warns

Jerome Powell says the US central bank is undergoing a ‘stress test’ like other institutions in the current era.

Former US Federal Reserve Chair Jerome Powell has warned against the politicisation of monetary policy amid President Donald Trump’s repeated attacks on the independence of the central bank.

In a speech at an awards ceremony in Boston on Sunday, Powell said that the Fed had been undergoing a “stress test” like many other institutions in the Trump era.

Powell said the US Congress had “wisely” chosen to insulate the central bank from political pressure and that all other advanced economies had similar norms upholding the independence of monetary policy.

“These protections have served the public well, and administrations from both parties have respected them,” Powell said after accepting the 2026 John F Kennedy Profile in Courage Award.

“If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well,” Powell said.

“The public would lose faith that the central bank will make decisions based only on what’s best for all Americans.”

Powell, who stepped down as the head of the central bank last month, said that the Fed’s credibility would be “lost” in such a scenario.

“That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses,” he said.

“Our credibility has been built and sustained over many decades, and we have a duty to safeguard that priceless asset for our fellow citizens and for generations to come.”

Powell, who made the usual decision to stay on as one of the seven members of the Fed’s Board of Governors after stepping down as chair, also offered a broader defence of democratic institutions generally.

“Partisan political differences are normal – indeed essential – in a thriving democracy. But we ought to be united in our commitment to the higher principles that define our nation,” Powell said.

“Chief among them is respect for the rule of law. As John Adams wrote, ours is ‘a government of laws and not of men’. Our public institutions carry us forward through change. These institutions embody our commitment to freedom, democracy, and service of the public good.”

While Powell did not mention Trump by name, the US president has waged a sustained pressure campaign against the central bank for not heeding his demands to cut interest rates more sharply.

Trump repeatedly threatened Powell with dismissal during his tenure, while Trump appointee and ally Jeanine Pirro opened a short-lived criminal investigation into Powell’s congressional testimony about ongoing renovation works at the Fed’s headquarters.

Trump also ordered the removal of Fed governor Lisa Cook over unproven claims of mortgage fraud, though the Supreme Court has ruled that she can remain in her position while it considers a legal challenge against her firing.

Under the Federal Reserve Act, the US president must demonstrate “cause”, widely interpreted to mean malfeasance, to remove any of the Federal Reserve’s governors.

The John F Kennedy Profile in Courage Award was created in 1989 to honour those who demonstrate courage in public service without regard to professional or personal consequences.

Past winners of the award, which is named after Kennedy’s Pulitzer-winning book Profiles in Courage, include former US President Barack Obama, then-Ukrainian President Viktor Yushchenko, and then-UN Secretary-General Kofi Annan.

Egypt races to salvage Gaza ceasefire as Israeli attacks and displacement threats push deal to the brink of collapse.

Egypt has launched an urgent diplomatic intervention to rescue a fragile Gaza ceasefire agreement that is on the brink of collapse.

The government warned Israel against expanding its occupation in Gaza, which would undermine efforts to end the war amid of wave of deadly air strikes.

According to an Egyptian intelligence official who spoke to Al Jazeera, Egypt has also invited a senior Hamas delegation, led by chief negotiator Khalil al-Hayya, for urgent talks to salvage the peace process.

The source described contacts between the parties as intense, saying Cairo was racing to arrange negotiations before the end of the week in order to prevent all-out war in Gaza.

The diplomatic moves come in the wake of renewed Israeli military attacks on Gaza and statements from top Israeli officials that threaten to unravel months of diplomacy.

At least 141 Palestinians have been killed in the last two weeks in an intensification of Israeli attacks.

Israeli Prime Minister Benjamin Netanyahu on Thursday issued a directive ordering the military to expand the area under its control from 53% to 70%.

This fundamentally violates the US-brokered comprehensive peace plan signed in October 2025 under the Trump administration, mediators say.

Compounding the crisis, Israeli Defence Minister Israel Katz also triggered regional outrage by publicly reviving a blueprint for the “voluntary migration” of Palestinians out of the enclave.

Speaking during an announcement confirming the assassination of Hamas’s newly appointed military chief, Mohammed Odeh, Katz asserted that the forced displacement scheme would be implemented “at the right time and in the right manner”.

Cairo sent a warning to the Israeli government, rejecting any measures designed to push Gaza’s residents towards voluntary emigration or direct Palestinians towards the Rafah crossing with Egypt.

Egypt has been coordinating with mediators in Qatar and Turkiye, as well as US officials, to return the process to a negotiating track, including revisions to the addendum of the original Gaza peace plan, designed to reduce violence.

The source said Egypt and its fellow mediators were aware that Netanyahu’s recent statements on expanding Israel’s occupation of Gaza, as well as attacks that killed Hamas military figures Izz al-Din al-Haddad and Mohammed Odeh, were driven by electoral calculations and compounded by difficulties Netanyahu faces in Lebanon.

Egypt has contacted United States officials to ask President Donald Trump to urgently restrain Netanyahu, given the recent Israeli escalations in Gaza, the source said.

A senior Hamas official abroad told Al Jazeera that Hamas had received Egyptian communications aimed at containing the escalation and preventing talks from collapsing, suggesting a meeting in Cairo was expected within days.

Hamas said the ceasefire was on the brink of collapse due to repeated Israeli violations, and called on the US and guarantor countries to take “serious and urgent” steps to compel Israel to honour its commitments.

Israel and Hamas agreed to a ceasefire in October to end two years of fighting, which had seen more than 72,000 Palestinians killed and the vast majority of Gaza’s population made homeless.

Despite a ceasefire still being in place, at least 929 Palestinians have been killed in Israeli attacks since October.

May 29 (UPI) — Ukraine on Friday evening said that it expects Russia to launch ‘big attacks’ against it sometime on Friday or Saturday, and warned its citizens to take cover.

Ukrainian President Volodymir Zelynsky told CBS News on Friday evening that it expects Russia to launch new attacks at the country in the next 24 to 48 hours, and advised his citizens to take cover.

“Our people have to be very, very careful, cautious and children – they have to use bomb shelters,” he told the news organization.

“Today, at night or tomorrow night, high percent – of course, nobody knows 100% – but there is high percent,” he said.

Russia on Friday evening already launched missiles toward Ukraine, with explosions reported in Kyiv and nearby regions, among other parts of the country, The Kyiv Post reported.

“We have intel that Russia is preparing a new massive attack,” Zelensky said in the post.

“Please pay attention to air raid alerts and stay safe,” he said.

The warnings follow an alleged drone hitting the roof of an apartment building in Romania, which was reportedly aimed at nearby location in Ukraine, which is neighbors the country.

New research from the European Central Bank suggests that the economic impact of the Iran war may be affecting euro zone consumers more deeply and rapidly than previous geopolitical crises, raising concerns about inflation, slowing growth, and long term economic uncertainty across Europe.

According to ECB economists, European consumers appear to be reacting more sensitively to rising prices and economic instability because many households are still psychologically affected by the financial stress caused by the Russia Ukraine war and the energy crisis that followed in 2022.

The latest conflict involving Iran, triggered after United States and Israeli airstrikes earlier this year, caused major disruptions to global energy supplies and reignited fears of another inflation shock throughout Europe.

ECB researchers found that consumers quickly became more attentive to price increases even while inflation remained close to the central bank’s 2 percent target. Economists believe this reaction reflects growing public anxiety over repeated geopolitical and economic disruptions.

Why It Matters

The findings raise serious concerns for Europe’s economic recovery because consumer confidence plays a critical role in spending, investment, and overall growth.

When households become highly sensitive to inflation and uncertainty, they often reduce spending, delay purchases, and increase savings out of caution. This behavior can weaken economic activity and slow recovery across key sectors including retail, manufacturing, housing, and services.

ECB researchers warned that Europe may now face the risk of a more persistent stagflation environment, where inflation remains elevated while economic growth slows simultaneously.

The Iran war also exposed Europe’s continuing vulnerability to global energy shocks. Despite efforts to reduce dependence on Russian energy after the Ukraine conflict, Europe remains heavily exposed to disruptions in global oil and gas markets.

Although oil prices have recently eased amid hopes for diplomacy, they surged sharply earlier this year during the height of the Iran conflict, intensifying inflationary pressure across the euro zone.

Key Stakeholders

Several major stakeholders are directly affected by the growing economic uncertainty surrounding the Iran war and Europe’s inflation outlook.

European Central Bank

The ECB faces increasing pressure to balance inflation control with economic stability. Policymakers are now widely expected to continue raising interest rates in an effort to prevent inflation expectations from becoming entrenched among consumers and businesses.

European Consumers

Households across Europe remain at the center of the crisis. Rising living costs, energy prices, and borrowing expenses continue placing pressure on disposable incomes and consumer confidence.

Businesses and Industries

European businesses, particularly energy intensive industries, face higher operating costs and weaker consumer demand. Continued uncertainty may reduce investment activity and slow hiring across multiple sectors.

Energy Markets

Global oil and gas markets remain highly sensitive to developments in the Middle East. Any renewed escalation involving Iran could rapidly push energy prices higher again, directly affecting inflation and economic stability in Europe.

Governments Across Europe

European governments may face growing political pressure if inflation remains persistent while economic growth weakens. Policymakers could be forced to increase public spending or introduce additional support measures for households and industries.

Future Outlook

The coming months are likely to become a critical period for the euro zone economy as European policymakers attempt to manage the combined effects of geopolitical instability, inflation concerns, and slowing growth.

Much will depend on whether tensions in the Middle East continue easing or whether new disruptions emerge in global energy markets. A stable diplomatic environment could help reduce inflationary pressure and restore consumer confidence gradually.

However, ECB researchers warn that the psychological impact of repeated crises may continue shaping consumer behavior long after energy prices stabilize. Many Europeans who experienced financial stress during the Ukraine war now appear quicker to react to fears of inflation and economic instability.

The ECB is therefore expected to maintain a cautious but firm monetary stance in the near term, with additional interest rate increases remaining highly likely.

If inflation remains elevated while economic growth weakens, Europe could face a prolonged period of economic stagnation combined with reduced consumer spending and higher borrowing costs.

The situation highlights how modern geopolitical conflicts increasingly influence not only energy and security policy but also consumer psychology, market behavior, and long term economic confidence across global economies.

With information from Reuters.