Economy

However, according to analysts at Barclays (LON:BARC), the scope of DOGE’s influence is likely far more limited than its proponents suggest.Contrary to its title, DOGE is not a formal government department. Its function is advisory, with no legal or executive powers to enforce its recommendations. Without congressional approval or direct legislative support, its capacity is constrained to making suggestions rather than implementing change.DOGE’s potential actions include highlighting areas of federal inefficiency, such as waste, fraud, and abuse, and proposing improvements to government operations. These recommendations could target reducing the federal workforce through measures like voluntary buyouts, early retirements, or temporary hiring freezes. The group may also identify federal assets for sale or relocation as a means to cut costs.However, its actual power to enforce these changes is negligible. For instance, proposals to cut government spending or restructure federal agencies require bipartisan congressional support—a tall order in the current polarized political climate. Even identifying and addressing “waste” is no simple task; past efforts by similar commissions have yielded limited results due to legal, logistical, and political barriers.Congress holds the “power of the purse,” meaning that significant reductions in government spending require legislative approval. Although discretionary spending, particularly in defense and non-defense budgets, could theoretically be trimmed, achieving this would demand a level of bipartisan cooperation that seems unlikely. Mandatory spending, which constitutes the bulk of federal outlays, is even less susceptible to DOGE’s influence. Programs like Social Security and Medicare are politically sensitive and legally protected from unilateral cuts.Similarly, efforts to deregulate or amend government operations are subject to rigid processes established under the Administrative Procedure Act. Regulatory rollbacks would need to navigate a lengthy and often contentious rulemaking or litigation process.Despite claims from Ramaswamy that DOGE aims to slash the federal workforce by 75%, the feasibility of such a move remains doubtful. Most federal employees are protected by civil service laws that prevent arbitrary dismissals. Additionally, nearly 70% of the federal workforce operates in defense or national security roles, areas that are politically and practically challenging to downsize. Past initiatives for large-scale reductions in the federal workforce have proven ineffective or counterproductive, often resulting in increased costs and reduced operational efficiency.DOGE’s most tangible contributions might come from identifying opportunities for operational improvements. Federal agencies spend significant sums on maintaining outdated IT systems, and upgrading these could generate long-term savings. According to the Government Accountability Office, there is potential to save billions through enhanced efficiency measures, though such initiatives would likely require upfront investments and congressional approval.Ultimately, the analysts at Barclays emphasize that DOGE’s influence is symbolic more than functional. It may use its platform to draw attention to inefficiencies and advocate for reforms, but its recommendations will remain non-binding. Achieving substantial change will require navigating a complex web of legal and political hurdles that go well beyond DOGE’s advisory remit. More

Analysts at BofA Securities warn that the tariffs, if implemented, could escalate into a full-blown trade war, with significant economic repercussions for all three countries.The proposed tariffs, expected to be signed into effect on January 20, would target all imports from Canada and Mexico. The U.S. justifies the move as a means of addressing its trade deficits, which are substantial with both neighbors. However, the interconnectedness of these economies complicates matters. Approximately 30% of Canada’s GDP and 40% of Mexico’s GDP are tied to trade with the U.S., underscoring the heavy reliance both nations have on their southern neighbor.BofA analysts flag a critical distinction in the capacity of the Bank of Canada and the Bank of Mexico to mitigate the economic fallout of a trade conflict. Both institutions operate under inflation-targeting frameworks but face differing constraints.The Bank of Canada is positioned to adopt an accommodative stance, potentially cutting interest rates to offset economic stress. With Canada’s inflation rate currently at the 2% target and core inflation measures similarly stable, the Bank of Canada has the flexibility to support the economy by easing monetary policy. Such action would also weaken the Canadian dollar, helping to cushion the blow to Canadian exports.Conversely, Mexico’s central bank faces tighter constraints. Headline inflation in Mexico stands at 4%, well above Bank of Mexico’s 3% target, and core inflation remains stubbornly high. Long-term inflation expectations are unanchored, further limiting Bank of Mexico’s ability to lower rates. BofA analysts project that Bank of Mexico will proceed cautiously, with modest rate cuts already factored into its 2025 forecast.While both nations are likely to retaliate with targeted tariffs, the report suggests that avoiding escalation may be more beneficial in the long run. Mexico, for instance, has already shown a willingness to align with U.S. demands by imposing its own tariffs on Chinese goods to address concerns about being a conduit for Chinese imports. Similarly, both countries have stepped up efforts to tackle U.S. concerns regarding drugs and illegal immigration, key conditions tied to the proposed tariffs.Although BofA Securities considers the imposition of tariffs unlikely, given these mitigating measures, the risks cannot be ignored. For Canada and Mexico, the choice is between measured retaliation and proactive diplomacy to avoid economic disruption. For both nations, prioritizing economic stability while safeguarding long-term trade relationships with the U.S. will remain the ultimate challenge. More

The government will likely revise the target to less than 300 billion rupees ($3.47 billion) from the initial 500 billion rupees, the newspaper said, citing people aware of the deliberations.The government may set the target at about 450 billion rupees to 500 billion rupees for the next fiscal year, as it intends to conclude the IDBI Bank (NS:IDBI) transaction and step up its asset monetisation bid, the report said.The Finance Ministry did not immediately respond to a Reuters’ email seeking comment.The Indian government, which owns 45.48% in IDBI Bank, and state-owned Life Insurance (NS:LIFI) Corp of India which holds 49.24%, together plan to sell 60.7% of the lender. The sale process was first announced in 2022.Prime Minister Narendra Modi’s administration moved from the usual practise of setting a stake sale target in its budget presented last year.Modi’s ambition of privatising state-run firms has taken a back seat due to regulatory hurdles, complex decision-making, political considerations and valuation issues, but his government has delivered more stake sales than any previous administration.The government has raised 86.25 billion rupees from disinvestments so far in this fiscal year.The government will continue to reduce its stakes in some entities via the offer-for-sale route, the report added.($1 = 86.5710 Indian rupees) More

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TORONTO (Reuters) -Four of Canada’s biggest lenders said on Friday they were withdrawing from a global banking sector climate coalition, joining six major U.S. banks.The departures from the Net-Zero Banking Alliance began with Goldman Sachs’ announcement on Dec. 6 and come ahead of Donald Trump’s return to the White House next week. Trump has been critical of efforts by governments to prescribe climate-change policies.The four Canadian banks are TD Bank, Bank of Montreal, National Bank of Canada (OTC:NTIOF) and Canadian Imperial Bank of Commerce (NYSE:CM) ( CIBC (TSX:CM)).The other big U.S. banks that have withdrawn are Wells Fargo (NYSE:WFC), Citi, Bank of America, Morgan Stanley (NYSE:MS) and JPMorgan.The Net-Zero Banking Alliance, a UN-sponsored initiative set up by former Bank of Canada Governor Mark Carney, was launched in 2021 to encourage financial institutions to limit the effects of climate change and push toward achieving net-zero emissions.The Canadian banks said in separate statements that they were equipped to work outside the alliance and develop their climate strategies.”The NZBA was formed at a time when the global industry was scaling up efforts to take action on climate, and served a valuable role in galvanizing these efforts and establishing momentum,” CIBC said in a statement.”As this space has evolved and matured, and having made significant progress alongside our clients in these areas, we are now well-positioned to further this work outside of the formal structure of the NZBA,” it said.Canadian banks have faced mounting pressure to address climate-related risks arising from their funding activities in the past few years. The country’s banking regulator has also introduced guidelines for financial institutions to manage their climate-related risks.Separately, the U.S. Federal Reserve announced it had withdrawn from a global body of central banks and regulators devoted to exploring ways to police climate risk in the financial system. More

NEW YORK (Reuters) – Federal prosecutors on Friday dropped their corruption case against former New York Lieutenant Governor Brian Benjamin, following the death of a key witness.Benjamin, 48, had been expected to face trial in Manhattan federal court after being accused of funneling a $50,000 state grant to a real estate developer in exchange for campaign contributions.But the developer, Gerald Migdol, who pleaded guilty to bribery and fraud charges and was cooperating with the government, died last February.In a court filing, prosecutors said that based on a review of the evidence and in light of Migdol’s death, “the government has determined that it can no longer prove, beyond a reasonable doubt, the charges in the indictment.”U.S. District Judge Paul Oetken approved the dismissal request late Friday afternoon.Benjamin, a Democrat, had faced charges including bribery, honest services wire fraud and conspiracy.”Today’s vindication of Brian Benjamin is a timely reminder of the Reverend Martin Luther King Jr’s famous words: “The arc of the moral universe is long, but it bends toward justice,'” Benjamin’s lawyers Barry Berke, Dani James and Darren LaVerne said in a joint statement. “We always believed this day would come.”Migdol had been a real estate developer in Manhattan’s Harlem neighborhood, where Benjamin was once a state senator.Governor Kathy Hochul, also a Democrat, tapped Benjamin in August 2021 for the state’s No. 2 job, which she had held before succeeding Andrew Cuomo as governor. Benjamin resigned in April 2022 when the criminal charges were announced. More

WASHINGTON (Reuters) -The outgoing head of the Federal Communications Commission said a massive Chinese-linked cyber-espionage operation against U.S. telecoms firms known as “Salt Typhoon” is a “clarion call” to address significant telecommunications security issues.”Salt Typhoon is a clarion call that reminds us that the security of our networks is absolutely vital for our national and economic security,” FCC (BME:FCC) Chair Jessica Rosenworcel, who steps down on Monday, said in a Reuters interview.”We’ve got to make some changes … We have to figure out how it happened. We have to figure out the extent of the incursion, and then, most importantly, we have to take action to make sure it never happens again.”Senator Ben Ray Lujan, the top Democrat on a telecom subcommittee, said China’s alleged efforts likely represent “the largest telecommunications hack in our nation’s history.”Verizon (NYSE:VZ) and AT&T (NYSE:T) have said they were impacted by Salt Typhoon but said last month their networks are now secure. The FCC voted on Thursday to require telecommunications to have cybersecurity risk management plans. Rosenworcel predicted there would be other threats from malicious actors and nation states in the future, and called for more to be done to make the networks more resilient.Incoming FCC Chair Brendan Carr said the Salt Typhoon attack “represents an unacceptable risk to our national security” but criticized the commission action.”We should be taking a series of actions that will restore America’s deterrence and harden our networks going forward,” Carr added. Under Rosenworcel, the FCC has taken steps to crackdown on Chinese telecoms including seeking to boost security of information transmitted across the internet after Washington said a Chinese carrier misrouted traffic. The FCC is also reviewing rules governing undersea cables that carry most internet traffic.The FCC voted in 2022 to prevent Huawei, ZTE (HK:0763) and other Chinese companies from winning approvals for new telecommunications equipment. Congress in December approved $3.1 billion for U.S. telecom companies to remove equipment made by Huawei and ZTE from American wireless networks. More