Aurelia Butler

Goldman Sachs is preparing to impose another round of job cuts on employees deemed to be the worst performers, people familiar with the matter have told the Financial Times.The planned move, which could start next month, is part of an annual exercise that typically results in between 1 per cent and 5 per cent of company-wide employees losing their jobs.Goldman is targeting a number at the lower end of that range, the people said, at parts of its core investment banking and trading businesses. A 1 per cent cut in Goldman’s total headcount, which includes asset and wealth management as well as operational roles, would equal about 440 jobs.Managers across Goldman have drawn up lists of employees who could be dismissed. This is what we know so far about the planned cuts. Here’s what else I’m keeping tabs on today and over the weekend:G20 summit: India’s prime minister Narendra Modi will host a bilateral meeting with US president Joe Biden ahead of the start of the G20 summit in New Delhi tomorrow. Mexico-Colombia relations: Mexican president Andrés Manuel López Obrador visits Colombia to meet his Colombian counterpart Gustavo Petro.Tennis: The women’s and men’s final of the US Open will be held in New York on Saturday and Sunday respectively. How well did you keep up with the news this week? Take our quiz.Five more top stories1. State employees across China, from nuclear power plants to far-flung hospitals, have been told in recent weeks to stop using Apple iPhones as part of a Beijing-led pushback against the US tech group. Investor concerns about the curbs, which have not been confirmed by the government in Beijing, have knocked $200bn off Apple’s market valuation in the past two days. More on Apple: Beijing’s crackdown has cast a shadow over next week’s launch of Apple’s latest iPhone and its ambition to become the world’s largest smartphone maker. 2. Janet Yellen has said she does not expect the slowdown in China to have a “very significant direct impact on the United States”. The US Treasury secretary, who was speaking earlier today in New Delhi ahead of the start of the G20 summit, added that China had “quite a bit of policy space” to address to the economic slowdown. The renminbi, meanwhile, continued its slide against the dollar on Friday. 3. Former FTX executive Ryan Salame has pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange. He is the fourth former FTX executive to cut a deal with prosecutors, further isolating founder Sam Bankman-Fried less than a month before his trial is set to begin. Here’s our report on the court hearing.4. A former climate scientist and a self-made businesswoman will contest Mexico’s presidential election next year after the ruling Morena party chose former Mexico City mayor Claudia Sheinbaum as its candidate. Sheinbaum’s selection pits her against Xóchitl Gálvez, leader of the free-market National Action party, and means Mexico is likely to have its first female leader in its 200-year history after the June 2024 poll. Here’s more on the candidates. 5. Germany is pushing the EU to postpone tariffs on electric vehicle sales with the UK, backing calls by Rishi Sunak’s government for a three-year delay to the duties. The bloc is set to impose 10 per cent levies on EVs shipped across the Channel from January if they have batteries made outside Europe. Here’s why Berlin has shifted its stance.Go deeper: After months of fruitless lobbying to deter Chinese EV imports, Europe’s carmakers are preparing to face down competition from their newest rivals.Today’s big read

A renewed effort by Saudi Arabia and Russia this week to push the price of oil towards $100 a barrel threatens to become another headache for Joe Biden as he puts his record on the US economy — and thwarting inflation — at the centre of his re-election bid. What role could Riyadh play in a tight US election?We’re also reading . . . Treasury market: Concern is growing in Washington about hedge funds’ exposure to US government debt through what’s called the “basis trade”. Gender gap: The centrality of children to the earnings gap between men and women remains mind-boggling, writes Soumaya Keynes. English Premier League: In this film, the FT investigates the mystery owners behind gambling brands that sponsor top-flight football clubs. Chart of the day

The euro is on course for an eighth straight week of losses against the dollar as concerns grow that the eurozone economy is heading for a downturn. In contrast, the US is proving more resilient than investors had expected, with the latest labour market data released yesterday indicating jobless claims unexpectedly fell. What next for the euro?Take a break from the newsNew York’s private member clubs are thriving. Josh Chaffin visits some of the new entrants to a scene that harks back to 19th-century London and a desire to flaunt wealth and exclusivity.

Additional contributions from Tee Zhuo and Benjamin Wilhelm More

A week after Søren Kierkegaard, it was Ludwig Wittgenstein’s turn to be quoted by Christine Lagarde — this time in a speech about how difficult it is for policy makers to “cut through” to the general public:Communication plays a vital role in the art of effective policy making today, and this is especially true for central banks like the ECB. But several changes in the media landscape – from new technologies to the rising tide of fake news – have made it increasingly difficult for policymakers to “cut through” to the wider public.In other words, just as the need for effective communication has grown, so too has the difficulty for policymakers to make their voices heard. This is a problem that we cannot afford to ignore. As Ludwig Wittgenstein once observed, “the limits of my language mean the limits of my world”.There’s nothing wrong with central bankers quoting clever people. But Wittgenstein? He was so opaque that Marie McGinn, emeritus professor of philosophy at the University of York, said we should not be surprised “if on first reading [Wittgenstein’s masterpiece Philosophical Investigations] we cannot see the point of [his] remarks”.Here’s a worthy-sounding take: engaging with as broad a swath of the public as possible is a key part of any central banker’s job. Unelected bureaucrats ought to be accountable for the important decisions they make, and the stories they tell (like Mario Draghi’s “whatever it takes” speech in 2012) have the power to change the course of economic history.And here’s an alternative view: none of it’s worth the hassle. “Central banks will keep trying to communicate with the general public, as they should. But for the most part, they will fail”, said Alan Blinder, former vice chairman of the board of governors of the Federal Reserve. Decades earlier, Montagu Norman, governor of the Bank of England from 1920 to 1944, summed up his approach to policy communication in four words: “never explain, never excuse”. Lagarde puts herself in the first camp, even as two interrelated factors — “the ever-increasing competition for attention” and “an overarching decline in trust” — conspire to make her job trickier. She needn’t fear, for help is at hand: there’s a dummies’ guide to help navigate these unique 21st century challenges. Behold (from her old employer, no less): the IMF Monetary and Capital Markets Department’s Technical Assistance Handbook for Central Bank Communications (updated January2022).Over 34 pages, the handbook explains why communication should be clear and concise, tiered to different audiences, delivered regularly, made equally accessible and use as little jargon as possible. Transparency is a quantifiably good thing, the pamphlet notes:Moving from a level of transparency equivalent to that of the Reserve Bank of India — which in 2010 (before the adoption of the inflation targeting framework) was near the bottom of the pack — to that of Sweden, at the top of the pack, reduces inflation variability by 3 p.p. and inflation by 11 p.p., all else being equal.With the basics out the way, the guide starts to get into the nitty gritty. “Conventional” forward guidance, it says, refers to the sort of projections for the future policy rate based on what’s known at the time. Yawn.Then there’s the cooler, “unconventional” kind of guidance — which tends to be used “irregularly, in a somewhat opportunistic way, whenever policymakers feel a stronger need to influence markets”. Presumably this mystery box approach would stretch to Andrew Bailey leading a singalong at an MPC press conference, or Jerome Powell popping up on SNL.If this binary’s too abstract, others are available [their emphasis]:Whether conventional or unconventional, forward guidance can be classified into two categories: “Delphic” and “Odyssean.” The former consists of announcing the expected future path of official interest rates; the latter also involves a conditional commitment to the announced monetary policy stance. The main argument in favor of the Delphic approach is that the policy rate must be free to respond to all possible contingencies without risking the central bank’s reputation by having its previous plan interpreted as a mistake. At the same time, by refusing to commit to predetermined actions, Delphic forward guidance may be less effective in moving inflation expectations and asset prices.Delphic messaging is all about conveying monetary policy when seas are calm, according to the Chicago Fed. Whereas Odyssean guidance is grounded in how everything changed after 2008 — when the Fed’s multitrillion dollar asset purchase programs and zero-interest rate policy left rate setters, like Odysseus, bound “to the mast of a time-inconsistent policy”. Clear enough?Moving swiftly on, chapter four — “To Whom to Communicate?” — is as pompous as it sounds. Emphasis our own:The amount of resources dedicated to communication tends to increase with the degree of heterogeneity of the desired audience. Different levels of economic literacy among the public or even the particular interest in the central bank’s messages will result in the need of specifically tailored messages. This raises the question of whether the central bank should target some specific groups. The answer should consider that, whereas a deep understanding of monetary policy instruments and strategies may matter only for the financial community, the average citizen is certainly worried about inflation and in most cases, the exchange rate. Left on their own, they often believe in and propagate distorted views on the evolution of those variables and how they influence their lives.Ouch. Central bank watchers in financial institutions, media or academia, on the other hand, “have the necessary technical background and expertise” to interpret central bank smoke signals. Is this true? Doesn’t matter. Policymakers “must establish good relationships” with these superior beings and “keep them close”.To be fair, the ECB under Lagarde has, as mainFT writes, “sought to use less technical language and reach a wider audience beyond financial market specialists”. How does that look in practice? “The outcome of our strategy review has helped in this regard,” Lagarde said. “Our inflation target of 2% – which came into effect in 2021 – is simpler, clearer and easier to communicate than our prior inflation aim of ‘below, but close to, 2%’.”The central bank also aspires to speak more frankly about its forecasting limitations and admit more openly to previous mistakes, and in so doing restore some of the trust that evaporated following the GFC. Nothing wrong with that.

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After all, “it is not only about getting policy right — we also have to talk about it in the right way”, Lagarde concluded. “So let us seize the moment. And I have no doubt we can do so effectively by embracing accessibility and humility in how we pursue and communicate our monetary policy to the citizens of the euro area.”Translation: be sure to brush up on your Hegel before the ECB’s pivotal rate announcement next week.Further reading— A new birding guide for central bankers More