Federal Reserve chairman Jerome Powell’s prognosis on the implications of what US President Donald Trump’s policies will have on the US economy can be summed up in three words: “We don’t know.”
After leaving interest rates unchanged at about 4.33 per cent on Wednesday, Mr Powell was grilled on the new administration, with many of the questions focusing on a range of policies Mr Trump has either promised or enacted since assuming office last week.
“I certainly think there was more conversation around the concept of waiting to see what new policies will do to both inflation and the economy, and I think that was true around everything that was discussed,” said Art Hogan, chief market strategist at B Riley Wealth.
The media conference represented a new reality for Mr Powell and the central bank, which is now firmly in wait-and-see mode amid strong inflation and uncertainty surrounding the Trump agenda. Traders do not expect the Fed to cut rates again until June.
I don't want to speculate, as tempting as it is, because we really don't know
US Fed chairman Jerome Powell
I don't want to speculate, as tempting as it is, because we really don't know," Mr Powell said. "We don't know what will happen with tariffs, with immigration, with fiscal policy, regulatory policy … really, I think we need to need to let those policies be articulated before we can even begin to make that plausible assessment of what their implications will be."
Chief among those was the degree of uncertainty around Mr Trump's trade agenda. Hours after being sworn in on January 20, he threatened to impose 25 per cent tariffs on Mexico and Canada, and additional penalties on Chinese goods.
"The range of possibilities is very, very long. I don't want to speculate, as tempting as it is, because we really don't know," Mr Powell said.
But earlier on Wednesday, the Bank of Canada published a report showing a scenario in which Mr Trump followed through with the 25 per cent tariffs on Canadian goods. The central bank found that, if Canada were to impose retaliatory tariffs, both economies would suffer lower growth and higher inflation.
After lowering Canada's interest rates by 25 basis points, governor Tiff Macklem said the central bank is assessing the consequences that tariffs might have on economies. "Unfortunately, tariffs mean economies simply work less efficiently," he said.
Mr Powell, however, was less inclined to weigh in: "We want to avoid commenting, even indirectly, on the conduct of tariffs here. It's not our job. It's our job to comment on the moves that people make.
"As tempting as it is" to speculate, he steered clear of political discourse, which he has consistently done during his tenure. He also again stressed the Fed's independence.
Mr Powell would not comment on Mr Trump's demand for lower interest rates: "I'm not going to have any response or comment whatsoever, it's not appropriate. The public should be confident that we will intend to do our work as we always have."
He said he has not had any contact with Mr Trump.
Later on Wednesday the President took his first swipe at the Fed chairman for not lowering interest rates. "If the Fed spent less time on DEI [Diversity, Equality and Inclusion], gender ideology, green energy and fake climate change, inflation would never have been a problem," he said.
Mr Trump has signed executive orders ranging from ending DEI to freezing federal grants and declaring a so-called national energy emergency. He said stepping up domestic oil production and pressuring Opec to lower oil prices would help lower inflation.
"As has been our practice over many administrations, we are working to align our policies with the executive orders as appropriate and consistent with applicable law," Mr Powell said.
And when pressed on Tesla executive Elon Musk's allegations that the Fed is overstaffed, Mr Powell said the central bank wants and is aware of careful budget process. Mr Musk now runs the new Department of Government and Efficiency, whose purpose is to cut government waste and spending.
The Fed has a dual mandate of price stability and full employment, making it unique from other central banks. As the Trump administration moves to crack down on illegal immigration, the Fed has indicated that it does not want to see any further weakening of the labour market.
Mr Powell and mainstream economists have noted the role immigration has played in maintaining a healthy labour market. Mr Trump is seeking to carry out mass deportations, conduct raids on migrants across the country and has floated the possibility of reopening Guantanamo Bay to its full 30,000-person capacity to house deported migrants.
Mr Powell said central bank staff have studied a range of possible outcomes that "tend to go from really good to really bad … so that's what they do".
"We're all well aware that the range of possibilities is always broad, and not just now, but always," he said.
Despite the torrent of executive orders signed since January 20 and the Trump policies yet to come, Mr Powell played down the degree of uncertainty the Fed faces, saying it holds little comparison to the 2008 global financial crisis or the 2020 Covid-19 pandemic.
"The kind of uncertainty we have is just the ... usual level of uncertainty about the economy," he said. "But then policies are not for us to criticise or praise, really. Those are … policies which people have been elected to implement. They’re implementing them with a view to making a better economy."
FORSPOKEN
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Starfield
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ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
COMPANY%20PROFILE
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Killing of Qassem Suleimani
Is it worth it? We put cheesecake frap to the test.
The verdict from the nutritionists is damning. But does a cheesecake frappuccino taste good enough to merit the indulgence?
My advice is to only go there if you have unusually sweet tooth. I like my puddings, but this was a bit much even for me. The first hit is a winner, but it's downhill, slowly, from there. Each sip is a little less satisfying than the last, and maybe it was just all that sugar, but it isn't long before the rush is replaced by a creeping remorse. And half of the thing is still left.
The caramel version is far superior to the blueberry, too. If someone put a full caramel cheesecake through a liquidiser and scooped out the contents, it would probably taste something like this. Blueberry, on the other hand, has more of an artificial taste. It's like someone has tried to invent this drink in a lab, and while early results were promising, they're still in the testing phase. It isn't terrible, but something isn't quite right either.
So if you want an experience, go for a small, and opt for the caramel. But if you want a cheesecake, it's probably more satisfying, and not quite as unhealthy, to just order the real thing.
TECH%20SPECS%3A%20APPLE%20IPHONE%2014%20PLUS
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Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Killing of Qassem Suleimani
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
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
Results
Stage seven
1. Tadej Pogacar (SLO) UAE Team Emirates, in 3:20:24
2. Adam Yates (GBR) Ineos Grenadiers, at 1s
3. Pello Bilbao (ESP) Bahrain-Victorious, at 5s
General Classification
1. Tadej Pogacar (SLO) UAE Team Emirates, in 25:38:16
2. Adam Yates (GBR) Ineos Grenadiers, at 22s
3. Pello Bilbao (ESP) Bahrain-Victorious, at 48s
Company%20profile
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World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
What is Reform?
Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.
It was founded in 2018 and originally called the Brexit Party.
Many of its members previously belonged to UKIP or the mainstream Conservatives.
After Brexit took place, the party focused on the reformation of British democracy.
Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.
The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.
The Year Earth Changed
Directed by:Tom Beard
Narrated by: Sir David Attenborough
Stars: 4
MATCH INFO
What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany
Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
Killing of Qassem Suleimani
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
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