tags, which can be a hurdle for both patients and insurance plans and other payers.

Walgreens is “uniquely positioned” to distribute drugs and serve as a “clinically aligned partner” that can help patients navigate their treatment safely, according to Wentworth.

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Powell reinforces position that the Fed is not ready to start cutting interest rates

Federal Reserve Chair Jerome Powell on Wednesday reiterated that he expects interest rates to start coming down this year, but is not ready yet to say when.

In prepared remarks for congressionally mandated appearances on Capitol Hill Wednesday and Thursday, Powell said policymakers remain attentive to the risks that inflation poses and don’t want to ease up too quickly.

“In considering any adjustments to the target range for the policy rate, we will carefully assess the incoming data, the evolving outlook, and the balance of risks,” he said. “The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

Those remarks were taken verbatim from the Federal Open Market Committee’s statement following its most recent meeting, which concluded Jan. 31.

During the question-and-answer session with House Financial Services Committee members, Powell said he needs “see a little bit more data” before moving on rates.

“We think because of the strength in the economy and the strength in the labor market and the progress we’ve made, we can approach that step carefully and thoughtfully and with greater confidence,” he said. “When we reach that confidence, the expectation is we will do so sometime this year. We can then begin dialing back that restriction on our policy.”

Stocks posted gains as Powell spoke, with the Dow Jones Industrial Average up more than 250 points heading into midday. Treasurys yields mostly moved lower as the benchmark 10-year note was off about 0.3 percentage point to 4.11%.

Rates likely at peak

In total, the speech broke no new ground on monetary policy or the Fed’s economic outlook. However, the comments indicated that officials remain concerned about not losing the progress made against inflation and will make decisions based on incoming data rather than a preset course.

“We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in the comments. “But the economic outlook is uncertain, and ongoing progress toward our 2 percent inflation objective is not assured.”

He noted again that lowering rates too quickly risks losing the battle against inflation and likely having to raise rates further, while waiting too long poses danger to economic growth.

Markets had been widely expecting the Fed to ease up aggressively following 11 interest rate hikes totaling 5.25 percentage points that spanned March 2022 to July 2023.

In recent weeks, though, those expectations have changed following multiple cautionary statements from Fed officials. The January meeting helped cement the Fed’s cautious approach, with the statement explicitly saying rate cuts aren’t coming yet despite the market’s outlook.

As things stand, futures market pricing points to the first cut coming in June, part of four reductions this year totaling a full percentage point. That’s slightly more aggressive than the Fed’s outlook in December for three cuts.

Inflation easing

Despite the resistance to move forward on cuts, Powell noted the movement the Fed has made toward its goal of 2% inflation without tipping over the labor market and broader economy.

“The economy has made considerable progress toward these objectives over the past year,” Powell said. He noted that inflation has “eased substantially” as “the risks to achieving our employment and inflation goals have been moving into better balance.”

Inflation as judged by the Fed’s preferred gauge is currently running at a 2.4% annual rate — 2.8% when stripping out food and energy in the core reading that the Fed prefers to focus on. The numbers reflect “a notable slowing from 2022 that was widespread across both goods and services prices.”

“Longer-term inflation expectations appear to have remained well anchored, as reflected by a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets,” he added.

Powell is likely to face a variety of questions during his two-day visit to Capitol Hill, which started with an appearance Wednesday before the House Financial Services Committee and concludes Thursday before the Senate Banking Committee.

Questioning largely centered around Powell’s views on inflation and rates.

Republicans on the committee also grilled Powell on the so-called Basel III Endgame revisions to bank capital requirements. Powell said he is part of a group on the Board of Governors that has “real concerns, very specific concerns” about the proposals and said the withdrawal of the plan “is a live option.” Some of the earlier market gains Wednesday faded following reports that New York Community Bank is looking to raise equity capital, raising fresh concerns about the state of midsize U.S. banks.

Though the Fed tries to stay out of politics, the presidential election year poses particular challenges.

Former President Donald Trump, the likely Republican nominee, was a fierce critic of Powell and his colleagues while in office. Some congressional Democrats, led by Sen. Elizabeth Warren of Massachusetts, have called on the Fed to reduce rates as pressure builds on lower-income families to make ends meet.

Rep. Ayanna Pressley, D-Mass., joined the Democrats in calling for lower rates. During his term, Democrats frequently criticized Trump for trying to cajole the Fed into cutting.

“Housing inflation and housing affordability [is] the No. 1 issue I’m hearing about from my constituents,” Pressley said. “Families in my district and throughout this country need relief now. I truly hope the Fed will listen to them and cut interest rates.”

Correction: Ayanna Pressley is a Democratic representative from Massachusetts. An earlier version misidentified the state.

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Fed officials expressed caution about lowering rates too quickly at last meeting, minutes show

WASHINGTON – Federal Reserve officials indicated at their last meeting that they were in no hurry to cut interest rates and expressed both optimism and caution on inflation, according to minutes from the session released Wednesday.

The discussion came as policymakers not only decided to leave their key overnight borrowing rate unchanged but also altered the post-meeting statement to indicate that no cuts would be coming until the rate-setting Federal Open Market Committee held “greater confidence” that inflation was receding.

“Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2 percent,” the minutes stated.

The meeting summary did indicate a general sense of optimism that the Fed’s policy moves had succeeded in lowering the rate of inflation, which in mid-2022 hit its highest level in more than 40 years.

However, officials noted that they wanted to see more before starting to ease policy, while saying that rate hikes are likely over.

“In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle,” the minutes stated. But, “Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent.”

Before the meeting, a string of reports showed that inflation, while still elevated, was moving back toward the Fed’s 2% target. While the minutes assessed the “solid progress” being made, the committee viewed some of that progress as “idiosyncratic” and possibly due to factors that won’t last.

Consequently, members said they will “carefully assess” incoming data to judge where inflation is heading over the longer term. Officials noted both upside and downside risks and worried about lowering rates too quickly.

Questions over how quickly to move

“Participants highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained,” the summary said.

Officials “remained concerned that elevated inflation continued to harm households, especially those with limited means to absorb higher prices,” the minutes said. “While the inflation data had indicated significant disinflation in the second half of last year, participants observed that they would be carefully assessing incoming data in judging whether inflation was moving down sustainably toward 2 percent.”

The minutes reflected an internal debate over how quickly the Fed will want to move considering the uncertainty about the outlook.

Since the Jan. 30-31 meeting, the cautionary approach has borne out as separate readings on consumer and producer prices showed inflation running hotter than expected and still well ahead of the Fed’s 2% 12-month target.

Multiple officials in recent weeks have indicated a patient approach toward loosening monetary policy. A stable economy, which grew at a 2.5% annualized pace in 2023, has encouraged FOMC members that the succession of 11 interest rate hikes implemented in 2022 and 2023 have not substantially hampered growth.

To the contrary, the U.S. labor market has continued to expand at a brisk pace, adding 353,000 nonfarm payroll positions in January. First-quarter economic data thus far is pointing to GDP growth of 2.9%, according to the Atlanta Fed.

Along with the discussion on rates, members also brought up the bond holdings on the Fed’s balance sheet. Since June 2022, the central bank has allowed more than $1.3 trillion in Treasurys and mortgage-backed securities to roll off rather than reinvesting proceeds as usual.

‘Ample level of reserves’

The minutes indicated that a more in-depth discussion will take place at the March meeting. Policymakers also indicated at the January meeting that they are likely to take a go-slow approach on a process nicknamed “quantitative tightening.” The pertinent question is how high reserve holdings will need to be to satisfy banks’ needs. The Fed characterizes the current level as “ample.”

“Some participants remarked that, given the uncertainty surrounding estimates of the ample level of reserves, slowing the pace of runoff could help smooth the transition to that level of reserves or could allow the Committee to continue balance sheet runoff for longer,” the minutes said. “In addition, a few participants noted that the process of balance sheet runoff could continue for some time even after the Committee begins to reduce the target range for the federal funds rate.”

Fed officials consider current policy to be restrictive, so the big question going forward will be how much it will need to be relaxed both to support growth and control inflation.

There is some concern that growth continues to be too fast.

The consumer price index rose 3.1% on a 12-month basis in January – 3.9% when excluding food and energy, the latter of which posted a big decline during the month. So-called sticky CPI, which weighs toward housing and other prices that don’t fluctuate as much, rose 4.6%, according to the Atlanta Fed. Producer prices increased 0.3% on a monthly basis, well above Wall Street expectations.

In an interview on CBS’ “60 Minutes” that aired just a few days after the FOMC meeting, Chair Jerome Powell said, “With the economy strong like that, we feel like we can approach the question of when to begin to reduce interest rates carefully.” He added that he is looking for “more evidence that inflation is moving sustainably down to 2%.”

Markets have since had to recalibrate their expectations for rate cuts.

Where traders in the fed funds futures market had been pricing in a near lock for a March cut, that has been pushed out to June. The expected level of cuts for the full year had been reduced to four from six. FOMC officials in December projected three.

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Biogen revenue and profit shrink on Aduhelm costs, slumping sales of multiple sclerosis therapies

A Biogen facility in Cambridge, Massachusetts.

Brian Snyder | Reuters

Biogen on Tuesday reported fourth-quarter revenue and profit that shrank from a year ago, as it recorded charges related to dropping its controversial Alzheimer’s drug Aduhelm and as sales slumped in its multiple sclerosis therapies, the company’s biggest drug category.

Biogen booked sales of $2.39 billion for the quarter, down 6% from the same period a year ago. It reported net income of $249.7 million, or $1.71 per share, for the fourth quarter, down from net income of $550.4 million, or $3.79 per share, for the same period a year ago. Adjusting for one-time items, the company reported $2.95 per share.

The drugmaker’s fourth-quarter earnings per share, both unadjusted and adjusted, saw a negative impact of 35 cents associated with previously disclosed costs of pulling Aduhelm, which had a polarizing approval and rollout in the U.S.

Biogen is cutting costs while pinning its hopes on its other Alzheimer’s drugs, including its closely watched treatment Leqembi, and other newly launched products to replace declining revenue from its multiple sclerosis therapies.

Shares of Biogen closed more than 7% lower on Tuesday.

Here’s what Biogen reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv: 

  • Earnings per share: $2.95 adjusted vs. $3.18 expected
  • Revenue: $2.39 billion vs. $2.47 billion expected

Also on Tuesday, Biogen issued full-year 2024 guidance that calls for adjusted earnings of $15 to $16 per share. Analysts surveyed by LSEG had expected full-year earnings guidance of $15.65 per share.

The drugmaker said it expects 2024 sales to decline by a low to mid-single digit percentage compared with last year. But the company anticipates its pharmaceutical revenue, which includes product revenue and its 50% share of Leqembi sales, to be flat this year compared with 2023.

Multiple sclerosis drug sales slump

Biogen’s fourth-quarter revenue from multiple sclerosis products fell 8% to $1.17 billion as some of the therapies face competition from cheaper generics.

The company’s once-blockbuster drug Tecfidera, which is facing competition from a generic rival, posted revenue that fell 17.8% to $244.3 million in the fourth quarter. Analysts had expected that drug to book sales of $233.1 million, according to FactSet.

Vumerity, an oral medication for relapsing forms of multiple sclerosis, generated $156.4 million in sales. That came in below analysts’ estimates of $174.4 million, FactSet estimates said. 

“We’ve had several years of declining revenue and profit, which is not unusual when you’re dealing with patent expirations,” Biogen CEO Christopher Viehbacher told reporters on a media call Tuesday. He added that one of the key ways Biogen will return to growth is to “reposition the company away from our legacy franchise of multiple sclerosis towards new products.”

Meanwhile, Biogen’s rare disease drugs recorded $471.8 million in sales, up 3% from the same period a year ago. 

Spinraza, a medication used to treat a rare neuromuscular disorder called spinal muscular atrophy, recorded $412.6 million in sales. That came under analysts’ estimate of $443.4 million in revenue, according to FactSet. 

Biogen’s biosimilar drugs booked $188.2 million in sales, up 8% from the year-earlier period. Analysts had expected sales of $196.7 million from those medicines.

Leqembi, other new drugs

The results come amid the rollout of Biogen and Eisai’s Leqembi, which became the first drug found to slow the progression of Alzheimer’s disease to win approval in the U.S. in July.

Eisai, which reported earnings last week, recorded $7 million in fourth-quarter revenue and $10 million in full-year sales from Leqembi.

Biogen CEO Viehbacher told reporters on the media call Tuesday that there are around 2,000 patients currently on Leqembi. That makes Biogen’s target of 10,000 patients by the end of March 2024 look increasingly difficult to hit, but Viehbacher emphasized that the company is focused more on the long-term reach of Leqembi rather than meeting that benchmark. 

“I think what’s important is we are now making progress,” he told reporters. “The 10,000 isn’t really hard and I think we are now really focusing on commercial plans — how do we get to the next 100,000?”

Notably, the low rate of adoption isn’t due to lack of demand: There are some 8,000 U.S. patients currently waiting to get on treatment, executives from Eisai said on an earnings call last week. 

More CNBC health coverage

The companies are also working toward Food and Drug Administration approval of an injectable version of Leqembi, which showed promising initial results in a clinical trial in October. 

Leqembi is currently administered twice monthly through the veins, a method known as intravenous infusion. The injectable form would be a new and more convenient option for administering the antibody treatment to patients, which could pave the way for higher uptake. 

But investors also have their eyes on other newly launched drugs. 

That includes Skyclarys from Biogen’s acquisition of Reata Pharmaceuticals in July. That drug brought in $56 million in fourth-quarter revenue, according to Biogen.

The FDA cleared Skyclarys last year, making it the first approved treatment for Friedreich ataxia, a rare inherited degenerative disease that can impair walking and coordination in children as young as 5.

On Monday, European Union regulators approved Skyclarys for the treatment of Friedreich ataxia in patients ages 16 and up. 

Biogen has also partnered with Sage Therapeutics on the first pill for postpartum depression, which won FDA approval in August. But the agency declined to clear the drug for major depressive disorder, which is a far larger commercial opportunity. 

Biogen said that pill, called Zurzuvae, generated roughly $2 million in sales for the fourth-quarter.

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Fed holds rates steady, indicates it is not ready to start cutting

WASHINGTON — The Federal Reserve on Wednesday sent a tepid signal that it is done raising interest rates but made it clear that it is not ready to start cutting, with a March move lower increasingly unlikely.

In a substantially changed statement that concluded the central bank’s two-day meeting this week, the Federal Open Market Committee removed language that had indicated a willingness to keep raising interest rates until inflation had been brought under control and was on its way toward the Fed’s 2% inflation goal. 

However, it also said there are no plans yet to cut rates with inflation still running above the central bank’s target. The statement further provided limited guidance that it was done hiking, only outlining factors that will go into “adjustments” to policy.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the statement said.

During Fed Chair Jerome Powell‘s news conference, he said policymakers are waiting to see additional data to verify that the trends are continuing. He also noted that a March rate cut is unlikely.

“I don’t think it’s likely that the committee will reach a level of confidence by the” March meeting, Powell said.

“We want to see more good data. It’s not that we’re looking for better data, we’re looking for a continuation of the good data we’ve been seeing,” he added.

Markets initially took the news in stride but slid following Powell’s comments casting doubt on a March cut. The Dow Jones Industrial Average surrendered more than 300 points in the session while Treasury yields plunged. Futures pricing also swung, with the market assigning about a 64% chance the Fed would stay put at its March 19-20 meeting, according to CME Group calculations.

While the committee’s statement did condense the factors that policymakers would consider when assessing policy, it did not explicitly rule out more increases. One notable change was removing as a consideration the lagged effects of monetary policy. Officials largely believe it takes at least 12 to 18 months for adjustments to take effect; the Fed last hiked in July 2023 after starting the tightening cycle in March 2022.

“In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the statement said. That language replaced a bevy of factors including “the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

‘Moving into better balance’

Those changes were part of an overhaul in which the Fed seeks to chart a course ahead, with inflation moving lower and economic growth proving resilient. The statement indicated that economic growth has been “solid” and noted the progress made on inflation.

“The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance,” the FOMC missive said. “The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”

Gone from the statement was a key clause that had referenced “the extent of any additional policy firming” that might come. Some Fed watchers had been looking for language to emphasize that additional rate hikes were unlikely, but the statement left the question at least somewhat open.

Going into the meeting, markets had expected the Fed could begin reducing its benchmark overnight borrowing rate as soon as March, with May also a possible launching point. Immediately after the decision, stocks fell to session lows.

Policymakers, though, have been more circumspect about their intentions, cautioning that they see no need to move quickly as they watch the data unfold. Committee members in December indicated a likelihood of three quarter-percentage point rate cuts this year, less ambitious than the six that futures markets are pricing, according to the CME Group.

More immediately, the committee, for the fourth consecutive time, unanimously voted not to raise the fed funds rate. The key rate is targeted in a range between 5.25%-5.5%, the highest in nearly 23 years.

The Fed has been riding a wave of decelerating inflation, a strong labor market and solid economic growth, giving it both leeway to start easing up on monetary policy and caution about growth that could reaccelerate and drive prices higher again. Along with 11 rate hikes, the Fed also has been allowing its bond holdings to roll off, a process that has shaved more than $1.2 trillion off the central bank balance sheet. The statement indicated that the balance sheet runoff will continue apace.

The ‘soft-landing’ narrative

Many economists now are adopting a soft-landing narrative where the Fed can bring inflation down without torpedoing economic growth.

Separate reports Wednesday indicated that the labor market is softening, but so are wages. Payrolls processing firm ADP reported that private companies added just 107,000 new workers in January, a number that was below market expectations but still indicative of an expanding labor market. Also, the Labor Department reported that the employment cost index, a gauge the Fed watches closely for signals of inflation coming through wages, increased just 0.9% in the fourth quarter, the smallest rise since the second quarter of 2021.

More broadly, inflation as measured through core personal consumption expenditures prices rose 2.9% in December from the prior year, the lowest since March 2021. On a six- and three-month basis, core PCE prices both ran at or below the Fed’s target.

In a separate matter, the Fed also announced it was altering its investment policy both for high-ranking officials and staff. The changes expand the scope of those covered to include anyone with access to “confidential FOMC information” and said some staff might be required to submit brokerage statements or other documents to verify the accuracy of disclosures.

The changes follow controversy over multiple Fed officials trading from private accounts at a time when the central bank was making major changes to policy in the early days of the Covid pandemic.

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The Hindu Morning Digest: December 28, 2023

Government working to make cooperatives strong part of rural life: PM Modi

Prime Minister Narendra Modi on Wednesday said his government is working to make cooperatives a strong part of rural life, asserting that they are being scaled up massively in sectors like agriculture and fisheries after making a mark in fields such as dairy and sugar production. In an interaction with beneficiaries of the ongoing ‘Viksit Bharat Sankalp Yatra‘, he said the change in the lives of crores of beneficiaries of his government’s welfare schemes in the last 10 years has been a story of courage, satisfaction and dreams.

Ayodhya railway junction renamed as Ayodhya Dham

Ayodhya railway junction in Uttar Pradesh has been renamed as Ayodhya Dham junction, local MP Lallu Singh said on Wednesday. The announcement came days before the inauguration of the redevelopment railway station by Prime Minister Narendra Modi. In a post on X, Mr. Singh said, “Ayodhya Junction has become Ayodhya Dham Junction.” Under the guidance of Prime Minister Modi, the renaming has been done respecting public sentiments, he said.

President Vladimir Putin invites PM Modi to visit Russia

President Vladimir Putin on Wednesday invited Prime Minister Narendra Modi to visit Russia next year as External Affairs Minister S. Jaishankar called on the Russian leader at the Kremlin. “We will be glad to see our friend, Mr. Prime Minister Modi in Russia,” Mr. Putin told EAM Jaishankar. Mr. Jaishankar, who is here on a five-day official visit to Russia, earlier met with his Russian counterpart Sergey Lavrov.

After rout in Hindi heartland, Congress reviews readiness of State units for Lok Sabha poll

The Congress leadership on Wednesday held a meeting with leaders of the party’s Andhra Pradesh and Himachal Pradesh units to discuss its strategy for the upcoming Lok Sabha election. Party president Mallikarjun Kharge, former chief Rahul Gandhi, and general secretary (organisation) K.C. Venugopal are among the top leaders from the Congress who have been reviewing the election preparedness of various States. On Tuesday, the party high command had reviewed electoral strategies with the units of Bihar, Punjab, Jammu and Kashmir, and Ladakh.

Amrit Bharat fare for second, sleeper class 15-17% higher than normal express trains

The minimum ticket price to travel on Amrit Bharat Express trains for a destination within one km to 50 km is ₹35, exclusive of the reservation fee and other charges, the Railway Board has informed all zones. It has issued a circular on the fare structure of Amrit Bharat trains and attached a “Fare Table” with the distance slabs and ticket prices for second-class and sleeper-class passengers. As the first Amrit Bharat train, which will be flagged off by Prime Minister Narendra Modi from Ayodhya in Uttar Pradesh on December 30, has only second-class and sleeper-class compartments, the Railway Ministry is yet to work out the fare table for the air-conditioned classes, sources said.

Supreme Court forms panel to prepare SOP for adjournments

The Supreme Court has constituted a committee of judges for preparing a standard operating procedure (SOP) for lawyers seeking adjournment of proceedings. The panel has invited suggestions of the Bar and other stakeholders on the issue. The decision to form a committee came after the Supreme Court Bar Association and the Supreme Court Advocate on Record Association raised concern over circulars issued in December about the discontinuation of the practice of circulation of adjournment slips.

Delhi Police arrests former cricketer for duping several 5-star hotels

Having cheated multiple five-star hotels and resorts of lakhs of rupees as well as cricketer Rishabh Pant of ₹1.63 crore, a conman was arrested from Delhi airport while trying to flee the country, the police said on Wednesday. Additional Deputy Commissioner of Police (New Delhi) Ravikant Kumar said Mrinank Singh was planning to fly to Hong Kong on Monday, but immigration officials detained the 25-year-old as a lookout circular had been issued against the accused and handed him to the police.

Hasina announces Awami League’s poll manifesto, pledges to build ‘Smart Bangladesh’

Bangladesh Prime Minister and ruling Awami League’s president Sheikh Hasina on Wednesday launched her party’s poll manifesto, pledging to build a “Smart Bangladesh” if elected for a fourth consecutive term in the January 7 general elections, being boycotted by the main opposition BNP. “Come; once again allow us to serve you by voting for the ‘boat’, the election symbol of the Awami League,” Ms. Hasina, along with senior party leaders and sympathisers, said while unveiling her party’s poll manifesto in a crowded press conference.

BJP had no role in Ram Janmabhoomi movement, says Uddhav’s Sena faction

A war of words has erupted between the Uddhav Thackeray-led Shiv Sena (UBT) and the ruling BJP over the upcoming Ram Mandir inauguration, after Mr. Thackeray was not invited to the event slated for January 22 next year. Sena (UBT) spokesperson Sanjay Raut on Wednesday questioned the BJP’s “actual” contribution to the Ram Janmabhoomi movement and the demolition of the Babri mosque in Ayodhya in December 1992, while accusing it of having forgotten the Shiv Sena’s and Bal Thackeray’s contribution.

Won’t take any step that hurts Samajwadi Party, says Pawar on Mayawati’s induction into INDIA bloc

Nationalist Congress Party (NCP) chief Sharad Pawar on Wednesday reiterated that it was not necessary for the Opposition INDIA bloc to announce a prime ministerial face as an alternative to Narendra Modi. Speaking in Maharashtra’s Amravati district, Mr. Pawar, replying to a query on the induction of Mayawati’s Bahujan Samaj Party (BSP) into the INDIA bloc, made it clear that the Akhilesh Yadav-led Samajwadi Party (SP) was the alliance’s important ally in the Uttar Pradesh and that it would not take any decision that would hurt it. 

Rajya Sabha MP writes to Railways Minister over avoiding exuberant expenditure on PM’s selfie points

Expressing dismay over the fact that the Central Railway spent nearly ₹1.62 crore on installing selfie photo booths with Prime Minister Narendra Modi’s cut out image, Member of Parliament from Rajya Sabha Dr. V. Sivadasan wrote a letter to Union Railways Minister Ashwini Vaishnaw.  Dr. Sivadasan requested urgent intervention from Ministry of Railways so that wastage of money for partisan political propaganda is avoided. The Hindu reported on December 27 that Central Bureau of Communication under Ministry of Information and Broadcasting had approved L1 contract rates for installing temporary selfie booths at ₹1.25 lakh per installation and ₹6.25 lakh for every permanent installation, to be installed at railway stations. 

Axis Bank moves NCLT to seek insolvency proceedings against Zee Learn

Private sector lender Axis Bank has filed a petition against Zee Learn before the National Company Law Tribunal (NCLT) seeking insolvency proceedings against the the education services provider firm. The company has received a notice from the Mumbai bench of the NCLT in this regard, Zee Learn said in a regulatory filing on Tuesday. “A petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 has been filed by Axis Bank Ltd to initiate Corporate Insolvency Resolution Process (CIRP) of the Company before the National Company Law Tribunal, Mumbai,” it said. The company is compiling information to verify the facts claimed.

Parliament security breach case: Accused Neelam Azad moves Delhi HC, calls police remand illegal

Neelam Azad, an accused arrested in the December 13 Parliament security breach case, on Wednesday approached the Delhi High Court alleging her police remand was illegal as she was not allowed to consult a legal practitioner of her choice to defend her during the trial court proceedings. In her petition, seeking a writ of habeas corpus directing her production before the high court as well as an order to “set her at liberty”, Azad said not allowing her to consult a lawyer of her choice amounted to violation of her fundamental right guaranteed under the Constitution, making the remand order unlawful. The trial court has remanded her in police custody till January 5.

Union Minister Anurag Thakur dismisses Congress’ Bharat Nyay Yatra, evokes 1984 riots

Union Minister Anurag Thakur dismissed the Congress party’s announcement on Wednesday to hold a ‘Bharat Nyay Yatra’, labelling it a spurious attempt to provide justice by “those who could not provide justice to the victims of the anti-Sikh riots of 1984”. The Congress had, at a press conference earlier in the day, announced it would be undertaking the Bharat Nyay Yatra, to be led by Wayanad MP Rahul Gandhi from Manipur to Mumbai, passing through 14 States and 85 districts from the east to the west of India in 67 days, beginning January 14.

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The Hindu Morning Digest, December 26, 2023

Jaishankar lands in Moscow, talks to focus on bilateral issues

Striking a nostalgic note on India-Russia ties, External Affairs Minister S. Jaishankar shared memories of a visit to Moscow during his childhood, at the beginning of his five-day visit to Moscow and St. Petersburg on Monday for bilateral talks with Russian Foreign Minister Sergey Lavrov and Trade Minister Denis Manturov.  Shortly after landing in Moscow, Mr. Jaishankar visited the Kremlin, posting an entry pass in his name from a 1962 commemoration for the first Russian cosmonauts in space at the Red Square, where he visited as a seven-year-old boy,  along with a current picture of himself at the Red Square amidst sub-zero temperatures, entitling it “How it started”, and “How it is going”. 

Three officers in Poonch area attached as Army probes three civilian deaths

Three officers, including the Brigadier in-charge in Jammu and Kashmir’s Poonch district, have been sidestepped and attached with the local unit pending inquiry, over the deaths of three civilians in the district on December 22. The J&K Police have already registered a murder case against unidentified persons over the deaths .Amid the prevailing tension, Army Chief General Manoj Pande visited Poonch sector on Monday, and was given an update on the prevalent security situation. The three officers have been “attached as per procedure” while an Army inquiry is under way into the incident, two sources independently confirmed. All three were attached to the Nagrota-based 16 Corps, another source stated.

Railway officers to be trained in disaster management; NAIR, IRIDM to impart training

Disaster management has now been incorporated as an integral component of the training module for railway officers at the induction/foundation course level and also included in refresher or mid-career training programmes. The National Academy of Indian Railways (NAIR), Vadodara, and the Indian Railway Institute of Disaster Management (IRIDM), Bengaluru, would work together in imparting the comprehensive training programme, railway sources said on Monday. 

France allows aircraft with 303 Indians to fly back to India

An aircraft with 303 passengers, mostly Indian citizens, that was detained by the French authorities on December 21 over alleged concerns of undocumented immigration was allowed to return to India on Monday, the Embassy of India in Paris announced. The aircraft, an Airbus A-340, had landed for a technical halt at the Vatry airport, located approximately 160 km away from the French capital on Thursday when an anonymous tip off had prompted the French government to stop the aircraft from taking off. 

Initial assessment of merchant vessel Chem Pluto indicates a drone attack: Navy

Merchant vessel Chem Pluto that was hit by a projectile reached Mumbai on Monday and the preliminary assessment of the area of attack and th“However, further forensic and technical analysis will be required to establish the vector of attack, including type and amount of explosive used,” the Navy said in a statement. A joint investigation by various agencies has commenced on completion of the analysis by the Navy’s EOD.

Delhi Health Minister, Chief Secy. clash over Burari Hospital case report

In a note to Chief Secretary Naresh Kumar on Sunday, Health Minister Saurabh Bharadwaj sought an action taken report (ATR) within six hours. Sources in Mr. Kumar’s office on Monday alleged that AAP released the note on social media hours before the bureaucrat got it on email and that Mr. Bharadwaj’s office was “politically compromised”. Meanwhile, the Chief Secretary sought the suspension of Mr. Bharadwaj’s private secretary.

Inauguration of Ram Temple befitting reply to those who mocked BJP: Fadnavis

The inauguration of the Ram Temple in Ayodhya on January 22 is a befitting reply to those who used to attack the BJP with the ‘mandir wahi banayenge par tarikh nahi batayenge‘ taunt, said Maharashtra Deputy Chief Minister Devendra Fadnavis on Monday .The opposition Congress and leaders from other parties often mocked the Bharatiya Janata Party claiming it was using the temple issue for political gains despite being unsure of whether it would ever get built.

Gaza refugee camp in ruins after Israeli strike

Residents of Gaza’s Al-Maghazi refugee camp returned to their neighbourhood on Monday only to find blocks of concrete strewn where their homes had stood just a day ago. “These houses are destroyed. Our house was bombed,” said camp resident Abu Rami Abu al-Ais amid the debris. “There’s no safe place in the Gaza Strip. ”Late on Sunday three houses in the camp were hit by Israeli air strikes that killed at least 70 people, according to the health ministry in Hamas-run Gaza. AFP was unable to independently verify the information.

Chhattisgarh CM Sai, Singh Deo join the debate over deforestation in Hasdeo

As protests against the ongoing deforestation in Chhattisgarh’s Hasdeo region continued on Monday, Chief Minister Vishnu Deo Sai blamed the Congress for the exercise, while former Deputy CM T.S. Singh Deo insisted that public opinion should be sought for any mining-related activity. “They should see that the permission for deforestation is from a time when it was their [Congress] government in power…. Whatever has happened, even if it is deforestation, is happening with their permission,” Mr. Sai said, responding to a query from the media on the issue.

India has had its moments in the Rainbow Nation, will look for maiden Test series win

South Africa has produced some of cricket’s finest cricketers and a team that brimmed with extraordinary talent. But that side, led by Ali Bacher and possessing gifted cricketers like Barry Richards, Graeme Pollock and Mike Procter, didn’t get the opportunities it deserved as South Africa was banned by the ICC for the country’s apartheid policy .The Test that the team played in 1970, against Australia at Gqeberha (formerly Port Elizabeth), would be Proteas’ last for more than two decades. And it was in 1992 that the South Africans could play in another Test at home. The opponent was India, which had earlier played host on South Africa’s return to international cricket with an ODI at Kolkata.

Russian forces gain control of Maryinka in east Ukraine, defence minister says

Russian forces have gained full control of Maryinka, a town in eastern Ukraine, Russian defence minister Sergei Shoigu told President Vladimir Putin, one of Russia’s most significant gains since the capture of Bakhmut in May. Most accounts of Maryinka, southwest of the Russian-held regional centre of Donetsk, describe it as a ghost town. Putin said control of the town, which was once home to 10,000 people, will allow the Russian forces to move enemy combat units away from Donetsk.

Army detained a few youth for questioning, three of them died, says FIR

The First Information Report (FIR) filed in the alleged custodial death in the Poonch-Rajouri sector stated that in the aftermath of the terror incident on December 21, Army troops detained a few youth for questioning and three of them succumbed to injuries and “as such a cognizable offence under section 302 of IPC is made out”. The FIR has been filed by the Surankote police station against “unknown” accused persons. Section 302 of the Indian Penal Code (IPC) pertains to murder.

Israel PM Benjamin Netanyahu heckled by hostage families during parliament address

Families of hostages taken by Gaza militants booed Israeli Prime Minister Benjamin Netanyahu on December 25 as he addressed parliament, vowing to bring the captives home but saying “more time” was needed. Mr. Netanyahu’s address came after his Likud party reported that he visited the Gaza Strip on Monday and vowed to step up the army’s assault in the Palestinian territory.

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The Hindu Morning Digest, December 25, 2023

J&K Police file murder case over death of three civilians in Army custody

The Jammu and Kashmir Police on Sunday registered a murder case against unidentified persons after three men picked up by the Army for questioning were found dead with multiple injuries on December 22. Eight men were detained following the ambush on an Army convoy on December 21 in Poonch-Rajouri area where four soldiers were killed and three others were injured. The terrorists involved in the ambush are yet to be identified or arrested. 

Plane carrying 303 passengers, mostly Indians, allowed to leave France

A Nicaragua-bound flight carrying 303 passengers, mostly Indians, was allowed to resume its journey on Monday, three days after they were detained by the French authorities at an airport near Paris over suspected “human trafficking”, according to local media reports on Sunday. After authorising the A340 aircraft, operated by Romanian company Legend Airlines, to leave, the French judges chose to cancel the hearings of the over 300 passengers due to irregularities in the procedure, BFM TV, a French news broadcast television and radio network, reported.

As COVID-19 cases rise, WHO asks countries to strengthen surveillance

The World Health Organization (WHO) has urged countries in Southeast Asia to strengthen surveillance in view of the increasing cases of respiratory diseases, including due to COVID-19 and its new sub-variant JN.1, and influenza. The WHO also urged people to take protective measures. “The COVID-19 virus continues to evolve, change, and circulate in all countries globally. While current evidence suggests the additional public health risk posed by JN.1 is low, we must continue to track the evolution of these viruses to tailor our response.

Virat Kohli rejoins team India ahead of first Test against South Africa

Stalwart batter Virat Kohli has rejoined the Indian red-ball squad in South Africa ahead of the Boxing Day Test at Centurion against the Proteas, according to sources .Earlier this week, a BCCI source revealed that Kohli returned to India due to personal reasons and now is in contention to make his first on-field appearance on December 26, after the World Cup final heartbreak last month. The two-match Test series will be a part of the World Test Championship 2023-25 cycle. As of now, India are at the top of the WTC table, with a win and a draw, giving them a total of 66.67 points percentage.

External Affairs Minister Jaishankar to visit Russia

External Affairs Minister S. Jaishankar will visit Russia from December 25-28. During the year-end visit, he will interact with Russian Deputy Prime Minister and Minister of Industry and Trade Denis Manturov, the Ministry of External Affairs (MEA) said on December 24. During the visit, Dr. Jaishankar is expected meet his counterpart, Sergey Lavrov, who visited Delhi during the G-20 summit, when he led the Russian delegation to the event. 

UK to send naval ship to Guyana amid Venezuela border dispute

Britain will deploy a naval ship off Guyana later this month, its ministry of defence said on Sunday, as the South American nation faces a border dispute with neighbour Venezuela over the oil-rich Essequibo region. The deployment follows a visit by a British junior foreign minister to Guyana earlier this month, intended to offer the UK’s support for the country, an ally and former British colony. Guyana and Venezuela agreed earlier this month to avoid any use of force and not to escalate tensions in the long-running dispute.

Maharashtra government tries to dissuade Jarange-Patil from staging rally in Mumbai

While lauding the Supreme Court’s decision to hear a curative petition on Maratha reservation on January 24, the Maharashtra government on Sunday urged quota activist Manoj Jarange-Patil to cancel his protest rally in Mumbai, scheduled for January 2024. However, the activist refused to yield, warning the government that all doors for discussion would be shut after January 20, when he plans to hold a mega rally of the Maratha community in the State capital. Speaking in Mumbai, Chief Minister Eknath Shinde thanked the Supreme Court for the chance to hear the curative petition on the Maratha reservation issue. 

Prioritising international cricket has helped my game: Starc on turning down multiple IPL fortunes

Senior Australian seamer Mitchell Starc has admitted that he had in the past turned down multiple lucrative offers from the Indian Premier League (IPL) to prioritise his international career, which has “helped” him in improving his game .Starc has been roped in by two-time winners Kolkata Knight Riders for a record Rs 24.75 crore during the auction last week, and it would be his first stint in the tournament since 2015. Starc said that the break during the IPL allowed him to recharge himself and stay fit for the international assignments.

J&K: Retired SSP shot dead by terrorists while offering ‘azaan’

A 72-year-old retired police officer, who was the local “muezzin”, was shot dead by terrorists while he was giving “azaan” – the call for prayer – from a mosque in Jammu and Kashmir’s Baramulla district on Sunday, police said. Recalling the moments before Mohammad Shafi Mir was killed, his cousin Mohammad Mustafa, who was at home, said the call for the pre-dawn prayers was being given by a loudspeaker and suddenly it stopped. Mir’s last words were “reham” (mercy), he said.

After poll debacle, Congress drags its feet on key Rajasthan posts

The Congress was quick to make changes in the State leadership in Chhattisgarh and Madhya Pradesh after the recent poll debacle, but in Rajasthan the party continues to drag its feet.  On Saturday, the party announced its long awaited organisational reshuffle. It promoted Rajasthan’s former Deputy Chief Minister Sachin Pilot to the position of general secretary. Last week, the party had nominated former Chief Minister Ashok Gehlot as a member of the National Alliance Committee. The two appointments indicate that it will be looking for a fresh face for the post of leader of the Congress Legislature Party. The other question looming over is whether the party will retain State chief Govind Singh Dotasra.  

Decision to suspend WFI taken under pressure: Opposition leaders

Opposition leaders on Sunday said the government’s decision to suspend the newly-elected WFI was not enough to give justice to protesting wrestlers and questioned why a loyalist of former WFI president Brij Bhushan Sharan Singh was allowed to contest the election to the sports body in the first place. The Wrestling Federation of India (WFI) elections were held on December 21 with Sanjay Singh and his panel winning the polls by big margins.

Security is stepped up around Christmas celebrations in Germany and Austria over attack concerns

Sightseeing visits were barred at Germany’s landmark cathedral in Cologne and Christmas Eve worshippers faced security checks to get into midnight Mass there Sunday as police responded to indications of a potential attack. However a top security official urged people not to shy away from holiday celebrations out of fear. Churchgoers attended multiple services at the cathedral despite the ban on visits purely for sightseeing, a day after police descended on the cathedral and searched it with sniffer dogs. With several dozen officers on duty outside, Auxiliary Bishop Rolf Steinhaeuser greeted those attending what he said was “probably the most secure church service in all of Germany.”

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The Hindu Morning Digest, December 24, 2023

Jammu and Kashmir government initiates legal action after three civilians picked up by Army found dead

A day after four Army jawans were killed in an ambush by unidentified terrorists in the Poonch-Rajouri area of Jammu and Kashmir, three civilians who were picked up allegedly by the Army for questioning were found dead on December 22 with multiple injuries. Five more persons have been admitted to hospital with serious injuries. A relative of one of the deceased civilian told The Hindu that the three men were tortured to death and the families were asked to collect the bodies from an Army camp on Friday evening.

Priyanka no longer U.P. in-charge; Sachin Pilot to handle Chhattisgarh

Priyanka Gandhi Vadra is now a Congress general secretary “without any assignment portfolio” while Sachin Pilot will be the general secretary in-charge of Chhattisgarh as part of a major organisational reshuffle that Congress president Mallikarjun Kharge carried out on Saturday .Ms. Vadra was in charge of Uttar Pradesh earlier. The much-awaited reshuffle displays a sense of urgency in the run-up to the 2024 Lok Sabha poll and comes just two days after a meeting of the Congress Working Committee (CWC), the party’s highest decision-making body.

Row over Calcutta High Court judge’s husband being quizzed by Bengal CID

At a time when the Trinamool Congress government and its leaders are defending allegations of corruption before the Calcutta High Court, the husband of a sitting High Court judge has alleged torture by the Criminal Investigation Department (CID) of the West Bengal Police. Pratap Chandra Dey, husband of Justice Amrita Sinha, was summoned for questioning by the CID earlier this week and his allegations have triggered a political row. Justice Sinha is hearing a number of cases including those related to the State recruitment scam and allegations against Trinamool leader Abhishek Banerjee.

BJP devises micro-level plans to increase vote share in 2024 Lok Sabha elections

Chaired by BJP president J.P. Nadda, the meeting was attended by national office-bearers, morcha presidents and those in charge of particular States as well State-level generation secretaries of organisation, with the Prime Minister addressing the gathering on Friday and Home Minister Amit Shah on Saturday. Plans by the BJP to reach out to at least 10 crore people by the time the Ram Temple in Ayodhya is inaugurated on January 22 was also discussed.

Dhoni to resume training in the next few weeks: CSK CEO

Chennai Super Kings skipper M.S. Dhoni is set to resume training in the next few weeks as part of his preparation for the 2024 IPL, according to the franchise’s CEO, K.S. Viswanathan .The former India skipper underwent surgery on his left knee after leading the Super Kings to a fifth IPL title earlier this year. The 42-year-old was often seen sporting knee strapping during the 2023 edition and struggled a bit, especially while running between the wickets. Giving an update about Dhoni’s fitness, Viswanathan said, “He is doing well now. He has started his rehab and is working in the gym. And, probably in another 10 days, he will also start working in the nets.”

Air India’s 1st wide-body A350-900 aircraft lands in Delhi

Air India’s first wide-body A350-900 aircraft, sporting new brand livery, arrived in New Delhi from European aviation major Airbus’ Toulouse facility in France. The aircraft, registered as VT-JRA, touched down at the national capital’s Indira Gandhi International Airport at 1346 hrs, making the Tata Group-owned airline the first aircraft operator in India to have this type of aircraft in its fleet, a statement said. The delivery flight is operated using a special call sign AI350, it said.

Sai Sudharsan always looking to learn and improve, says Hemang Badani

Rising star Sai Sudharsan has had a stellar run in the last 12 months. He has won the TNPL, Deodhar Trophy, Irani Cup, and County Championship (playing for Surrey) this year. His batting exploits in the 50-over Vijay Hazare tournament helped Tamil Nadu make the knockouts, which culminated in his India call-up for the ODI series against South Africa .In his debut against South Africa in the first ODI, he looked very comfortable facing a strong Proteas’ bowling unit and scored a match-winning half-century in tough conditions.

Jarange-Patil announces another hunger strike next month in Mumbai; Maharashtra CM says SC to take up hearing on Maratha quota

Granting a nearly month-long reprieve to the Eknath Shinde-led government concerning the Maratha reservation issue, pro-quota activist Manoj Jarange-Patil on Saturday announced an indefinite strike at Azad Maidan in Mumbai from January 20 to intensify his demands for reservation to the community. Mr. Jarange-Patil was addressing a mega rally in Marathwada region’s Beed district. In his address, he said that “crores of people from the Maratha community” will march to Mumbai on January 20.

U.S. Federal Reserve’s rate cuts come into view as inflation retreats

Federal Reserve policymakers are set to start the new year with fresh evidence that their 2022-2023 interest-rate hike campaign put U.S. price pressures firmly in retreat, with data on Friday showing that by some key measures inflation is now at or below their 2% goal. Traders broke out the champagne after a government report showed the personal consumption expenditures (PCE) price index fell 0.1% in November from October, responding to the first decline on that measure since April 2020 by boosting bets not only that the Fed will begin reducing borrowing costs in March but will continue to cut them throughout the year.

Turkey says 12 soldiers killed in clashes with Kurdish militants

Twelve Turkish soldiers have been killed in the past two days in clashes with Kurdistan Workers Party (PKK) militants in northern Iraq, the Defence Ministry said on December 23. The military carried out air strikes on PKK targets, “neutralising” at least 13 PKK militants on Saturday in ongoing clashes, the ministry said in a statement on social messaging platform X. Turkey typically uses the term “neutralised” to mean killed. The ministry also said seven militants had been killed on Friday.

Liquor in GIFT City: Congress, AAP slam Gujarat’s BJP govt. over decision

The ruling Bharatiya Janata Party (BJP) and the Opposition Congress on Saturday clashed over the Gujarat government’s decision a day earlier to allow liquor in GIFT City, which partially overturned the State’s strict prohibition policy. The State government, on Friday, lifted the ban on liquor in the Gujarat International Finance Tec-City (GIFT) to provide a “global ecosystem”. While the Congress and Aam Aadmi Party said it was an unfortunate decision that would ruin the youth, the BJP said it would provide proper environment for the development of business in the region.

U.S. court rules Twitter breached contract over failure to pay bonuses

A U.S. federal court ruled on Friday that social media company Twitter, now branded X, violated contracts by failing to pay annual performance bonuses it orally promised its workers. The breach-of-contract lawsuit was brought by former employer Mark Schobinger in June. The lawsuit said Twitter had promised workers a 2022 performance bonus if they stayed with the company through the final possible payout date, which was the first quarter of this year. The court threw out Twitter’s attempts to have the case dismissed, ruling that Schobinger’s claim of breach of contract under California law was valid.

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