Aurelia Butler

NEW YORK (Reuters) -The U.S. dollar hit a five-month high against the Japanese yen on Thursday on expectations the greenback would be boosted next year by policies by the incoming Donald Trump administration that are expected to boost growth and lift inflation.Trading volumes were light on Thursday with many traders on holiday after Wednesday’s Christmas holiday and before next week’s New Year holiday.Looser business regulations and tax cuts are expected to help propel U.S. growth next year while analysts say that a clamp-down on illegal immigration and the prospect of new tariffs on trading partners could increase price pressures, and weigh on the economy longer term.That has boosted the dollar against its peers, though there remains a lot of uncertainty over exactly what policies will be introduced and what their impact will be.Rising doubts over how many interest rate cuts the Federal Reserve will be able to undertake next year has added to the dollar rally in the past few weeks.The U.S. central bank last week cut rates by 25 basis points as expected and Fed Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation.Fed policymakers raised their inflation projections for 2025 and cut their interest rate forecast to 50 basis points for the year, from 100 basis points.Money market traders are currently pricing in 38 basis points of cuts next year, implying they see a roughly 50% chance that the Fed will make a second 25 basis point reduction.Data on Thursday showed that the number of Americans filing new applications for jobless benefits dipped to the lowest in a month last week, consistent with a cooling but still-healthy U.S. labor market.U.S. retail sales also rose 3.8% between Nov. 1 and Dec. 24, as intense promotion to drum up sales in what was expected to be a highly competitive holiday season for retailers prompted last-minute shopping among consumers.The dollar index was last up 0.02% at 108.13. It is holding just below a two-year high of 108.54 reached on Friday.The euro rose 0.13% to $1.0418. The single currency fell to $1.03435 on Friday, the lowest since Nov. 22. The greenback gained 0.35% to 157.93 Japanese yen and earlier reached 158.09, the highest since July 17.The Japanese yen has suffered from the wide interest rate differential between the United States and Japan. The Bank of Japan expects the economy to move closer to sustainably achieving the central bank’s 2% inflation target next year, Governor Kazuo Ueda said on Wednesday, suggesting the timing of its next interest rate increase was nearing.In cryptocurrencies bitcoin fell 2.88% to $95,598. More

(Reuters) – Social Security is an earned benefit. You become eligible by paying the payroll tax during your working years, and the amount you get is geared to your wage history – with a glaring exception. Since the 1980s, some public sector workers have seen their earned Social Security benefit amounts cut sharply due to a little-understood rule called the Windfall Elimination Provision (WEP). The logic of the WEP – and its cousin, the Government Pension Offset (GPO) – was inscrutable to all but policy analysts and actuaries. These rules can chop earned benefit amounts by more than half; they have provoked fury over the years from affected workers and repeated lobbying efforts at reform or repeal.Last weekend, Congress responded by repealing the WEP and the GPO with a law dubbed the Social Security Fairness Act. Opponents of the repeal argue that the two rules address alleged overpayments to people who split their careers between jobs covered by Social Security and other work covered by a public sector defined benefit plan.Opponents also argue that repeal will accelerate depletion of Social Security’s trust funds. Some claim it would increase the federal deficit. The truth is that it will not, because Social Security has its own dedicated funding stream separate from the general government budget.Most Americans are in jobs covered by Social Security – the main exception is state and municipal workers who participate in separately funded pension plans. Consequently, the WEP and GPO impacted only about 2.5 million Social Security beneficiaries as of late 2023, according to the Congressional Research Service. That is just 4% of the total beneficiary pool. The  repeal will hasten the insolvency of the Social Security trust funds by about six months, according to the Congressional Budget Office – but that is a problem Congress will need to address separately, anyway.WHY THE WEP?Why would these public sector workers be treated differently from everyone else? The answer begins with the way that Social Security benefits are distributed across wage earners with varying incomes. Social Security’s benefit formula is progressive; workers with low average lifetime earnings get a higher benefit amount compared with their earnings than people who are better-paid. In this system, workers affected by the WEP look as though they earned less over the span of their careers than they actually did – so their unadjusted benefit would be larger than it would be had they worked their entire careers in jobs covered by Social Security. The WEP aims to eliminate the high benefit return these workers get on their Social Security income when they are not really low-income.  “We’ve decided as a society that we should help low-income people in retirement,” said Richard Johnson, director of the program on retirement policy at the Urban Institute. “To Social Security, these people look like they have very low incomes, so the formula gives them an unusually generous benefit for them to account for that.”Some of the language used to defend WEP and GPO really makes no sense. For example, some supporters argue that providing a full Social Security benefit to these workers would constitute “double-dipping,” despite the fact that they are drawing benefits from two entirely separate systems with different funding sources.Even the word “windfall” in the term WEP implies that these workers would otherwise be receiving extra benefits in a way that is not fair. But none of it makes sense to the people impacted by WEP or GPO – for them, it is a simple matter. If you earned the benefit, you should receive it. WEP and GPO now have been repealed. Their elimination will make retirement a little easier for public sector workers such as firefighters, police officers and teachers, most of whom earn modest incomes and pensions – not to mention their spouses and widows. The law calls for the restored benefits to be paid starting with retroactive payments for 2024, although no details are available yet on how that will be handled, or when the retroactive payments will be made. I would have preferred to see this taken care of as part of a broader package of Social Security reforms that address the solvency problem and other flaws in the system. For example, if Congress is really interested in addressing “fairness” – as implied by the name of the WEP/GPO repeal bill – it should swear off any effort to raise Social Security’s full retirement age to 70 to address the program’s looming shortfall, as proposed by many Republicans. That would be unfair to millions of workers who cannot wait that long due to the physical nature of their jobs, health problems or inability to save money for an earlier retirement. Another way to improve fairness: Congress should end its chronic under-funding of the Social Security Administration’s budget, which has created a shameful, enormous backlog of people awaiting decisions on Social Security Disability Insurance claims – delays that can further damage their health and shorten their lifespans. Outside the Social Security system, a more fair retirement security system would expand 401(k) access to all Americans, and rework the tax-deferral features of 401(k) and IRA accounts so that they do not primarily help upper-income households. After all – fair is fair.The opinions expressed here are those of the author, a columnist for Reuters. More

NEW DELHI (Reuters) -Described as a “reluctant king” in his first stint as prime minister, the soft-spoken Manmohan Singh, who died on Thursday at the age of 92, was arguably one of India’s most successful leaders.Singh, the first Sikh to lead his nation, was prime minister from 2004 to 2014, serving a rare two terms. He had been undergoing care for age-related medical conditions.Singh is credited with steering India to unprecedented economic growth and lifting hundreds of millions out of dire poverty.”India mourns the loss of one of its most distinguished leaders,” said Prime Minister Narendra Modi.Born into a poor family in a part of British-ruled India now in Pakistan, Manmohan Singh studied by candlelight to win a place at Cambridge University before heading to Oxford, earning a doctorate with a thesis on the role of exports and free trade in India’s economy.He became a respected economist, then India’s central bank governor and a government adviser, but had no apparent plans for a political career when he was suddenly tapped to become finance minister in 1991.During that tenure to 1996, Singh was the architect of reforms that saved India’s economy from a severe balance of payments crisis and promoted deregulation, as well as other measures that opened an insular country to the world. Famously quoting Victor Hugo in his first budget speech, he said: “No power on earth can stop an idea whose time has come,” before adding: “The emergence of India as a major economic power in the world happens to be one such idea.”Singh’s ascension to prime minister in 2004 was even more unexpected.He was asked to take on the job by Sonia Gandhi, who had led the centre-left Congress Party to a surprise victory. Italian by birth, she feared her ancestry would be used by Hindu-nationalist opponents to attack the government if she were to lead the country.Riding an unprecedented period of economic growth, Singh’s government shared the spoils of India’s newfound wealth, introducing welfare schemes such as a jobs programme for the rural poor.In 2008, his government also clinched a landmark deal that permitted peaceful trade in nuclear energy with the United States for the first time in three decades, paving the way for strong relations between New Delhi and Washington. But his efforts to further open up the Indian economy were frequently frustrated by political wrangling within his own party and demands made by coalition partners.’HISTORY WILL BE KINDER TO ME’While he was widely respected by other world leaders, at home Singh always had to fend off the perception that Sonia Gandhi was the real power in the government.The widow of former prime minister Rajiv Gandhi, whose family has dominated Indian politics since independence from Britain in 1947, she remained Congress Party leader and often made key decisions.Known for his simple lifestyle and with a reputation for honesty, Singh was not personally seen as corrupt. But he came under attack for failing to crack down on members of his government as a series of scandals erupted in his second term, triggering mass protests.The latter years of his premiership saw the Indian growth story that he had helped engineer wobble as global economic turbulence and slow government decision-making battered investment sentiment. In 2012, his government was tipped into a minority after the Congress Party’s biggest ally quit their coalition in protest at the entry of foreign supermarkets. Two years later Congress was decisively swept aside by the Bharatiya Janata Party under Narendra Modi, a strongman who promised to end the economic standstill, clean up graft and bring inclusive growth to the hinterlands.At a press conference not long before he left office, Singh insisted he had done the best he could. “I honestly believe that history will be kinder to me than the contemporary media or, for that matter, the opposition parties in parliament,” he said.Singh is survived by his wife and three daughters. More

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