WASHINGTON (AP) — Secretary of State Antony Blinken heads to Egypt on Tuesday for his 10th trip to the Middle East since the war in Gaza began nearly a year ago, this one aimed partly at refining a proposal to present to Israel and Hamas for a cease-fire deal and release of hostages.
Unlike in recent mediating missions, America's top diplomat this time is traveling without optimistic projections from the Biden administration of an expected breakthrough in the troubled negotiations.
Also unlike the earlier missions, Blinken has no public plans to go to Israel to meet with Prime Minister Benjamin Netanyahu on this trip. The Israeli leader's fiery public statements — like his declaration that Israel would accept only “total victory” when Blinken was in the region in June — and some other unbudgeable demands have complicated earlier diplomacy.
Blinken is going to Egypt for talks Wednesday with Egyptian Foreign Minister Badr Abdelatty and others, in a trip billed as focused both on American-Egyptian relations and Gaza consultations with Egypt.
The tamped-down public approach follows months in which President Joe Biden and his officials publicly talked up an agreement to end the war in Gaza as being just within reach, hoping to build pressure on Netanyahu's far-right government and Hamas to seal a deal.
The Biden administration now says it is working with fellow mediators Egypt and Qatar to come up with a revised final proposal to try to at least get Israel and Hamas into a six-week cease-fire that would free some of the hostages held by Hamas in exchange for Palestinian prisoners held by Israel. Americans believe public attention on details of the talks now would only hurt that effort.
American, Qatari and Egyptian officials still are consulting “about what that proposal will contain, and .... we're trying to see that it's a proposal that can get the parties to an ultimate agreement,” State Department spokesman Matthew Miller said Monday.
The State Department pointed to Egypt's important role in Gaza peace efforts in announcing last week that the Biden administration planned to give the country its full $1.3 billion in military aid, overriding congressional requirements that the U.S. hold back some of the funding if Egypt fails to show adequate progress on human rights. Blinken told Congress that Egypt has made progress on human rights, including in freeing political prisoners.
Blinken's trip comes amid the risk of a full-on new front in the Middle East, with Israel threatening increasing military action against the Hezbollah militant organization in Lebanon. Biden envoy Amos Hochstein was in Israel on Monday to try to calm tensions after a stop in Lebanon.
Hezbollah has one of the strongest militaries in the Middle East, and like Hamas and smaller groups in Syria and Iraq it is allied with Iran.
Hezbollah and Israel have exchanged strikes across Israel's northern border with Lebanon since the Oct. 7 attack by Hamas started the war in Gaza. Hezbollah says it will ease those strikes — which have uprooted tens of thousands of civilians on both sides of the border — only when there's a cease-fire in Gaza.
Hochstein told Netanyahu and other Israeli officials that intensifying the conflict with Hezbollah would not help get Israelis back in their homes, according to a U.S. official. The official, who spoke on the condition of anonymity to discuss the private talks, said Hochstein stressed to Netanyahu that he risked sparking a broad and protracted regional conflict if he moved forward with a full-scale war in Lebanon.
Hochstein also underscored to Israeli officials that the Biden administration remained committed to finding a diplomatic solution to the tensions on Israel’s northern border in conjunction with a Gaza deal or on its own, the official said.
Netanyahu told Hochstein that it would “not be possible to return our residents without a fundamental change in the security situation in the north.” The prime minister said Israel “appreciates and respects” U.S. support but “will do what is necessary to maintain its security and return the residents of the north to their homes safely.”
Israel Defense Minister Yoav Gallant, meanwhile, warned in his meeting with Hochstein that “the only way left to ensure the return of Israel’s northern communities to their homes will be via military action,” his office said.
In Gaza, the U.S. says Israel and Hamas have agreed to a deal in principle and that the biggest obstacles now include a disagreement on details of the hostage and prisoner swap and control over a buffer zone on the border between Gaza and Egypt. Netanyahu has demanded in recent weeks that the Israeli military be allowed to keep a presence in the Philadelphi corridor. Egypt and Hamas have rejected that demand.
The Hamas-led attacks in southern Israel on Oct. 7 killed about 1,200 people. Militants also abducted 250 people and are still holding around 100 hostages. About a third of the remaining hostages are believed to be dead.
Israel's offensive in Gaza has killed more than 41,000 Palestinians, said Gaza’s Health Ministry, which does not distinguish between civilians and militants in its count. The war has caused widespread destruction, displaced a majority of Gaza’s people and created a humanitarian crisis.
Netanyahu says he is working to bring home the hostages. His critics accuse him of slow-rolling a deal because it could bring down his hardline coalition government, which includes members opposed to a truce with the Palestinians.
Asked earlier this month if Netanyahu was doing enough for a cease-fire deal, Biden said, simply, “no.” But he added that he still believed a deal was close.
Associated Press writer Aamer Madhani contributed to this report.
FILE - Israeli soldiers move next to destroyed buildings following Israeli strikes during a ground operation in the Gaza Strip, Sept. 13, 2024. (AP Photo/Leo Correa, File)
FILE - Smoke rises after an Israeli shelling on an area in Lebanon, seen from the Israel-annexed Golan Heights, next to the Israeli-Lebanese border, Sept. 16, 2024. (AP Photo/Leo Correa, FIle)
FILE - Secretary of State Antony Blinken speaks during a news conference about Russia's election interference at the Department of State in Washington, Sept. 13, 2024. (AP Photo/Jose Luis Magana, File)
NEW YORK (AP) — U.S. stock indexes edged lower Wednesday after the Federal Reserve kicked off its efforts to prevent a recession with a bigger-than-usual cut to interest rates.
The S&P 500 slipped 0.3% to pull 0.9% below its all-time high set in July. The Dow Jones Industrial Average dipped 103 points, or 0.2%, though it remains close to its record set on Monday. The Nasdaq composite lost 0.3%.
The momentous move by the Fed helps financial markets in two big ways. It eases the brakes off the economy, which has been slowing under the weight of higher rates, and it gives a boost to prices for all kinds of investments. Besides stocks, gold and bond prices had already rallied in recent months on expectations that cuts to rates were coming.
Because the move was so well telegraphed, and because markets had already climbed so much in anticipation of it, Wall Street’s reactions were relatively muted despite the Fed’s historic action. It marked the first cut to the federal funds rate in over four years, and it closed the door on a stretch where the Fed kept rates at a two-decade high to slow the economy enough to stifle the worst inflation in generations.
Now that inflation has eased significantly from its peak two summers ago and appears to be heading toward 2%, the Fed says it it can turn more of its attention toward protecting the slowing job market and overall economy.
“The time to support the labor market is when it’s strong and not when you begin to see the layoffs,” Fed Chair Jerome Powell said. “That’s the situation we’re in.”
The only question is how much the Fed will ultimately cut rates by to do so, which can prove to be a tricky balance. Lowering rates would help the economy by making it easier for U.S. businesses and households to borrow. But it could also offer more fuel for inflation.
The Fed released forecasts Wednesday that said its median official expects to cut the federal funds rate by another half of a percentage point through the end of the year. That could mean a traditional-sized cut of a quarter of a percentage point at each of its two remaining meetings scheduled for 2024.
After that, the median Fed official is projecting another full percentage point of cuts during 2025.
Some critics say the Federal Reserve may have already kept interest rates too high for too long, doing damage to the economy.
“When the Fed is behind the curve, it sometimes takes a big move to catch up to where they should have been all along,” said Brian Jacobsen, chief economist at Annex Wealth Management.
“We don’t think we’re behind,” Powell said in a press conference following the Fed’s announcement. “We think this is timely. But I think you can take this as a sign of our commitment not to get behind,” pointing to Wednesday’s hefty cut of half a percentage point. Powell called it a “good strong start to this.”
Other critics, meanwhile, say the Fed will need to be careful about cutting rates too much because of the possibility that inflation will remain stubbornly higher than it’s been in recent decades.
Powell repeated several times that the Fed does not feel “a rush to get this done” and will make its decisions on interest rates at each successive meeting, depending on what incoming data say.
“We’ll move as fast or as slow as we think is appropriate in real time,” he said. For now, he said, “the U.S. economy is in a good place, and our decision today is designed to keep it there.”
Like stock prices, Treasury yields wavered up and down repeatedly immediately after the Fed announced its cut and published its projections.
The 10-year Treasury yield eventually rose to 3.70% from 3.65% late Tuesday. The two-year yield, which more closely follows expectations for Fed action, edged up to 3.62% from 3.60% late Tuesday.
On Wall Street, Intuitive Machines soared 38.3% after NASA awarded it with a contract worth up to $4.82 billion for communication and navigation services the space agency will use to establish a long-term presence on the moon.
Trading in Tupperware Brands remained halted after the company filed for Chapter 11 bankruptcy protection. Its stock has been sinking, down to 51 cents, since a mini-revival early in the pandemic sent its stock above $30.
McGrath RentCorp, a company that rents and sells mobile office trailers, portable classrooms and other structures, fell 3.1% after it agreed to terminate its proposed buyout by WillScot following tough scrutiny of the deal from U.S. regulators.
All told, the S&P 500 slipped 16.32 points to 5,618.26. The Dow dropped 103.08 to 41,503.10, and the Nasdaq composite lost 54.76 to 17,573.30.
In stock markets abroad, indexes fell modestly in Europe after rising in much of Asia.
The Bank of Japan and the Bank of England are also holding monetary policy meetings later this week. Neither central bank is expected to move on rates, though the language of what the officials say could be an indicator of later moves and still influence markets.
AP Business Writers Yuri Kageyama and Matt Ott contributed.
Specialist Genaro Saporito, foreground, works with traders at his post on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
The news conference of Federal' Reserve Chair Jerome Powell appears on a screen as trader Neil Catania works on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
Trader Michale Conlon, right, works on the floor of the New York Stock Exchange as Federal Reserve Chair Jerome Powell's news conference appears on a television screen behind him, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
Trader Edward Curran works on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
Specialist John O'Hara works at his post on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
Trader Leon Montana works on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
Trader Aaron Ford works on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
Trader Michael Capolino works on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)
A bus passes the Wall St. subway station on Wednesday, Sept. 18, 2024, in New York. (AP Photo/Peter Morgan)
The New York Stock Exchange, with a banner for American Eagle Outfitters, is shown on Tuesday, Sept. 17, 2024, in New York. (AP Photo/Peter Morgan)
A person stands near an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 18, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
People stand near an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 18, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
People stand in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 18, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
A person rides a bicycle in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Sept. 18, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
