Economy

WASHINGTON (Reuters) -The chair of a U.S. House of Representatives panel wants TikTok CEO Shou Zi Chew to address questions next week about the popular Chinese-owned video app’s efforts to protect children from inappropriate content and potential exploitation.Chew will be appearing for the first time before Congress when he testifies before the House Energy and Commerce Committee on March 23.Committee Chair Cathy McMorris Rodgers, a Republican, said Thursday lawmakers “need to know what actions the company is taking to keep our kids safe from online and offline harms.”McMorris Rodgers and other Republicans in December wrote TikTok saying said “many children are exposed to non-stop offerings of inappropriate content that TikTok’s algorithm force-feeds to them.” They also raised concerns that TikTok livestreamed events allow adult TikTok users to offer monetary rewards to “persuade children to perform sexually suggestive acts.”TikTok, owned by Chinese tech company ByteDance, said the Biden administration had threatened to ban the app in the United States if its Chinese owners did not sell their stakes in the company.”Americans deserve to know the extent to which their privacy is jeopardized and their data is manipulated by ByteDance-owned TikTok’s relationship with China,” she added. The U.S. government has raised concerns that TikTok’s user data could be passed on to China’s government.TikTok, which did not immediately comment, said earlier this month it is developing a tool that will allow parents to prevent their teens from viewing content containing certain words or hashtags on the short-form video app.TikTok announced new features to help users limit the amount of time spent on the app. Accounts belonging to users under 18 will automatically have a time limit of one hour per day, and teens will need to enter a passcode to continue using the app.TikTok and the Biden administration have been negotiating for more than two years on data security requirements. TikTok said it has spent more than $1.5 billion on rigorous data security efforts and rejects spying allegations.The Biden administration demand for divestiture was the most dramatic in a series of recent steps by U.S. officials and legislators. More

(Reuters) – The Biden administration on Thursday added a unit of prominent Chinese genetics company BGI Genomics Co Ltd to a trade blacklist, accusing the firms of posing a significant risk of contributing to monitoring and surveillance by the government of China, which has been utilized in the repression of ethnic minorities in China.The Commerce Department, which oversees export controls, added BGI Tech Solutions (Hongkong), as well as BGI Research and Forensic Genomics International, which belong to BGI Group, the parent of BGI Genomics Co Ltd. In 2020, the Commerce Department added two units of BGI Group, the world’s largest genomics company, to its economic blacklist over allegations of conducting genetic analyses used to further the repression of China’s minority Uighurs has denied wrongdoing. BGI denied allegations of wrongdoing in 2020. More

NEW YORK (Reuters) – Jeffrey Gundlach, the chief executive of DoubleLine Capital, said a recession could happen within the next four months, as recent U.S. bank failures have exacerbated the tightening of financial conditions caused by higher borrowing rates.”With all that’s going on I think a recession is probably within four months at the most,” Gundlach said in a Twitter Spaces audio chat on Thursday. More

Exactly one year ago, on March 16, 2022, the Federal Open Market Committee enacted the first of what would be eight interest rate increases.
The anniversary raises questions about what’s ahead as policymakers continue to grapple with a persistently high cost of living, on top of a banking crisis.

U.S. Federal Reserve Chair Jerome Powell responds to a question from David Rubenstein (not pictured) during an on-stage discussion at a meeting of The Economic Club of Washington, at the Renaissance Hotel in Washington, D.C., U.S, February 7, 2023. REUTERS/Amanda Andrade-Rhoades
Amanda Andrade-rhoades | Reuters

The Federal Reserve is one year down its rate-hiking path, and in some ways it’s both closer and further away from its goals when it first set sail.
Exactly one year ago, on March 16, 2022, the Federal Open Market Committee enacted the first of what would be eight interest rate increases. The goal: to arrest a stubborn inflation wave that central bank officials spent the better part of a year dismissing as “transitory.”

In the year since, inflation as measured by the consumer price index has come down some, from an 8.5% annual rate then to 6% now and trending lower. While that’s progress, it still leaves the Fed well short of its 2% goal.
And it raises questions about what’s ahead and what the ramifications will be as policymakers continue to grapple with a persistently high cost of living and a shocking banking crisis.

“The Fed will acknowledge that they were late to the game, that inflation has been more persistent than they were expecting. So they probably should have tightened sooner,” said Gus Faucher, chief economist at PNC Financial Services Group. “That being said, given the fact the Fed has tightened as aggressively as they have, the economy is still very good.”
There’s an argument for that point about growth. While 2022 was a lackluster year for the U.S. economy, 2023 is starting off, at least, on solid footing with a strong labor market. But recent days have shown the Fed has another problem on its hands besides inflation.
All of that monetary policy tightening — 4.5 percentage points in rate increases, and a $573 billion quantitative tightening balance sheet roll-off — has been tied to significant dislocations that are rippling through the banking industry now, particularly hitting smaller institutions.

Unless the contagion is stanched soon, the banking issue could overshadow the inflation fight.

‘Collateral damage’ from rate hikes

“The chapters are now only beginning to get written” about ramifications from the past year’s policy moves, said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “There’s a lot of collateral damage when you not just raise rates after a long period at zero, but the speed at which you’re doing so creates a bull in a china shop.”
“The bull was able to skate around, not knocking anything over, until recently,” he added. “But now it’s starting to knock things over.”
Rising rates have hammered banks holding otherwise secure products like Treasurys, mortgage-backed securities and municipal bonds.

Because prices fall when rates go up, the Fed hikes have cut into the market value of those fixed income holdings. In the case of Silicon Valley Bank, it was forced to sell billions on holdings at a substantial loss, contributing to a crisis of confidence that has now spread elsewhere.
That leaves the Fed and Chairman Jerome Powell with a critical decision to make in six days, when the rate-setting FOMC releases its post-meeting statement. Does the Fed follow through on its oft-stated intention to keep raising rates until it’s satisfied inflation is coming down toward acceptable levels, or does it step back to assess the current financial situation before moving forward?

Rate hike expected

“If you’re waiting for inflation to go back to 2% and that’s what’s caused you to raise rates, you’re making a mistake,” said Joseph LaVorgna, chief economist at SMBC Nikko Securities. “If you’re on the Fed, you want to buy optionality. The easiest way to buy optionality is to just pause next week, stop QT and just wait and see how things play out.”
Market pricing has whipsawed violently in recent days over what to expect from the Fed.
As of Thursday afternoon, traders had gone back to expecting a 0.25 percentage point rate increase, pricing in an 80.5% chance of a move that would take the federal funds rate to a range of 4.75%-5%, according to CME Group data.
With the banking industry in tumult, LaVorgna thinks that would be a bad idea at a time when confidence is waning.
Since the rate increases started, depositors have pulled $464 billion from banks, according to Fed data. That’s a 2.6% decline after a massive surge in the early days of the Covid pandemic, but it could accelerate as the soundness of community banks comes into question.

“They corrected one policy mistake with another,” said LaVorgna, who was chief economist for the National Economic Council under former President Donald Trump. “I don’t know if it was political, but they went from one extreme to the other, neither of which is good. I wish the Fed had a more honest appraisal of what they got wrong. But you typically don’t get that from government.”
Indeed, there will be plenty to chew on when analysts and historians look back on the recent history of monetary policy.
Warning signals on inflation began in the spring of 2021, but the Fed stuck to a belief that the increase was “transitory” until it was forced into action. Since July 2022, the yield curve also has been sending signals, warning of a growth slowdown as shorter-term yields exceed longer duration, a situation that also has caused acute problems for banks.
Still, if regulators can solve the current liquidity problems and the economy can avoid a steep recession this year, the Fed’s missteps will have exacted only minimal damage.
“With the experience of the past year, there are legitimate criticisms of Powell and the Fed,” PNC’s Faucher said. “Overall, they have responded appropriately, and the economy is in a good place considering where we were at this time in 2020.”

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The European Central Bank went ahead with a planned half a percentage point rise in interest rates on Thursday despite the outbreak of financial turmoil, while signalling future increases would depend on the market panic seen in recent days dissipating. The ECB’s decision to lift its benchmark deposit rate from 2.5 per cent to 3 per cent — in line with what it had promised last month — came ahead of crunch policy votes by rate-setters in the US and UK next week. The meeting was seen as a test of policymakers’ appetite to keep raising rates despite the stress on banks in the wake of the failure of Silicon Valley Bank and worries over Credit Suisse. While the ECB’s governing council stuck to the script set during its February meeting, its members ditched a previous commitment to keep “raising interest rates significantly at a steady pace” in a sign they are unsure about how much further they will be able to increase borrowing costs. That was despite acknowledging inflation remained “too high”. Christine Lagarde, ECB president, indicated some of the council wanted to stop raising rates as soon as this week, saying three or four members were waiting for clarity on “how the situation unfolds”. The “vast majority” that kept to the plan went ahead with the rate rise to show confidence in the eurozone banking system.Katharine Neiss, an economist at investor PGIM Fixed Income, said the change in the ECB’s guidance was “a notable shift towards a more dovish tone”, adding that it “opens the door to the possibility that this hike may well be the last — at least for the foreseeable future”.Shares in Credit Suisse and other European banks clawed back some earlier losses on Thursday after Switzerland’s second-biggest lender said it would borrow up to SFr50bn ($54bn) from the Swiss central bank and buy back about SFr3bn of its debt in an attempt to boost liquidity and calm investors.The Swiss central bank’s intervention lightened the mood among eurozone rate-setters on Thursday morning, with one saying it had “stopped the panic”. The ECB said eurozone banks were “resilient, with strong capital and liquidity positions”, while emphasising it had the tools to “provide liquidity support” if needed.The central bank also cut its inflation forecasts for the next three years, while saying price pressures were still “projected to remain too high for too long”. Frederik Ducrozet, an economist at Pictet Wealth Management, said he was “not sure the ECB is done raising rates yet, but they have given themselves a lot more flexibility” to pause. The euro traded between gains and losses against the dollar as Lagarde responded to questions from journalists. Germany’s rate-sensitive two-year borrowing costs rose 0.17 percentage points to 2.57 per cent, partly reversing recent falls.The US Federal Reserve and the Bank of England are seen as more likely than the ECB to adopt a wait-and-see approach.Economists said central banks were entering a new phase in their efforts to tame decades-high inflation, requiring them to balance monetary tightening with measures to avoid a financial crisis. Krishna Guha, head of policy and central bank strategy at US investment bank Evercore ISI, said rate-setters would have to show they can “walk and chew gum at the same time — address financial stability concerns with financial stability instruments while using rates to control inflation and so avoid financial dominance”.Lagarde, however, said there was “no trade-off” between the two as rates could be used to tackle inflation while other tools — including new ones if required — addressed any financial turmoil.Italy’s hard-right League party run by deputy prime minister Matteo Salvini criticised the ECB decision as “detached from the real economy” and warned it risked “artificially provoking a recession in order to fight inflation with poverty”. The European Trade Union Confederation was also unhappy, as its general secretary Esther Lynch said the ECB move was “pre-emptive and reckless at a time when banks are failing”, inflation is falling and bankruptcies are rising.The central bank lowered its quarterly inflation forecast for this year from the 6.3 per cent expected in December to 5.3 per cent and for next year from 3.4 per cent to 2.9 per cent. Price growth in 2025 would also be slightly lower than anticipated but remain above its 2 per cent target, at 2.1 per cent. Core inflation, a measure excluding energy and food, would be higher than expected at 4.6 per cent this year, indicating more policy tightening could be required.“If our baseline was to prevail when the uncertainty reduces, we know we still have a lot of ground to cover,” said Lagarde, while adding there was “a big caveat” because its forecasts were based on data before the recent banking turmoil.Additional reporting by George Steer More

Economists expected inflation and rates to stay low for years. With Silicon Valley Bank’s implosion, Wall Street is starting to reckon with how wrong that prediction has proved.WASHINGTON — If a number defined the 2010s, it was 2 percent. Inflation, annual economic growth, and interest rates at their highest all hovered around that level — so persistently that economists, the Federal Reserve and Wall Street began to bet that the era of low-everything would last.That bet has gone bad. And with the implosion of Silicon Valley Bank, America is beginning to reckon with the consequences.Inflation surprised economists and policymakers by spiking after the onset of the coronavirus pandemic, and at 6 percent in February, it is proving difficult to stamp out. The Fed has lifted interest rates by 4.5 percentage points in just the past 12 months as it tries to slow the economy and wrestle price increases under control. The central bank’s decision next Wednesday could nudge rates even higher. And that jump in borrowing costs is catching some businesses, investors and households by surprise.Silicon Valley Bank is the most extreme example of an institution’s being caught off guard so far. The bank had amassed a big portfolio of long-term bonds, which pay more interest than shorter-term ones. But it wasn’t paying to sufficiently protect its assets against the possibility of an interest rate spike — and when rates jumped, it found the market value of its holdings seriously dented. The reason: Why would investors want those old bonds when they could buy new ones at more attractive rates?Those impending financial losses helped to spook investors, fueling a bank run that collapsed the institution and shot tremors across the American banking system.The bank’s mistake was a bad — and ultimately lethal — one. But it wasn’t wholly unique.Many banks are holding big portfolios of long-term bonds that are worth a lot less than their original value. U.S. banks were sitting on $620 billion in unrealized losses from securities that had dropped in price at the end of 2022, based on Federal Deposit Insurance Corporation data, with many regional banks facing big hits.Adding in other potential losses, including on mortgages that were extended when rates were low, economists at New York University have estimated that the total may be more like $1.75 trillion. Banks can offset that with higher earnings on deposits — but that doesn’t work if depositors pull their money out, as in Silicon Valley Bank’s case.“How worried should we be comes down to: How likely is it that the deposit franchise leaves?” said Alexi Savov, who wrote the analysis with his colleague Philipp Schnabl.Regulators are conscious of that potentially broad interest rate risk. The Fed unveiled an emergency loan program on Sunday night that will offer banks cash in exchange for their bonds, treating them as though they were still worth their original value in the process. The setup will allow banks to temporarily escape the squeeze they are feeling as interest rates rise.But even if the Fed succeeds at neutralizing the threat of bank runs tied to rising rates, it is likely that other vulnerabilities grew during decades of relatively low interest rates. That could trigger more problems at a time when borrowing costs are substantially higher.Impending financial losses helped to spook investors, fueling a bank run that collapsed Silicon Valley Bank and shot tremors across the U.S. banking system.Jason Henry for The New York Times“There’s an old saying: Whenever the Fed hits the brakes, someone goes through the windshield,” said Michael Feroli, chief economist at J.P. Morgan. “You just never know who it’s going to be.”America has gone through regular bouts of financial pain brought about by rising interest rates. A jump in rates has been blamed for helping to burst the bubble in technology stocks in the early 2000s, and for contributing to the decline in house prices that helped to set off the crash in 2008.Even more closely related to the current moment, a sharp rise in interest rates in the 1970s and 1980s caused acute problems in the savings and loan industry that ended only when the government intervened.There’s a simple logic behind the financial problems that arise from rising interest rates. When borrowing costs are very low, people and businesses need to take on more risk to earn money on their cash — and that typically means that they tie up their money for longer or they throw their cash behind risky ventures.When the Fed raises interest rates to cool the economy and control inflation, though, money moves toward the comparative safety of government bonds and other steady investments. They suddenly pay more, and they seem like a surer bet in a world where the central bank is trying to slow the economy.That helps to explain what is happening in the technology sector in 2023, for example. Investors have pulled back from tech company stocks, which tend to have values that are predicated on expectations for growth. Betting on prospective profits is suddenly less attractive in a higher-rate environment.A more challenging business and financial backdrop has quickly translated into a souring job market in technology. Companies have been making high-profile layoffs, with Meta announcing a fresh round just this week.That is more or less the way Fed rate moves are supposed to work: They diminish growth prospects and make access to financing tougher, curb business expansions, cost jobs and end up slowing demand throughout the economy. Slower demand makes for weaker inflation.But sometimes the pain does not play out in such an orderly and predictable way, as the trouble in the banking system makes clear.“This just teaches you that we really have these blind spots,” said Jeremy Stein, a former Fed governor who is now at Harvard. “You put more pressure on the pipes, and something is going to crack — but you never know where it is going to be.”The Fed was conscious that some banks could face trouble as rates rose meaningfully for the first time in years.“The industry’s lack of recent experience with rising and more volatile interest rates, coupled with material levels of market uncertainty, presents challenges for all banks,” Carl White, the senior vice president of the supervision, credit and learning division at the Federal Reserve Bank of St. Louis, wrote in a research note in November. That was true “regardless of size or complexity.”But it has been years since the central bank formally tested for a scenario of rising rates in big banks’ formal stress tests, which examine their expected health in the event of trouble. While smaller regional banks aren’t subject to those tests, the decision not to test for rate risk is evidence of a broader reality: Everyone, policymakers included, spent years assuming that rates would not go back up.When borrowing costs are very low, people and businesses need to take on more risk to earn money on their cash.John Taggart for The New York TimesIn their economic forecasts a year ago, even after months of accelerating inflation, Fed officials projected that interest rates would peak at 2.8 percent before falling back to 2.4 percent in the longer run.That owed to both recent experience and to the economy’s fundamentals: Inequality is high and the population is aging, two forces that mean there are lots of savings sloshing around the economy and looking for a safe place to park. Such forces tend to reduce interest rates.The pandemic’s downswing upended those forecasts, and it is not clear when rates will get back on the lower-for-longer track. While central bankers still anticipate that borrowing costs will hover around 2.5 percent in the long run, for now they have pledged to keep them high for a long time — until inflation is well on its way back down to 2 percent.Yet the fact that unexpectedly high interest rates are putting a squeeze on the financial system could complicate those plans. The Fed will release fresh economic forecasts alongside its rates decision next week, providing a snapshot of how its policymakers view the changing landscape.Central bankers had previously hinted that they might raise interest rates even higher than the roughly 5 percent that they had previously forecast this year as inflation shows staying power and the job market remains strong. Whether they will be able to stick with that plan in a world colored by financial upheaval is unclear. Officials may want to tread lightly at a time of uncertainty and the threat of financial chaos.“There’s sometimes this sense that the world works like engineering,” Skanda Amarnath, executive director of Employ America, said of the way central bankers think about monetary policy. “How the machine actually works is such a complex and fickle thing that you have to be paying attention.”And policymakers are likely to be attuned to other pockets of risk in the financial system as rates climb: Mr. Stein, for instance, had expected rate-related weakness to show up in bond funds and was surprised to see the pain surface in the banking system instead.“Whether it is stabler than we thought, or we just haven’t hit the air pocket yet, I don’t know,” he said.Joe Rennison More

Credit Suisse shares tumbled by as much as 30% in Wednesday intraday trade.
The whole banking sector ended Wednesday’s session down by about 7%.
Initial pressures on the banking sector emerged last week, when U.S. authorities deemed Silicon Valley Bank insolvent.

Christine Lagarde, president of the European Central Bank (ECB), pauses during a rates decision news conference in Frankfurt, Germany, on Thursday, March 16, 2022.
Alex Kraus | Bloomberg | Getty Images

The European Central Bank on Thursday announced a further rate hike of 50 basis points, signaling it is ready to supply liquidity to banks if needed, amid recent turmoil in the banking sector.
The ECB had signaled for several weeks that it would be raising rates again at its March meeting, as inflation across the 20-member region remains sharply above the targeted level. In February, preliminary data showed headline inflation of 8.5%, well above the central bank’s target of 2%.

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Some market players questioned whether President Christine Lagarde would still go ahead with the move, given recent shocks in the banking sector. Credit Suisse shares tumbled by as much as 30% in Wednesday intraday trade, and the whole banking sector ended the Wednesday session down by about 7%.
“Inflation is projected to remain too high for too long. Therefore, the Governing Council today decided to increase the three key ECB interest rates by 50 basis points,” the ECB said in a statement. One basis point is equal to 0.01%.
This latest move brings the bank’s main rate to 3%. It was in negative territory before July last year.
“The Governing Council is monitoring current market tensions closely and stands ready to respond as necessary to preserve price stability and financial stability in the euro area. The euro area banking sector is resilient, with strong capital and liquidity positions,” the central bank said in the same statement.
Initial pressures on the banking sector emerged last week, when U.S. authorities deemed Silicon Valley Bank insolvent. The event threw international subsidiaries of the bank into collapse and raised concerns about whether central banks are increasing rates at too aggressive of a pace. Goldman Sachs quickly adjusted its rate expectations for the Federal Reserve, due to meet next week — the bank now anticipates a 25 basis point increase, after previously forecasting a 50 basis point hike.

European officials were keen to stress that the situation in Europe is different from the one in the United States. Overall, there is less deposit concentration — SVB was an important lender to the tech and health-care sectors — deposit flows seem stable, and European banks are well capitalized since the regulatory transformation that followed the global financial crisis.
Equity action Thursday showed some relief across the banking sector, after Credit Suisse said it will borrow up to $54 billion from the Swiss National Bank, the country’s central bank.

‘I was around in 2008’

Lagarde was keen to stress that the recent market turmoil is different from what happened during the global financial crisis of 2008.
“Given the reforms that have taken place, and I was around in 2008, so I have a clear recollection of what happened and what we had to do, we did reform the framework, we did agree on Basel III [a regulatory framework], we did increase the capital ratios … the banking sector is currently in a much, much stronger position,” Lagarde said during a news conference.
“Added to which, if it was needed, we do have the tools, we do have the facilities that are available, and we also have a toolbox that also has other instruments that we always stand ready to activate, if and when needed,” she added, reiterating that the central bank is ready to step in, if required.

Determined to bring down inflation

The ECB on Thursday also revised its inflation expectations. It now sees headline inflation averaging 5.3% this year, followed by 2.9% in 2024. In December, the bank had projected a 6.3% inflation figure for 2023 and a 3.4% rate in 2024.
Lagarde said the ECB remains committed to bringing down inflation.
“We are determined to return inflation back to 2% in the medium term, that should not be doubted, the determination is intact,” she said.
An open question remains: how quickly will the ECB proceed with further rate hikes? Until the recent market instability, expectations pointed to another 25 basis point increase in May, followed by the same move in June.
Lagarde did not provide an indication about future decisions.
“We know that we have a lot more ground to cover, but it is a big caveat, if our base line were to persist,” she said, highlighting that “the pace we will take will be entirely data dependent.”

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UK chancellor Jeremy Hunt’s policies to boost the workforce will cost £70,000 for each person who enters employment, the Institute for Fiscal Studies think-tank said on Thursday.The main reason for the high cost is that the government’s £5bn expansion of free childcare to children under three years old will mostly benefit parents who are already working, according to the IFS. But because families where one parent earns more than £100,000 a year will not qualify for the new 30-hour entitlement, the policy will also deal a “huge hit” to work incentives for high earners, the think-tank said. Economists have largely welcomed the chancellor’s efforts to bring more people into work by increasing support for childcare, making changes to the benefits system and helping those with health conditions.But the IFS analysis shows that this policy package will have a high price tag for relatively limited gains — while creating some perverse effects.In particular, anyone with a child below school age earning between £100,000 and £134,500 would be better off if they kept their taxable income below £100,000 in order to qualify for the childcare offer.Robert Joyce, IFS deputy director, said that taking this alongside a similar cliff edge in eligibility for child benefit when a parent’s salary reached £50,000, the government was making “an absolute pig’s breakfast” of the tax and transfer system for higher earning households.The expansion of state-funded childcare will still have a bigger effect on employment than any other policy: the Office for Budget Responsibility fiscal watchdog estimated it will lead 60,000 people to enter work and about 1.5mn to work longer hours — potentially boosting their long-term earnings.But the IFS said this meant spending on the policy would double while only a sixth of the places funded would be new. Most of the money would go to parents who were previously paying for childcare.Another measure — the big tax giveaway for high earners saving into pensions — looks even more expensive given its uncertain contribution to the workforce. If the OBR’s central forecast proves correct, it will boost employment by just 15,000 — at a cost of £100,000 per job.The OBR thinks other measures to get people back to work — including upfront payment of childcare support for low income parents, intensive employment support for disabled people and a tougher regime for parents and carers claiming out of work benefits — will have a smaller effect on employment but they also come at a much lower cost per person, ranging from roughly £2,000 to £20,000.Its forecasts suggest the overall package will raise employment by 110,000 by 2027-28 at a cost of about £7bn a year — nearly £70,000 for each job.Paul Johnson, IFS director, said this gain would be “just a fraction of the number lost from the workforce in the last couple of years” and would be dwarfed by annual net migration.

But Tony Wilson, director of the Institute for Employment Studies think-tank, said spending on childcare could be justified by the wider benefits to society, parents and children’s development — while £10,000 to £20,000 was “well worth paying” to help disadvantaged people into work and cut inequality.Intensive support for disabled people to enter work could boost employment by about 10,000, the OBR said. This would be separate from any effects of a bigger shake-up of disability benefits, which will remove any link between people’s ability to work and their eligibility for benefits. This is meant to give disabled people confidence that they can take a job without risking the loss of vital income. More