US President Donald Trump on Wednesday denied reports he intends to fire Federal Reserve Chairman Jerome Powell as the White House escalates its attacks on the central bank.
After US media reported the President indicated he was open to dismissing the Fed chairman, Mr Trump confirmed he had met Republicans from the House of Representatives during a closed-door meeting on Tuesday.
“I talked about the concept of firing him. I said, 'what do you think?' Almost every one of them said I should, but I'm more conservative,” he said before a meeting with Bahrain’s Crown Prince Salman bin Hamad Al Khalifa.
When asked if he would rule out the idea, Mr Trump said: “I don't rule out anything but I think it's highly unlikely unless he has to leave for fraud.”
Republicans on the House Financial Services Committee were expected to meet Mr Powell on Wednesday night, Semafor reported.
Mr Trump has launched an unrelenting campaign to pressure Mr Powell to lower interest rates, which the President wants to help service the nation's debt in a concept known as “fiscal dominance”. On Wednesday, he again said the Fed's current target rate of 4.25 per cent to 4.50 per cent should be three points lower.
Under the Federal Reserve Act, a president can remove a Federal Reserve official only “for cause”. This means the White House must show a Fed official or its chairperson had committed an act of malfeasance or neglect of duty. A recent Supreme Court ruling upheld the notion that legal reasoning the White House has been used to fire officials at other independent federal agencies does not apply to the Fed.
But the White House in recent weeks has launched a new phase of attack on the Federal Reserve, accusing Mr Powell of mismanaging the central bank given the ballooning renovation costs of its headquarters.
Asked if Mr Powell should be investigated, Mr Trump said: “Well, I think he's already under investigation. He spent far more money than he was supposed to rebuilding.”
Some Trump officials, including National Economic Council director Kevin Hassett, said Mr Powell could be fired over the renovation project. When asked on Tuesday if the renovation issue was a sackable offence, Mr Trump said: “I think it sort of is.”
Mr Powell, whose term as Fed chairman expires next May, has asked the Fed's inspector general to review the renovation project.
The Fed chairman has remained adamant that the President has no authority to fire him. In November, Mr Powell said such a move is “not permitted under the law”.
Mr Trump's pressure campaign comes as the central bank has extended its pause on interest rates as it braces for tariff-related inflation. A Labour Department report on Tuesday showed inflation accelerate in line with expectations last month. Underlying numbers in the report showed rising prices in goods such as household appliances and clothing are showing that tariffs are being passed on to consumers.
Most Fed officials suggest they are still waiting further clarity before cutting interest rates, meaning they are likely to continue their rate-cut pause when they meet later this month.
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UAE currency: the story behind the money in your pockets
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
