US presidential candidates Kamala Harris and Donald Trump have been on the campaign trail in the past week laying out their agendas. AFP
US presidential candidates Kamala Harris and Donald Trump have been on the campaign trail in the past week laying out their agendas. AFP
US presidential candidates Kamala Harris and Donald Trump have been on the campaign trail in the past week laying out their agendas. AFP
US presidential candidates Kamala Harris and Donald Trump have been on the campaign trail in the past week laying out their agendas. AFP

How would a Harris or Trump administration affect the US economy?


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US Vice President Kamala Harris is riding a wave of momentum after accepting the Democratic Party's nomination for president last week, but the economy remains the paramount issue in this year's race.

“This election, the outcome is going to be determined by how people vote with their wallets based on inflation,” Ryan Sweet, chief US economist at Oxford Economics, told reporters last week.

According to an ABC News/Washington Post/Ipsos poll, Ms Harris's Republican rival Donald Trump holds a nine-point lead when it comes to who Americans trust more to handle the economy and inflation. Meanwhile, a poll released by the Financial Times and the University of Michigan Ross School of Business showed the Democrat with a one-point advantage.

The election's outcome will have significant effects on the economy with the Federal Reserve's inflation battle still being fought and the expiration of Mr Trump's tax cuts next year that will be fiercely debated in Congress.

Both candidates have been on the campaign trail in the past week laying out their agendas – Ms Harris with an appearance last Friday in North Carolina, and Mr Trump with a speech in the battleground state of Pennsylvania on Monday.

Inflation and interest rates

The inflation scenario varies, with economists agreeing Mr Trump's protectionism and immigration policies will stall progress in restoring price stability.

Mr Trump has recently proposed a 10 per cent tariff on all US trading partners – as well as a 60 per cent tariff on Chinese goods – as a replacement to income taxes.

A recent paper from the Peterson Institute of International Economics said higher tariffs would harm US exports and diminish economic growth, while also leading to higher inflation. A separate study by the Lombard Odier Group predicts that a Trump presidency and a Republican-controlled Congress would also stall inflation, forcing the Federal Reserve to halt cutting interest rates at around 4 per cent.

“In the event of a Trump presidency with a divided Congress, the impact of tariffs would likely dominate, slowing growth while still increasing inflation,” the group wrote in its latest CIO Office Viewpoint.

The current target range for US interest rates is 5.25 to 5.50 per cent.

Bond yields would also probably rise, and so would the US dollar against the euro, the organisation said. The company expected a Harris-led presidency to have greater policy continuity should she succeed Mr Biden, with the Fed cutting rates through mid-2025.

Changes to the Fed's monetary policy will have implications for most central banks in the Gulf Co-operation Council, whose currencies are pegged to the US dollar.

“Any drop in the benchmark interest rates or higher-for-longer scenario will have an impact on interest rate-sensitive sectors in the GCC like banking, real estate, utilities as well as leverage companies,” said Faisal Hasan, chief investment officer at Al Mal Capital in Dubai.

“The investors here are also very international [in their focus] and changes in the monetary policy will impact their investment.”

Tariq Qaqish, chief executive at the Salt Fund Placement advisory firm in Dubai, said GCC countries must prepare for both administrations.

Mr Qaqish anticipates a Trump win would lead to a weaker dollar, thereby increasing liquidity into the region. A Harris win, he said, would lead to a stronger US dollar which would hamper economic growth.

Federal deficit

Regardless of who wins the 2024 election, the US federal deficit is expected to further increase.

The International Monetary Fund has warned that high fiscal deficits and the continuing increase in the debt-to-GDP ratio are not only a risk for the US, but also the global economy.

Ms Harris last week released some elements of her economic agenda, including expanding the child tax credit base from $2,000 to $3,000, expanding the earned income tax credit, advancing a federal ban on price-gouging on groceries and providing a tax credit of up to $25,000 for first-time homebuyers.

US Vice President Kamala Harris announced a plan to halt price-gouging at grocery stores as part of her economic agenda. Bloomberg
US Vice President Kamala Harris announced a plan to halt price-gouging at grocery stores as part of her economic agenda. Bloomberg

These and other plans make up the elements of the Agenda to Lower Costs for American Families, which outlines her intentions for her first 100 days in office.

All told, the plan would increase the US federal deficit by $1.7 trillion over a decade, according to the bipartisan Committee for a Responsible Federal Budget (CRFB). That figure would rise to $2 trillion if the housing policies became permanent.

Mr Trump has thus far not released a detailed economic agenda. The CRFB in July estimated that his plans to eliminate taxes on Social Security benefits would increase deficits by $1.6 trillion to $1.8 trillion through 2035.

The national debt also soared during Mr Trump's term in office.

According to another analysis conducted by the CRFB, Mr Trump added $8.4 trillion to the national debt. Of that, $3.6 trillion was from Covid relief laws.

Donald Trump speaks on the economy during a campaign event in York, Pennsylvania. Bloomberg
Donald Trump speaks on the economy during a campaign event in York, Pennsylvania. Bloomberg

A second Trump term would likely be a continuation of the Make America Great Again agenda that defined his first term, where he wants further tax cuts and enhancing US industries, Mr Qaqish said.

“These policies could stimulate growth but will put more pressure on fiscal deficits,” he said, adding that geopolitical factors must also be considered. Should Mr Trump win and negotiate a ceasefire between Russia and Ukraine, as well as a peace deal between Israel and Palestine, then Mr Qaqish expects a lower level of government spending and national debt.

Corporate taxes in focus

In one major policy shift, Ms Harris's campaign said her administration would lift the US corporate tax rate to 28 per cent from its current rate of 21 per cent. The campaign's proposal is in line with President Joe Biden's most recent budget proposal.

Mr Qaqish said this would have a direct impact on investors, who would establish businesses outside the US to reduce their corporate taxes.

Mr Trump cut the corporate tax rate from 35 per cent to 21 per cent as part of his 2017 tax plan, and pledged to further cut taxes if he was elected president again. Mr Trump's tax plan brought the US's corporate income tax rate down from the fourth-highest in the world to roughly median, according to the Tax Foundation.

The non-partisan Congressional Budget Office (CBO) in 2018 said raising the current corporate tax rate by one percentage point would raise US revenue by $96 billion from 2019 to 2028.

Mr Trump's tax plan is set to expire at the end of next year, and will be one of the biggest issues facing Congress when the new session begins.

Extending the tax cuts would add $3.3 trillion to the US deficit over the next 10 years, the CBO said.

Western Region Asia Cup T20 Qualifier

Sun Feb 23 – Thu Feb 27, Al Amerat, Oman

The two finalists advance to the Asia qualifier in Malaysia in August

 

Group A

Bahrain, Maldives, Oman, Qatar

Group B

UAE, Iran, Kuwait, Saudi Arabia

 

UAE group fixtures

Sunday Feb 23, 9.30am, v Iran

Monday Feb 25, 1pm, v Kuwait

Tuesday Feb 26, 9.30am, v Saudi

 

UAE squad

Ahmed Raza, Rohan Mustafa, Alishan Sharafu, Ansh Tandon, Vriitya Aravind, Junaid Siddique, Waheed Ahmed, Karthik Meiyappan, Basil Hameed, Mohammed Usman, Mohammed Ayaz, Zahoor Khan, Chirag Suri, Sultan Ahmed

Timeline

1947
Ferrari’s road-car company is formed and its first badged car, the 125 S, rolls off the assembly line

1962
250 GTO is unveiled

1969
Fiat becomes a Ferrari shareholder, acquiring 50 per cent of the company

1972
The Fiorano circuit, Ferrari’s racetrack for development and testing, opens

1976
First automatic Ferrari, the 400 Automatic, is made

1987
F40 launched

1988
Enzo Ferrari dies; Fiat expands its stake in the company to 90 per cent

2002
The Enzo model is announced

2010
Ferrari World opens in Abu Dhabi

2011
First four-wheel drive Ferrari, the FF, is unveiled

2013
LaFerrari, the first Ferrari hybrid, arrives

2014
Fiat Chrysler announces the split of Ferrari from the parent company

2015
Ferrari launches on Wall Street

2017
812 Superfast unveiled; Ferrari celebrates its 70th anniversary

Global Fungi Facts

• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil

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)

Company%C2%A0profile
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COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Haltia.ai%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202023%0D%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Arto%20Bendiken%20and%20Talal%20Thabet%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20AI%0D%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%2041%0D%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20About%20%241.7%20million%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Self%2C%20family%20and%20friends%26nbsp%3B%3C%2Fp%3E%0A

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.”

The President's Cake

Director: Hasan Hadi

Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem 

Rating: 4/5

UAE currency: the story behind the money in your pockets
The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

EA Sports FC 26

Publisher: EA Sports

Consoles: PC, PlayStation 4/5, Xbox Series X/S

Rating: 3/5

Profile of Hala Insurance

Date Started: September 2018

Founders: Walid and Karim Dib

Based: Abu Dhabi

Employees: Nine

Amount raised: $1.2 million

Funders: Oman Technology Fund, AB Accelerator, 500 Startups, private backers

 

RESULT

Bayern Munich 3 Chelsea 2
Bayern: Rafinha (6'), Muller (12', 27')
Chelsea: Alonso (45' 3), Batshuayi (85')

UAE SQUAD FOR ASIAN JIU-JITSU CHAMPIONSHIP

Men’s squad: Faisal Al Ketbi, Omar Al Fadhli, Zayed Al Kathiri, Thiab Al Nuaimi, Khaled Al Shehhi, Mohamed Ali Al Suwaidi, Farraj Khaled Al Awlaqi, Muhammad Al Ameri, Mahdi Al Awlaqi, Saeed Al Qubaisi, Abdullah Al Qubaisi and Hazaa Farhan

Women's squad: Hamda Al Shekheili, Shouq Al Dhanhani, Balqis Abdullah, Sharifa Al Namani, Asma Al Hosani, Maitha Sultan, Bashayer Al Matrooshi, Maha Al Hanaei, Shamma Al Kalbani, Haya Al Jahuri, Mahra Mahfouz, Marwa Al Hosani, Tasneem Al Jahoori and Maryam Al Amri

Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

Sinopharm vaccine explained

The Sinopharm vaccine was created using techniques that have been around for decades. 

“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.

"What is left is a skeleton of the virus so it looks like a virus, but it is not live."

This is then injected into the body.

"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.

"You have to be exposed more than one time to what we call the antigen."

The vaccine should offer protection for at least months, but no one knows how long beyond that.

Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.

“Since it is inactivated, it will not last forever," she said.

CONFIRMED%20LINE-UP
%3Cp%3EElena%20Rybakina%20(Kazakhstan)%3Cbr%3EOns%20Jabeur%20(Tunisia)%3Cbr%3EMaria%20Sakkari%20(Greece)%3Cbr%3EBarbora%20Krej%C4%8D%C3%ADkov%C3%A1%20(Czech%20Republic)%3Cbr%3EBeatriz%20Haddad%20Maia%20(Brazil)%3Cbr%3EJe%C4%BCena%20Ostapenko%20(Latvia)%3Cbr%3ELiudmila%20Samsonova%3Cbr%3EDaria%20Kasatkina%3Cbr%3EVeronika%20Kudermetova%3Cbr%3ECaroline%20Garcia%20(France)%3Cbr%3EMagda%20Linette%20(Poland)%3Cbr%3ESorana%20C%C3%AErstea%20(Romania)%3Cbr%3EAnastasia%20Potapova%3Cbr%3EAnhelina%20Kalinina%20(Ukraine)%3Cbr%3EJasmine%20Paolini%20(Italy)%3Cbr%3EEmma%20Navarro%20(USA)%3Cbr%3ELesia%20Tsurenko%20(Ukraine)%3Cbr%3EEmma%20Raducanu%20(Great%20Britain)%20%E2%80%93%20wildcard%3C%2Fp%3E%0A
Updated: August 27, 2024, 6:25 AM