The final phase in Federal Reserve Chairman Jerome Powell's inflation battle is set to collide with another obstacle – the 2024 presidential election.
This sits ahead of a tipping point expected on Wednesday, when the Federal Reserve will announce whether it will cut interest rates for the first time since March 2020.
Interest rates are already a partisan issue going into November, where the economy and inflation are seen as the big issue for voters. Republican politicians warn that cutting rates would harm the Federal Reserve's credibility. Democrats have called on the Fed to cut rates for months.
Mr Powell has paid those directions little notice, instead using public appearances to repeat his data-driven narrative.
Today, the data points towards a rate cut. The Fed's preferred inflation measure is at 2.5 per cent and seen as on a sustainable path back to the Fed's 2 per cent goal. The labour market is softening, with the unemployment rate now at 4.2 per cent.
Now, Mr Powell aims to stick to the landing.
Doing so will require a careful calibration of interest rate cuts to not send the economy tipping into a recession.
But looming behind the 2024 election is the potential return to office for Donald Trump, whose recent comments threaten to undermine the Fed's independence.
“I feel the president should have at least [a] say in” monetary policy decisions, Mr Trump told reporters at his Mar-a-Lago estate in Palm Beach, Florida, about a month ago.
“I think that in my case, I made a lot of money, I was very successful, and I think I have a better instinct than in many cases, people that would be on the Federal Reserve or the chairman,” said the former president on August 8.
Should he return to office, Mr Trump could dismantle the guardrails that have protected the Fed for decades, said David Wilcox, senior fellow at the Peterson Institute for International Economics and director of US economic research at Bloomberg Economics.
“The potential for institutional damage is quite great, and the task of repairing any damage along those lines would be the work of many, many years, if not decades,” Mr Wilcox told The National.
A near-sacred principle
The consensus among economists is clear – politicians should not interfere with central banks.
Mainstream economists argue independent central banks are best equipped to tackle inflation because of their long-term view, as opposed to an electoral focus. Independent central banks also help to anchor inflation expectations, which is critical to price stability.
“The record is pretty clear that that's a good, intentional arrangement that serves the public well,” Mr Powell told politicians in July.
While the Fed is accountable to Congress, it enjoys broad independence to implement monetary policy decisions, and for the most part, without political pressure. This level of independence helps to secure the US dollar as the world's reserve currency.
The Fed's independence is “critical”, said Ryan Sweet, chief US economist Oxford Economics.
"A tremendous amount of research has shown that countries with independent central banks have more economic stability," he said.
"When inflation is typically lower, the labour markets perform better. So shielding ... any central bank from political pressure is typically in the best interest of the economy."
Vice President and Democratic nominee Kamala Harris has said she would never interfere with the Fed's independence.
When politics interfere
The Fed has not always taken the long-term view.
This year's electoral cycle conjures memories of former Fed chairman Arthur Burns, who caved in under pressure by president Richard Nixon to cut rates in 1970 even when the economy showed signs of overheating. Mr Nixon won re-election two years later, but the resulting decades were defined by a period of stagflation.
One of the more recent examples comes from Turkey, whose inflation rate is currently 51.97 per cent as of late August, according to New York-based economic statistics monitor Trading Economics.
Under pressure from President Recep Tayyip Erdogan, the Turkish central bank began cutting rates in 2021 even during a time of soaring inflation to encourage more capital investment. The gambit failed and the inflation rate climbed to a peak of 85 per cent.
Most recently, central banks in Brazil and Thailand have come under pressure from their governments, although they have so far fended off the pressure.
“The track record, both in the United States and around the globe, is pretty clear that when political figures become involved in day-to-day monetary policy decision making, the economic performance of that country tends to deteriorate,” Mr Wilcox said.
Trump's shadow looms
“This is the bad idea of all bad ideas,” Joe Brusuelas, chief economist at consulting firm RSM US, wrote in a social media post at the time.
Mr Trump's campaign distanced itself from the report at the time, but the Republican nominee did little to downplay concerns last month.
With Mr Powell's term set to expire in 2026, the next president will have the opportunity to nominate the next Fed chairman. Mr Trump nominated Mr Powell to the position in 2018 to succeed Janet Yellen, although clashed with his appointee and went so far as to question if the Fed chairman was an enemy to the US in 2019.
Mr Trump told Bloomberg in July he would not try to fire Mr Powell, whose term as Fed chairman expires in 2026 and as governor in 2028, if he returns to the Oval Office. No Fed chairman or woman has been fired, and it is uncertain if the president has the authority to do so.
Mr Powell has said he intends to serve his full term as chairman.
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Temple numbers
Expected completion: 2022
Height: 24 meters
Ground floor banquet hall: 370 square metres to accommodate about 750 people
Ground floor multipurpose hall: 92 square metres for up to 200 people
First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time
First floor terrace areas: 2,30 square metres
Temple will be spread over 6,900 square metres
Structure includes two basements, ground and first floor
if you go
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
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UAE currency: the story behind the money in your pockets
Why seagrass matters
- Carbon sink: Seagrass sequesters carbon up to 35X faster than tropical rainforests
- Marine nursery: Crucial habitat for juvenile fish, crustations, and invertebrates
- Biodiversity: Support species like sea turtles, dugongs, and seabirds
- Coastal protection: Reduce erosion and improve water quality
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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), Dh190,000 (Countryman)
KILLING OF QASSEM SULEIMANI
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
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Killing of Qassem Suleimani
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Zayed Sustainability Prize
MISSION: IMPOSSIBLE – FINAL RECKONING
Director: Christopher McQuarrie
Starring: Tom Cruise, Hayley Atwell, Simon Pegg
Rating: 4/5
More from Neighbourhood Watch:
6 UNDERGROUND
Director: Michael Bay
Stars: Ryan Reynolds, Adria Arjona, Dave Franco
2.5 / 5 stars
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
West Indies v England ODI series:
West Indies squad: Jason Holder (c), Fabian Allen, Devendra Bishoo, Darren Bravo, Chris Gayle, Shimron Hetmyer, Shai Hope, Evin Lewis, Ashley Nurse, Keemo Paul, Nicholas Pooran, Rovman Powell, Kemar Roach, Oshane Thomas.
Fixtures:
1st ODI - February 20, Bridgetown
2nd ODI - February 22, Bridgetown
3rd ODI - February 25, St George's
4th ODI - February 27, St George's
5th ODI - March 2, Gros Islet
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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
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The years Ramadan fell in May
Killing of Qassem Suleimani
Zayed Sustainability Prize
The five pillars of Islam
Stormy seas
Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.
We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice.
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
The specs
Price, base / as tested Dh1,100,000 (est)
Engine 5.2-litre V10
Gearbox seven-speed dual clutch
Power 630bhp @ 8,000rpm
Torque 600Nm @ 6,500rpm
Fuel economy, combined 15.7L / 100km (est)
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Oppenheimer
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The five pillars of Islam
How to donate
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
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Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
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How to improve Arabic reading in early years
One 45-minute class per week in Standard Arabic is not sufficient
The goal should be for grade 1 and 2 students to become fluent readers
Subjects like technology, social studies, science can be taught in later grades
Grade 1 curricula should include oral instruction in Standard Arabic
First graders must regularly practice individual letters and combinations
Time should be slotted in class to read longer passages in early grades
Improve the appearance of textbooks
Revision of curriculum should be undertaken as per research findings
Conjugations of most common verb forms should be taught
Systematic learning of Standard Arabic grammar
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Killing of Qassem Suleimani
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KILLING OF QASSEM SULEIMANI
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