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U.S. Federal Reserve raises rates by a quarter of a percent

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This is the highest level that interest rates have gone to, in the U.S, in 16 years

The U.S. Federal Reserve has opted to raise interest rates by 25 basis points.

This is the highest level that interest rates have gone to, in the U.S, in 16 years.

Fed Chair Jerome Powell did signal this could the final rise for some time, as the central bank wants to give officials time to assess the impact it may have on inflation.

“If you add up all the tightening that’s going on through various channels, we feel like we’re getting close or are maybe even there,” Powell said.

Powell also touched on the the fallout from recent bank failures, and the resilience of the system over the past few months.

He also spoke about the impending issue of the U.S. defaulting in June, if Congress doesn’t raise the debt ceiling.

“No one should assume that the Fed can protect the economy from the potential short and long-term effects of a failure to pay our bills on time,” he said.

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When will airfares begin to fall?

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As the global aviation market rebounds, airlines are changing their service offerings

 
Over 46 million workers in the global aviation sector lost their jobs as global aviation came to a grinding halt at the onset of the pandemic.

However, Geoffrey Thomas from AirlineRatings.com said passengers have returned to airport terminals and boarded flights in droves.

“When travelled returned, many of us wondered what sort of low airfares will we have to be charged to entice people back onto airplanes.”

In February 2023, total traffic (measured in revenue passenger kilometres) rose 55.5 per cent when compared to February 2022.

Globally, traffic is at 84.9 per cent of February 2019 levels.

“It was a stampede, the likes of which we have never seen before,” Mr Thomas said.

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The worst of inflation could be behind us

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The unprecedented nature of the pandemic continue to shape international fiscal policy

As reserve banks and federal reserves continue to battle the impacts of Covid-19, inflation has become a dominate issue.

In some parts of the world, rising household costs have slowed consumer spending by more than expected.

It means the end of aggressive rate hikes could come to an end in a matter of months.

In Australia, recent data from the Australian Bureau of Statistics confirmed inflation has passed its peak and is beginning to moderate.

The numbers show annual inflation peaked in December 2022 but will still remain higher for longer than anticipated.

Matt Grudnoff is a Senior Economist at The Australia Institute, who said these are uncharted waters.

“I don’t think they should be fully blamed.

“The pandemic was an entirely different kind of recession, one that we have never seen before.

“The world went into recession because the world shut down for very good health reasons.

“But the economy rebounded extremely quickly, simply because there was no underlying problem with the economy,” he said.

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“I think there is a great risk”: will AI steal our jobs?

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Artificial Intelligence has become an increasingly powerful and pervasive force in our modern world.

 
Artificial intelligence is not a new concept. However, the growing advancements have the potential to revolutionise industries, improve efficiency, and enhance the quality of life.

Along with its promising advancements, artificial intelligence also brings certain risks and challenges that must be acknowledged and addressed.

It has become the focus of lawmakers, who are working towards greater regulation of the sector.

U.S. and European Union officials recently met in Sweden to weigh up the benefits and challenges of artificial intelligence, and other emerging technologies.

“The AI process is creeping up on us,” said Dr Keith Suter, who is a global futurist.

“You’ve got competition between companies.”

It’s almost like some of us can see this raft that’s heading towards the rapids and a disappearance towards the waterfall, and we’re giving a warning but it’s not being heeded because everybody’s in this race to get down to the river,” Dr Suter said.

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