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News Wrap: Federal Reserve projects rate increases in 2023 as economy recovers from COVID

In our news wrap Wednesday, the Federal Reserve signaled it may raise a key, short-term interest rate — from near-zero — sooner than planned. The European Union called for lifting travel restrictions on Americans. North Korea's leader Kim Jong-un warned of extended COVID restrictions and food shortages. The U.S. Congress moved to give final approval to making "Juneteenth" a federal holiday.

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  • Judy Woodruff:

    In the day's other news: The Federal Reserve signaled that it may raise its key short-term interest rate from near zero sooner than planned.

    The Central Bank had indicated rates would likely not change until 2024. Today, it projected two hikes, what Fed officials call liftoff, by late 2023.

    Chairman Jerome Powell said that the rapidly improving economy is key.

  • Jerome Powell, Federal Reserve Chairman:

    Liftoff is well into the future. The conditions for liftoff — we're very far from maximum employment, for example. It's a consideration for the future.

    We're going to watch carefully to make sure evolving inflation and our understanding of what's happening is right. And, in the meantime, we will conduct policy appropriately.

  • Judy Woodruff:

    The Fed projected inflation will hit 3.4 percent by year's end, a full percentage point higher than the March forecast. But it said price increases will ease after that.

    The European Union called today for lifting COVID-19 travel restrictions on Americans. The 27 E.U. members have the option to comply as they see fit.

    Meanwhile, India's famed Taj Mahal reopened, with strict safety protocols. New infections in the country have fallen sharply since peaking in April.

    North Korea's leader, Kim Jong-un, is warning of extended COVID restrictions and food shortages for his people. State media says that Kim addressed the ruling Workers' Party on Tuesday. He cited economic damage from the pandemic and agricultural losses from last year's typhoons.

    China confirmed today that a reactor at a nuclear power plant near Hong Kong had five broken fuel rods. The Environment Ministry said radiation rose inside the reactor in Guangdong province. but it said no radiation leaked outside.

    Palestinians in Gaza have again launched incendiary balloons into Israel. That followed Israeli airstrikes on Hamas militants in Gaza. Those raids, in turn, came after balloon attacks yesterday. Separately, Israel today ended late-night raids on Palestinian homes in the West Bank. The intelligence-gathering raids had drawn growing criticism.

    Back in this country, the U.S. Congress moved to give final approval to making Juneteenth a federal holiday, marking the official end of slavery. The last Black slaves in Texas learned they were free on June 19, 1865.

    Texas Democrat Sheila Jackson Lee spoke before today's vote in the U.S. House of Representatives.

  • Rer. Sheila Jackson Lee (D-TX):

    What I see here today is racial divide crumbling, being crushed this day, under a momentous vote that brings together people who understand the value of freedom. And that is what Juneteenth is all about.

  • Judy Woodruff:

    In all, 47 states already recognize Juneteenth. It would be the 12 federal holiday in the U.S. once President Biden signs it into law.

    Attorney General Merrick Garland announced a major change to asylum policy for immigrants today. He rescinded a Trump era decision that made it harder for victims of domestic abuse or gang violence to win entry to the U.S. Central American migrants have frequently cited those reasons in their bids for asylum.

    The U.S. Interior Department is reviewing a federal court order to resume auctioning leases for oil and gas drilling offshore and on federal lands. President Biden suspended new leases in January. A judge in Louisiana ruled Tuesday that the president likely exceeded his authority.

    The Biden administration has forgiven 18,000 student loans for people who attended a now-defunct for-profit chain of schools. They say ITT Technical Institute made exaggerated claims about graduates finding jobs. Today's move clears half-a-billion dollars in debt, but more than 100,000 similar claims remain.

    And on Wall Street, stocks fell back after the Federal Reserve talked of raising interest rates next year. The Dow Jones industrial average lost 265 points to close at 34033. The Nasdaq fell 33 points, and the S&P 500 slipped 23.

    Still to come on the "NewsHour": a major schism divides the nation's largest Protestant denomination; why some economists call for a return to completely open borders; and a rural restaurant uses cuisine to preserve a way of life.

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