The US economy seems poised for a continued slowdown in inflation that will allow the Federal Reserve to cut its benchmark interest rate and “over time” reach a level that is no longer holding back activity, Fed chairman Jerome Powell said on Monday in remarks that showed no obvious lean towards a faster or slower pace of reductions in borrowing costs.
“Disinflation has been broad-based, and recent data indicate further progress towards a sustained return to two per cent,” the Fed's targeted inflation level, Mr Powell said in remarks to a National Association for Business Economics conference in Nashville, Tennessee.
“If the economy evolves broadly as expected, policy will move over time towards a more neutral stance,” Mr Powell said. “But we are not on any preset course. The risks are two-sided, and we will continue to make our decisions meeting by meeting.”
In response to a question following his formal remarks, Mr Powell said in terms of the outlook for rate cuts he saw “a process that will play out over time”, adding “this is not a committee that feels like it's in a hurry to cut rates quickly”.
The US central bank's policy-setting Federal Open Market Committee cut rates by half a percentage point at its September 17-18 meeting, lowering the range of its policy rate from a 20-year high of 5.25 per cent to 5.50 per cent, which it had maintained for 14 months, to the current 4.75 per cent to 5.00 per cent range.
Economic projections released at that meeting showed the median policymaker expectation was for the rate to decline further to the 4.25 per cent to 4.50 per cent range by the end of the year, to the 3.25 per cent to 3.50 per cent range by the end of 2025, and for policy easing to end in 2026 with the rate around the longer-run estimated “neutral” level of 2.9 per cent.
“If the economy performs as expected, that would mean two more cuts this year, a total of 50 [basis points] more,” Mr Powell said. “We will do what it takes in terms of the speed with which we move.”
Investors have been divided over whether the Fed will slip into a series of quarter-percentage-point cuts now or perhaps be prompted to make another large cut if the job market weakens or inflation slows more than expected.
Stocks eased slightly and yields on Treasuries rose after Mr Powell's remarks. Rate futures traders leaned into bets the Fed will deliver a quarter-percentage-point rate cut rather than a second straight half-percentage-point cut in November.
Mr Powell's reference to “two-sided” risks, however, points to an open debate as data accumulate, with the release on Friday of the US employment report for September being the first of two major labour market reports the Fed will receive before its November 6-7 meeting. The most recent inflation data showed a headline rate of just 2.2 per cent, near the Fed's target, while a “core” measure stripped of food and energy costs has been stalled around 2.6 per cent to 2.7 per cent for four months.
Mr Powell, however, said he felt that “broader economic conditions … set the table for further disinflation”. Goods prices have been declining, while the once-sticky aspects of the service industry saw inflation now “close to its pre-pandemic pace”, he said.
Progress on housing inflation has been “sluggish”, the Fed chief said, but “the growth rate in rents charged to new tenants remains low. As long as that remains the case, housing services inflation will continue to decline”.
The job market remains “solid”, he said, with a 4.2 per cent unemployment rate still a low level and around that which Fed officials consider sustainable in the long run with inflation at the central bank's target.
“Overall, the economy is in solid shape; we intend to use our tools to keep it there,” Mr Powell said, adding that the Fed had made “a good deal of progress” in lowering inflation without a sharp rise in joblessness.
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Contracted list
Ashton Agar, Alex Carey, Pat Cummins, Aaron Finch, Peter Handscomb, Josh Hazlewood, Travis Head, Usman Khawaja, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Mitchell Marsh, Tim Paine, Matt Renshaw, Jhye Richardson, Kane Richardson, Billy Stanlake, Mitchell Starc, Marcus Stoinis, Andrew Tye.
Brief scoreline:
Wolves 3
Neves 28', Doherty 37', Jota 45' 2
Arsenal 1
Papastathopoulos 80'
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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Kat Wightman's tips on how to create zones in large spaces
- Area carpets or rugs are the easiest way to segregate spaces while also unifying them.
- Lighting can help define areas. Try pendant lighting over dining tables, and side and floor lamps in living areas.
- Keep the colour palette the same in a room, but combine different tones and textures in different zone. A common accent colour dotted throughout the space brings it together.
- Don’t be afraid to use furniture to break up the space. For example, if you have a sofa placed in the middle of the room, a console unit behind it will give good punctuation.
- Use a considered collection of prints and artworks that work together to form a cohesive journey.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Springtime in a Broken Mirror,
Mario Benedetti, Penguin Modern Classics
RESULT
Huddersfield Town 2 Manchester United 1
Huddersfield: Mooy (28'), Depoitre (33')
Manchester United: Rashford (78')
Man of the Match: Aaron Mooy (Huddersfield Town)
THE BIO
Favourite author - Paulo Coelho
Favourite holiday destination - Cuba
New York Times or Jordan Times? NYT is a school and JT was my practice field
Role model - My Grandfather
Dream interviewee - Che Guevara
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
How to get exposure to gold
Although you can buy gold easily on the Dubai markets, the problem with buying physical bars, coins or jewellery is that you then have storage, security and insurance issues.
A far easier option is to invest in a low-cost exchange traded fund (ETF) that invests in the precious metal instead, for example, ETFS Physical Gold (PHAU) and iShares Physical Gold (SGLN) both track physical gold. The VanEck Vectors Gold Miners ETF invests directly in mining companies.
Alternatively, BlackRock Gold & General seeks to achieve long-term capital growth primarily through an actively managed portfolio of gold mining, commodity and precious-metal related shares. Its largest portfolio holdings include gold miners Newcrest Mining, Barrick Gold Corp, Agnico Eagle Mines and the NewMont Goldcorp.
Brave investors could take on the added risk of buying individual gold mining stocks, many of which have performed wonderfully well lately.
London-listed Centamin is up more than 70 per cent in just three months, although in a sign of its volatility, it is down 5 per cent on two years ago. Trans-Siberian Gold, listed on London's alternative investment market (AIM) for small stocks, has seen its share price almost quadruple from 34p to 124p over the same period, but do not assume this kind of runaway growth can continue for long
However, buying individual equities like these is highly risky, as their share prices can crash just as quickly, which isn't what what you want from a supposedly safe haven.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh132,000 (Countryman)
THE DETAILS
Director: Milan Jhaveri
Producer: Emmay Entertainment and T-Series
Cast: John Abraham, Manoj Bajpayee
Rating: 2/5
Brief scores:
Juventus 3
Dybala 6', Bonucci 17', Ronaldo 63'
Frosinone 0
