Facebook reported better-than-expected quarterly profit and revenue on Wednesday as it pushed further into video advertising, showing no sign of financial damage from the controversy over how Russia used the social network in an attempt to sway voters in the 2016 U.S. election.

The company’s shares, which hit a record earlier in the day, initially rose in after-hours trading, but later fell into negative territory. They have gained almost 60 percent this year.

Chief Executive Mark Zuckerberg condemned Russia’s attempts to influence last year’s election through Facebook posts designed to sow division, and repeated his pledge to ramp up spending significantly to increase the social network’s security, something he said on Wednesday would affect profits.

“What they did is wrong, and we are not going to stand for it,” Zuckerberg said of the Russians, on a conference call with analysts.

Facebook is at the center of a political storm in the United States for the ways it handles paid political ads and allows the spread of false news stories. U.S. lawmakers have threatened tougher regulation and fired questions at Facebook General Counsel Colin Stretch in hearings this week.

Facebook, in a series of disclosures over two months, has said that people in Russia bought at least 3,000 U.S. political ads and published another 80,000 Facebook posts that were seen by as many as 126 million Americans over two years. Russia denies any meddling.

Facebook’s total advertising revenue rose 49 percent in the third quarter to $10.14 billion, about 88 percent of which came from mobile ads.

Analysts on average had expected total ad revenue of $9.71 billion, according to data and analytics firm FactSet.

Facebook in the third quarter gave advertisers for the first time the ability to run ads in standalone videos, outside the Facebook News Feed, and the company is seeing good early results, Chief Operating Officer Sheryl Sandberg told analysts on a conference call.

“Video is exploding, and mobile video advertising is a big opportunity,” Sandberg said.

More than 70 percent of ad breaks up to 15 seconds long were viewed to completion, most with the sound on, she said.

The 49 percent increase in total ad sales in the latest quarter compares with a 47 percent rise in the prior quarter and a 51 percent jump in the first quarter.

Facebook has been warning for more than a year about reaching a limit in “ad load”, or the number of ads the company can feature in users’ pages before crowding their News Feed.

Advertisers seem unfazed, though, spending heavily as the social network continues to attract users.

The nearly 50 percent jump in ad revenue “is phenomenal, especially when for the past few quarters they’ve been trying to bring that expectation way, way down. Yet it keeps going up,” Tigress Financial Partners analyst Ivan Feinseth said.

Of the Russia scandal enveloping Facebook publicly, Feinseth said: “In the bigger picture, I don’t think it’s a really big factor.”

The company’s performance was strong in comparison with smaller social media firms Snap Inc and Twitter, Wedbush analyst Michael Pachter said.

“Facebook grew revenues by $3.3 billion year-over-year for the quarter. This is more than Twitter and Snapchat generate combined for the full year,” he said.

Facebook said about 2.07 billion people were using its service monthly as of Sept. 30, up 16 percent from a year earlier.

Analysts on average had expected 2.06 billion monthly active users, according to FactSet.

Net income rose to $4.71 billion, or $1.59 per share, from $2.63 billion, or 90 cents per share.

Analysts on an average were expecting the company to earn $1.28, according to Thomson Reuters I/B/E/S.

Total revenue increased 47.3 percent to $10.33 billion beating analysts estimate of $9.84 billion, according to Thomson Reuters I/B/E/S.

Various U.S. investigations into how Russia may have tried to sway American voters in the months before and after last year’s elections are hanging over Facebook and its competitors.

There is also proposed U.S. legislation that would extend rules governing political ads on television, radio and satellite to also cover digital advertising.

“We expect more scrutiny about Facebook’s ad system ahead,” analyst Debra Aho Williamson of research firm eMarketer said in a note. “We’re also monitoring for any signs that this investigation will have a material impact on ad revenue.”
…

President Donald Trump is expected to name Jerome Powell as the new head of the U.S. central bank.

Trump is scheduled to formally announce the pick Thursday in the White House Rose Garden.

“I think you will be extremely impressed by this person!” he teased in a Twitter post.

WATCH: Who Will Be the Next Fed Chief?

Sucessor to Yellen

The Wall Street Journal, citing unnamed sources, reported late Wednesday that White House officials have notified Powell that he will replace Federal Reserve Chair Janet Yellen when her term expires early next year. Other media outlets also said Powell is Trump’s choice.

Powell is one of the Federal Reserve’s governors. Analysts say he is a Republican centrist who appears inclined to continue the Fed’s strategy of gradually raising interest rates. The Journal story cautioned that Trump, who has praised Yellen recently, might still change his mind.

Powell would be a middle-ground pick for Trump, who is also considering current Fed Chair Yellen as well as Stanford University economist John Taylor and former Fed Governor Kevin Warsh.

Powell may relax rules

While Powell is expected to continue Yellen’s cautious approach to raising interest rates, economists say he might relax some of the financial rules designed to prevent another financial crisis like the one that caused chaos in the markets during the 2007-2008 recession. Trump has complained that those rules hurt banks and economic growth. Yellen, who was selected as Fed chair by President Barack Obama, has been an outspoken advocate for the stricter financial regulations that took effect in 2010.

Many conservative members of Congress had been pushing Trump to select Taylor, rather than Powell, for Fed chairman. Taylor, one of the country’s leading academics in the area of Fed policy, would likely embrace a more “hawkish’’ approach, more inclined to raise rates to fight inflation than to keep rates low to support the job market. Taylor is the author of a widely cited policy rule that provides a mathematical formula for guiding rate decisions. By one version of that rule, rates would be at least double what they are now.
…

ExxonMobil has promised to upgrade pollution controls at eight of its manufacturing facilities along the U.S. Gulf Coast under an agreement it reached with federal authorities.

The petrochemical giant will spend about $300 million to install pollution controls at the plants to settle allegations that it violated U.S. environmental law by failing to properly monitor industrial flares at its petrochemical plants, resulting in illegal air pollution.

The U.S. Justice Department, in a statement, said the Exxon facilities — located in Louisiana and Texas — will operate new air pollution control and monitoring technology to reduce the harmful emissions.

“Once fully implemented, the pollution controls required by the settlement are estimated to reduce harmful air emissions of volatile organic compounds (VOCs) by more than 7,000 tons per year,” the DOJ said in a statement. “The settlement is also expected to reduce toxic air pollutants, including benzene, by more than 1,500 tons per year.”

The Justice Department describes VOCs as key components in the formation of smog, which can irritate lungs and inflame respiratory issues like asthma. Chronic exposure can lead to leukemia and adverse reproductive effects in women, the DOJ said.

Exxon also will be required to spend $1 million on a project to plant trees in Baytown, Texas, and purchase a $1.5 million mobile air quality monitoring vehicle for use by Louisiana’s environmental protection agency.
…

The co-owner of a Fifth Avenue skyscraper controlled by the family of Jared Kushner says demolishing the tower to build luxury apartments is not practical and the building will likely remain as offices.

Vornado Realty Trust CEO Steven Roth told investors on Tuesday that the Kushner family’s plan to raise billions from investors to rebuild the tower is “not feasible.” He added that “it’s likely that the building will revert to an office building.”

The project drew criticism after media reports that the Kushner Cos. was negotiating with a Chinese insurer with ties to the ruling Communist Party, among other big foreign investors. Critics say such deals would raise conflicts of interest issues with Jared Kushner serving in the White House as an adviser to his father-in-law, President Donald Trump.

 
…

Official figures show that the robust economic recovery across the 19-country eurozone persisted during the third quarter, helping unemployment fall to a near 9-year low.

Eurostat, the European Union’s statistics agency, said Tuesday that the eurozone economy grew by 0.6 percent during the July to September period. Though that’s slightly down on the stellar 0.7 percent tick recorded in the second quarter, it’s modestly higher than expectations for a 0.5 percent rise.

Separately, Eurostat said unemployment fell to 8.9 percent in September from 9.0 percent the previous month. That’s the lowest rate since January 2009.

Elsewhere, Eurostat said annual inflation in the eurozone dipped to 1.4 percent in October from 1.5 percent as the core rate, which strips out volatile items, surprisingly fell to 0.9 percent from 1.1 percent.

 
…

The African Development Bank has called off a loan to Nigeria that would have helped fund the country’s budget, instead redirecting the money to specific projects, a vice president at the lender said on Monday.

The African Development Bank had been in talks with Nigeria for around a year to release the second, $400 million tranche of a $1 billion loan to shore up its budget for 2017, as the government tried to reinvigorate its stagnant economy with heavy spending.

But Nigeria refused to meet the terms of international lenders, which also included the World Bank, to enact various reforms, including allowing its currency, the naira, to float freely on the foreign exchange market.

Rather than loan Nigeria money to fund its budget, the African Development Bank is likely to take at least some of that money and “put it directly into projects,” Amadou Hott, African Development Bank vice president for power, energy, climate change and green growth, told Reuters in an interview during a Nordic-African business conference in Oslo.

Because prices for oil, on which Nigeria’s government relies for about two-thirds of its revenues, have risen and the naira-dollar exchange rate has improved, the country is relying less than expected on external borrowing, Hott said.

No one from the Nigerian finance ministry was immediately available to comment.

Nigeria’s 2017 budget, 7.44 trillion naira, is just one in a series of record budgets that the government has faced obstacles funding, pushing it to seek loans from overseas.

In late 2016, the AfDB agreed to lend Nigeria a first tranche of $600 million out of $1 billion. But negotiations over economic reform later bogged down, blocking attempts to secure the second tranche of $400 million, sources told Reuters then.

Now, AfDB’s loans will be more targeted, Hott said.

“It’s hundreds of millions of dollars, just in one go, that we were supposed to provide in budget support, but we will move into real projects … ” he said.

Earlier this month, the head of Nigeria’s Debt Management Office said the country is still in talks with the World Bank for a $1.6 billion loan, which will help plug part of an expected $7.5 billion deficit for 2017.

The administration is also trying to restructure its debt to move away from high-interest, naira-denominated loans and towards dollar loans, which carry lower rates.
…

U.S. President is expected to nominate Federal Reserve Governor Jerome Powell as the next chairman of the central bank, senior administration officials said Monday.

Powell is a Republican centrist who appears inclined to continue the Fed’s strategy of gradual interest rate hikes.

But officials say Trump hasn’t made up his mind and could change it.

Powell would represent a middle-ground pick for Trump, who is also considering current Democratic Fed Chair Janet Yellen as well as Stanford University economist John Taylor and former Fed Governor Kevin Warsh.

Powell could, however, relax some of the stricter financial rules that were enacted after the 2008 financial crisis. Trump has complained that those rules have been too restrictive.

The decision over the Fed’s next leader is overshadowing this week’s meeting of the Federal Reserve’s policy meeting.

Trump said Friday he has “someone very specific in mind” for the Fed. “It will be a person who, hopefully, will do a fantastic job,” Trump said in a short video message posted on Instagram and Twitter.

Many conservative members of Congress had been pushing Trump to select Taylor, rather than Powell, for Fed chairman. Taylor, one of the country’s leading academics in the area of Fed policy, would likely embrace a more “hawkish” approach — more inclined to raise rates to fight inflation than to keep rates low to support the job market. Taylor is the author of a widely cited policy rule that provides a mathematical formula for guiding rate decisions. By one version of that rule, rates would be at least double what they are now.

Yellen, who was selected as Fed chair by President Barack Obama, has been an outspoken advocate for the stricter financial regulations that took effect in 2010 to prevent another crisis.
…

Imagine you could swipe your phone over a piece of fish in the supermarket and instantly see secure records of its entire path through the supply chain, from the technique used by the fisherman who caught it in Indonesia to when it was shipped and how it was processed at a factory in your home country —  all at the tap of a smartphone.

Trial projects such as that one are testing the potential of Blockchain technology to bring transparency to all sorts of notoriously inefficient or shadowy industries in Southeast Asia.

Blockchain, the technology that powers bitcoin, is an essentially unchangeable form of bookkeeping. It creates cryptographically chained signatures between blocks of information that are authenticated by users over a peer-to-peer distributed ledger — a public record that can be applied to any type of bookkeeping, not just cryptocurrencies.

“It removes the requirement for a centralized authority, and in a lot of the products that it’s being launched in, this centralized authority tends to be the government,” said Alisa DiCaprio, head of research at R3 — an enterprise banking software firm that uses distributed ledger technology.

In a region where the most important records — identity and ownership for instance — are often subjected to little or no external oversight, blockchain offers enormous potential benefits.

Erin Murphy, Founder and Principal of Inle Advisory Group, a Myanmar and emerging business advisory firm, said major Asian business hubs are looking to blockchain to clean up and simplify transactions.

“Ideally, we would want to see adoption of blockchain at an official level all across the region,” she said in an email. “But perhaps not surprisingly, the governments that are leading blockchain adoption are those that are already low-corruption.”

One of those governments, she said, is Singapore, which is working with major banks on a blockchain-based system to streamline and qualitatively improve their customer (KYC) processes.

In other countries, it is being used for completely different purposes. In the Philippines, a remittance market worth billions of dollars per month has been invaded by firms offering cheaper services built on blockchain, which people can access without a bank account..

“Any steps that get taken at first may not be viewed through an anti-corruption lens and may inadvertently tackle that issue; it will likely be viewed through a development lens to kickstart poverty alleviation and bringing sectors up to international standards that attract foreign investment,” Murphy said.

More than money

There are many trials with clear utility in Southeast Asia underway, including systems for land titling under development in Sweden and Japan.

In June, the United Nations unveiled a blockchain-based system built in partnership with Microsoft and Accenture that gives stateless refugees a permanent identity based on biometric data.

It’s also being explored for secure voting systems.

The blockchain-based app developed to track the supply chain of fish from Indonesia — Provenance — is now the basis of many other trials, including a project to create a similar system for the garment industry.

Online you can view the results of a pilot released in May this year that follows a piece of clothing — an Alpaca Mirror Jumper from London-based designer Martine Jarlgaard, from a farm in Dulverton, Britain, through every step of production into London with location, content and timestamps.

It is a long way, though, from realizing that something can be done to actually making it happen, DiCaprio of R3 said.

“The technical capability to do this exists in most developing countries,” she said. “You have engineers who can code on the blockchain. But the understanding of how to actually implement this from a business point of view is very poor.”

DiCaprio estimates it will take about five years before we actually see large-scale functioning applications and believes the most impactful will occur at the macro economic level.

“So for example one area that it’s moving very quickly is trade finance,” she said. “And trade finance, you’re generally talking about fairly large companies, generally in Asia mostly exporting or importing from or to the US or EU,.”

Faster, cheaper and more transparent transactions combined with reductions in the risks of lending and borrowing would flow to down to the village level, she added.

Subversion vs centralization

Blockchain proponents are divided by some sharply divergent values. Some see blockchain — whose slogan is “be your own bank,” as technology that can fundamentally upend a global financial system they believe is intractably corrupt.

“There is a serious opportunity for us here to remove money out of government,” said a Southeast Asia based bitcoin trader who would only give his alias FlippingABitCoin, fearing he could expose himself to physical theft.

Billions of people currently excluded from the formal banking system will be able to access global cryptocurrencies with no middle man using nothing more than a phone, he said.

“It will level out the playing field of power,” he said.

Another group of enthusiasts are encouraging the absorption of this technology by states, as demonstrated by Canada, Singapore, China and Germany, all of which are either exploring or conducting trials of their own central bank digital currencies using blockchain.

“In the long run, we believe if there is any threat at all to governments, it is that other governments will lead the way in adopting blockchain technologies in producing low-corruption, high-transparency, highly-secure digitized economic infrastructures that will attract business, investment and stakeholder confidence,” wrote Michael Hsieh, a non-resident affiliate at the Center for International Security and Cooperation at Stanford University, in an email.

“The societies who lead in the great fintech [financial technology] innovation race of the 21st century will siphon all the capital and productivity from those that lag,” he wrote.
…

Xavier Gabriel can take some credit if the tiny Catalan mountain town of Sort is one of the most famous in Spain.

He runs a lottery shop called La Bruja de Oro, or The Golden Witch, in a town whose name, aptly, means “Luck” in Catalan. Its fortune in having sold many prize-winning tickets has made it a household name and a successful online business.

But the crisis surrounding Catalonia’s push for independence has changed life for 60-year-old Gabriel. He joined more than 1,500 companies in moving their official headquarters out of the wealthy region in recent weeks. Their main fear: that they would no longer be covered by Spanish and European Union laws if Catalonia manages to break away, dragging their businesses into unknown territory.

“The time had come to make a decision,” said Gabriel, who employs 16 people and describes himself as a proud Catalan.

​Hedging their bets

Like Gabriel’s, the vast majority of companies that moved their headquarters didn’t transfer workers or assets, such as bank holdings or production equipment. So far, it’s mainly a form of legal insurance. But as the political crisis escalates, the risk is that companies are deferring investments and hiring. There is evidence that tourists are holding off booking, perhaps frightened by images in the media of police crackdowns, street demonstrations and strikes.

And the situation risks getting worse before it improves: the central government’s decision Friday to take control of the region could spiral out of control if there is popular resistance, whether by citizens or local authorities like the Catalan police force.

“There is absolutely no doubt that the crisis is having a very damaging effect on the economy,” said Javier Diaz Gimenez, an economics professor at Spain’s prestigious IESE Business School.

Financial markets in Spain have so far fallen only modestly, reflecting investors’ apparent belief that the tensions will eventually be resolved. The Spanish government has called a regional election in Catalonia for Dec. 21 and could later consider revisions to the constitution that might placate some of the independence supporters.

But that could take some time, Diaz Gimenez says, given how confrontational both sides have been.

Banks leave

The list of businesses moving headquarters includes Catalonia’s top two banks, Caixabank and Sabadell, which are among Spain’s top five lenders. Then there is the Codorniu cava sparkling wine maker for which Catalonia is famous. Another well-known cava maker, Freixenet, is also planning to follow if the independence drive continues. Publishing giant Planeta, the world’s leading Spanish-language publisher and second biggest publisher in France, has also moved its official address out of Catalonia.

Caixabank says it suffered a moderate but temporary run on deposits because of the crisis, but said it has since recovered and was adamant the move was permanent.

Shares for Caixabank, Sabadell and some other companies have been volatile, falling after the Oct. 1 vote for independence and jumping sharply when they announced their decision to move headquarters.

Tip of the iceberg

Lottery shop owner Gabriel says ticket sales this month are up nearly 300 percent over last year, a rise he attributed to popular support for his decision to move his business.

Diaz Gimenez said the decisions to move headquarters, while not immediately affecting jobs, were “just the tip of the iceberg.”

“Plans to relocate firms or invest elsewhere are going to accelerate and some of it is going to go to, say, Poland, and it’s never going to come back,” he said.

“People that were thinking about investing in Spain and Barcelona are starting to think again,” he said. “It’s not just Catalonia. It’s the mismanagement by Spain, which is proving that it’s not a serious country because it cannot solve this thing.”

Spanish economy humming

The turmoil, ironically, comes just as Spain has been enjoying some of the fastest economic growth in Europe.

Its economy, the fourth-largest in the 19-country eurozone, grew by a hefty quarterly rate of 0.9 percent in the second quarter. The government has maintained its forecast for growth in 2017 at 3.1 percent, but revised its estimate for 2018 from 2.6 percent to 2.3 percent because of the political crisis. Moody’s credit rating agency has warned that a continued political impasse and, ultimately, independence for Catalonia would severely hurt the country’s credit rating.

Billions at stake

Tourism seems to be taking the biggest hit so far.

Experts say spending in the sector in Catalonia in the first two weeks of October — that is, following the independence referendum — was down 15 percent from a year earlier.

Tourism represents about 11 percent of Spain’s 1.1-trillion euro ($1.3 trillion) gross domestic product, with Catalonia and its capital, Barcelona, providing a fifth of that, being the most popular destinations for visitors.

Exceltur, a nonprofit group formed by the 25 leading Spanish tourist groups, expects growth in tourism this year to ease from an estimated 4.1 percent to 3.1 percent.

Reservations in Barcelona alone are down 20 percent compared with last year, it said. If the trend continues in the final three months of the year, it could lead to losses of up to 1.2 billion euros ($1.41 billion) in the sector, which in turn could affect jobs.

Analysts fear that the independence movement’s stated aim of continuing to create as much social and economic chaos for Spain as possible could exacerbate the situation. The Catalan National Assembly group has been openly talking about a boycott against Spain’s top companies and major strike activity.

“Spain, its tourism, everything is very dependent on image,” Diaz Gimenez said. “And this is just killing it.”
…

At the 2015 Paris summit, world leaders pledged to take steps to avoid catastrophic climate change. This November in Bonn, Germany, U.N. negotiators will be back, working out the details of how to cut emissions of planet-warming gases. It is the first conference since President Donald Trump said the United States would withdraw from the agreement. That leaves questions about the direction of U.S. greenhouse gas emissions. As VOA’s Steve Baragona reports, the answer is not straightforward.
…

Artisans in Mali are hoping that Bogolan, a traditional cotton fabric, will continue to fascinate Western fashion designers and provide jobs at home. VOA’s Teffera Girma Teffera and Bagassi Koura visited a small neighborhood in central Bamako where artisans are hard at work. Salem Solomon narrates.
…

Things are weird, as usual, in Key West.

A pair of Vikings push a stroller full of stuffed chimps down Duval Street. A man with a ponytail swallows a steel sword. People dressed only in body paint and glitter wander and jiggle from bar to bar.

Fantasy Fest, one of Key West’s major tourist draws of the year, is in full swing. And that’s a relief for Florida Keys business owners trying to weather the economic storm that hit after Hurricane Irma battered the middle stretch of the tourism-dependent island chain.

Bucket list trip

The festivities have not disappointed Gary Gates from Buffalo, New York, who planned this “bucket list” trip 10 months ago with six friends.

“We were coming whether there was a hurricane or not,” the former NFL cameraman said. “I’ve never seen anything quite like this. To come down here and actually see people dressed in all kinds of costumes — or no costumes at all — was something that I needed to see.”

Gates flew into Key West and has not left during its annual 10-day festival of costume parties and parades, so he has not seen the devastation that lingers more than a month since Hurricane Irma made landfall Sept. 10 about 20 miles north of the city.

​Middle Keys hit hardest

The mostly residential middle stretch of the island chain took the brunt of the hurricane’s 130-mph winds. The area is almost entirely brown, with debris piled alongside the highway and mangroves stripped bare. A stranded boat was christened the SS Irma with spray paint and offered “free” to drivers passing by.

But at opposite ends of the 120-mile-long island chain, tourist attractions in Key Largo and Key West escaped significant damage.

Dolphins Plus Bayside was ready for visitors three days after Irma’s landfall, but business has been down by half compared to last fall, said Mike Borguss, the third generation in his family to run the Key Largo attraction.

Some staff now live with friends or in temporary trailers parked outside their damaged homes, but the dolphins swim up to the water’s edge to check out new people toting cameras, and an adjacent hotel property is open for weddings and other events that had to be canceled elsewhere in the Keys because of Irma, said Art Cooper, Borguss’ cousin and curator at Dolphins Plus Bayside.

“The water’s pretty, the weather’s beautiful and we wish you were here,” Cooper said.

​Tourism down significantly

Scott Saunders, president and CEO of Fury Water Adventures, estimated tourism in Key West has been about a third of what it was at this time last fall, even though the city’s hotels, restaurants, cruise ship operations and beaches quickly reopened after the storm.

“There’s no reason not to be doing everything we did last year,” Saunders said before one of his fleet’s sunset cruises. “We should be having that tourist base down here, but we haven’t had any.”

Jodi Weinhofer, president of the Lodging Association of the Florida Keys and Key West, blames news coverage of Irma, but not the hurricane itself, for the downturn.

“There was over a $100 million worth of negative press,” Weinhofer said.

Tourism big business in Keys

Tourism is a $2.7 billion industry in the Keys, supporting 54 percent of all jobs in the island chain, according to Monroe County’s Tourist Development Council.

Some jobs have been lost to Irma. Last week, Hawks Cay Resort on Duck Key, about 35 miles northeast of Irma’s landfall, let go 260 workers amid ongoing repairs. The Islamorada Resort Company said its four properties in the Middle Keys will be closed for renovations over the next six months.

But up and down the island chain, bars, marinas and mom-and-pop establishments able to reopen have been hiring laid-off workers and keeping people from moving away, Daniel Samess, CEO of the Greater Marathon Chamber of Commerce.

About 70 percent of roughly 35 hotels and motels in the Middle Keys are open, though those rooms mostly are filled by displaced residents and state and federal recovery workers. Officials plan to provide alternative housing and open those hotel rooms fully to tourists within the next two months, Samess said.

Final sweeps for debris in some parts of the Keys are scheduled Sunday, which also is the finale for Fantasy Fest. So far, the amount of broken tree branches and remnants of homes and belongings wrecked by Irma could fill over 133 Goodyear Blimps, according to Monroe County officials.

The cleanup will help create a good impression for visitors to Key West long before they arrive in the southernmost city in the continental U.S., said Key West Mayor Craig Cates.

“It’s a scenic cruise in your car coming down, and it’s very important that they get it cleaned up,” he said.
…

The U.S. economy expanded at a three percent annual pace in July, August and September, about the same pace as the prior quarter.

Friday’s Commerce Department data surprised economists, who thought damage from two hurricanes would cut growth to a lower level. The data show the world’s largest economy is now about 2.3 percent larger than it was at this time last year.

Stuart Hoffman of PNC bank says the “solid” growth data is likely to help corporate profits and reinforce the U.S. central bank’s determination to raise interest rates in December. Josh Bivens of the Economic Policy Institute says the figures “overstate” growth, and he notes inflation is still below the Fed’s two percent target, making an interest rate hike unnecessary at this time.

Officials raise rates to fend off high inflation by cooling economic activity. Rates were slashed during the recession to bolster growth and employment. 

Federal Reserve leaders gather Tuesday and Wednesday in Washington to debate interest rate policy. Most economists predict they will not raise rates until their next meeting in mid-December.

Next Friday, government experts will publish unemployment data for October. September’s rate was a low 4.2 percent.
…

President Trump says he is “very close” to picking a person for the most important economic post in the country: the head of the US Federal Reserve. Current Chair Janet Yellen, whose term expires early next year, is one of at least five candidates under consideration. Regardless of the president’s choice, most analysts who spoke with VOA don’t expect big changes in US monetary policy. But as Mil Arcega reports, others say, sooner or later the next Fed Chief could face a slowing economy.
…

The United States has announced changes to its nonimmigrant work visa policies that are expected to make renewals more difficult.

In the past, U.S. Citizenship and Immigration Services would generally approve the renewals unless the visa holder had committed a crime. Now, renewals will face the same scrutiny as the original applications.

“USCIS officers are at the front lines of the administration’s efforts to enhance the integrity of the immigration system,” USCIS Director L. Francis Cissna said, according to the announcement posted on USCIS’ website this week. “This updated guidance provides clear direction to help advance policies that protect the interests of U.S. workers.”

The new regulations could affect more than 100,000 people holding at least eight different types of work visas who fill out the I-129 form for renewals.

Sam Adair, a partner at the Graham Adair business immigration law firm in California and Texas, said that for the most part, he expected visa holders would most likely face lengthier adjudication periods in their renewal processes, as opposed to increased numbers of denials.

“I don’t think it’s going to be a big shift for us,” Adair told VOA. “But I think what we’ll see is just an increase in the number of requests for evidence, an increase in the delays on the adjudication of these petitions, and really it’s going to just result in more costs for the employers who are filing these petitions.”

‘High-skilled’ workers

Of all visa holders affected by this policy, those in the United States on an H-1B, a visa for “high-skilled” workers, are the biggest group. Of 109,537 people who had to submit I-129 forms in fiscal 2017, 95,485 were H-1B holders, according to data sent to VOA by USCIS.

H-1B visas have been threatened in the past, most recently by a bill proposed this year that would have raised the minimum salary requirement for workers brought in on the visa. While advocates of the program argued that it would keep workers from being exploited, many H-1B holders feared that businesses would be less willing to hire them or keep them on board.

But some Americans support the new regulations, saying that nonimmigrant work visas hurt American workers.

“It’s prudent to make sure that the people that receive those visas are in complete compliance with all of the requirements,” Joe Guzzardi, national media director of Californians for Population Stabilization, told VOA.

“It just isn’t possible to think that there aren’t American workers that couldn’t fill these jobs,” he said, noting that while the regulations might hurt businesses, they would help Americans looking for work.
…

President Donald Trump says he is “very close” to picking a person for the most important economic post in the United States, the head of the Federal Reserve. Current Chair Janet Yellen’s term expires early next year and she is one of at least five candidates for the job.

Besides Yellen, the candidates include Fed board member Jerome Powell, former Fed governor Kevin Warsh, Stanford University economist John Taylor and Trump economic adviser Gary Cohn.

WATCH: Who Will Be the Next Fed Chief?

Moody’s Analytics economist Ryan Sweet says a new Fed chief is likely to continue current policy at least for a while because “rocking the boat” could rattle financial markets.

The Fed’s job is to manage the world’s largest economy in ways that maximize employment and maintain stable prices. During recessions, the bank cuts interest rates in a bid to boost economic growth and create more jobs.To cope with the most recent recession, the U.S. central bank slashed interest rates nearly to zero.

The jobless rate fell from 10 percent to the current 4.2 percent, and the economy stopped shrinking and began growing slowly.

Critics of the record-low interest rates said keeping rates too low for too long could spark strong inflation and damage the economy. However, the inflation rate has been below the two percent level that many experts say is best for the economy.

As a member of the Fed’s board and later as Chair, Yellen supported low interest rates and a slow, cautious return to “normal” rates. Experts also say she improved communication between the Fed and financial markets, which reduced uncertainty and reassured investors.

Trump criticized Yellen during the campaign, but then as president, praised her work. Analysts Tom Buerkle of “Reuters Breaking Views” gives the Fed credit for taking effective action during a crisis when Congress was reluctant to act.

Another candidate is former investment banker Gary Cohn, who now heads the National Economic Council at the White House. He has reportedly been working on efforts to reform taxes and boost spending on U.S. infrastructure.

Fed Board member Jerome Powell is also a candidate. He is a Republican with a background in private equity who served in a top Treasury Department post. Powell supported Yellen’s approach of slashing interest rates during the crisis, and returning them to historic levels as the economy recovers.

When rates were cut to nearly zero, Fed officials took the further step of buying huge quantities of bonds in an effort to push down long-term interest rates to give additional economic stimulus. The complex procedure is called “quantitative easing.”

“Ryan Sweet of Moody’s Analytics says when the next recession appears, Powell will be more willing to use tools like quantitative easing than more conservative candidates like Kevin Warsh and John Taylor.

Warsh is a former member of the Fed’s board, a lawyer, and a former executive of a major financial firm with experience at the president’s National Economic Council.

John Taylor of Stanford University and the Hoover Institution is an eminent economist who has served on advisory councils for presidents and congress and written books on economic topics. Taylor came up with an equation, called the “Taylor Rule,” that considers inflation as well as slack in the economy as a way to set interest rates. Some conservatives say the Taylor Rule would improve policymaking.

Critics say the economy is too complex to be managed by a computer, and the Taylor Rule would make the Fed less independent and effective.

Tara Sinclair of Indeed.com says independence is a “key part” of having an effective monetary policy. She says the interest rate-setting process and other decisions need to be separate from Congress and the administration so interest rates and other policies are based on long-run economic needs.

The president is expected to announce his choice in early November.
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Jordan’s high and rising public debt has worried the International Monetary Fund and prompted a downgrade from Standard & Poor’s. So the government is planning a blast of austerity by year-end.

Tax hikes and subsidy cuts —- likely to be highly unpopular —- are on the agenda as the country’s debt to GDP ratio has reached a record 95 percent, from 71 percent in 2011.

“Postponing problems might increase the popularity of the government but would be a crime against the nation,” Prime Minister Hani Mulki told a group of parliamentarians this week.

After an IMF standby arrangement that brought some fiscal stability, Jordan agreed last year to a more ambitious three-year program of long-delayed structural reforms to cut public debt to 77 percent of GDP by 2021.

The debt is at least in part due to successive governments adopting an expansionist fiscal policy characterized by job creation in the bloated public sector, and by lavish subsidies for bread and other staple goods.

It also hiked spending on welfare and public sector pay in a move to ensure stability in the aftermath of the “Arab Spring” protests in the region in 2011. But the economy has slowed, battered by the turmoil in neighboring Syria and Iraq.

The economic strains reduced local revenue and foreign aid, forcing Jordan to borrow heavily externally and also resort to more domestic financing.

Although there has been some progress this year with improving remittances, tourism and some rebound in exports, there has been no pickup in growth since 2015 — with the officials forecasting 2 percent growth this year from an earlier IMF 2.3 percent target.

“This year we are at a crossroads. Everything I am trying to do is to stop the hemorrhage and start breathing,” Mulki was quoted as saying at another meeting to garner support.

The rising debt accentuated by the protracted regional conflicts on Jordan’s borders was the main reason Standard and Poor last week downgraded its sovereign rating to B+.

Subsidy risk

Economists said Jordan’s ability to maintain a costly subsidy system and a large state bureaucracy was increasingly untenable in the absence of large foreign capital inflows or infusions of foreign aid, which have dwindled as the Syrian crisis has gone on.

Jordanian officials say they expect less donor support next year than any time since the crisis began. They are also concerned that Gulf states, hit by lower oil prices, have so far not committed any support funds given after the “Arab Spring” to be renewed.

Politicians and economists say the government’s fiscal consolidation plan envisages a doubling of bread prices and raising sales taxes on basic food and fuel items.

This should cut into the estimated 850 million dinars ($1.2 billion) the government pays in annual subsidies from bread to electricity to water.

But economists reckon subsidy cuts are bound to worsen the plight of poorer Jordanians, a majority of the country’s population, and removing subsidies has triggered civil unrest in the past.

As well as debt, the IMF has also pointed to the unemployment rate, which has risen sharply in the last two years to 16 percent, and to low tax collection.

The IMF says Jordan stands out among countries in the region with among the lowest tax collections. Personal taxes constituting only 0.4 percent of GDP, with nearly 95 percent of the population not subject to income tax.

Critics say any hikes would extract more from the segment of salaried employees that already pays while leaving influential business tycoons outside the tax net.

“The tax burden in comparison with countries of the region except the oil producers is low… there is big generosity in exemptions,” said Jihad Azour, the IMF’s director of the Middle East and Central Asia department during a recent visit to Jordan.

Economists fear that the IMF’s tax recommendations endorsed by the government that range from expanding corporate income tax to dividends and tougher sanctions for tax evaders will hurt business sentiment in a country whose political stability has turned it a safe haven.

“It’s important to activate growth to bolster stability and ensure a faster drop in debt,” said the IMF’s Azour adding that tackling Jordan debt problem was crucial for its future prosperity in a turbulent region.
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An unprecedented Chinese financial and construction effort is rapidly developing Pakistan’s strategically located Arabian Sea port of Gwadar into one of the world’s largest transit and transshipment cargo facilities.

The deep water port lies at the convergence of three of the most commercially important regions of the world, the oil-rich Middle East, Central Asia, and South Asia.

Beijing is developing Gwadar as part of the China-Pakistan Economic Corridor, known as CPEC. The two countries launched the 15-year joint mega project in 2015 when President Xi Jinping visited Islamabad.

Under the cooperation deal construction or improvement of highways, railways, pipelines, power plants, communications and industrial zones is underway in Pakistan with an initially estimated Chinese investment of $46 billion.

The aim is to link Gwadar to landlocked western China, including its Muslim-majority Xinjiang region, giving it access to a shorter and secure route through Pakistan to global trade. The port will also provide the shortest route to landlocked Central Asian countries, including Afghanistan, through transit trade and offering transshipment facilities.

Chinese fuel imports and trading cargo will be loaded on trucks and ferried to and from Xinjiang through the Karakoram Highway, snaking past snow-caped peaks in northern Pakistan.

‘Qualitative change’

Gwadar will be able to handle about one million tons of cargo annually by the end of the year. Officials anticipate that with expansion plans under way, the port will become South Asia’s biggest shipping center within five years, with a yearly capacity of handling 13-million tons of cargo. And by 2030, they say, it will be capable of handling up to 400-million tons of cargo annually.

China has in recent months begun calling CPEC  the flagship project of its global Belt and Road Initiative, or BRI. The “qualitative change” from an experimental project to flagship project underscores the importance Beijing attaches to CPEC, said Zhao Lijian, the deputy chief of mission at the Chinese embassy in Islamabad.

Out of 39 “early harvest” projects under CPEC, 19 have since been completed or are under construction with a Chinese investment of about $18.5 billion, Lijian told VOA. The progress makes it the fastest developing of all of at least six BRI’s corridors China plans to establish, added the Chinese diplomat.

Gwadar is a “symbol of regional peace and prosperity” because it will connect countries around Pakistan to serve their trading interests, said port Chairman Dostain Khan Jamaldini.

Jamaldini dismissed as “not true” concerns that skilled Chinese laborers, engineers and businesses will flood Pakistan, hurting domestic industries. About 65 percent of the labor force on construction and other projects at Gwadar is Pakistani, and the number of Chinese is currently just over 300, he added.

Security concerns and India’s claims over some of the territory crossed by the massive project remain key challenges for Gwadar and CPEC in general. Pakistani and Chinese officials dismiss reported assertions that Beijing is expanding its presence at Gwadar to be able to handle naval ships and military transport planes.

The collaboration has “no strategic or political” aims against a third country, insisted Lijian. He went on to assert that the purpose of CPEC” is to help our iron brother Pakistan” to improve its economy and to strengthen the bilateral relationship.

Pakistani officials have trained and deployed about 15,000 troops and paramilitary forces to guard CPEC-related projects and the Chinese working on them. Islamabad alleges that the Indian intelligence agency has been tasked to plot subversive acts to derail CPEC.

Sleepy fishing town

Gwadar, with a population of around 100,000, mostly fishermen and boat makers, is often referred to as a sleepy fishing town.

The costal city’s poverty-stricken residents are hoping new employment opportunities will be created for them in the wake of the massive development underway in Gwadar.

But their immediate challenges are shortages of clean drinking water and hours long daily power blackouts.

“We are happy Chinese are building port, hospitals, schools and roads but right now we out of power during most of the day and limited water availability,” said fisherman Khalil Ahmed.

The family, like other fishermen in Gwadar, has been plying unspoiled crystal blue waters of the Arabian Sea for decades with age-old fishing techniques and barely surviving on limited income because financial resources do not allow them to buy modern fishing tools.

However, ongoing massive economic activity will “qualitatively” change the lives of its poverty-stricken residents for the better, says Mushahid Hussain, who chairs a parliamentary committee on CPEC.

He says a fisheries processing plant is being installed at the port and arrangements are being planned to train and equip fishermen to improve and export local fish to other parts of Pakistan and China.

Senator Hussain believes economic projects under construction in Gwadar will help its people and address long-running grievances of the province of Baluchistan, where the port is situated.

The poverty-stricken largest Pakistani province has long been in the grip of a low-level Baluchistan separatist insurgency, which mainly stems from demands from the federal government for local control over Baluchistan’s vast natural resources.

Gwadar’s existing 50-bed government hospital is being extended to 300 beds, a technical and vocational institute is being constructed, a 300-megawatts coal-based power plant and a desalination plant are being installed, a new international airport and a six-lane international standard expressway are being built to connect Gwadar port with the rest of Pakistan and neighboring countries, including Iran and Afghanistan.

Local officials say most of the projects, including the new airport, are being built with Chinese financial grants. The rest of the projects in Gwadar and elsewhere in Pakistan under CPEC are being built with “interest-free” and “soft-loans” from China.

 
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The U.S. economy is expected add another 11.5 million jobs by 2026, as an aging population and longer life spans raise the need for health care providers. The total U.S. workforce is expected to grow to 167.6 million people.

Tuesday’s projections come from the U.S. Bureau of Labor Statistics, which says job growth will accelerate slightly from its current pace, but it will not return to the brisk gains seen the over previous decades. The BLS updates its job outlook every two years as new information becomes available.

The percentage of the workforce over age 55 will rise to nearly one-quarter in 2026, a sharp increase from the less than 17 percent back in 2006. People in their 50s and 60s may retire, which is one reason experts expect workforce participation rates (the percentage of working age people who have jobs or are seeking work) to decline.

Over the decade, nine out of 10 new jobs will be in the services sector, particularly health care. Employment by companies that produce goods is expected to grow at a meager one-tenth of one percent a year, with a gain of just 219,000 jobs by 2026.

The workforce is expected to become more diverse as Asian and Hispanic parts of the U.S. population grow more quickly than average. Whoever is in the workforce will find additional education important, as two out of three jobs in the fastest-growing areas require at least some post-secondary education and training.

And the whole economy is predicted to expand at a two percent annual rate. That is faster than the current growth rate, but below the gains seen in previous decades.

 
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Taiwan is offering visa waivers and setting up overseas investment offices across a swathe of countries to its south, the latest moves to deepen a rebalancing of economic relations away from political foe China.

Officials in Taipei hope to foster more tourism, trade and higher education links with 18 countries covering most of South and Southeast Asia plus Australia and New Zealand. Stronger ties in theory would reduce the role of China, which is Taiwan’s top trading partner now, as the two sides struggle over political differences.

In the latest phase of Taiwan’s effort, called the New Southbound Policy, Philippine citizens may visit Taiwan visa-free for 14 days during a trial period that starts next month and ends in July. Taiwan offered waivers to citizens of Brunei and Thailand in August 2016. Those efforts complement new investment offices, growth in the number of university students in Taiwan and more Taiwanese development aid.

“The purpose of the New Southbound Policy is for us to hold a more advantageous position in international society,” Taiwan President Tsai Ing-wen said in a National Day speech earlier this month. “I also want to use this opportunity to tell our friends from around the world that faced with a rapidly changing Asia-Pacific region. Taiwan is ready to play a more important role in shaping regional prosperity and stability.”

Shaky relations with China

Tsai announced the New Southbound Policy after taking office in May 2016 to rebalance relations for Taiwan’s $529 billion economy.

Taiwanese business people traditionally choose China for investment because of its relatively low costs, skilled workforce and cultural links. More than 93,000 Taiwanese businesses invested in China between 1988 and 2016, according to the American think tank Council on Foreign Relations.

But China claims sovereignty over Taiwan despite the island’s democratic self-rule, causing enough friction to stop dialogue under Tsai’s presidency.

How the New Southbound Policy works

Taiwan’s economic affairs ministry has established investment offices in Indonesia, Myanmar, Thailand, Vietnam and the Philippines to help investors find projects in those countries based on local needs.

The Taiwan government is offering as well credit guarantees for smaller businesses headed to Southeast Asia, where aid from Taipei will help pay for infrastructure and other major projects in those countries. The visa waivers facilitate travel to Taiwan, another boon to the economy.

Taiwan’s trade with the 18 countries covered by the policy had risen 20 percent this year compared to last, Tsai said in her speech without giving an exact time frame.

Tourist arrivals from New Southbound countries are rising as the headcount from China decreases, official data show. The number of postsecondary students in Taiwan from New Southbound Policy countries went up 10 percent over the six months to March from a year earlier, while the number of non-degree university students from China has eased since mid-2016.

Taiwan’s Investment Commission last year approved 252 applications for projects intended for China last year, down 21.5 percent from 2015.

But China remains Taiwan’s top trading partner thanks to a thriving consumer market and the maturity of its supply chain for the likes of tech and machinery. Imports and exports totaled $117.9 billion in 2016.

Feedback from South and Southeast Asia

Indonesia has been a bright spot for finding new investment projects, especially in agriculture, an economic affairs official in Taipei said earlier in the year. Thailand had already approved 274 Taiwanese investment applications, worth $1.39 billion, from 2010 to 2015.

About 3,500 Taiwanese investors had invested in Vietnam as early as 2011 because costs were rising in China while Vietnam was offering incentives to lure foreign capital.

The restart in May of Taiwanese-owned Formosa Plastics Group’s Vietnam steel plant could draw a “cluster” of related Taiwanese firms, said Liang Kuo-yuan, president of Taipei-based think tank Polaris Research Institute in Taipei. Factory work had stopped over a suspected toxic leak that killed fish.

The Philippines, an investment-thirsty Southeast Asian archipelago, is actively looking for Taiwanese companies, said Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in Metro Manila. Taiwanese electronics firms consider the country an export manufacturing base, he said, while healthcare firms may find partners such as hospitals. The growing consumer base lures others.

“We’re seeing entrepreneurs from Taiwan looking into the Philippines, given that it’s a very big retail market,” Ravelas said.

But one Southeast Asian country, Cambodia, may fear angering China by veering too close to Taiwan. Beijing forbids its allies from establishing formal ties with Taipei. In February Cambodian Prime Minister Hun Sen declared a ban on raising the Taiwan flag. Two years earlier the government forbid Taiwan from establishing an informal trade office.

Still early days

Similar go-south policies fell flat under former Taiwan president Lee Teng-hui in 1993 and his successor, Chen Shui-bian, after 2000. China in those years was cheaper, with less competition from local companies, in turn drawing Taiwanese investors.

Today’s policy will struggle as Taiwan faces competition in the 18 target counties from other foreign investment sources, Liang said. Competitors include China, India, Japan and South Korea. China and India were less competitive before 2000. Taiwan lacks a material advantage, he said.

“The biggest problem is that Southeast Asia is not a blue ocean market,” Liang said. “There are too many competitors, so Taiwan can’t just use its point of view to go compete in that market. Taiwan after all has what strength?”
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The sloping vineyards of New York’s Finger Lakes region known for producing golden-hued rieslings and chardonnays also are offering a splash of orange wine.

The color comes not from citrus fruit, but by fermenting white wine grapes with their skins on before pressing – a practice that mirrors the way red wines are made. Lighter than reds and earthier than whites, orange wines have created a buzz in trendier quarters. And winemakers reviving the ancient practice like how the “skin-fermented” wines introduce more complex flavors to the bottle.  

“Pretty outgoing characteristics. Very spicy, peppery.  A lot of tea flavors, too, come through,” winemaker Vinny Aliperti said, taking a break from harvest duties at Atwater Estate Vineyards on Seneca Lake. “They’re more thoughtful wines. They’re more meditative.”

Atwater is among a few wineries encircling these glacier-carved lakes that have added orange to their mix of whites and reds. The practice dates back thousands of years, when winemakers in the Caucasus, a region located at the border of Europe and Asia, would ferment wine in buried clay jars. It has been revitalized in recent decades by vintners in Italy, California and elsewhere looking to connect wine to its roots or to conjure new tastes from the grapes. Or both. Clay jars are optional.

Aliperti has been experimenting with skin fermenting for years, first by blending a bit into traditional chardonnays to change up the flavor and more recently with full-on orange wines. This fall, he fermented Vignoles grapes with their skins in a stainless steel vat for a couple of weeks before pressing and then aging them in oak barrels.

Orange wines account for “far less than 1 percent” of what is handled by Southern Glazer’s Wine & Spirits, the nation’s largest distributor with about a quarter of the market, according to Eric Hemer, senior vice president and corporate director of wine education.

Hemer expects orange wines to remain a niche variety due to small-scale production, higher retail prices _ up to $200 for a premium bottle – and the nature of the wine.

“It’s not a wine that’s going to appeal to the novice consumer or the mainstream wine drinker,” Hemer said. “It really takes a little bit more of, I think, a sophisticated palate.”

The wines have caught on in recent years among connoisseurs who like the depth of flavors, sommeliers who can regale customers with tales of ancient techniques and drinkers looking for something different. Christopher Nicolson, managing winemaker at Red Hook Winery in Brooklyn, said the wines hit their “crest of hipness” a couple of years ago, though they remain popular.

“I think they’re viewed by these younger drinkers as, ‘Oh, this is something new and fresh. And they’re breaking the rules of these Van Dyke-wearing, monocled … fusty old wine appreciators,’” Nicolson said.

It’s not for everyone. The rich flavors can come at the expense of the light, fruity feel that some white wine drinkers crave. And first-time drinkers can be thrown by seeing an orange chardonnay in their glasses.

“Actually I wasn’t sure because of the color, but it has a really nice flavor,” said Debbie Morris, of Chandler, Arizona, who tried a sip recently at Atwater’s tasting room. “I’m not a chardonnay person normally, but I would drink this.”
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A bakery in a low-income area of Johannesburg slashed prices of its popular bread, with unexpected results. What started as a way to help feed the community became a recipe for success as the bakery has a lot more business than ever. VOA’s Arash Arabasadi reports.

((NARRATOR))
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President Donald Trump is considering nominating Federal Reserve Governor Jerome Powell and Stanford University economist John Taylor for the central bank’s top two jobs, in an apparent bid to reassure markets and appease conservatives hungry for change.

Under that scenario, either Powell or Taylor would take the reins from Fed Chair Janet Yellen when her term expires in early February, and the other would fill the vice chair position left vacant when Stanley Fischer retired this month.

“That is something that is under consideration, but he hasn’t ruled out a number of options. He’ll have an announcement on that soon, in the coming days,” White House spokeswoman Sarah Sanders told reporters Friday.

​Powell a centrist

Making Powell, a soft-spoken centrist who has supported Yellen’s gradual approach to raising interest rates, the next Fed chief would provide the continuity in monetary policy that investors crave.

The addition of Taylor, who has backed an overhaul of the Fed and embraced a more rigid rule-oriented monetary policy, would be a feather in the cap of conservative Republicans who feel that monetary policy has been too loose under Yellen, who was named as Fed chair by Democratic President Barack Obama and has led the central bank since February 2014.

“I think Powell might be the safer pick insofar as we know what we’re getting,” said Michael Feroli, chief U.S. economist at J.P. Morgan Chase. “He’s a guy who obviously knows the Fed culture, how the (policy-setting) committee operates, so for some of those soft skills we know he would be effective.”

Powell has embraced the Yellen Fed’s monetary policy, keeping the faith that a tighter job market will eventually push wages higher and end a lengthy period of worryingly low inflation.

Taylor has spent the last two decades refining and advocating wider use of a rule that lays out where interest rates ought to be, given certain conditions of inflation and the broader economy. His rule implies that rates should be higher than they are now.

​Yellen’s defense

Yellen, speaking at an economic conference in Washington Friday evening, mounted a strong defense of the tools the Fed has used to fight the sharp economic downturn triggered by the financial crisis and said there was a risk of another crisis in which those “unconventional policies” may be needed again.

Yellen, who Trump has indicated could still be named to another term as Fed chair, was not asked about the Fed job and did not offer any comment on the selection process.

Taylor inflexible?

Although Taylor is highly regarded within the Fed, his rule-based rate-setting position has spurred criticism that he would handcuff U.S. monetary policy.

Taylor pushed back at a meeting at the Boston Fed on Saturday, saying he favored a flexible implementation of policy rules and did not want to tie the Fed’s hands or suggest that he was motivated by a distrust of policymakers.

“I think that’s completely incorrect,” he said. “I trust policymakers; (rules) are an effort to make policy better.”

Some analysts suggest that fears that Taylor would bring an inflexible monetary policy with him to the Fed, as some Republicans in Congress hope, are likely exaggerated.

“There is some scope for disappointment if people think putting Taylor in will just lead to mechanical-based policy,” Feroli said.

Cleveland Fed President Loretta Mester, speaking with reporters Friday, seemed to agree.

“Even if you pick a rule, the rule itself would need to be modified given the structure of the economy,” she said. “But I do think being systematic, looking at the kinds of information we look at systematically over time, articulating our strategy for policy and being less discretionary is a good idea.”

Confusing signal

At the same time, there are concerns that the combination of Powell and Taylor atop the world’s most powerful central bank could send a confusing signal to markets.

It is unclear whether Trump, who has criticized Yellen’s stewardship but also said on several occasions that he preferred rates to stay low, wants to dramatically alter the Fed’s direction.

Although he appears to be tilting to Powell and Taylor, in addition to Yellen the Republican president has interviewed his top economic adviser Gary Cohn and former Fed Governor Kevin Warsh for the Fed chief position.
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Turkey’s banking regulator urged the public on Saturday to ignore rumors about financial institutions, in an apparent dismissal of a report that some Turkish banks face billions of dollars of U.S. fines over alleged violations of Iran sanctions.

“It has been brought to the public’s attention that stories, that are rumors in nature, about our banks are not based on documents or facts, and should not be heeded,” the BDDK banking regulator said in a statement, adding that Turkey’s banks were functioning well.

The Haberturk newspaper on Saturday reported that six banks potentially face substantial fines, citing senior banking sources. It did not name the banks. One bank faces a penalty in excess of $5 billion, while the rest of the fines will be lower, it said.

Asked to comment, a spokesman for the U.S. Treasury, which is responsible for U.S. sanctions regimes, said only: “Treasury doesn’t telegraph intentions or prospective actions.”

Two senior Turkish economy officials told Reuters Turkey has not received any notice from Washington about such penalties, adding that U.S. regulators would normally inform the finance ministry’s financial crimes investigation board.

U.S. authorities have hit global banks with billions of dollars in fines over violations of sanctions with Iran and other countries in recent years.

The administration of U.S. President Donald Trump last week adopted a harsh new approach to Iran by refusing to certify its compliance with a nuclear deal struck with the United States and five other powers including Britain, France and Germany under his predecessor Barack Obama.

Trump argues the deal was too lenient and has effectively left its fate up to the U.S. Congress, which might try to modify it or bring back U.S. sanctions previously imposed on Iran.

Last week, the U.S. Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker said Trump’s strategy involved placing additional sanctions on Tehran and that Washington had been “engaging our allies and partners” with the aim of denying funds to Iran’s Revolutionary Guard Corps.

The Haberturk report comes as relations between Washington and Ankara, which are NATO allies, have been strained by a series of diplomatic rows, prompting both countries to cut back issuing visas to each other’s citizens.

U.S. prosecutors last month charged a former Turkish economy minister and the ex-head of a state-owned bank with conspiring to violate Iran sanctions by illegally moving hundreds of millions of dollars through the U.S. financial system on Tehran’s behalf.

President Erdogan has dismissed the charges as politically motivated, and tantamount to an attack on the Turkish Republic.

The charges stem from the case against Reza Zarrab, a wealthy Turkish-Iranian gold trader who was arrested in the United States over sanctions evasion last year. Erdogan has said U.S. authorities had “ulterior motives” in charging Zarrab, who has pleaded not guilty.
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