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.
'My Son'
Director: Christian Carion
Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis
Rating: 2/5
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
RESULTS
5pm: Sheikh Mansour bin Zayed Al Nahyan Racing Festival Purebred Arabian Cup Conditions (PA) Dh 200,000 (Turf) 1,600m
Winner: Hameem, Adrie de Vries (jockey), Abdallah Al Hammadi (trainer)
5.30pm: Sheikha Fatima bint Mubarak Cup Conditions (PA) Dh 200,000 (T) 1,600m
Winner: Winked, Connor Beasley, Abdallah Al Hammadi
6pm: Sheikh Sultan bin Zayed Al Nahyan National Day Cup Listed (TB) Dh 380,000 (T) 1,600m
Winner: Boerhan, Ryan Curatolo, Nicholas Bachalard
6.30pm: Sheikh Sultan bin Zayed Al Nahyan National Day Group 3 (PA) Dh 500,000 (T) 1,600m
Winner: AF Alwajel, Tadhg O’Shea, Ernst Oertel
7pm: Sheikh Sultan bin Zayed Al Nahyan National Day Jewel Crown Group 1 (PA) Dh 5,000,000 (T) 2,200m
Winner: Messi, Pat Dobbs, Timo Keersmaekers
7.30pm: Sheikh Mansour bin Zayed Al Nahyan Racing Festival Handicap (PA) Dh 150,000 (T) 1,400m
Winner: Harrab, Ryan Curatolo, Jean de Roualle
8pm: Wathba Stallions Cup Handicap (PA) Dh 100,000 (T) 1,400m
Winner: AF Alareeq, Connor Beasley, Ahmed Al Mehairbi
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test India won by innings and 53 runs at Colombo
- 3rd Test August 12-16 at Pallekele
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Navdeep Suri, India's Ambassador to the UAE
There has been a longstanding need from the Indian community to have a religious premises where they can practise their beliefs. Currently there is a very, very small temple in Bur Dubai and the community has outgrown this. So this will be a major temple and open to all denominations and a place should reflect India’s diversity.
It fits so well into the UAE’s own commitment to tolerance and pluralism and coming in the year of tolerance gives it that extra dimension.
What we will see on April 20 is the foundation ceremony and we expect a pretty broad cross section of the Indian community to be present, both from the UAE and abroad. The Hindu group that is building the temple will have their holiest leader attending – and we expect very senior representation from the leadership of the UAE.
When the designs were taken to the leadership, there were two clear options. There was a New Jersey model with a rectangular structure with the temple recessed inside so it was not too visible from the outside and another was the Neasden temple in London with the spires in its classical shape. And they said: look we said we wanted a temple so it should look like a temple. So this should be a classical style temple in all its glory.
It is beautifully located - 30 minutes outside of Abu Dhabi and barely 45 minutes to Dubai so it serves the needs of both communities.
This is going to be the big temple where I expect people to come from across the country at major festivals and occasions.
It is hugely important – it will take a couple of years to complete given the scale. It is going to be remarkable and will contribute something not just to the landscape in terms of visual architecture but also to the ethos. Here will be a real representation of UAE’s pluralism.
Simran
Director Hansal Mehta
Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey
Three stars
UAE currency: the story behind the money in your pockets
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster with a decades-long career in TV. He has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others. Karam is also the founder of Takreem.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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UAE currency: the story behind the money in your pockets
Results
6.30pm: Al Maktoum Challenge Round-2 Group 1 (PA) US$75,000 (Dirt) 1,900m
Winner: Ziyadd, Richard Mullen (jockey), Jean de Roualle (trainer).
7.05pm: Al Rashidiya Group 2 (TB) $250,000 (Turf) 1,800m
Winner: Barney Roy, William Buick, Charlie Appleby.
7.40pm: Meydan Cup Listed Handicap (TB) $175,000 (T) 2,810m
Winner: Secret Advisor, Tadhg O’Shea, Charlie Appleby.
8.15pm: Handicap (TB) $175,000 (D) 1,600m
Winner: Plata O Plomo, Carlos Lopez, Susanne Berneklint.
8.50pm: Handicap (TB) $135,000 (T) 1,600m
Winner: Salute The Soldier, Adrie de Vries, Fawzi Nass.
9.25pm: Al Shindagha Sprint Group 3 (TB) $200,000 (D) 1,200m
Winner: Gladiator King, Mickael Barzalona, Satish Seemar.
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
From exhibitions to the battlefield
In 2016, the Shaded Dome was awarded with the 'De Vernufteling' people's choice award, an annual prize by the Dutch Association of Consulting Engineers and the Royal Netherlands Society of Engineers for the most innovative project by a Dutch engineering firm.
It was assigned by the Dutch Ministry of Defence to modify the Shaded Dome to make it suitable for ballistic protection. Royal HaskoningDHV, one of the companies which designed the dome, is an independent international engineering and project management consultancy, leading the way in sustainable development and innovation.
It is driving positive change through innovation and technology, helping use resources more efficiently.
It aims to minimise the impact on the environment by leading by example in its projects in sustainable development and innovation, to become part of the solution to a more sustainable society now and into the future.
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
The specs
Engine: Turbocharged four-cylinder 2.7-litre
Power: 325hp
Torque: 500Nm
Transmission: 10-speed automatic
Price: From Dh189,700
On sale: now
The biog
From: Upper Egypt
Age: 78
Family: a daughter in Egypt; a son in Dubai and his wife, Nabila
Favourite Abu Dhabi activity: walking near to Emirates Palace
Favourite building in Abu Dhabi: Emirates Palace
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