For reasons largely outside its control, the US Federal Reserve is now being widely blamed for fuelling financial market instability and risking derailment of the US economy.
This is quite a contrast from just a few month ago, when it was still being feted by many for its role as an active and effective represser of financial market volatility. It is probably only a matter of time until the European Central Bank finds itself in a similar, perhaps tougher, position. The reality is both central banks have entered a new, more uncertain phase that is likely to last for some time, requiring more skilful policy navigation and communication, and some operational changes.
Coming out of the 2008 global financial crisis, central banks went out of their way to boost asset prices as a means of supporting the economy. They suppressed volatility by driving down interest rates; buying huge amounts of debt securities and housing them securely on their balance sheets; and, when a bout of volatility occurred, being quick to reassure markets of their broad and consistent support.
This unprecedented phase of central banking had its natural limits.
The benefits of buying time for the economy to heal came with costs and unintended consequences. Accordingly, when the conditions to normalise policy arose, the Fed pivoted by stopping its asset-purchase programme, hiking interest rates nine times and slowly reducing its balance sheet. The ECB followed with a considerable lag. After tapering its asset-purchase programme during the past few months, it will halt it at the end of this year and may start raising rates during the summer.
But what started out as a relatively smooth and orderly process has become more problematic - especially for the Fed, which is being accused of fuelling financial volatility and risking the country’s economic well-being.
Stock markets are experiencing wild intraday swings, while falling prices have delivered one of the worse Decembers ever for equities. With that, the measure of household consumer sentiment reported last week came in below consensus forecasts, at the same time that consumer confidence expectations also tumbled.
Yet much of the volatility of recent weeks is due to factors outside the Fed’s control. They include: a slower global expansion as both Europe and China struggle to implement of pro-growth policies; other economic concerns, from the partial shutdown of the federal government to trade policy as markets wait to see which concessions China will offer the US to end the trade war between the two countries; asset prices that, for years, were decoupled from fundamentals amid ample and predictable liquidity; and the proliferation of passive investing, computer trading and exchange-traded funds, including some that promised liquidity in inherently less liquid asset classes, potentially amplifying the risk of contagion both on the way up and on the way down.
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It is only a matter of time until the spot light also shines on the ECB. Because its normalisation process is now focused on balance-sheet policy rather than the more visible interest-rate moves, it hasn’t yet attracted the same attention as the Fed. Yet this process faces many more questions on account of the slow growth in the euro zone, some weaknesses in the region's banking system, pockets of excessive indebtedness and political gridlock that limits needed structural and fiscal reforms.
Against that backdrop, the risk has risen that volatility could undermine the global economy, and that some investors may lose confidence in the orderly functioning of financial markets. Naturally, this is obscuring the benefits of a long-due transition to a less distorted financial regime that, otherwise, would have threatened much larger economic damage down the road.
There is no easy way out of this situation. Indeed, the spotlight will shine even more brightly on the Fed next year. This will become most apparent at the news conferences, now to be held after each Federal Open Market Committee meeting, where Chairman Jerome Powell is asked to opine on inherently tricky and uncertain policy decisions, options and outlooks.
Whichever way you look at it, central banks will be exposed to more criticism from politicians, market participants and analysts. Having said that, there are a few things they could do. For example, in the case of the Fed, consideration could be given to the following steps, including in the context of the review of communications practices that Powell has already launched: Conveying more consistently and credibly that policy makers are sensitive to the risk of spill-backs from a weakening global economy and market disruptions; signalling the possibility that the automatic pilot governing its balance-sheet reduction is subject to review; and phasing out the blue dot plot that shows policy makers' individual expectations for future rate increase in favour of communications that portray the range of possible outcomes. This might be more along the lines of what the Bank of England does with its quarterly inflation report.
These steps will not take the Fed out of the firing line. Yet they can play a role in lowering the risks of a policy mistake or market accident.
Bloomberg
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The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
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Winners
Best Men's Player of the Year: Kylian Mbappe (PSG)
Maradona Award for Best Goal Scorer of the Year: Robert Lewandowski (Bayern Munich)
TikTok Fans’ Player of the Year: Robert Lewandowski
Top Goal Scorer of All Time: Cristiano Ronaldo (Manchester United)
Best Women's Player of the Year: Alexia Putellas (Barcelona)
Best Men's Club of the Year: Chelsea
Best Women's Club of the Year: Barcelona
Best Defender of the Year: Leonardo Bonucci (Juventus/Italy)
Best Goalkeeper of the Year: Gianluigi Donnarumma (PSG/Italy)
Best Coach of the Year: Roberto Mancini (Italy)
Best National Team of the Year: Italy
Best Agent of the Year: Federico Pastorello
Best Sporting Director of the Year: Txiki Begiristain (Manchester City)
Player Career Award: Ronaldinho
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Sinopharm vaccine explained
The Sinopharm vaccine was created using techniques that have been around for decades.
“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.
"What is left is a skeleton of the virus so it looks like a virus, but it is not live."
This is then injected into the body.
"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.
"You have to be exposed more than one time to what we call the antigen."
The vaccine should offer protection for at least months, but no one knows how long beyond that.
Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.
“Since it is inactivated, it will not last forever," she said.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Zidane's managerial achievements
La Liga: 2016/17
Spanish Super Cup: 2017
Uefa Champions League: 2015/16, 2016/17, 2017/18
Uefa Super Cup: 2016, 2017
Fifa Club World Cup: 2016, 2017
Email sent to Uber team from chief executive Dara Khosrowshahi
From: Dara
To: Team@
Date: March 25, 2019 at 11:45pm PT
Subj: Accelerating in the Middle East
Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.
Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.
I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.
This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.
It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.
Uber on,
Dara
The%20Genius%20of%20Their%20Age
%3Cp%3EAuthor%3A%20S%20Frederick%20Starr%3Cbr%3EPublisher%3A%20Oxford%20University%20Press%3Cbr%3EPages%3A%20290%3Cbr%3EAvailable%3A%20January%2024%3C%2Fp%3E%0A
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
