Fed Officials Face Weak Inflation, but Split Over What It Means

SHARES DROP: Page 3 Delta buys stake in Korean Air parent company Saturday, June 22, 2019 Shawwal 19, 1440 AH LARGEST PENALTY BY FCA: Page 5 Britain’s Lloyds GULF TIMES fi ned $58mn for BUSINESS HBOS fraud failings Envoy optimistic on Qatari FDI growth in Italy Fed offi cials face weak By Peter Alagos beverage (F&B), design and Business Reporter architecture, and engineering sectors. Leading Italian companies Robust relations and co- are taking part in various infl ation, but split operation between Qatar infrastructure projects in and Italy would play a Qatar, particularly in Al Khor’s significant role in the growth Al Bayt Stadium for the 2022 of Qatari investments in the FIFA World Cup, Salzano said. Italian trade and economic “That stadium is extremely landscape, including other diff icult to build because major sectors, ambassador its shape represents a tent; over what it means Pasquale Salzano said. the materials as well as the According to Salzano, Qatar technology used for that Reuters if the Fed does not lift infl ation not only has important structure is unbelievable. Washington/San Francisco higher, with weakened expecta- investments in Italy’s Skilled and world-class Italian tions dragging down actual in- property market, specifically companies were able to make fl ation, and leaving the central hotels, but also in the Porta the structure look like a real S Federal Reserve offi - bank perennially stuck near zero. Nuova property project in tent in the desert. It will be an cials were divided yes- In a sharp broadside against Milan, the world’s leading iconic and truly impressive Uterday over how seriously the Fed’s decision last week to fashion and design capital. stadium, and I am very proud to treat a slide in infl ation, with hold interest rates steady, Min- The project, the ambassador that Italian companies are one top policymaker saying the neapolis Federal Reserve bank pointed out, is “one of the part of this project,” Salzano Fed was “close” to its infl ation president Neel Kashkari said the most profitable for Qatar,” explained. target and three others warning economy needed shock therapy as Porta Nuova is also He said Italian companies are the weak price increases posed to push infl ation and infl ation considered as one of the also involved in the building major risks the Fed may need to expectations higher, and con- main business districts in of the Doha Metro project, attack with lower interest rates. vince the public the Fed is seri- Milan. specifically in the “artistic Just how deep that division is ous about its 2% infl ation goal. Similarly, Salzano said Qatar lighting” of the stations. and where in the debate the most It is a target that has not been also has investments in the Currently, the Red Line of the infl uential policymakers have consistently met since it was Olbia-headquartered Air Italy metro is ferrying passengers staked their ground is going to formally adopted in 2012, and through Qatar Airways, which along 13 of its 18 stations. grip the fi nancial world between Kashkari said he is concerned has a 49% share in the Italian “Our companies are also now and conclusion of the Fed’s the public and investors have ab- airline. He said Qatar also responsible for providing a next meeting on July 31. sorbed the wrong message. has investments in the Costa specific kind of asphalt used Interest rate futures markets Though he is currently not a Smeralda Resort in Sardinia, for roads and highways in currently see a 100% probability voter on the Fed’s rate-setting as well as in other important Qatar. The material used for of a rate cut then, with the only panel, he called for the Fed to and strategic companies in these road networks are cost- debate in trading circles over slash rates by half a percentage Italy. The presence of Qatari eff icient and can resist high whether the cut will 25 basis point now, and commit to not investments in the large temperatures. points or twice that. raising them until infl ation du- Italian island is seen to spur “It is also very sustainable Policymakers’ rate projections rably moves to the central bank’s growth in the area’s tourism and environment-friendly issued on Wednesday showed a 2% target. sector. because old asphalt could be near clean break at the Fed. The Fed “should take strong On the presence of Italian reused for new roads. Italy Roughly half of offi cials see no action to re-anchor infl ation companies in Qatar, the is well-known for fashion, rate reduction as likely appropri- expectations at our 2% target ambassador said he design, and food. But we ate this year, and roughly half see and support strong job growth, is “satisfied” because are also well-regarded a cut of up to half a percentage higher wage growth, and sus- many leading firms are in high technology and point as probably warranted. tained economic expansion,” operating in most sectors infrastructure, as well as in That division took shape yes- Richard Clarida, vice chairman of the US Federal Reserve, speaks during a Bloomberg Television interview said Kashkari, who has consist- in the country, such as in the defence sector,” said terday, in the fi rst hours after the in Washington, DC, yesterday. Clarida’s description of the current 1.5% inflation rate expected this year as ently opposed recent rate hikes. construction, health, food and Salzano. central bank’s formal “black- “close” to the Fed’s 2% target was in contrast to the views of other policymakers, including Lael Brainard, St. Louis Federal Reserve bank out” lifted for commenting on his colleague on the board of governors. president James Bullard, mean- the results of the last two-day while, a current voter on rate policy session, which concluded emphasised by chairman Jer- day in prepared remarks to a Fed counter a downturn with rates policy, explained his dissent at Wednesday with the Fed leaving ome Powell earlier this month conference in Ohio. cuts alone. The threat of infl ation the recent meeting as largely a rates on hold in a range between as markets slid over broad global With rates so low by historic drifting downward is twofold. response to the weakening pace 2.25 and 2.5%. growth and trade concerns. standards, “basic principles of Waiting too long to counter it of price increases. “The economy’s baseline out- But Clarida’s description of risk management...would argue means more aggressive Fed ac- “Infl ation measures have de- look is good — sustained growth, the current 1.5% infl ation rate for softening the expected path tion could be required. clined substantially since the end a strong labour market and infl a- expected this year as “close” to of policy when risks shift to the In an era when the benchmark of last year and are presently run- tion near our objective,” Fed vice the Fed’s 2% target was in con- downside.” policy rate is already so low, that ning some 40 to 50 basis points chairman Richard Clarida said trast to the views of other poli- While one of the Fed’s man- could mean again hitting the below the FOMC’s 2% infl ation yesterday in an interview with cymakers, including Lael Brain- dates from Congress is for “sta- zero lower bound and forcing target,” Bullard said in a prepared Bloomberg Television. ard, his colleague on the board of ble prices,” central bankers glo- the politically diffi cult decision statement. “The forces that are Clarida said there was “broad governors and the only other Fed bally feel that a bit of infl ation is to ramp up “unconventional” keeping infl ation below target agreement” that the case for rate board member with a doctorate healthy. policy tools like bond-buying seem unlikely to be solely transi- increases had grown stronger in in economics. “Recent indica- Allowing wages and prices once again. tory...Lowering the target range recent weeks. tors of infl ation and infl ation to rise steadily would give them Brainard also sketched out the for the federal funds rate at this Salzano: Proud participation. He also said the Fed was ready expectations have been disap- room to keep interest rates above threat of a sort of self-reinforc- time would provide insurance to act “as appropriate,” a phrase pointing,” Brainard said yester- zero and, therefore, have room to ing spiral that could take hold against further declines.” Money-laundering watchdog unveils Divided leaders of EU set sorting out crackdown on cryptocurrencies eurozone budget fi nancing as priority Reuters laundered cash using two crypto ATMs, machines that Frankfurt/London issue cryptocurrencies for cash. Riondet said cryptocurrencies were used to transfer money across borders, as Reuters currency could be fi nanced, “We ask the Eurogroup to re- toring powers over countries well as to break down large criminal money transfers Brussels what it should be used for and port back swiftly on the appro- with economic imbalances and Cryptocurrency firms will be subjected to rules to into smaller amounts that are harder to detect. how it would be managed, with priate solutions for fi nancing,” also facilitate the restructuring prevent the abuse of digital coins such as bitcoin for “We also have some investigation on the dark web in the fi nal size to be determined they said about the eurozone of governments’ debts in crises. money laundering, a global watchdog said yesterday, which the payments are made in cryptocurrencies, uropean Union leaders by the leaders.

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