decision time at the fed, we take a look at the us economy and whether there's need for a change in policy. and... we'll have the latest on china's long labour day break and the revival of chinese tourism. hello and welcome to asia business report. i'm karishma vaswani. our top story today: will the us federal reserve raise rates one more time? or will it take a break? as the fed meets to decide whether to raise interest rates again, rising prices aren't their only worry. the turbulence at first republic this week has revived worries about credit conditions. major us stock indexes fell

more than 1% each on tuesday. shares in several regional banks in the us have dropped sharply, as investors fear the banking crisis is not over. another area of concern is the labour market, which while still strong is showing signs of cooling. so what will america's central bank do and say? the bbc�*s michelle fleury reports from westchester, new york. losing momentum after nine rate hikes in the past year. the federal reserve�*s efforts to cool the us economy are having an effect. this is a chain that you'll see on like roller shades and vertical blinds. something bill, who runs a family owned manufacturing business in westchester, new york, is seeing first—hand. right now, we're expecting some softness in the marketplace for probably six months or so. we're seeing a lot of softness in the marketplace as far as demand, the commitment in terms of like long term blanket orders with customers. we're not seeing that either right now. so we're having some challenges with that. american businesses are pulling

back on spending and hiring. the housing market is slowing both areas sensitive to changes in interest rates. and more pain may be coming. america's central bank was tipped to raise rates again this week in what was expected to be its last hike for a while. but after the collapse this week of first republic bank, some are speculating it may already be done with the fed having to manage inflation growth and now financial stability concerns. slowing the economy too much could lead to a recession. and with inflation moderating and problems with us regional banks still unresolved, america's central bank may feel that after this week, it's time to hit pause to see if after nine rate hikes, they've done enough. one thing they will be watching the cost of food. while products like eggs have come down in price, they remain historically high. one us economist says the inflation fight has yet to be won.

i don't think the inflation battle is over, but we are in a situation in which we're seeing gradual disinflation. so inflation is slowing and we're also in an environment where interest rates are high and elevated and therefore constraining business activity, which should lead to further disinflation in the coming months. so darren mentioned the r word. fear of a recession is very much present in the economy today. and the political risks are growing, too. president biden and republicans in congress are on a collision course over raising the debt ceiling, the limit on how much the us can borrow. failure to do so would not only inflict economic pain here, but also on the rest of the globe. michelle fleury, bbc news, westchester, new york. staying with central bank decisions. the reserve bank of australia raised its key rate on tuesday. the move stunned the markets and analysts who were expecting an extended pause. australia's central bank said

inflation was way too high and warned that there could be further rate hikes. the bank's governor acknowledged that inflation is now past its peak, but it will take awhile for it to fall back into the bank's target range of 2% to 3%. indian low—cost carrier go first filed for bankruptcy with the country's national company law tribunal owing to severe cash flow crunch. the airline has blamed its us engine supplier pratt & whitney for not supplying working engines, which resulted in the airline's downfall. it has also cancelled flights for the next three days. go first becomes the second airline in the country to file for bankruptcy afterjet airways filed one in 2019. india business correspondent archana shukla filed this report. from planning an ipo early last year to filing bankruptcy. now go first story has really changed. the airline had been cash strapped for much of last year as nearly half of its aircrafts are grounded, 25 out of 61 airbus aircrafts reason faulty engines. now, these aircrafts

are powered by engines exclusively supplied by pratt and whitney, and most of those have been faulty. company says the engine supplier refused to comply with an order to release engines or even supply serviceable spares. with further engine failure expected in the next three to four months, airline operations will be made unviable. it has, in fact, also filed a complaint in a us court against the engine maker. now, with almost half its fleet unavailable, it has meant frequent flight cancellations. it has meant a drop in share in the indian aviation market, which has seen fierce competition and new players. airline says it has lost over $1.3 billion. some of its planes have been repossessed by lessors on nonpayment of dues. it may be facing fuel payment issues as well since it was moved to cash and carry by oil companies. local reports say the airline has cancelled most of its flights for the next three days, starting third of me. days, starting third of may. the airline is owned by a prominent corporate family, the wadia group

here in india. and in fact, last year they were looking and talking to possible investors to sell, stake and raise funds owing to the crunch. but no luck so far. it's also important to note because go first is not the only airline affected by faulty pratt and whitney engines and the supply glitch. another low cost carrier, indigo, is also stuck between the two of them. 60 aircrafts are grounded for lack of spare parts. and in fact, that forced the country's aviation regulator to take note last month and seek solutions as well. pratt & whitney is committed to the success of our airline customers and we continue to prioritize and i should use for our all our customers. we are compliant with the arbitration ruling related to go first but as this is a matter of

litigation we will not comment further. that statement coming in the last few minutes from pratt and whitney. in china, it's the last day of an extended time off. a one day labour day holiday observed in many countries is actually a five—day break in china. it's the first ultra long weekend since the spring festival in january and authorities had forecasted increased travel across different modes of transportation. raymond cheng from standard chartered. we have seen very strong domestic tourist traffic across the board and whether you look at in terms of the number of trains that have been operating, single day rail tickets as well as domestic tourist sites. consumption growth remains

unclear because there've been anecdotes of some consumers trading down during the season and when we look at the movie box office as another example, we also see slightly weaker than forecast activity as well. so, we continue to keep a close eye but all in all it very strong traffic numbers and domestic travel is much stronger than international travel. probably because of aircraft and crew availability remaining limited at this point. how concerned are you are about unemployment rates? particularly amongst the youth. how is that connected with those consumer figures you were talking about? great question. unemployment rate has been quite high, as high as around 20% for the younger demographics. i think this will certainly put a blip on consumption growth for the country. that is now heavily reliant

on consumption to drive gdp growth this year. for the time being, we continue to see the younger generation spending but as opposed to the trend of spending up, there are increasing signs of trading down by our young consumers. so, i think this certainly would have some negative implications on long—term consumption outlook for china and chinese authorities are paying close attention during a meeting last friday, we heard news of the authorities trying to boost employment of the younger demographics by their own advices. so hopefully that development with improve our overall consumption outlook and for the country. briefly, what is your outlook for the chinese economy in terms of growth this year?

we are cautiously optimistic on the countries gdp outlook. we do think that there is a chance for the country to exceed the official gdp growth target of 5%,

hello, i'm qasa alom, from the bbc sport centre. coming up on this programme... the gunners fire themselves back to the top of the premier league table with a 3—1 win over chelsea. fifa president gianni infantino threatens a women's world cup �*broadcast blackout�* unless countries are prepared to bid more money. and australia's star batsmen steve smith says he's in england to help his county sussex not prepare for the ashes.