Central bankers warn of sticky inflation as markets shudder

Good morning. On today’s agenda:

• Central bankers warn over sticky inflation

• The FT’s Person of the Year

• The hurdles to a Nissan-Honda merger

Leading central banks have warned that inflation is proving stickier than expected and that they will only cut borrowing costs gradually in 2025, in a shift that hit bond markets on both sides of the Atlantic.

A day after Federal Reserve officials dialled back their rate-cutting expectations, the yield on US 10-year Treasuries, a bedrock of global finance, hit the highest level since May at 4.59 per cent.

UK yields also reached 4.66 per cent, the highest in more than a year as Bank of England officials yesterday warned of an increased risk of “inflation persistence” and kept benchmark rates on hold.

Inflation has begun to pick up again in both the US and UK, while uncertainties over the policies of US president-elect Donald Trump are clouding economic prospects across the globe.

That includes Tokyo, where Bank of Japan governor Kazuo Ueda said yesterday that the central bank needed “one more notch” of information before committing to its next interest rate rise.

The yen tumbled past ¥157 against the dollar after Ueda’s comments, which followed the BoJ’s announcement that it was holding short-term interest rates at 0.25 per cent.

• Related: Trump is still weeks away from taking the oath of office, but the president-elect’s vow to enact a sweeping policy overhaul is already looming over the Federal Reserve.

Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: Japan and Hong Kong report November inflation data.

• Monetary policy: China announces its one-year and five-year loan prime rates.

• Myanmar: Asean ministers meet in Thailand to discuss the civil war in the south-east Asian country.

• China: Today is the 25th anniversary commemorations in Macau marking the handover of the former Portuguese colony to Chinese rule on this day in 1999.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. North Korean groups have stolen $1.34bn through cryptocurrency hacks this year, their highest level of such thefts on record. The country now accounts for two-thirds of digital asset thefts globally.

2. Exclusive: Joe Biden is sending top diplomats to Damascus to meet Abu Mohammed al-Jolani, the leader of the Islamist rebels who toppled Syria’s dictator Bashar al-Assad. The meeting would be the first formal in-person contact between the US and leaders of Hayat Tahrir al-Sham, which is designated a terrorist group by Washington.

3. Tulip Siddiq, Treasury minister responsible for the City of London, has been named in a Bangladesh corruption probe into accusations that her family embezzled $5bn. Siddiq has declined to comment on the claims relating to former prime minister Sheikh Hasina — Siddiq’s aunt — and a $12bn nuclear power plant that Bangladesh is building with Russian assistance.

4. A French court has found Dominique Pelicot guilty of repeatedly drugging and raping his wife over decades, and inviting more than 50 men to participate in the abuse in their family home. Judges sentenced the 72-year-old Pelicot, who had admitted to the crimes, to the maximum penalty of 20 years in prison. Read more on the conclusion to a case that has shocked people around the world.  

5. US House Republicans have crafted a new spending bill that acquiesces to Donald Trump’s demand to seek a two-year extension to the debt limit in order to avoid a government shutdown by the end of the week. But Democrats bashed the proposal, putting into question whether it had enough votes to pass before a Friday night deadline.

FT Person of the Year

The Financial Times made Donald Trump its “Person of the Year” in 2016, a month before his inauguration as US president. He would end his first term helping to goad a mob assault on Capitol Hill, and much of the world agreed at the time that he had been, in the words of Joe Biden, “an aberrant moment”. Then came the most dramatic political comeback in modern US history. This year, the FT has again picked Trump because of his remarkable return to power. It is no longer possible to dismiss him as a blip.

We’re also reading . . . 

DIY chart of the day

How well do you know the jobs market? Test your knowledge on trends such as hybrid schedules, the gender pay gap and AI hiring with the FT’s new “draw your own chart” game.

Take a break from the news

Over the past three months, Lucinda Smyth has watched 100 Christmas movies, a gruelling watchathon that resulted in a stiff neck and an eye twitch. But she has emerged with a delightful deep-dive into one of the most critically overlooked genres, just in time for the holiday.