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Israel, Hamas trade blame as bloodshed clouds Gaza peace bid

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2 months ago

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Israel launched airstrikes in the Gaza Strip and blamed Hamas for what it called a significant Palestinian ambush of its troops, even as trouble-shooters assembled in an effort to keep President Donald Trump’s peace plan on track.

Signaling Washington’s focus on preserving the ceasefire secured on Oct. 10, an Israeli official said Trump’s vice president, JD Vance, was expected to accompany White House mediators Steve Witkoff and Jared Kushner to the region this week.

The US embassy in Jerusalem had no immediate comment. 

Under Trump’s internationally backed plan, the truce is meant to lead to Hamas disarming and ceding what remains of its governance to a foreign-supervised alternative Palestinian administration. Hamas has balked at those conditions. 

The partial implementation to date has seen Israeli troops and tanks redeploy to a “yellow line” that still leaves more than half of the shattered enclave under their control. That’s enabled Palestinian civilians in the rest to begin picking up the pieces with a measure of safety, while Hamas returned living hostages to Israel as required by the deal. 

Hamas says at least 27 Palestinians have been killed by Israeli forces over the last week; Israeli officials said troops fired to prevent incursions across the yellow line, which is now being marked with colored stanchions as a clearer warning.

In Sunday’s incident, Palestinians fired anti-armor rockets and guns at Israeli troops operating in Rafah, a southern city within the yellow line, the army said, without providing details on casualties. A similar ambush attempt in the area was reported by the army on Friday, with only small-scale counter-fire following. 

This time, there were air strikes as far away as Gaza City, about 30 kilometers (19 miles) to the north. Israeli Prime Minister Benjamin Netanyahu’s office, accusing Hamas of violating the ceasefire, said he’d ordered that “strong action be taken against terrorist targets in the Gaza Strip.” Palestinian witnesses said at least five people were killed. Gaza residents inside areas designated a “dangerous combat zone” were ordered to evacuate westward. 

Hamas said it remained committed to the truce and that it had lost contact with, and therefore couldn’t be held responsible for, any Palestinian fighters operating in Rafah.

Israel “continues to violate the agreement and fabricate flimsy pretexts to justify its crimes,” Hamas official Ezzat Al-Risheq said on the group’s Telegram feed.

Though the last living Gaza hostages are now free, 16 who were killed during the Oct. 7, 2023 Hamas raid which triggered the war, or who’ve died in captivity in the following two years, remain unaccounted for. Hamas says it needs special equipment to locate all remains with the Gaza ruins. On Sunday, however, it announced the discovery of another hostage body.

Israel, accusing the Islamist faction of prevaricating, on Saturday said it would indefinitely postpone reopening the Rafah terminal on the Gaza-Egypt border for humanitarian supplies. The movement of aid has increased through Israel’s border, but on a scale that Palestinians say falls short of the needs of a destitute populace.

“We haven’t concluded this war. If Hamas doesn’t lay down its arms after all hostages are recovered, we shall go back to active combat,” Miri Regev, the Israeli transport minister and a member of Netanyahu’s security cabinet, told Israel’s Army Radio.

Trump broke with US convention by directly engaging Hamas despite the State Department’s designation of the group as terrorists, a move that helped seal the peace deal. Yet after declaring the two-year war over, his tone has darkened in recent days. 

Trump condemned a lethal internal crackdown by Hamas, warning that if it continues “we will have no choice but to go in and kill them.” Hamas defended its actions as a law-and-order drive in areas vacated by Israel. 

Read more: US Warns of ‘Imminent’ Attack by Hamas Against Palestinians 

Trump’s deal won the support of Arab, Muslim and Western powers, several of which have voiced interest in contributing to a post-war stabilization force in Gaza.

A multi-national taskforce is now assembling in Israel, with military delegates from least two other countries joining the US lead, according to an official who requested anonymity. Germany’s defense ministry said on Saturday it had sent three soldiers to the Civil Military Coordination Centre in southern Israel. 

A poll on Israel’s Channel 12 TV on Friday found that 36% of Israelis believe their country won the war while 9% saw Hamas as victorious, while 48% said neither side did. 

Netanyahu, who said Saturday he plans to run for election again in 2026, may not be in a rush to resume a conflict which put strains on the conscript military and whose toll on Palestinian civilians plunged Israel into global isolation. 

Two years of war caused more than 67,000 deaths in Gaza, according to the Hamas-run health ministry, which doesn’t distinguish between combatants and civilians. Israel lost 1,200 people in the Oct. 7 attacks, and more than 250 troops in Gaza fighting.



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Rivian CEO says it’s a misconception EVs are politicized, with a 50-50 party split among R1 buyers

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December 10, 2025

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If Rivian’s sales are any indication, owning an electric vehicle isn’t such a partisan issue, despite President Donald Trump’s rollbacks of mandates, incentives, and targets for EVs.

At the Fortune Brainstorm AI conference in San Francisco on Tuesday, Rivian CEO RJ Scaringe said it’s a misconception that electrification is politicized, explaining that most customers buy a product based on how it fits their needs, not their ideology. The questions car buyers ask, he said, are the same whether they’re purchasing one with an internal-combustion engine or a battery: “Is it exciting? Are you attracted to the product? Does it draw you in? Does the brand positioning resonate with you? Do the features answer needs that you have?”

Buyers of Rivian’s R1 electric SUV are split roughly 50-50 between Republicans and Democrats, Scaringe told Fortune’s Andrew Nusca. “I think that’s extraordinarily powerful news for us to recognize—that this isn’t just left-leaning buyers,” he added. “These are people that are saying, ‘I like the idea of this product, I’m excited about it.’ And this is thousands and thousands of customers. This is statistically relevant information.”

Buying an EV was once an indication of left-leaning politics, but the politics got scrambled after Tesla CEO Elon Musk became the top Republican donor and a close adviser to Trump. That drew some new customers to Tesla, and turned off a lot of progressive EV buyers, with many existing owners putting bumper stickers on their Teslas explaining that they bought their cars before Musk’s hard-right turn. Trump and Musk later had a stunning public feud, in part over the administration’s elimination of EV and solar tax credits.

But Scaringe said he started Rivian with a long-term view, independent of any policy framework or political trends. He also insisted that if Americans have more EV choices, sales would follow. Right now, Tesla dominates a key corner of the market, namely EVs in the $50,000 price range. Rivian’s forthcoming R2 mid-size SUV will represent a new choice in that market, with a starting price of $45,000 versus the R1’s $70,000.

Ten years from now, Scaringe said he hopes—and believes—that EV adoption in the U.S. will be meaningfully higher than it is today across the board, explaining that the main constraint isn’t on the demand side. Instead, it’s on the supply side, which suffers from “a shocking lack of choice,” especially compared to Europe and China, he added. EV options in the U.S. are limited by the fact that Chinese brands are shut out of the market.

More choices for U.S. EV buyers would presumably create more competition for Rivian—and indeed, the flood of low-priced Chinese EVs in other auto markets has created a backlash, with countries such as Canada imposing steep tariffs on them. But Scaringe appears to view more competition as positive for the market overall.

“I do think that the existence of choice will help drive more penetration, and it actually creates a unique opportunity in the United States,” he said.



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Powell warns of a ‘very unusual’ economy as inflation remains high amid a weakening job market

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December 10, 2025

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Federal Reserve Chair Jerome Powell on Wednesday described the U.S. economy as “very unusual,” saying policymakers are navigating a rare combination of tariff-driven goods inflation and a labor market that may already be weaker than official data suggests.

The Fed cut interest rates for the third consecutive meeting, a quarter-point reduction Powell framed not as a confident pivot toward easier policy, but as a defensive move meant to keep the labor market from slipping further. He repeatedly emphasized risks to employment have risen “in recent months,” and noted that behind the headline numbers, job creation may already be negative.

Powell made the striking admission the Fed believes the official payroll figures—which have slowed sharply since the summer—are overstating job growth by roughly 60,000 per month. 

“Forty thousand jobs could be negative 20,” he said, adding this dynamic is not well understood by the public because unemployment claims remain historically low—something both economists Mark Zandi and Claudia Sahm recently toldFortune could be giving people a false sense of security about the job market.

“I think a world where job creation is negative… we need to watch that very carefully,” Powell said. 

It is this weakening backdrop Powell said makes the current moment “very unusual”: Inflation remains elevated, but most of the remaining overshoot comes from goods categories directly affected by tariffs, as opposed to domestic economic overheating, which he said the Fed has worked hard to cool since its 2022 highs; inflation excluding tariff-affected goods is “in the low [two percent],” he said. Services inflation is cooling, wage pressures are easing, and neither the labor market nor business surveys suggest a “Phillips-curve” kind of inflation threat, Powell said, referring to the inverse relationship between inflation and unemployment. 

Instead, Powell said, the bulk of the problem is a “one-time price increase” pushing up goods categories as import levies work their way through supply chains. Goods inflation, he noted, should peak around the first quarter of 2026, assuming no additional tariff rounds.

Those crosscurrents have fractured the Fed. Three officials formally dissented from the rate cut on Wednesday, and several others offered what Powell described as “soft dissents,” when an official’s personal projection falls out of what they ultimately voted for. There were six such “soft dissents” this time, during one of the deepest divides inside the FOMC in years, driven by disagreement over how to weigh the risks of lingering inflation against the possibility that job growth is weaker—and much more fragile—than reported.

Powell stressed that policymakers cannot simply choose one mandate to prioritize. 

“There is no risk-free path,” he said, a refrain he’s repeated for months. “When both sides of the mandate are threatened, you should be kind of neutral.” 

He characterized the current stance as being at the “high end” of neutral, allowing the Fed to “wait and see” how the data evolve.



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Top economist Diane Swonk: Jerome Powell risks losing the Fed’s credibility on a gamble about AI and immigration

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December 10, 2025

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Federal Reserve Chair Jerome Powell warned Wednesday afternoon that the U.S. labor market may be significantly weaker than the official data suggest. But according to KPMG chief economist Diane Swonk, the Fed may be drawing the wrong conclusion—and in doing so, risks undermining its hard-won credibility on fighting inflation.

In a new analysis shared with Fortune, Swonk argues that Powell is treating the slowdown in hiring as a sign of weakening demand that must be offset with lower interest rates. But if that weakness is being driven instead by structural forces—specifically, AI adoption and sharp declines in immigration—then cutting rates won’t fix the underlying problem and could worsen inflation.

“Powell risks the Fed’s inflation-fighting credibility if the weakness in employment is due more to AI and curbs in immigration than weak demand,” Swonk wrote.

That warning comes after one of the most contentious Federal Open Market Committee meetings in years. The Fed cut rates by a quarter point for the third meeting in a row, taking the federal funds rate down to 3.5%–3.75%, but the vote fractured the committee. Swonk notes it was the first time since 2019 that there were three dissents, and they came “in opposite directions.”

Governor Stephen Miran — currently on leave from the White House Council of Economic Advisers — voted for a half-point cut, while Kansas City Fed President Jeff Schmid and Chicago Fed President Austan Goolsbee voted to hold rates steady.

Swonk highlights that the Fed’s statement resurrected language meant to indicate a pause: “In considering the extent and timing of additional adjustments… the Committee will carefully assess incoming data, the evolving outlook and the balance of risks.” Powell reinforced that stance, saying “We are well positioned to see how the economy evolves” and emphasizing that policymakers would need to “be a bit skeptical” of data distorted by the government shutdown.

But the bigger issue, Swonk argues, is that Powell kept pointing to imminent downward revisions to employment, revisions she warns may not mean what the Fed thinks they do.

If job growth is negative because automation is replacing workers or because the labor force is shrinking due to immigration policy, then monetary policy can’t solve the problem. That’s because rate cuts can stimulate demand, but they cannot create workers or reverse automation decisions already made by firms. 

“The challenge is if that weakness is due to AI and curbs on immigration, then rate cuts will not do much to shore up the labor market. More could show up in inflation,” she wrote.

Powell, during the conference, acknowledged that AI may be “part of the story” behind the cooling labor market, citing major employers like Amazon that have linked hiring freezes and job cuts to automation. But he stressed that it’s “not a big part of the story yet,” and said it’s too early to know whether this wave of technological change will ultimately destroy more jobs than it creates.

He also noted that labor supply has “come down quite sharply” due to a drop in immigration and participation.

A misread could become especially dangerous given the fiscal backdrop. Swonk notes that “expansions to tax cuts last year will show up as a record high tax refunds in early 2026,” warning that the windfall could “further entrench inflation much like we saw in the wake of the pandemic.” 

At the same time, federal debt is projected to surpass GDP for the first time since World War II, marking a level of issuance that is “a lot of debt for bond markets to absorb.”

Swonk also flags mounting risks to credibility inside the Fed itself.

Six participants wanted to hold rates steady, and the market openly dismissed Powell’s attempt at a hawkish spin: investors “priced in more cuts after the meeting,” she notes. Powell now appears to be one of the more dovish voices on the committee, raising questions about the direction of policy if the administration installs a new chair aligned with Miran’s more aggressive easing stance.

Swonk expects the Fed to pause early next year, but warns that if inflation fails to cool as expected, “the bond market could grow more skittish about rate cuts.”



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