WSJ What’s News - Investors Await Fed Clues on September Rate Cut

Episode Date: July 30, 2024

A.M. Edition for July 30. Federal Reserve officials are kicking off their latest rate-setting meeting today against the backdrop of a weakening labor market that’s strengthening the case for future rate cuts. Plus, Venezuelan President Nicolás Maduro cuts ties with Latin American countries raising concerns about fraud in last weekend’s elections. And WSJ foreign correspondent Stephen Kalin describes how Palestinian exile Mohammed Dahlan has emerged as a potential postwar leader for Gaza. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Venezuela's Maduro cuts ties with Latin American countries raising concerns about fraud in last weekend's elections. Plus investors await signs on the Fed's next moves as its latest rate-setting meeting kicks off. And as fighting in Gaza drags on, a Palestinian exile emerges as a potential post-war leader. There are a lot of parties to this conflict and reasons why nobody's palatable to everybody together. Previously, in his role as the security chief in Gaza, he actually went after Hamas and

arrested a lot of them. It's Tuesday, July 30th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Thousands of Venezuelans took to the streets of the capital Caracas last night to challenge President Nicolas Maduro's claim that he won the country's presidential election on Sunday.

In what could be a sign of the shifting political winds in the country, many demonstrators hailed from the city's poor neighborhoods long Maduro strongholds in a contrast with previous mass protests driven by the middle class. Opposition leaders say they have obtained more than 70 percent of tally sheets from polling stations and those show challenger Edmundo Gonzalez, not Maduro, winning in a landslide. A number of foreign governments, including the U.S. and the European Union, have pressured Venezuela to address accusations of fraud. Omar Paganini is the foreign minister of Uruguay, one of nine Latin American nations that issued

a joint statement demanding an audit of the results. The region is aligning itself with a position in favor of democracy and transparency, and I think this is the right thing to do. In other words, there is a clear lack of transparency here that does not allow us to go ahead with recognizing a government in this way. In response, Venezuela has broken off diplomatic ties with seven of the Latin American countries calling for transparency, including Uruguay. Federal Reserve officials are gathering today to kick off their latest monetary policy meeting

with investors and analysts closely watching for any signal that the central bank will be ready to cut rates in September. Journal Deputy Finance Editor Quinton Webb says that as of late, the case for rate cuts has strengthened. Quinton Webb, Journal of Finance, Quintin What officials call a balance of risks has kind of come into better balance, if you like. So on the one hand, inflation has come down somewhat. On the other hand, you are starting to see some signs that higher rates have had the

desired effect of slowing the economy a little bit. So you're seeing some weakness in lower income consumers. The housing market is frozen. The labor market is pretty solid, but maybe less robust than it was. So take those together and it does look like the justification for a rate cut is mounting. In other markets news for watching today, BHP Group and London Mining have agreed to jointly acquire Canadian exploration company Filo for just under $3 billion. BHP, the world's largest miner by market value, said the deal reflects its appetite

for early-stage projects for copper, which is seen as the most critical metal for the clean energy transition. It is setting up to be a jam-packed day of earnings with Microsoft, now the world's second-largest company by market cap, taking center stage this afternoon. Also do our updates from Pfizer and Procter & Gamble this morning and Starbucks and Chipmaker advanced micro devices after the closing bell. And we will be getting fresh data on U.S. job openings and consumer confidence at 10 a.m. Eastern. Coming up, while the war in Gaza grinds on, a possible face of its post-war future comes into focus. We've got that story and more after the break. a pet groomer, a contractor, or a consultant. You can get customized coverage for your business.

Contact a licensed TD Insurance advisor to learn more. Last week, the Palestinian factions Hamas and Fatah, along with a dozen other smaller parties agreed to form a unity government in Gaza and the occupied West Bank once the war between Israel and Hamas is over. To be clear, that war remains far from over, with ceasefire negotiations stuck for months. But as Journal Foreign Correspondent Stephen Kalin is here to discuss, that agreement comes as discussions around a potential future leader of post-war Gaza seem like they might be gathering steam. Stephen, you have just written a profile for us on a man named Mohammed Dahlan, who you

report some U.S., Israeli, and Arab officials all evidently see as a potentially viable future leader of Gaza. How does that come about? Tell us a little bit about him. David Klingman Yeah, so Dahlan has been living in exile here in the United Arab Emirates for over a decade. He was very close to the late Palestinian leader Yasser Arafat and then became a rising star in Palestinian politics. He was in control of security forces in Gaza when Hamas took over after winning the 2006 elections. He ended up back in the West Bank and a few years later was exiled

by Mahmoud Abbas, who's still the president. And after the war started, people started looking at him as a possible sort of compromise solution. And that's been batted around for months now and it's picked up steam in recent weeks. compromise solution. There was a lot of blood between them. But since the war began, he says he's speaking regularly to Hamas and he has been an interlocutor with the Israelis. Even the Americans have previously backed him at a certain point. I don't want to be overly pessimistic, but is it not the case that even if someone on the surface looks like they might be one of the more viable people to lead Gaza, that there are still so many overlapping interests on the various parties here

that that doesn't mean they're actually a likely pick, if you will. That's right. A lot of parties to this conflict and a lot of complexities and history there. Dahlan, he was exiled from the Palestinian Authority, so they might not necessarily be very happy with him having a role, and the PA wants to ensure that it has autonomy over Gaza. So an empowered Dahlan could sideline the Palestinian Authority, which runs large parts of the West Bank. And the Biden administration has said they want to see the PA run Gaza as well.

So Dahlan having a role there could complicate those plans. Dahlan has said himself in interviews since October that he doesn't aspire to be the ruler of Gaza, and the role that we've heard diplomats talking about for him is more in the capacity of a security role rather than outright leader of Gaza. Dahlan has said also that he's laid out this sort of vision for Gaza's future, which would entail a two-year transition to elections. So his future beyond that is unclear. And yet, is it too simple to say, Stephen, that we could be far away from an actual end to the conflict,

but that it's still a good sign that there's at least some discussion happening about leadership and future governance structures? Yeah, the fact that people are starting to think about practical issues like security after Israeli forces begin to withdraw from Gaza is an indication that the pace of the war is coming down. According to one of the options that we've heard about, which is under consideration, the Halan would potentially oversee a Palestinian security force that would help to secure aid into Gaza. That could be around 2,500 men.

They would also operate potentially with an international force. And those Palestinian forces would be vetted by the U.S. and Israel as well as Egypt. And potentially, they could also eventually help with the reconstruction of Gaza. So obviously, that's a long way off. For the moment, we're still waiting to see whether ceasefire talks get back on track. But these are just sort of the initial seeds of what could come. Nat. That was Wall Street Journal foreign correspondent, Stephen Kalin. Stephen, thank you so much for bringing us this story.

Thank you. U.S. intelligence officials say that Iran is seeking to harm Donald Trump's presidential campaign through covert online influence operations, fearing that a return to power by the former president would inflame relations with Washington. That marks a shift from recent intelligence assessments that had concluded that Tehran was chiefly focused on acting as a chaos agent in the election, though officials say it remains primarily focused on fueling distrust in U.S. political institutions and increasing social discord more generally. A spokesman for the Iranian mission to the UN in New York said that, quote, Iran does

not engage in any objectives or activities intended to influence the U.S. election. Israel's military has raided one of its own prisons in the south of the country, detaining nine Israeli reservists on allegations that they abused a Palestinian prisoner who had been held there. In response, right-wing protesters and politicians showed up at the facility and breached its gates yesterday, angry that Israel was detaining its own forces during a war. Allegations of prisoner mistreatment at the site, which has been used to hold Palestinians captured after the October 7 attacks, have been building for months, with human rights

groups claiming that Palestinian detainees there are denied due process and subject to abuse. The Israeli military didn't provide details about its investigation. And as Olympic athletes in Paris focus on their competitions, prosecutors in the capital are considering combining investigations into several high-profile acts of vandalism in recent days that paralyzed the country's high-speed trains last Friday and disrupted telecommunications operations on Sunday night. Journal reporter Noemi Bisserv is in Paris. So they were concerned that this could be state-sponsored. Moscow has been a particular concern for French security officials. But France's top cop, Gérald Darmanin, said

yesterday that it seemed that the attack bore the mark of the far left. It's not clear whether the sabotage against the train lines and the telecommunication lines are related. Prosecutors have given very few details about what they have found so far, so it still remains uncertain who's behind this. But police have said they're confident they will solve this within the next few days. And that's it for What's News for Tuesday morning. Today's show was produced by Daniel Bach and Kate Bullivant, with supervising producer Christina Rocca and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show.

Until then, thanks for listening.