India And Pakistan Latest, Libya Deportations, The Fed And Interest Rates

0:01Pakistan says it shot down drones over some of its major cities. It's the aftermath of Indian airstrikes. How are two nuclear powers managing the latest confrontation in their generations-long Cold War? I'm Steve Inskeep with Leila Fathol, and this is Up First from NPR News. President Trump's administration plans to send migrants removed from the United States to Libya. The U.S. has deportation deals already with Mexico and El Salvador, so why another? And the Federal Reserve says it will wait and see how the economy responds to higher tariffs, but interest rates will remain unchanged for now.

0:39People are feeling stress and concern, but unemployment hasn't gone up. Job creation is fine. Wages are in good shape. Stay with us. We'll give you the news you need to start your day.

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2:24Visit schwab.com to learn more. Blasts heard over Pakistan's second largest city is the latest step in a generations-long conflict in South Asia. This morning, residents in Pakistan's second largest city of Lahore were hearing explosions. Pakistan's military spokesman, Lieutenant General Ahmad Sharif, says Pakistan shot down Indian drones, which he says were flying over major cities. This naked aggression continues, and the armed forces are on high degree of alert and neutralizing them as we speak. This is a serious, serious provocation. Let's remember here, India launched multiple strikes against Pakistan on Tuesday.

3:08These were considered the most extensive attacks that India has carried out in more than 50 years. India says it was responding to terror attacks last month that were launched out of Pakistani territory. On the line with us is NPR's Dia Hadid. She's in Mumbai and covers both India and Pakistan. Good morning. Good morning, Leila. So, Dia, just bring us up to speed. What is happening today? Right. Well, the Pakistani army spokesman, Lieutenant General Ahmed Sharif, accused India of setting across 25 Israeli-made drones this morning. He says some of them flew over major population centres, including Karachi, which is the biggest city in the country with 20 million people, and crucially, Rawal Pindi, which is home to Pakistan's general military headquarters.

3:50Sharif says they shot down all the drones except for one that targeted an old airport in Lahore. He says four military personnel were injured and one civilian killed. Sharif just spoke to the media in English. That's a signal that his message is for the West. It appears that India has apparently lost the plot and rather than going on a path of rationality, is further escalating in a highly charged environment to satisfy the hubristic mindset of the Indian government. What he's referring to there, Leila, is India's Hindu nationalist government, which had vowed retribution for a militant attack in late April, where gunmen opened fire on tourists in a meadow, killing 26.

4:37India blamed Pakistan for that attack. Pakistan says it's not connected, but it's that incident which triggered these escalations. Right, but I'm thinking, where does this go? It seems like tensions are just rising and rising at this point. At this point, yes, but if I can step back a bit, when India struck Pakistan earlier this week, the Indian military had quickly signalled they were not seeking an escalation. And Pakistan said it shot down five Indian military aircraft. And analysts told me they were waiting to see if that would be enough for Pakistan to show its people that the army was defending the country.

5:10Even this morning, the Pakistani Deputy Prime Minister confirmed that national security advisors of both countries had spoken to each other, so it was looking hopeful. But then the accusation happened of India sending drones over Pakistani airspace. So Ajay Shukala, he is a retired Indian Army colonel, and he says any new development here changes all calculations. And the dynamic between those two are sort of hostile and sort of aggressive. Then what Waters said two days ago no longer holds good. There is absolutely a scope for something bigger. Has India said anything about these allegations about the drones?

5:48Not so far, but India's foreign minister has just said if the country is attacked, there'll be a firm response. And it's important to remember already in this latest escalation, there are casualties. More than 30 people on the Pakistani side, including children, and more than 12 people killed in India. And that doesn't even include the 26 people who were killed by gunmen in late April, which triggered this whole escalation. That's Dia Hadid in Mumbai. Thank you, Dia. Thank you, Leila.

6:20The Trump administration wants to send migrants to Libya, possibly as soon as this week. Libya. U.S. officials have spent the last few months negotiating with various countries to see who is willing to take in people deported from the United States. NPR's immigration reporter Jimena Ostio joins us now to talk about all this. Good morning, Jimena. Good morning. So what do we know about this plan to send migrants to Libya? Yesterday, my colleague Tom Bowman confirmed administration officials are planning to use Libya as a destination for migrants removed from the U.S. Earlier this week, Rwanda's foreign minister also said it was in talks with Washington about the same issue.

6:56And of course, the U.S. has had similar deals already with Mexico and El Salvador. Now, the deportations to Libya would be carried out by the U.S. military, but it's not clear how many people or what nationalities would be sent under the deal. President Trump told reporters yesterday he didn't know about the plan and to ask the Department of Homeland Security. Homeland Security did not respond to NPR's requests to confirm the plans. Okay, so we've already seen actions in court to try and stop these military flights before they've even happened. What can you tell us about the lawsuit? A judge in Massachusetts already issued an injunction blocking the Homeland Security Department from removing migrants to these third countries.

7:37That means deporting people to countries they're not originally from. The administration has found workarounds, though. they've used other agencies, such as the Defense Department, to remove people from the U.S. Immigration lawyers filed an emergency motion yesterday asking that same judge to again block removals to Libya or any third country. They argued their clients, who are Laotian, Vietnamese, and Filipino, could be sent in a matter of hours. And last night, the judge issued another order. It clarifies DHS can't use a loophole and that any agencies, including the Pentagon can't deport people to these third countries unless those people get prior time to contest their removals.

8:17Okay, so there's a legal block in this court. I mean, Libya is not considered the safest country. Have other concerns been raised about this plan? First off, Libya has been wrestling with violence and armed conflict since the civil war that toppled Muammar Gaddafi almost 15 years ago. The country is still in turmoil. There is a military strongman who controls the eastern half of the country, and a UN-backed government controls the west. And I'd note both governments issued statements rejecting the plan to send migrants there. And Libya has a notorious human rights record. Yeah, I mean, this isn't the first deal, though, that the White House has made with other countries.

8:53We've already reported a lot on the U.S. paying El Salvador $6 million to house migrants removed from the U.S. in a mega prison there. What's the point of these agreements? One of the main goals is to send migrants further away to avoid people crossing back over U.S. borders. And that's according to Secretary of State Marco Rubio. But there are plenty of practical implications. About 1.4 million people have pending deportation orders. That's according to the Immigration and Customs Enforcement Agency. But there are many challenges to sending them back to their home countries. One is that their home countries may not agree to accept them or actually have limits on how many people or flights they will take from the United States.

9:37And this has created challenges for past administrations because it means that even if someone has a final removal order, they may not actually be removed. But Trump's goal is to increase the pace of deportations, as we've been reporting, and that does mean finding more places for people to go. So the administration is aiming to make these inroads with these kind of quote, third-party countries that can take in deportees. If Libya isn't under the table, others likely will be. NPR's Ximena Bustillo, thank you, Ximena. Thank you.

10:15If you're waiting for lower interest rates to take out a car loan, finance a business, or just make a big purchase on your credit card, you're going to have to wait a bit longer. Policymakers at the Federal Reserve voted to hold short-term interest rates steady for now. That's how powerful they are. They make news even when they do nothing, which is what they chose to do here while they wait to see how President Trump's trade war plays out in the U.S. economy. NPR's Scott Horsley has been watching the Fed's deliberations, and he joins us now. Hi, Scott. Good morning, Lila. Okay, so in its statement, the Fed pointed to growing uncertainty about the economic outlook.

10:48What does it mean by that? It's been just over a month since President Trump ordered worldwide tariffs, effectively dropping a giant rock into the oceans on which global trade flows. And we are still waiting to see where the resulting waves wash up. Federal Reserve Chairman Jerome Powell says if those tariffs last, they could have a profound effect on the economy. But, you know, the Trump administration has already backtracked some. Just this morning, the president is announcing a new trade deal with the UK. So Powell says it's not clear those tariffs are going to stick around. My gut tells me that uncertainty about the path of the economy is extremely elevated.

11:25The risks of higher unemployment and higher inflation have risen, but they haven't materialized yet. And that tells me the right thing to do is await further clarity. Fed policymakers voted unanimously yesterday to keep interest rates where they've been since the end of last year. They'll have another chance to adjust rates, though, in June and then again in July. What will Fed policymakers be watching for between now and then? They're watching for any sign of increased pressure on prices, which could rekindle inflation, or any weakening in the job market that could lead to higher unemployment.

12:00We know the trade war has taken a toll on consumer confidence. People are clearly worried about higher inflation and the prospect of widespread layoffs. But just last week, we learned that employers added 177 ,000 jobs in April. So Pal and his colleagues just don't feel a great sense of urgency right now to goose the economy by cutting rates. People are feeling stress and concern, but unemployment hasn't gone up. Job creation is fine. Wages are in good shape. The economy itself is still in solid shape. Now, one early warning sign we have seen is the drop in cargo traffic from China. Trump's triple-digit tariffs on Chinese goods have put a big dent in shipments across the Pacific Ocean.

12:39We could start to see some empty store shelves in a few weeks because of that. But as we learned during the pandemic, when there's a problem with supply chains, there's not a whole lot the central bank and its interest rate tools can do about that. Now, President Trump has repeatedly called on the Fed to lower interest rates. Is that having any effect? Not really. Trump was back on social media this morning criticizing the Fed for not lowering interest rates. The president highlighted the recent drop in oil prices and called Powell a fool for not moving more aggressively. This is nothing new for this president, who has frequently browbeat the Fed, but the central bank was set up to be insulated from that kind of political pressure.

13:19And it has a powerful ally in the stock market, which reacted very badly last month when Trump threatened to fire the Fed chairman. Trump has since backed off those threats. He will have a chance to replace Powell a year from now. But until then, the central bank has largely shrugged off, kibitzing from the White House. I'm PR Scott Horsley. Thank you, Scott. You're welcome. And that's Up First for Thursday, May 8th. I'm Leila Faldin. And I'm Steve Inskeep. Your next listen is Consider This from NPR News. Up First gives you three big stories of the day. Consider This dives deep on one. Listen now on the NPR app or wherever you get your podcasts.

13:56Today's episode of Up First was edited by Ryland Barton, Anna Yukonanov, Raphael Naum, Jenea Williams, and Alice Wolfley. It was produced by Katie Klein, Nia Dumas, and Christopher Thomas. we get engineering support from Stacey Abbott, and our technical director is Carly Strange. Join us again tomorrow.

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