Inflation in the US eased more than expected last month, fuelling hopes that the Federal Reserve is close to cutting interest rates.
The Consumer Price Index (CPI) decreased 0.1 per cent in June, data from the Labour Department showed. On an annual basis, CPI inflation rose 3.0 per cent, down from 3.3 per cent in May. It marked the third straight month of moderating inflation.
Core inflation, which does not include food and energy, fell from 3.4 per cent to 3.3 per cent.
Economists had predicted headline CPI inflation would drop to 3.1 per cent on an annual basis, according to a median estimate compiled by FactSet. Core CPI was expected to rise 3.4 per cent.
“This morning's CPI report was arguably the most encouraging one the FOMC has received since it began its inflation fight nearly two and a half years ago,” Wells Fargo economists Sarah House and Michael Pugliese wrote to investors, referring to the policy-setting Federal Open Market Committee.
The Fed has held its benchmark rate steady at 5.25 to 5.50 per cent since last July. Central banks in the UAE and Saudi Arabia, which follow the Fed's lead, have also maintained their own interest rates since then.
Fed Chairman Jerome Powell told politicians in congressional testimony on Wednesday that he has seen “considerable progress” in bringing inflation closer to the central bank's 2 per cent target, but added “more good data” was required before moving on rate cuts.
While he declined to offer a timetable on when this would happen, traders expect the Fed will make an initial rate cut in September before potentially two additional quarter-point cuts in their November and December meetings, according to CME Group data.
Mahmoud Alkudsi, senior market analyst at ADSS, said “expectations are growing for an impending monetary policy pivot”.
“With inflation cooling off from the higher levels earlier in the year, the Federal Reserve will gain greater confidence in its current road map, with the coveted 2 per cent target growing closer,” Mr Alkudsi wrote to clients.
And in a further clue that the Fed sees the economy as cooling, Mr Powell described the labour market as “strong, but not overheated”. While the US jobs market added a healthy 206,000 positions last month, the unemployment rate unexpectedly ticked up to 4.1 per cent.
Unlike other central banks, the Fed has a dual mandate of maintaining price stability and maximum employment.
Mr Powell touched on the two-sided risks the US central bank faces. Holding rates for either too long or not long enough both threaten the health of the economy, either by steering it into a recession and causing an unwanted sharp rise in unemployment, or seeing inflation rise again.
“We're very much aware that we have two-sided risks now … and we're determined to balance those as best we can,” Mr Powell said.
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Directed by: RS Prasanna
Starring: Ayushmann Khurrana, Bhumi Pednekar
COMPANY PROFILE
Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends
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Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
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Job: Fitness entrepreneur, body-builder and trainer
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Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through www.etihadarena.ae and www.ticketmaster.ae.
COMPANY PROFILE
Company name: Klipit
Started: 2022
Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant
Based: Dubai, UAE
Industry: Digital receipts, finance, blockchain
Funding: $4 million
Investors: Privately/self-funded
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
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Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
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COMPANY PROFILE
Name: Elmawkaa
Based: Hub71, Abu Dhabi
Founders: Ebrahem Anwar, Mahmoud Habib and Mohamed Thabet
Sector: PropTech
Total funding: $400,000
Investors: 500 Startups, Flat6Labs and angel investors
Number of employees: 12
COMPANY PROFILE
Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside
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Sudden change in behaviour or displays higher levels of stress or anxiety
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Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars