Aurelia Butler

WASHINGTON (Reuters) -The United States on Friday imposed extensive human rights-related sanctions on dozens of people and entities tied to China, Myanmar, North Korea and Bangladesh, and added Chinese artificial intelligence company SenseTime Group to an investment blacklist.Canada and the United Kingdom joined the United States in imposing sanctions related to human rights abuses in Myanmar https://www.reuters.com/world/asia-pacific/us-slams-myanmar-military-over-credible-reports-soldiers-killed-11-people-2021-12-09, while Washington also imposed the first new sanctions on North Korea https://www.reuters.com/world/china/us-maintain-troop-level-south-korea-minister-2021-12-02 under President Joe Biden’s administration and targeted Myanmar military entities, among others, in action marking Human Rights Day.”Our actions today, particularly those in partnership with the United Kingdom and Canada, send a message that democracies around the world will act against those who abuse the power of the state to inflict suffering and repression,” Deputy Treasury Secretary Wally Adeyemo said in a statement.China’s embassy in Washington denounced the U.S. move as “serious interference in China’s internal affairs” and a “severe violation of basic norms governing international relations.” Embassy spokesman Liu Pengyu said it would do “grave harm to China-U.S. relations” and urged Washington to rescind the decision.The North Korean mission at the United Nations and the Washington embassies of Myanmar and Bangladesh did not immediately respond to requests for comment.The measures are the latest in a raft of sanctions timed to coincide with Biden’s two-day virtual Summit for Democracy https://www.reuters.com/world/us/biden-summit-democracy-rally-nations-against-rising-authoritarianism-2021-12-09, where he announced initiatives to bolster democracy around the world and support for pro-democracy legislation in the United States.Biden said on Friday that commitments made by some of the more than 100 world leaders at the summit would push back against rising autocracy around the world, fight corruption and promote human rights.”This is going to help seed fertile ground for democracy to bloom around the world,” he said in a speech closing the summit.The Treasury on Friday added Chinese artificial intelligence company SenseTime to a list of “Chinese military-industrial complex companies,” accusing it of having developed facial recognition programs that can determine a target’s ethnicity, with a particular focus on identifying ethnic Uyghurs.As a result, the company will fall under an investment ban https://www.reuters.com/business/chinas-sensetime-discussing-fate-767-mln-hong-kong-ipo-with-exchange-sources-2021-12-10 for U.S. investors. SenseTime is close to selling 1.5 billion shares in an initial public offering (IPO). After news of the Treasury restrictions earlier this week, the company began discussing https://www.reuters.com/business/chinas-sensetime-discussing-fate-767-mln-hong-kong-ipo-with-exchange-sources-2021-12-10 the fate of the planned $767 million offering with Hong Kong’s stock exchange, two people with direct knowledge of the matter said.U.N. experts and rights groups estimate more than a million people, mainly Uyghurs and members of other Muslim minorities, have been detained in recent years in a vast system of camps in China’s far-west region of Xinjiang.China denies abuses in Xinjiang, but the U.S. government and many rights groups say Beijing is carrying out genocide there.MYANMAR, NORTH KOREAThe Treasury said it was imposing sanctions on two Myanmar military entities and an organization that provides reserves for the military. The Directorate of Defense Industries, one of the entities targeted, makes weapons for the military and police that have been used in a brutal crackdown on opponents of the military’s Feb. 1 coup. The Treasury also targeted four regional chief ministers, including Myo Swe Win, who heads the junta’s administration in the Bago region where the Treasury said at least 82 people were killed https://www.reuters.com/world/asia-pacific/myanmar-security-forces-with-rifle-grenades-kill-over-80-protesters-monitoring-2021-04-10 in a single day in April. Canada imposed sanctions against four entities affiliated with the Myanmar military government, while the United Kingdom imposed fresh sanctions against the military.Myanmar was plunged into crisis when the military overthrew leader Aung San Suu Kyi and her government on Feb. 1, triggering daily protests in towns and cities and fighting in borderlands between the military and ethnic minority insurgents.Junta forces seeking to crush opposition have killed more than 1,300 people, according to the Assistance Association for Political Prisoners (AAPP) monitoring group.Campaign group Global Witness said the measures fell short of targeting Myanmar’s natural gas industry, a key source of foreign currency for the junta, and were “unlikely to materially impact the military junta’s bottom line.” The Treasury also blacklisted North Korea’s Central Public Prosecutors Office, along with the former minister of social security and recently assigned Minister of People’s Armed Forces Ri Yong Gil. It also targeted a Russian university for facilitating the export of workers from North Korea.North Korea has long sought a lifting of punishing U.S. and international sanctions imposed over its weapons programs and has denounced U.S. criticism of its human rights record as evidence of a hostile policy against it.The Biden administration has repeatedly called on North Korea to engage in dialogue over its nuclear and missile programs, without success.The U.S. State Department on Friday also barred 12 people from traveling to the United States, including officials in China, Belarus and Sri Lanka. More

NEW YORK (Reuters) – Investors are bracing for the last Federal Reserve meeting of the year, with market participants hungry to learn how quickly the central bank plans to finish unwinding its bond-buying program and pick up signs of when it may start to raise rates in 2022.Stocks are back at record highs following last week’s selloff – a market spasm brought on by worries over the Omicron variant of the coronavirus and comments from Fed Chairman Jerome Powell, who said the central bank may discuss speeding up the reduction of its $120 billion per month bond buying program at next week’s meeting.There is potential for renewed volatility, however, if the Fed takes a more hawkish than expected view on rolling back the easy money policies that have helped stocks more than double from their March 2020 lows, including a rapid reduction in bond buying that clears the way for the central bank to raise rates sooner. Markets could also be roiled if the Fed signals greater worry about inflation, which Powell said can no longer be described as “transitory.” Data on Friday showed consumer prices last month notched their largest annual gain in nearly four decades, bolstering the case for higher rates. “The biggest factor in the equity market remains and will remain to be interest rates,” said Jack Ablin, chief investment officer at Cresset Capital Management.Higher yields – which can rise on expectations of tighter monetary policy – can dim the allure of stocks by creating a greater discount for companies’ future cash flows, potentially pressuring valuations that are already elevated by historical standards. The S&P 500, which has climbed 25% this year, is trading at 20.5 times forward 12-month earnings estimates, compared with its historic valuation average of 15.5 times, according to Refinitiv Datastream.The yield on the benchmark 10-year Treasury note has climbed about 15 basis points from the start of the month to 1.49%, but is below the 1.776% it reached in March.Some stocks have already been hit by higher rate worries this year, including technology and growth companies that thrived during 2020’s lockdowns.The broader market, however, has generally tolerated tightening monetary policy, analysts at BofA Global Research said in a recent report, noting that stocks mostly climbed as the Fed normalized policy in the last decade.The Fed last month began “tapering” its purchases of Treasuries and mortgage-backed securities at a pace that would have put it on track to complete the wind-down by mid-2022. Following Powell’s comments, investors now believe the Fed could quicken the pace of reductions that will end the bond-buying by March, which could allow the central bank to potentially start raising rates sooner.Bets on earlier rate increases have also grown. Traders late on Friday saw a more than 50% chance of a rate hike by May 2022, up from a roughly 30% chance a month ago, according to the CME Group’s (NASDAQ:CME) FedWatch program.Investors are also keen to learn the central bank’s view on the Omicron variant’s potential impact on economic growth or inflation. One possible scenario outlined by UBS Global Wealth Management in a report sees the virus complicating supply-chain issues that have helped stoke inflation in recent months, bringing concerns the Fed may need to tighten monetary policy faster. The bank’s base case scenario, however, assumes the Omicron variant will not derail the recovery. Mona Mahajan, senior investment strategist at Edward Jones, said the Fed meeting could bring more clarity to investors after an upsurge of volatility in recent weeks.“It feels like the market has climbed two walls of worry already: Omicron and the path of the Fed,” she said. “I do think over the next couple of weeks we will get a little bit more certainty on both fronts.” More

WASHINGTON (Reuters) – The U.S. Federal Reserve’s experiment with running a “hot” economy has edged into historically uncharted territory, with an unemployment rate never reached without associated central bank rate increases and now levels of inflation that in the past also prompted a policy response.The Consumer Price Index for November posted the biggest annual increase in 39 years, data on Friday showed, amid signs that price pressures are broadening and likely leading policymakers at their meeting next week to significantly raise inflation projections that have been running behind actual outcomes.That may prompt a policy shift, with officials accelerating plans to end their bondbuying and, many analysts expect, signaling that rate increases may begin sooner than anticipated.The unemployment rate is also flashing red, at least by past Fed standards. The 4.2% rate reached in November has only been hit or exceeded about 20% of the time since the late 1940s, covering four periods of low joblessness, including the late 2010s, with the Fed raising rates during each.The central bank in 2020 concluded that inflation was now less of a risk and pledged to try to milk more jobs and a lower unemployment rate out of an economy it felt had changed in fundamental ways since the high inflation scares of the 1980s – a conclusion that’s now being tested in real time. “They are behind the curve and I have thought so for some time,” said Glenn Hubbard, former chair of the Council of Economic Advisers under President George Bush and now a Columbia University economics professor. The Fed’s new approach hoped to drive an array of labor market indicators like the participation rate back to pre-pandemic levels, but Hubbard said “running the economy hot…is a risky bet” if it aims to offset structural economic forces like demographics that aren’t responsive, at least not quickly, to central bank policy.DECLINING REAL WAGESFed officials still hope inflation will ease largely on its own, even as they prepare to shift policy in ways that would allow sooner and faster interest rate increases next year than had been anticipated. In the meantime, while Fed Chair Jerome Powell and other policymakers rebut comparisons between this era and the years in the 1980s when high inflation cut into living standards, recent price increases have posed a similar sort of political dilemma.On the surface wages are rising as employers struggle to fill open jobs in a pandemic era where the unemployed are reluctant to rejoin jobs for health or other reasons, and those who are in jobs have gained leverage to job-hop for higher pay.Yet once adjusted for inflation wages have fallen for nine of the past 11 months, with growth in “real” wages moving little beyond the pre-pandemic trend.That fact has hit home in the Oval Office, with President Joe Biden’s Democratic Party facing a potentially difficult mid-term election map next year and his approval ratings taking a hit in part because of rising prices.Biden in a statement Friday pitched the issue forward, arguing that key prices for gas and autos were already drifting lower, and said steps taken or proposed by his administration would help ease inflation’s pace.”Price increases continue to squeeze family budgets,” Biden said. “We are making progress on pandemic-related challenges to our supply chain which make it more expensive to get goods on shelves, and I expect more progress on that in the weeks ahead.”NEXT UP: THE FEDThe strong CPI data for November were expected, but still “only solidify the case for a faster tapering of asset purchases” when the Fed meets next week, said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “More important will be Chair Powell’s message on tightening of policy going forward.” Central to Powell’s messaging will be a defense of why this time it’s different. The pandemic offers one rationale. The shock dealt to the American economy in 2020 was unrivaled in its speed and scope, and the reopening – far from the turgid recovery from the 2007 to 2009 recession – has been so fast it has caused problems of its own. Inflation is one aspect of that, with global supply chains trying to catch up with unprecedented consumer demand in the United States that was driven by another historic anomaly – personal incomes that rose, due to large government support programs, despite massive unemployment.But the Fed’s response is similarly unprecedented. The November unemployment rate is now close to the 4% level that policymakers consider sustainable over the long run. It is also edging towards what Fed officials have effectively penciled in as the lower limit on the unemployment rate of about 3.5%. Since policymakers began publishing quarterly economic projections in 2012 the median unemployment rate for any given year-end has slipped below 3.5% only once, and that just barely, at 3.45%. In data since January 1948, the unemployment rate has only fallen below 3.5% in 41 of 887 months – during a jobs boom of the early 1950s, again in the late 1960s, and never since.The central bank is counting on finding a sweet spot this time that has been elusive, a “soft landing” that brings inflation down from higher-than-desired levels while allowing the labor market to continue to heal.Spells of unemployment this low have not, so far, tended to end so well. More