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Good morning and welcome back to FirstFT. Here’s what we’ve got for you today:
First US interest rate cut this year
Kimmel show shelved
How Israel is dismantling the dream of a Palestinian state
And the FT’s coffee connoisseurs
The Federal Reserve yesterday cut interest rates for the first time since Donald Trump returned to the White House. It also released a new set of economic projections. Here’s what we learnt.
Reasons for the cut: Wednesday’s reduction in interest rates to the new range of 4 per cent to 4.25 per cent was the first since December and was made in response to a deterioration in the labour market, Fed chair Jay Powell told a press conference after the decision was announced. The Fed’s decision, however, was not unanimous. New board member and staunch Trump ally Stephen Miran voted for a jumbo 50-basis-point cut but was the only member of the Federal Open Market Committee to do so. The other 11 FOMC members, including Christopher Waller and Michelle Bowman who dissented in July in favour of a quarter-point cut, backed the Fed chair.
What about the outlook for the economy? The economic projections, which survey Fed governors and presidents of regional branches of the central bank, showed policymakers broadly in support of lowering rates further in the months ahead because of downside risks to the labour market. Nine Fed officials supported two further quarter-point cuts this year. One thought the target range should be between 2.75 per cent and 3 per cent by the end of 2025, while another said rates should revert to 4.25 to 4.5 per cent. Yesterday’s cut came despite inflation running above the central bank’s 2 per cent target. Read more on the Fed’s first interest rate cut of 2025.
Here’s what we’re keeping tabs on today:
Trump’s UK visit: The US president is expected to meet UK Prime Minister Sir Keir Starmer after a day of pageantry and a lavish state banquet. Follow today’s news on our live blog.
Interest rates: Financial markets expect the Bank of England to keep interest rates at 4 per cent at its monetary policy meeting.
Results: FedEx is expected to report a first-quarter profit hit from President Donald Trump’s decision to remove tariff-free exemptions on small packages.
Economic data: Initial and continued claims for state unemployment benefits are expected, and Argentina releases its trade balance for August.
Join FT reporters and guests including Michael Moritz later today for a subscriber-only event examining how political attacks on elite US universities and cuts to federal research funding are reshaping the landscape of US innovation. Register here.
Five more top stories
1. China is dropping an antitrust probe into Google, as Beijing and Washington step up negotiations over TikTok. The investigation, which was formally opened in February, centred on the dominance of the US group’s Android operating system and its impact on Chinese phonemakers. The decision follows a ban on China’s big technology companies buying new Nvidia chips. Read more on the decision.
2. Switzerland’s Roche has agreed to buy US drugmaker 89bio in a deal worth up to $3.5bn. 89bio specialises in obesity treatments and is listed on the Nasdaq stock exchange. Its shares closed yesterday at $8.08. Hannah Kuchler and Mercedes Ruehl report on the first US acquisition by a Swiss pharmaceuticals group since the Trump administration hit the country with the highest tariffs in Europe.
3. Jimmy Kimmel’s late-night television show has been pulled off the air “indefinitely” by Disney-owned ABC after comments the comedian made on Monday night about the man accused of killing conservative activist Charlie Kirk. Kimmel’s broadcast provoked criticism, including from Brendan Carr, chair of the Federal Communications Commission, the US regulator.
4. The Trump administration is drawing up plans to use tariff revenue to fund a programme to support US farmers, agriculture secretary Brooke Rollins told the FT. The comments follows mounting pressure from farm groups after China curbed purchases of a new US soyabean crop. With the soyabean harvest already under way, farmers warn the crisis is deepening. Read the full Rollins interview.
5. Switzerland’s stricter capital proposals will make it “not viable” for UBS to keep its headquarters in the country, Cevian Capital has said. The activist investor, which holds about 1.4 per cent of the Swiss bank’s shares, says the proposals will give the lender “no other realistic option but to leave” to protect its competitiveness.
The Big Read
© John Wessels/AFP/Getty Images
While attention has been focused on Gaza, Israel has been grabbing swaths of land and destroying refugee camps in the West Bank. It is expanding settlements, building walls and deepening its military presence in the territory, undermining the delicate architecture of governance built up over three decades through the Oslo peace accords. Read more on how Israel is dismantling the dream of a Palestinian state.
We’re also reading . . .
Chart of the day
Argentina’s central bank yesterday intervened to support the country’s tumbling peso for the first time since President Javier Milei partially floated the currency in April. The monetary authority sold $53mn, according to its daily report on foreign currency reserves, as the peso fell to the lower limit of its exchange rate band, currently about 1,475 pesos to the dollar.
Take a break from the news . . .
Ahead of this weekend’s special magazine devoted to coffee, Cherish Rufus spoke to FT journalists, including Martin Wolf, about their passion for the caffeinated drink. The coffee geeks share their tips for the perfect brew.
