Day: September 10, 2025

After weeks of intense diplomacy, Israeli and Palestinian officials announced an agreement on a framework for a ceasefire on Saturday. It’s a significant step forward, but it does not address the underlying issues that will determine the conflict’s outcome.

The agreement includes terms that would end fighting on land, air and at sea. It would also include rehabilitating Gaza’s devastated infrastructure and allowing access to the supplies needed to accommodate and shelter displaced families.

But most significantly, the deal would set up a process whereby Hamas would release 33 hostages in a phase that would last 42 days. The first batch would consist of women, the elderly and those categorized as severe humanitarian cases. It would also include the two very young children of the family of the Israeli Prime Minister. In exchange, Israel would free hundreds of Palestinian prisoners, including a number of prisoners sentenced to life in prison for murdering Israelis.

A number of observers have been skeptical about the timing of the agreement, noting that it was announced on a day when Israel’s Prime Minister would normally avoid meetings that are not urgent. However, it was a clear signal that the Israeli hard right wanted to begin its relations with the new administration with a success story on this issue.

The US is hoping that this can become the first step in a larger movement toward peace. But this will require Netanyahu to agree to a path toward a future Palestinian state and the Trump administration to press the Israeli government to do so.

Central bank policy is the set of decisions made by a central bank with regard to interest rates, and often other types of policies as well. These decisions aim to influence dimensions of macroeconomic activity like prices and inflation, output, employment and sometimes designated monetary aggregates. Central banks normally exert whatever influences they have over these magnitudes through their setting of short-term interest rates.

For example, by supplying money markets with ample liquidity during times of stress (like after the stock market and housing busts in recent years) or by allowing its bank reserves to rise and fall on a regular basis (called “repo operations”). The traditional story is that changes in the central bank’s policy rate are transmitted to other interest rates through a mechanism that involves banks increasing their loans and investments when reserves are plentiful/less costly and cutting back on them when they become scarce/more costly. However, there is no empirical evidence that this transmission mechanism actually works in practice.

Moreover, the more central banks are focused on their inflation target the more they have to trade off between stabilizing the economy in the short run and achieving the target in the long run. For this reason many central banks use a flexible inflation target.

Ideally, the broad objectives of financial agencies should be specified in legislation and the broad modalities of accountability for these agencies should also be publicly disclosed. For example, the procedures for appointment, terms of office and any general criteria for removal of the heads and members of their governing bodies should be publicized.