St Louis Federal Reserve Bank president James Bullard says volatility in markets is to be expected when interest rates rise. Reuters
St Louis Federal Reserve Bank president James Bullard says volatility in markets is to be expected when interest rates rise. Reuters
St Louis Federal Reserve Bank president James Bullard says volatility in markets is to be expected when interest rates rise. Reuters
St Louis Federal Reserve Bank president James Bullard says volatility in markets is to be expected when interest rates rise. Reuters

US Fed's Bullard content with big rate rises now and a wait-and-see stance in 2023


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A “hotter-than-expected” September inflation report does not necessarily mean the Federal Reserve needs to raise interest rates higher than officials projected at their most recent policy meeting, St Louis Fed president James Bullard said on Friday, although it does warrant continued “front-loading” through larger rises of three-quarters of a percentage point.

Mr Bullard said US Consumer Price Index data for September, which was released on Thursday, showed inflation had become “pernicious” and difficult to arrest, and therefore “it makes sense that we're still moving quickly”.

After delivering a fourth 75-basis-point increase at its policy meeting last month, Mr Bullard said “if it was today, I'd go ahead with” a rise of the same magnitude in December, although he added it was “too early to prejudge” what to do at that final meeting of the year.

If the Fed follows through with two more 75-basis-point rises this year, its policy rate would end 2022 in a range of 4.50 per cent to 4.75 per cent.

In what were tempered remarks for one of the Fed's most hawkish voices recently, Mr Bullard said that at that point he would let further increases rest on incoming data.

“I do think 2023 should be a data-dependent sort of year. It's two-sided risk. It is very possible that the data would come in a way that forces the [Federal Open Market] Committee higher on the policy rate,” Mr Bullard said a day after the US government reported that consumer price inflation remained above 8 per cent last month.

“But it's also possible that you get a good disinflationary dynamic going, and in that situation the committee could keep the policy rate and hold it steady.”

The possibility of a fifth larger-than-usual increase in December is “a little more front-loading than what I've said in the past”, he added.

But the trajectory mapped out by Mr Bullard would still leave the target policy rate at the median level that Fed officials projected last month they would need to reach — evidence of a broad consensus at the central bank around at least a temporary stopping point after a year in which they have ratcheted rate expectations steadily higher.

Even if some of Mr Bullard's colleagues want to reach that point in smaller steps and not until early next year, he said he regards faster increases as justified because the US labour market remains strong, and “there's just not much indication that we're getting the disinflation that we're looking for”.

Although some investors and economists expect the Fed will need to lift its policy rate even further, to 5 per cent or higher, Mr Bullard said: “I wouldn't predict that now … If that happens it will be because inflation doesn't come down the way we're hoping in the first half of 2023 and we continue to get hot inflation reports”.

The level he has pencilled in for the end of the year is adequate, he believes, to lower the Fed's closely-watched core personal consumption expenditures inflation index to below 3 per cent next year, a long way back to the central bank's 2 per cent target.

Mr Bullard said that despite the sense of turbulence in financial markets, there was “still a fair amount of potential for a soft landing”, with the US likely to avoid a recession and companies reluctant to lay off workers who have been hard to hire during the post-pandemic economic reopening.

I do think 2023 should be a data-dependent sort of year. It's two-sided risk. It is very possible that the data would come in a way that forces the [Federal Open Market] Committee higher on the policy rate
James Bullard,
president of the St Louis Fed

Warnings about recession risk may be distorted in part by inflation itself, Mr Bullard said, with short-term bond yields driven higher than longer-term ones not for lack of faith in the economy, an “inversion” of the yield curve that shows investors betting on a recession, but because of the premium charged for the inflation taking place now.

Volatility in markets is to be expected when rates rise, he said, but may settle after a period of adjustment.

“It's the transition that throws everybody for a loop,” Mr Bullard said. But after that, the economy “could grow just as fast at the higher interest rates”, he said.

Asked about the sense that overseas events, such as the tension between the Bank of England and the current British government, may risk broader financial problems, Mr Bullard said that his regional bank's index of financial stress showed it to be low.

Compared to the sorts of serious market seizures seen during the financial crisis in 2008 or the start of the coronavirus pandemic in early 2020, “I don't think we're in a situation where global markets are facing a lot of stress of that type”.

The specs

Engine: 1.5-litre turbo

Power: 181hp

Torque: 230Nm

Transmission: 6-speed automatic

Starting price: Dh79,000

On sale: Now

THE CLOWN OF GAZA

Director: Abdulrahman Sabbah 

Starring: Alaa Meqdad

Rating: 4/5

Company profile

Company: Verity

Date started: May 2021

Founders: Kamal Al-Samarrai, Dina Shoman and Omar Al Sharif

Based: Dubai

Sector: FinTech

Size: four team members

Stage: Intially bootstrapped but recently closed its first pre-seed round of $800,000

Investors: Wamda, VentureSouq, Beyond Capital and regional angel investors

Specs

Engine: Dual-motor all-wheel-drive electric

Range: Up to 610km

Power: 905hp

Torque: 985Nm

Price: From Dh439,000

Available: Now

While you're here
Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

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Abu Dhabi traffic facts

Drivers in Abu Dhabi spend 10 per cent longer in congested conditions than they would on a free-flowing road

The highest volume of traffic on the roads is found between 7am and 8am on a Sunday.

Travelling before 7am on a Sunday could save up to four hours per year on a 30-minute commute.

The day was the least congestion in Abu Dhabi in 2019 was Tuesday, August 13.

The highest levels of traffic were found on Sunday, November 10.

Drivers in Abu Dhabi lost 41 hours spent in traffic jams in rush hour during 2019

 

Tips to keep your car cool
  • Place a sun reflector in your windshield when not driving
  • Park in shaded or covered areas
  • Add tint to windows
  • Wrap your car to change the exterior colour
  • Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
  • Avoid leather interiors as these absorb more heat
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The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
  • On sale: 2026
  • Price: Not announced yet

Banthology: Stories from Unwanted Nations
Edited by Sarah Cleave, Comma Press

Apple product price list

iPad Pro

11" - $799 (64GB)
12.9" - $999 (64GB)

MacBook Air 

$1,199

Mac Mini

$799

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ENGLAND TEAM

Alastair Cook, Mark Stoneman, James Vince, Joe Root (captain), Dawid Malan, Jonny Bairstow, Moeen Ali, Chris Woakes, Craig Overton, Stuart Broad, James Anderson

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
F1 The Movie

Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem

Director: Joseph Kosinski

Rating: 4/5

Oscars in the UAE

The 90th Academy Awards will be aired in the UAE from 3.30am on Monday, March 5 on OSN, with the ceremony starting at 5am

The specs
Engine: 4.0-litre flat-six
Power: 510hp at 9,000rpm
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
Price: From Dh801,800
THE BIO: Martin Van Almsick

Hometown: Cologne, Germany

Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)

Favourite dessert: Umm Ali with dark camel milk chocolate flakes

Favourite hobby: Football

Breakfast routine: a tall glass of camel milk

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 two: how climate change drove the race for an alternative 

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

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UAE currency: the story behind the money in your pockets
UAE cricketers abroad

Sid Jhurani is not the first cricketer from the UAE to go to the UK to try his luck.

Rameez Shahzad Played alongside Ben Stokes and Liam Plunkett in Durham while he was studying there. He also played club cricket as an overseas professional, but his time in the UK stunted his UAE career. The batsman went a decade without playing for the national team.

Yodhin Punja The seam bowler was named in the UAE’s extended World Cup squad in 2015 despite being just 15 at the time. He made his senior UAE debut aged 16, and subsequently took up a scholarship at Claremont High School in the south of England.

The specs

Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now

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

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

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates
Bharatanatyam

A ancient classical dance from the southern Indian state of Tamil Nadu. Intricate footwork and expressions are used to denote spiritual stories and ideas.

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Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai

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Jawan
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The biog

Name: Atheja Ali Busaibah

Date of birth: 15 November, 1951

Favourite books: Ihsan Abdel Quddous books, such as “The Sun will Never Set”

Hobbies: Reading and writing poetry

Updated: October 16, 2022, 4:30 AM`