US Federal Reserve Chairman Jerome Powell on Friday signalled it would be appropriate to begin tapering the Fed's bond purchases by the end of the year if the economy shows further progress, but stopped short of providing an exact timeframe.
Mr Powell, speaking virtually at the Jackson Hole conference, said inflation met its test of “substantial further progress” towards the Fed's goal of 2 per cent annual inflation over time, which was necessary to begin the tapering process.
He stressed that it does not signal any plan to start raising the Fed’s benchmark short-term rate, which it has kept near zero since the start of the pandemic.
Mr Powell had not been expected to make waves in his remarks at the two-day Fed symposium, where investors were keen to see how the Fed will approach US interest rates amid the coronavirus pandemic, now exacerbated by the Delta variant.
Before the conference, the Fed had already indicated it may begin tapering before the end of the year.
The Fed has been pouring $120 billion monthly through its bond-purchasing programme since the onset of the pandemic, helping keep long-term policy rates low.
Some market-watchers expected the conference would be an opportunity for Mr Powell to hint about tapering this practice amid rising commercial prices and signs of inflation.
New GDP figures issued on Thursday showed the US economy grew slightly faster than had been estimated, at 6.6 per cent.
Jobless claims rose on Thursday for the first time in a month, climbing to 353,000 following a pandemic low of 349,000 a week earlier. Despite this increase, economists expect unemployment claims to continue declining.
“We expect jobless claims to remain on a downward path as the labour market continues to recover, but progress will be more fitful as claims get closer to pre-pandemic levels,” economists Nancy Vanden Houten and Gregory Daco of Oxford Economics wrote in a report.
The nation's unemployment rating fell to 5.4 per cent in July, with 943,000 jobs created.
But the highly transmissible Delta variant and a resurgence of Covid-19 cases have clouded the economic outlook — also forcing the conference, typically held in Jackson Hole, Wyoming, to go virtual.
Mr Powell addressed the rise of the Delta variant on Friday.
“While the Delta variant presents a near-term risk, the prospects are good for continued progress towards maximum employment,” he said.
Dallas Federal Reserve President Robert Kaplan, one of the US central bank's biggest supporters of reducing support for the US economy, acknowledged the variant's effect on economic growth could force him to adjust his views.
“US consumers bought fewer goods in July than they did in June while consumer sentiment in August fell to its lowest level since the start of the pandemic last year,” said Khatija Haque, the chief economist and head of research at Emirates NBD.
Calling off the tapering may not be the base case scenario, suggests Ipek Ozkardeskaya, a senior analyst for Swissquote. Instead, the base case scenario would be for Mr Powell to cautiously stick to the plan.
By sticking to its tapering plan, the Fed could trigger a profit across the major US indices in the coming sessions.
Russia's Muslim Heartlands
Dominic Rubin, Oxford
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
UAE currency: the story behind the money in your pockets
Simran
Director Hansal Mehta
Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey
Three stars
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
The nine articles of the 50-Year Charter
1. Dubai silk road
2. A geo-economic map for Dubai
3. First virtual commercial city
4. A central education file for every citizen
5. A doctor to every citizen
6. Free economic and creative zones in universities
7. Self-sufficiency in Dubai homes
8. Co-operative companies in various sectors
9: Annual growth in philanthropy
Zayed Sustainability Prize
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UAE currency: the story behind the money in your pockets
More coverage from the Future Forum
JAPAN SQUAD
Goalkeepers: Masaaki Higashiguchi, Shuichi Gonda, Daniel Schmidt
Defenders: Yuto Nagatomo, Tomoaki Makino, Maya Yoshida, Sho Sasaki, Hiroki Sakai, Sei Muroya, Genta Miura, Takehiro Tomiyasu
Midfielders: Toshihiro Aoyama, Genki Haraguchi, Gaku Shibasaki, Wataru Endo, Junya Ito, Shoya Nakajima, Takumi Minamino, Hidemasa Morita, Ritsu Doan
Forwards: Yuya Osako, Takuma Asano, Koya Kitagawa
KILLING OF QASSEM SULEIMANI
KILLING OF QASSEM SULEIMANI
UAE currency: the story behind the money in your pockets
Mohammed bin Zayed Majlis
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Essentials
The flights
Emirates, Etihad and Malaysia Airlines all fly direct from the UAE to Kuala Lumpur and on to Penang from about Dh2,300 return, including taxes.
Where to stay
In Kuala Lumpur, Element is a recently opened, futuristic hotel high up in a Norman Foster-designed skyscraper. Rooms cost from Dh400 per night, including taxes. Hotel Stripes, also in KL, is a great value design hotel, with an infinity rooftop pool. Rooms cost from Dh310, including taxes.
In Penang, Ren i Tang is a boutique b&b in what was once an ancient Chinese Medicine Hall in the centre of Little India. Rooms cost from Dh220, including taxes.
23 Love Lane in Penang is a luxury boutique heritage hotel in a converted mansion, with private tropical gardens. Rooms cost from Dh400, including taxes.
In Langkawi, Temple Tree is a unique architectural villa hotel consisting of antique houses from all across Malaysia. Rooms cost from Dh350, including taxes.
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
More from Neighbourhood Watch:
The five pillars of Islam
The five pillars of Islam
Profile of Bitex UAE
Date of launch: November 2018
Founder: Monark Modi
Based: Business Bay, Dubai
Sector: Financial services
Size: Eight employees
Investors: Self-funded to date with $1m of personal savings
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
Points about the fast fashion industry Celine Hajjar wants everyone to know
- Fast fashion is responsible for up to 10 per cent of global carbon emissions
- Fast fashion is responsible for 24 per cent of the world's insecticides
- Synthetic fibres that make up the average garment can take hundreds of years to biodegrade
- Fast fashion labour workers make 80 per cent less than the required salary to live
- 27 million fast fashion workers worldwide suffer from work-related illnesses and diseases
- Hundreds of thousands of fast fashion labourers work without rights or protection and 80 per cent of them are women
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
More on Quran memorisation:
Mohammed bin Zayed Majlis
