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    Biden Administration Moves to End a Minimum Wage Waiver for Disabled Workers

    A plan by the Biden administration would phase out a provision that allows employers to pay workers with disabilities less than the federal minimum wage.The Biden administration on Tuesday moved to end a program that has for decades allowed companies to pay workers with disabilities less than the minimum wage.The statute, enacted as part of the Fair Labor Standards Act of 1938, has let employers obtain certificates from the Labor Department that authorize them to pay workers with disabilities less than the federal minimum wage, currently $7.25 an hour. The department began a “comprehensive review” of the program last year, and on Tuesday it proposed a rule that would bar new certificates and phase out current ones over three years.“This proposal would help ensure that workers with disabilities have access to equal employment opportunities, while reinforcing our fundamental belief that all workers deserve fair compensation for their contribution,” Taryn Williams, assistant secretary of labor for disability employment policy, said on a call with reporters.As of May, about 800 employers held certificates allowing them to pay workers less than minimum wage, affecting roughly 40,000 workers, said Kristin Garcia, deputy administrator of the Labor Department’s wage and hour division.Those figures reflect a steep decline in employers’ reliance on the program in recent years: The number of workers with disabilities earning less than the minimum wage dropped to 122,000 in 2019 from 296,000 in 2010, according to a report published last year from the Government Accountability Office.Since 2019, more than half of workers employed under this program earned less than $3.50 an hour, according to the report.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Job openings jumped and hiring slumped in October, key labor report for the Fed shows

    Job openings totaled 7.74 million on the month, up 372,000 from September.
    Hiring tailed off at a time when the labor market was disrupted by violent storms in the Southeast as well as two major labor strikes involving dockworkers and Boeing.

    Available jobs rose in October while hiring fell during a month in which payrolls growth hit its lowest level in nearly four years, the Bureau of Labor Statistics reported Tuesday.
    Job openings totaled 7.74 million on the month, up 372,000 from September and more than the Dow Jones estimate for 7.5 million, the BLS said in its Job Openings and Labor Turnover Survey. The rate of openings as a share of the labor force rose to 4.6% from 4.4%.

    That brought the ratio of available positions to unemployed workers up to 1.1, about half of where it was during the peak of a massive gap between supply and demand in 2022.
    Hiring also tailed off at a time when the labor market was disrupted by violent storms in the Southeast as well as two major labor strikes involving dockworkers and Boeing. Hires totaled 5.31 million, down 269,000 on the month, lowering the hiring rate to 3.3%. That’s also a decline of 0.2 percentage point.
    Layoffs, though, fell to 1.63 million, a decrease of 169,000 from September. Also, voluntary job quitters increased to 3.33 million, up 228,000 from September.
    The data comes for a month in which the BLS reported nonfarm payroll growth of just 12,000, the worst month since December 2020.
    The Federal Reserve watches the JOLTS report closely for signs of tightness or slack in the labor market. Markets expect the Fed to lower its benchmark borrowing rate by a quarter percentage point when it meets later this month, in part an effort to head off any potential weakness in the labor market.

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    Fed Governor Waller says he is ‘leaning toward’ a December rate cut, but worries about inflation

    Federal Reserve Governor Christopher Waller said Monday he is anticipating an interest rate cut in December but is concerned about recent trends on inflation.
    Waller cited recent data indicating that progress on inflation may be “stalling.”
    Markets expect the Fed to lop another quarter-percentage point off its benchmark overnight borrowing rate when it meets Dec. 17-18.

    Federal Reserve Governor Christopher Waller speaks during The Clearing House Annual Conference in New York City on Nov. 12, 2024.
    Brendan Mcdermid | Reuters

    Federal Reserve Governor Christopher Waller said Monday he is anticipating an interest rate cut in December but is concerned about recent trends on inflation that could change his mind.
    “Based on the economic data in hand today and forecasts that show that inflation will continue on its downward path to 2 percent over the medium term, at present I lean toward supporting a cut to the policy rate at our December meeting,” Waller said in remarks before a monetary policy forum in Washington.

    However, he noted the “decision will depend on whether data that we will receive before then surprises to the upside and alters my forecast for the path of inflation.”
    Waller cited recent data indicating that progress on inflation may be “stalling.”
    In October, the Fed’s preferred inflation indicator, the personal consumption expenditures price index, showed headline inflation moving up to 2.3% annually, and core prices, which exclude the cost of food and energy, moving up to 2.8%. The Fed targets a 2% rate.
    Though the data was in line with Wall Street expectations, it showed an increase from the prior month and was evidence that despite the progress, the central bank’s goal has proved elusive.
    “Overall, I feel like an MMA fighter who keeps getting inflation in a choke hold, waiting for it to tap out, yet it keeps slipping out of my grasp at the last minute,” Waller said, referring to mixed martial arts. “But let me assure you that submission is inevitable — inflation isn’t getting out of the octagon.”

    Markets expect the Fed to lop another quarter-percentage point off its benchmark overnight borrowing rate when it meets Dec. 17-18. That would follow a half-point cut in September and a quarter-point reduction in November.
    “As of today, I am leaning toward continuing the work we have started in returning monetary policy to a more neutral setting,” Waller said.
    Waller said he will watch incoming employment and inflation data closely. The Bureau of Labor Statistics this week will release reports on job openings and nonfarm payrolls, the latter coming after gains in October came in at a paltry 12,000, due largely to labor strikes and weather issues.
    Even with the slowing progress on inflation, Waller said broader economic health has him feeling like it will be appropriate to continue to ease monetary policy.
    “After we cut by 75 basis points, I believe the evidence is strong that policy continues to be significantly restrictive and that cutting again will only mean that we aren’t pressing on the brake pedal quite as hard,” he said.
    Also Monday, New York Fed President John Williams expressed confidence that inflation is heading lower and said he still thinks it will be likely to put policy in a more “neutral” setting over time, without providing specifics.

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    Biden Targets China’s Chip Industry With Wider Trade Bans

    New rules prohibit the sale of certain types of chips and equipment to China, in an effort to close loopholes and cement the Biden administration’s legacy in countering the U.S. rival.The Biden administration announced on Monday broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence.The restrictions will prohibit the sales of certain types of chips and machinery to China, and will add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration’s third major update over the past three years to a set of rules that have tried to cut China off from the world’s most advanced technology.The rules are also likely to be the administration’s last on Chinese technology before President-elect Donald J. Trump’s inauguration next month, aiming to cement the Biden administration’s legacy in slowing down a rival country’s technological progress.Commerce Secretary Gina Raimondo told reporters in a call on Sunday that the move represented “the strongest controls ever enacted by the U.S. to degrade the P.R.C.’s ability to make the most advanced chips that they’re using in their military modernization,” referring to the People’s Republic of China. She said the government had worked closely with experts, industry and allied countries to ensure that “our actions protect national security while minimizing unintended commercial consequences.”National security officials have said that China’s ability to acquire and make advanced computer chips poses a threat to the United States. The chips are crucial for powering artificial intelligence and supercomputers that can be used to launch cyberattacks, design new weapons, erect surveillance systems and increase the military’s ability to respond accurately and rapidly to foreign attacks.In October 2022, the Biden administration issued its first sweeping restrictions on China, by banning sales of advanced A.I. chips and certain chip-making machinery to the country. In October 2023, the Biden administration built on those rules to capture more types of A.I. chips.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    India’s quarterly growth slumps to a near two-year low, well below expectations

    India’s economy expanded by 5.4% in its second fiscal quarter ending September.
    Economists polled by Reuters had forecast growth of 6.5% for the period, while the Reserve Bank of India expected an expansion of 7%.
    Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis, said India’s economy will slow but not “collapse” in 2025.

    Construction workers in Mumbai, India, on June 5, 2024. 
    Bloomberg | Bloomberg | Getty Images

    India’s economy expanded by just 5.4% in its second fiscal quarter ending September, well below estimates by economists and close to a two-year low.
    The print follows 6.7% growth over the previous quarter and is the lowest reading since the last quarter of 2022. Economists polled by Reuters had forecast growth of 6.5% for the period, while the Reserve Bank of India expected an expansion of 7%.

    The country’s statistics agency noted sluggish growth in manufacturing and the mining sector.
    The yield on the country’s 10-year sovereign bond quickly sank to 6.74% after the release, from around 6.8%.
    The weak GDP reading could potentially affect the country’s interest rate trajectory, with the RBI’s Monetary Policy Committee scheduled to meet between Dec. 6-8. Markets watchers had been expecting an eleventh consecutive pause by the RBI, with the repo rate currently at 6.5%.
    Harry Chambers, an assistant economist at Capital Economics, said the Friday reading showed that weakness was “broad based.” His firm expects economic activity “to struggle over the coming quarters.”
    “That bolsters the case for policy loosening, but the recent jump in inflation means the RBI won’t feel comfortable cutting interest rates for a few more months yet,” he said in research note.

    Speaking to CNBC “Squawk Box Asia” before the GDP release, Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis, forecast that India’s economy will slow but not “collapse” in 2025.
    She said that Natixis has a 2025 growth forecast of 6.4% for India — without clarifying whether this refers to the fiscal or calendar year — but added that the print could also come in as low as 6%, which she qualified as “not a bit problem, but it’s not welcome.”
    Separately, the RBI projected that GDP growth for the 2024 fiscal year ending in March 2025 will reach a higher 7.2%.
    Asked how India’s economy will fare under President-elect Donald Trump’s second presidency, Herrero said the country is “not really at the center of the reshuffling of the value chain that China has been conducting.”
    “If I were the Trump administration, I would start [looking at tariffs for] Vietnam. That’s a much more obvious case,” she noted.
    She said that China could make products in India for Indian consumption instead of exporting products globally — and as such, New Delhi could avoid getting hit by tariffs. More

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    Euro zone inflation climbs to 2.3% in November, meeting expectations

    Annual euro zone inflation rose to 2.3% in November, statistics agency Eurostat said Friday.
    While it takes price rises back above the European Central Bank’s 2% target, the increase was expected and primarily down to effects from the energy market.

    The stalls at the 590th Dresden Striezelmarkt are brightly lit at the opening.
    Sebastian Kahnert | Picture Alliance | Getty Images

    Annual euro zone inflation rose to 2.3% in November, statistics agency Eurostat said Friday, climbing back above the European Central Bank’s 2% target.
    Economists polled by Reuters had expected the 2.3% annual rate for the month, up from 2% in October.

    Price rises in the bloc have ticked higher for two straight months after dropping to 1.7% in September, as was expected due to the fading deflationary pull from energy prices.
    Core inflation, excluding volatile energy, food, alcohol and tobacco prices, held at 2.7% for a third straight month in November.
    The core rate is being propped up by the stickiness of services inflation, which only slid slightly to 3.9% in November from 4% during the previous month.

    Markets have fully priced in a 25-basis-point interest rate cut from the ECB in December, which would mark the institution’s fourth trim of the year.
    Speculation that the central bank could be pushed into a larger 50-basis-point cut has faded since last month, after slight improvements in the weak euro area growth outlook and a rebound in inflation.

    Inflation came in slightly higher than forecast in October, while ECB policymakers, including executive board member Isabel Schnabel, have stressed the need for caution in monetary easing.
    The ECB’s decision will largely be informed by the latest staff macroeconomic projections it will receive just ahead of its upcoming Dec. 12 meeting. The central bank will also be weighing the potential global impact of the recent election of Donald Trump as U.S. president, including whether he will follow through on his threats of universal trade tariffs and how such a step would impact European Union exports.

    The euro was little-changed against the U.S. dollar and British pound following the data release.
    Kyle Chapman, FX market analyst at Ballinger Group, said in an emailed note that the uptick in headline inflation was solely down to year-on-year energy price volatility, and that the ECB would look favorably on a 0.9 percentage point fall in month-on-month services inflation.  
    “With the growth picture looking soft, there is still no doubt that inflation will fall to 2% on a sustainable basis next year,” Chapman said, adding that the market nonetheless appeared to have settled on a 25-basis-point move in December.
    “The economy is not falling off a cliff just yet and there is uncertainty about where the neutral rate is, so there is no pressing need to start frontloading cuts,” he noted.
    Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said the inflation figures, combined with recent data showing record low unemployment and higher negotiated wage growth in the third quarter, will prevent a 50-basis-point cut.
    The final monetary policy decision will nevertheless remain a “close call,” with the more dovish members of the ECB pushing hard for a 50-basis-point trim, Debono said. If the central bank does stick with a 25-basis-point move, it will likely follow this step with cuts of the same size at both of its following meetings in January and March, she added. More

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    These economists say artificial intelligence can narrow U.S. deficits by improving health care

    The potential positive shock of AI on the U.S.’s fiscal health could help lower the fiscal deficit, according to a study from the Brookings Institution.
    The report forecasts AI could lower the U.S. budget deficit by 1.5% of GDP by 2044.
    The incoming Trump administration raises questions as to how AI might be implemented in delivering health care services.

    Just_super | E+ | Getty Images

    Can artificial intelligence be so transformative as to solve one of the U.S. economy’s biggest problems: its skyrocketing fiscal deficit? According to three economists at the Brookings Institution, the answer is yes — AI could prove a positive “critical shock” for the country’s fiscal health. 
    A working paper released last month by the Center on Regulation and Markets at Brookings projects that under the most optimistic scenario, AI could reduce the annual U.S. budget deficit by as much as 1.5% of gross domestic product by 2044, or about $900 billion in nominal terms, lowering annual budget deficits by roughly one fifth at the end of the 20-year span.

    “The use of AI presents the rare — possibly unique — opportunity to expand access to health care information and services while simultaneously reducing the burden on the conventional health care system,” the paper’s authors, Ben Harris, Neil Mehotra and Eric So, wrote.
    While the authors name various channels through which AI can increase productivity, they highlight AI’s potential to dramatically improve health care services and public health. 
    Not only could AI make American health care more efficient, it might also “democratize” access to the system by giving people more options for preventative medical care — “changing the ‘who’ and ‘where’ of health care,” the economists wrote.
    AI could ease deficit pressure
    The economic impacts of a more efficient health care system, and giving individuals more paths to manage their own health, could ease pressure on the government’s yawning fiscal deficit, which topped $1.8 trillion in the fiscal year ended Sept. 30. The national debt stands at $36 trillion.
    But adopting AI in health care services isn’t a sure thing. Plenty of impediments stand in the way of widely implementing AI, largely tied to regulation and incentives.

    Economists’ outlook on AI and health care is “a mix of enthusiasm and despair,” said Ajay Agrawal, a professor at the University of Toronto’s Rotman School of Management ,where he researches the economics of artificial intelligence.
    “Enthusiasm because there’s probably no sector that stands to benefit more from AI than health care. … But there’s friction due to regulation, due to incentives —  because of the way things are structured and how people are paid for things — and friction due to the associated risks and liabilities,” Agrawal said. 
    “So yes, there’s lots of implementation challenges, and at the same time, the prize for succeeding at this is very big,” Agrawal said. 
    Health care and the deficit
    The federal government spent an estimated $1.8 trillion on health insurance in 2023, or around 7% of GDP, according to the Congressional Budget Office. From 2024 to 2033, the CBO forecasts federal subsidies for health care will total $25 trillion, or 8.3% of GDP. 
    The problem is that so much health care spending in the U.S. isn’t tied to treatment or patient outcomes. Instead, about a quarter of all spending, public and private, is estimated to go toward administrative functions.
    “Nearly every industry in the U.S. has experienced substantial improvements in productivity over the last 50 years, with 1 major exception: health care,” according to a report by McKinsey analysts. 
    This is one area where AI could improve operations, according to the Brookings Institution economists. Basic tasks such as appointment scheduling can be automated, while tasks such as patient flow management and preliminary data analysis can also be done by AI programs.
    While the three economists acknowledge that the impact of AI on federal spending is still “highly uncertain,” the coauthors believe it could ultimately be more transformative for the economy than past technological leaps, such as the use of personal computers in the 1990s. The current AI shock “feels different. This isn’t your typical technological shock,” Harris told CNBC.
    AI is affecting “how people receive health care,” how the drug industry discovers new products and how researchers make medicine more precise, Harris said.
    Disease and death rates
    In particular, Harris underscored AI’s impact not just on productivity, but also its potential to transform the cost of care and the rates of illness, disease and death. 
    “Such changes could have profound impacts on Social Security and public health program outlays,” he and his coauthors wrote.
    To be sure, there is also the potential that AI advancements could counterintuitively increase federal spending if the average lifespan increases as a result of the technology. Not only could improved technology lead people to seek more medical care, longer lifespans might also result in a larger retired population.
    But the Brookings paper takes a more optimistic tack, predicting one of AI’s largest benefits will result from accelerating the efficacy of preventative care and disease detection. This will create a healthier population that will need less medical intervention, the authors wrote — and might also increase labor force participation rates if a healthier workforce stays employed for more years.
    “AI’s ability to improve diagnostic accuracy can not only improve patient outcomes but also reduce wasteful spending on inappropriate treatments,” the economists said. “From a more optimistic perspective, existing AI systems may lower expenditures on all health spending, including Medicare, with cost reductions occurring through several channels—with personalized medicine being a prominent example.”
    Evaluating whether AI can ultimately translate into a positive or negative shock on fiscal policy will depend on what stage of the age distribution it affects, Agrawal said. Whether AI is “having its bigger impact on retired people, or around working people,” will answer how the numbers play out, Agrawal said. 
    AI proliferating already
    So far, diagnostics has shown the most advances and greatest potential in applying AI in health care. Agrawal cited AI’s influence throughout almost all the steps of diagnostic care, from receiving input data, medical imagery such as X-rays and MRIs, as well as doctor notes, charts. 
    “In almost every area of diagnosis, AI has, in some cases, already demonstrated what they call ‘superhuman performance’ — better than than most docs,” Agrawal said. 
    AI has also shown “significant promise” in better optimizing treatment plans for patients through data analysis. Machine intelligence can develop more effective and less costly plans for individual patients, according to the authors of the paper. 
    Agrawal believes it’s too early to say whether public or private health systems will take better advantage of AI. In the U.S., private insurers have generally been more keen on AI technology associated with preventative treatment, he said. There’s been less interest in using AI in diagnostic applications, possibly that might lead to a rise in cases and more treatment, he said. 
    “There aren’t clear economic incentives for the private sector to [implement] that,” said Agrawal. “In the public sector, even though there are incentives, there are a lot of frictions associated with privacy on the data side.” 
    He believes public-private partnerships will be key in driving the rollout of AI across health care. 
    The public health care sector “will need very strong incentives in order to drive change, because otherwise, everybody is in their routine. There’s a lot of resistance to change,” Agrawal said. 
    “So to get over that resistance, you need a very strong motivator, and the private sector generally provides a much stronger motivator, either because the users are trying to reduce cost, or the creators of the technology are trying to generate profit,” he continued. 
    Large tech companies have already pushed forward in developing large language models specifically for health care services. Google’s AI system, Articulate Medical Intelligence Explore (AMIE), mimics diagnostic dialogue. Its Med-Gemini platform uses AI to aid in diagnosis, treatment planning and clinical decision support. Amazon and Microsoft have their own projects underway to expand the application of AI programs in health services.
    Outlook under Trump 
    President-elect Donald Trump’s second term could alter the rollout of AI in health care, and ultimately, its economic impact. Trump has vowed to reduce government spending and formed an outside panel called the Department of Government Efficiency designed to “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.” Public health funding is one area that could reduced funding, frustrating the ability to roll out AI applications.  
    “Now, it is possible that if you do see a retreat in the federal government’s role in providing health care to people, that more efficient AI could help compensate for the cost of that retreat,” said Harris. “If AI means that each dollar goes farther, then I think we’ve timed everything in a sort of lucky way.” 
    There’s also the chance that rolling back regulations under a second Trump administration could expedite the implementation of AI across health care. 
    “Many people are fearful of reducing regulation because they don’t want technologies that are immature to be brought into the health care system and harm people,” Agrawal said. “And that’s a very legitimate concern. But very often what they fail to also put into their equation is the harm we’re causing people by not bringing” in new technologies, he added. 
    “Some areas need a lot more technical development, but there are some domains in diagnosis that are already ready to go, and it’s just regulation that’s preventing them from being used,” Agrawal said.  More

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    Fed’s preferred inflation gauge rises to 2.3% annually, meeting expectations

    The personal consumption expenditures price index increased 0.2% on the month and showed a 12-month inflation rate of 2.3%, both in line with expectations.
    Core inflation showed even stronger readings, with an increase at 0.3% on a monthly basis and an annual reading of 2.8%, also as forecast.
    Spending rose 0.4% on the month, as forecast, while personal income jumped 0.6%, well above the 0.3% estimate.

    Inflation edged higher in October as the Federal Reserve is looking for clues on how much it should lower interest rates, the Commerce Department reported Wednesday.
    The personal consumption expenditures price index, a broad measure the Fed prefers as its inflation gauge, increased 0.2% on the month and showed a 12-month inflation rate of 2.3%. Both were in line with the Dow Jones consensus forecast, though the annual rate was higher than the 2.1% level in September.

    Excluding food and energy, core inflation showed even stronger readings, with the increase at 0.3% on a monthly basis and an annual reading of 2.8%. Both also met expectations. The annual rate was 0.1 percentage point above the prior month.
    Services prices generated most of the inflation for the month, rising 0.4%, while goods fell 0.1%. Food prices were little changed, while energy was off 0.1%.
    Fed policymakers target inflation at a 2% annual rate. PCE inflation has been above that level since March 2021 and peaked around 7.2% in June 2022, prompting the Fed to go an on aggressive rate-hiking campaign.
    Stocks were mixed following the release, with the Dow Jones Industrial Average up about 100 points, though the S&P 500 and Nasdaq Composite were both negative. Treasury yields fell.
    Despite the rise in headline inflation, traders increased their bets that the Fed would approve another rate cut in December. Odds of a quarter-percentage-point reduction in the central bank’s key borrowing rate were at 66% Wednesday morning, according to the CME Group’s FedWatch measure.

    While the inflation rate has dropped significantly since the Fed started tightening, it remains a nettlesome problem for households and figured prominently into the presidential race. Despite its deceleration over the past two years, the cumulative effects of inflation have hit consumers hard, particularly on the lower end of the wage scale.
    Consumer spending was still solid in October, though it tailed off a bit from September. Current-dollar expenditures rose 0.4% on the month, as forecast, while personal income jumped 0.6%, well above the 0.3% estimate, the report showed.
    The personal saving rate slipped to 4.4%, tied for its lowest since January 2023.
    On the inflation side, housing-related costs have continued to boost the numbers, despite expectations that the pace would cool as rents eased. Housing prices rose 0.4% in October.
    The Fed follows a broad dashboard of indicators to gauge inflation but uses the PCE figure specifically for its forecasting and as its main policy tool. The data is considered broader than the Labor Department’s consumer price index and adjusts for behavior in consumer spending such as replacing more expensive items for less costly ones.
    Officials tend to consider core inflation as a better long-term gauge but use both numbers in considering policy moves.
    The release follows consecutive rate cuts by the Fed in September and November totaling three quarters of a percentage point. Though the November reduction happened after the month the report covers, markets had been widely anticipating the move.
    Fed officials at their November meeting indicated confidence that inflation was moving toward the 2% target, though members advocated a gradual reduction in interest rates as they acknowledged uncertainty over how much cuts will be needed.

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