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As the world’s central banking elite gathered at Jackson Hole, Wyoming, Janet Yellen, Federal reserve chair, gave assurances the US central bank will not find itself out of weaponry if a new recession unexpectedly strikes.
But, beneath the surface at the Kansas Fed’s annual symposium, many economists remained anxious about whether western central banks have sufficient scope to galvanise growth as some experiment with radical measures such as negative interest rates.
Loretta Mester, the president of the Federal Reserve Bank of Cleveland, said in an interview that she believed the US central bank can rely on previously proven tools such as quantitative easing and forward guidance, on top of rate cuts, to reverse a future downturn.
But she added: “I think we would have a better economy, a stronger economy, if we were able to have fiscal policy together with monetary policy — especially for these things which are about the long-run potential growth rate of the US economy.” (FT)
In the news
Alt-right gains prominence When Hillary Clinton recently accused Donald Trump of spreading racism by retweeting a post by @WhiteGenocideTM, she was referring to the “alt-right”, a white supremacist movement that backs the Republican candidate. The fringe group has gained steam with the rise of Mr Trump, whose rhetoric is often denounced as xenophobic. Its association with the candidate came under harsher scrutiny after he hired Stephen Bannon, head of the anti-establishment website Breitbart News, which has been a vehicle for their ideas, as his campaign chief executive.
Sign up for our daily US politics newsletter here. (FT)
Obama film hints at fond legacy A film showcasing Barack Obama’s first date with Michelle Obama earned more than $3m at the box office in its first weekend of release. Southside With You offers a fond farewell to the president during his final year in office — in stark contrast to scathing tales of presidents past. “It’s a moment where the election is a downer on both sides, with all the darkness, and Obama is seen as a solid person. History will be kind to him,” says Joshua Kendall, a presidential historian. (Politico, Guardian)
Merkel deputy breaks ranks on refugees, TTIP Angela Merkel’s deputy has attacked her handling of the migrant crisis, firing the gun on the campaign for a general election next year. Sigmar Gabriel, leader of the left-leaning Social Democrats and Ms Merkel’s junior coalition partner, said the government had “underestimated the challenge” of integrating the 1m refugees who arrived in 2015. Mr Gabriel, who is also economics minister, added that talks on the Transatlantic Trade and Investment Partnership, the free trade deal being negotiated between the EU and US, had failed. (FT, Reuters)
Japan public sector is top shareholder Japan’s government pension fund and its central bank are now the biggest shareholders in more than 400 companies — nearly a quarter of all issues — on the Tokyo Stock Exchange’s first section, raising concerns that this buying surge is undermining market mechanisms. (NAR)
Isis targets Yemen facility At least 60 people have been killed in a suicide car bombing at a military facility in the southern Yemen city of Aden, doctors say. The jihadi group Isis said it carried out the attack, which comes amid a fresh push to end Yemen’s 17-month-old war between the Saudi-backed government and rebels that the UN says has left 6,600 people dead. (BBC)
It’s a big day for
Dilma Rousseff The impeachment trial of Brazil’s suspended president will reach a dramatic point when she appears in person to defend herself in the Senate. Ms Rousseff is accused of illegally manipulating the budget to hide a growing deficit. She denies the allegations and says the impeachment proceedings amount to a coup d’état. (BBC)
Greece Finance minister Euclid Tsakalotos and economy minister Giorgos Stathakis are scheduled to meet EU economic affairs commissioner Pierre Moscovici, days after Brussels urged Athens to repudiate claims that Greece’s national statistics agency produced false data under its former chief. The commission stopped short of demanding a halt to criminal proceedings. (FT)
Keep up with the important business, economic and political stories in the coming days with the FT’s weekahead.
Food for thought
Ducking the biggest challenge By any barometer, US politics has hit extreme weather in 2016, yet global warming ranks near the bottom on the list of voter concerns. There are two big obstacles. The first is that voters increasingly distrust experts and the second is that people are afraid that doing something about global warming will make them poorer, writes Ed Luce. It could take years before the public reaches a verdict on global warming, “by which time we may be reaping the whirlwind”. (FT)
Azerbaijan: aiming to please The oil price crash and need for western funds have shocked Baku into attempting major reforms and tackling corruption. (FT)
Powerful ditch gadget addiction To be emailing from the pool no longer proves you are powerful, but it is starting to be seen for what it is — a sign of weakness, poor time management and an inability to delegate, says Lucy Kellaway. If you can take two weeks off altogether it shows you have overcome all gadget addiction, and like a modern-day tycoon can control when you work — and when you don’t. (FT)
Caught in the world wide web The internet is usually portrayed as a technology of emancipation — but it has also trained us to withdraw from the world into distraction and dependency. (Aeon)
Video of the day
A look at the week ahead Nalini Sivathasan looks at big stories in the week ahead, including Mariano Rajoy’s confidence vote, which could end political turmoil in Spain, results from two of China’s biggest lenders, and eurozone and UK economic data after the Brexit vote. (FT)