<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107188527-1675404834349-gettyimages-1238109773-AFP_9XP9CY-820x462.jpeg" alt="" class="wp-image-422895" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107188527-1675404834349-gettyimages-1238109773-AFP_9XP9CY-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107188527-1675404834349-gettyimages-1238109773-AFP_9XP9CY-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107188527-1675404834349-gettyimages-1238109773-AFP_9XP9CY-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107188527-1675404834349-gettyimages-1238109773-AFP_9XP9CY-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107188527-1675404834349-gettyimages-1238109773-AFP_9XP9CY.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A pedestrian watches a digital screen at the Bombay Stock Exchange (BSE) in Mumbai on February 1, 2022. Punit Paranjpe | Afp | Getty Images</figcaption></figure>



Stocks in the Asia-Pacific traded mixed on Friday as shares of Adani Enterprises plunged and last traded 15% lower, continuing a sell-off triggered by allegations raised by short seller firm Hindenburg.



The Nifty 50 in Mumbai traded 0.5% higher despite Adani companies continuing to drop sharply, while the S&amp;P Sensex rose 0.65%.



Adani Group founder and chairman Gautam Adani’s net worth fell further overnight, and now sits at #21 on the Bloomberg Billionaires Index. He lost a total of $59.2 billion in net worth year-to-date to $63.1 billion as of Thursday’s market close.



Hong Kong’s Hang Seng index fell 1.2%. In mainland China, the Shanghai Composite fell 0.66% and the Shenzhen Component lost 0.63% as the Caixin purchasing managers’ index showed services activity in China picked up in January.



The Nikkei 225 in Japan rose 0.39% and the Topix traded 0.26% higher as the au Jibun Bank Japan Services Purchasing Managers’ Index for January marked further growth for the month.



In South Korea, the Kospi also rose 0.47% to 2,480.4 and the Kosdaq gained 0.28% 766.79.



In Australia, the S&amp;P/ASX 200 rose 0.62% to 7,558.1 as investors digest new housing loan commitments for December that fell 4.3%.



Overnight in the U.S., major indexes on Wall Street saw a rally driven by technology stocks. Meta surged 23%, marking its best day since 2013 after seeing a better-than-expected earnings report.

107188527-1675404834349-gettyimages-1238109773-AFP_9XP9CY

Adani Enterprises plunges as rout deepens in Hindenburg fallout; Asia stocks mixed

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107187869-1675332665348-gettyimages-1246732958-INDIA_ADANI-820x462.jpeg" alt="" class="wp-image-422877" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107187869-1675332665348-gettyimages-1246732958-INDIA_ADANI-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107187869-1675332665348-gettyimages-1246732958-INDIA_ADANI-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107187869-1675332665348-gettyimages-1246732958-INDIA_ADANI-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107187869-1675332665348-gettyimages-1246732958-INDIA_ADANI-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107187869-1675332665348-gettyimages-1246732958-INDIA_ADANI.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Signage of Adani Group at company’s gas station in Ahmedabad, India, on Wednesday, Feb. 1, 2023. Bloomberg | Bloomberg | Getty Images</figcaption></figure>



India’s Adani conglomerate deepened market losses to exceed $100 billion on Thursday, which have snowballed since a short-seller’s scathing report triggered market turmoil and led the company to walk back its public share sale.



Losses across Gautam Adani’s main businesses hit $107 billion by 10 a.m. London time on Thursday since the Jan. 24 publication of an extensive critical report from New York’s Hindenburg Research, which has disclosed a short position in Adani Group companies.



Alleging a two-year investigation, the report charged the conglomerate with engaging in a “brazen stock manipulation and accounting fraud scheme over the course of decades.”



The Adani firmly denied the accusations as “nothing but a lie” from the “Madoffs of Manhattan” in a 413-page riposte that failed to soothe skittish investor sentiment and rein in a rapid sell-off.



“It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors,” the Adani response said, describing Hindenburg as an “unethical short seller.”



“Hindenburg has not published this report for any altruistic reasons but purely out of selfish motives and in flagrant breach of applicable securities and foreign exchange laws,” it said.



Hindenburg on Jan. 29 retorted that the Adani commentary “predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative, claiming our report amounted to a ‘calculated attack on India’.”



Forbes downgraded Gautam Adani from its Top 10 list of the richest men in the world.



The swift share decline of Adani Group companies has sparked concerns over broader systemic risk to Indian markets. India’s central bank has asked local banks for the details of their exposure to the Adani conglomerate, Reuters reported Thursday, citing government and banking sources.



“Unprecedented” market conditions and sharp fluctuations in the daily stock price pushed Adani Enterprises to ax its $2.5 billion follow-on public offering (FPO) on Wednesday.



“The interest of the investors is paramount and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO,” Adani said in a statement.  



The FPO sale had achieved a full subscription.



—CNBC’s Ganesh Rao contributed to this article.

107187869-1675332665348-gettyimages-1246732958-INDIA_ADANI

Adani losses top $100 billion in wake of Hindenburg Research report

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107076508-1667332344080-jer-820x547.jpg" alt="" class="wp-image-420977" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107076508-1667332344080-jer-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107076508-1667332344080-jer-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107076508-1667332344080-jer-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107076508-1667332344080-jer-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107076508-1667332344080-jer-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107076508-1667332344080-jer-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. Federal Reserve Board Chairman Jerome Powell takes questions from reporters after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation, during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, June 15, 2022.
Elizabeth Frantz | Reuters</figcaption></figure>



The Federal Reserve on Wednesday raised its benchmark interest rate by a quarter percentage point and gave little indication it is nearing the end of this hiking cycle.   Aligning with market expectations, the rate-setting Federal Open Market Committee boosted the federal funds rate by 0.25 percentage point. That takes it to a target range of 4.5%-4.75%, the highest since October 2007.



The move marked the eighth increase in a process that began in March 2022. By itself, the funds rate sets what banks charge each other for overnight borrowing, but it also spills through to many consumer debt products.



The Fed is targeting the hikes to bring down inflation that, despite recent signs of slowing, is still running near its highest level since the early 1980s.



The post-meeting statement noted that inflation “has eased somewhat but remains elevated,” a tweak on previous language.



“Inflation data received over the past three months show a welcome reduction in the monthly pace of increases,” Fed Chairman Jerome Powell said in his post-meeting news conference. “And while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.”



Markets, however, were looking to this week’s meeting for signs that the Fed would be ending the rate increases soon. But the statement provided no such signals. At first, stocks fell in the wake of the announcement, with the Dow Jones Industrial Average tumbling more than 300 points.



However, the market rebounded during Powell’s press conference, after he acknowledged that “the disinflationary process” had started. Major averages ultimately turned positive as market commentary focused on Powell’s somewhat optimistic comments on progress against inflation.



“We can now say I think for the first time that the disinflationary process has started,” Powell said, while also noting that it would be “very premature to declare victory or to think we really got this.”



The Fed’s statement included language noting that the FOMC still sees the need for “ongoing increases in the target range.” Market participants had been hoping for some softening of the phrase, but the statement, approved unanimously, kept it intact.



The statement altered one part when describing what will determine the future policy path. Officials said they would determine the “extent” of future rate increases based on factors such as the effects so far of the rate hikes, the lags in which policy has an impact, and developments in financial conditions and the economy. Previously, the statement said it would use those factors to determine the “pace” of future hikes, a possible nod that the committee sees an end to the increases somewhere, or at least a continuation of smaller moves ahead. In 2022, the Fed approved four consecutive 0.75 percentage point moves before going to a smaller 0.5 percentage point increase in December. In recent public statements, multiple officials said they think the central bank at least can scale back on the size of the hikes, without signaling when they could end. While it was raising its benchmark rate, the committee characterized economic growth as “modest” though it noted only that unemployment “has remained low.” The latest job market assessment omitted previous language that employment gains have been “robust.“ Otherwise, the statement remained intact from previous messages as the Fed continues its efforts to arrest inflation.



<h2 class="wp-block-heading" id="h-fed-firmly-focused-on-inflation"><a></a>Fed firmly focused on inflation</h2>



Fed policy is thought to work on a lag – when the central bank raises rates, it takes time for the economy to adjust to tighter controls on money.



This particular round of inflation started due to Covid-related factors such as clogged supply chains and surging demand for goods over services. The war in Ukraine aggravated rising gas prices, while unprecedented fiscal and monetary stimulus fueled increasing costs across a variety of goods and services. Food prices have risen more than 10% over the past year. Egg prices alone have soared 60%, butter is up more than 31% and lettuce has jumped 25%, according to Labor Department data through December. Gas prices were ticking lower toward the end of 2022 but have popped higher in recent days, hitting $3.50 a gallon nationally for an increase of about 30 cents over the past month, according to AAA. Fed officials have remained resolute about tackling inflation, though they have said recent numbers show pressures could be easing. The consumer price index declined 0.1% in December on a monthly basis and is up 6.5% from a year ago – down from the peak of 9% last summer but still well above where the Fed feels comfortable.



<h2 class="wp-block-heading" id="h-fed-s-bond-buying"><a></a>Fed’s bond buying</h2>



Along with the rate hikes, the Fed has been reducing the holdings in its bond portfolio. That has resulted in a reduction of about $445 billion since June, as the Fed has targeted a capped level of $95 billion in maturing bonds it is allowing to roll off each month rather than reinvest.



The balance sheet reduction has been the equivalent of about 2 percentage points of additional rate hikes, according to the San Francisco Fed. The balance sheet is still at more than $8.4 trillion.



Markets are watching for where the Fed will finally end the increases.



At the December FOMC meeting, committee members indicated they see the “terminal rate,” or point where the Fed thinks policy is sufficiently restrictive, as 5.1%. Markets are betting that number is closer to 4.75%, and they expect the Fed to start cutting rates later this year, after one more quarter-point increase in March.



Responding to a question from CNBC’s Steve Liesman, Powell said it’s “possible” that the funds rate could stay lower than 5%. But he also said it’s unlikely the Fed would cut rates this year unless inflation comes down more rapidly.

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Fed raises rates a quarter point, expects ‘ongoing’ increases

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-820x547.jpeg" alt="" class="wp-image-419969" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/09/107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, July 27, 2022.
Elizabeth Frantz | Reuters</figcaption></figure>



The Federal Reserve is expected to raise interest rates by just a quarter point but also likely signal it will stay vigilant in its fight against inflation even as it reduces the size of the hikes.



The Fed releases its latest rate decision Wednesday at 2 p.m. ET, and Fed Chair&nbsp;Jerome Powell&nbsp;briefs the media at 2:30 p.m. The expected quarter-point hike follows a&nbsp;half percentage point increase in December,&nbsp;and would be the smallest increase in the federal funds target rate range since the first hike of the cycle last March.



While the meeting is expected to be relatively uneventful, strategists say it could be a challenge for the Fed chief to temper the reaction in financial markets. The markets have been rising as investors expect the central bank might succeed in a soft landing for the economy while also snuffing out inflation sufficiently to move back to easing policy.



“How is he going to tell people to calm down, chill out and don’t get so excited by us getting close to the end of the interest rate increases?” said Peter Boockvar, chief investment officer at Bleakley Financial Group. “He’s going to do that by still saying the Fed’s going to stay tight for a while. Just because he’s done doesn’t mean it’s a quick bridge to an ease.”



The Fed’s rate hike Wednesday would be the eighth since last March. It would put the fed funds target rate range at 4.50% to 4.75%. That is just a half percentage point away from the Fed’s estimated end point, or terminal rate range of 5% to 5.25%.



“I think he will push back on financial conditions. I think the markets are expecting that. I think people realize how much credit spreads have moved, how much the equity market has moved, how much tech stocks have moved. This month has been extraordinary,” said Rick Rieder, BlackRock’s chief investment officer for global fixed income.



<h2 class="wp-block-heading" id="h-a-rally-that-could-dampen-the-fed-s-efforts"><a></a>A rally that could dampen the Fed’s efforts</h2>



Easy credit and a stock market that is rising too quickly could defeat the Fed’s efforts to chill the economy and crush inflation.



Stocks rallied Tuesday as the Fed began its two-day meeting, capping January’s gain of nearly 6.2% for the&nbsp;S&amp;P 500. The tech sector was up 9.2% for the month. Rates have fallen since the end of the year, with the benchmark&nbsp;10-year Treasury&nbsp;yield at roughly 3.5%, after it ended December at about 3.9%.



Rieder expects Powell to deliver his comments with a hawkish tone. “I think if he’s hawkish, I think the markets have built that in. I think if he’s not, the market could make another leg,” he said.



In the futures market, fed funds futures continued to price a terminal rate of less than 5%. The futures also show investors expect the Fed to actually reverse policy and cut rates by at least 25 basis points by the end of 2023. A basis point equals 0.01 of a percentage point.



“I think he’s going to be hawkish relative to market pricing,” said Jim Caron, head of macro strategies for global fixed income at Morgan Stanley Investment Management.



Caron said the Fed’s downsizing of its rate hikes will be seen dovish in itself. Prior to December’s 50 basis point hike, the central bank raised rates by 75 basis points four times in a row.



“He wants to defend the validity of the 5% to 5.25% terminal rate [forecast],” said Caron. “At the same time, he sees record housing prices are coming down. Wage inflation is coming down. The auto sector is not doing great. Retail’s not doing so great. The jobs market is doing OK. Wage inflation is coming down but it’s still above comfort levels.”



<h2 class="wp-block-heading" id="h-listening-carefully-to-the-fed-s-messaging"><a></a>Listening carefully to the Fed’s messaging</h2>



Caron said Powell also wants to be careful not to sound too hawkish. “It’s very easy for there to be a mistake in the communication from the Fed or there could be a mistake in the way the market initially interprets things as well,” he said. “That tells me there’s going to be a lot of volatility.”



Investors will be attuned to any comments Powell makes about the economy and whether he expects it to dip into recession, as many economists forecast. The central bank has not projected a recession in its forecast, but it expects very sluggish flat growth, and it sees&nbsp;the unemployment rate rising sharply to 4.6%&nbsp;later this year, from its&nbsp;December level of 3.5%.



The Fed is not expected to make any major changes in its policy statement when it announces the rate hike.&nbsp;Its last statement said that “ongoing increases”&nbsp;in the target rate range will be appropriate in order to reach a policy position that can send inflation back to 2%.



The Fed is making headway against inflation.&nbsp;Personal consumption expenditure core inflation&nbsp;rose by 0.3% in December and was at 4.4% on an annual basis from 4.7% in November, the slowest increase since October 2021



Strategists say the Fed needs more data and will likely wait until at least March to signal how long it could continue to raise interest rates. If it stays at the same pace, there could be two more quarter-point hikes.



The Fed will not be releasing any new forecasts or economic projections Wednesday. Its next forecast is the quarterly release of economic projections at the March meeting, and that is one way markets will get more clues on the intended rate path.



“They don’t want financial conditions to ease all that much, and they don’t have a new set of forecasts to give, so I think what that means is you have fewer changes in the statement and that line about ‘ongoing increases’ is going to stay the same,” said Michael Gapen, Bank of America’s chief U.S. economist.



Gapen said it will be difficult for Powell to sound too hawkish. “Actions speak louder than words. If they decelerate [the size of rate hikes] for the second straight meeting in a row, it’s hard to back that up with overtly hawkish language,” he said.



Boockvar said Powell should emphasize how the Fed will keep rates at higher levels, despite the market view that it will soon cut rates. “Powell is more focused on inflation going down and staying down than trying to help the S&amp;P 500,” said Boockvar. “His legacy is not going to be determined by where credit spreads are or where the S&amp;P is going. It’s going to be determined by whether he slayed inflation and it stayed down.”

107094949-16589488462022-07-27t185755z_1401356456_rc2ikv9v3blg_rtrmadp_0_usa-fed

Fed expected to slow rate hiking to a quarter point but will stay unrelenting in inflation battle

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="405" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107145125-16674204972022-11-02t183820z_359868579_rc2udx98odbn_rtrmadp_0_usa-fed.jpeg" alt="" class="wp-image-422831" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107145125-16674204972022-11-02t183820z_359868579_rc2udx98odbn_rtrmadp_0_usa-fed.jpeg 720w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107145125-16674204972022-11-02t183820z_359868579_rc2udx98odbn_rtrmadp_0_usa-fed-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107145125-16674204972022-11-02t183820z_359868579_rc2udx98odbn_rtrmadp_0_usa-fed-160x90.jpeg 160w" sizes="auto, (max-width: 720px) 100vw, 720px" /><figcaption class="wp-element-caption">A screen displays the Fed rate announcement as a trader works on the floor of the New York Stock Exchange (NYSE), November 2, 2022. Brendan McDermid | Reuters</figcaption></figure>



The U.S. Federal Reserve, European Central Bank and Bank of England are all expected to hike interest rates once again this week, as they make their first policy announcements of 2023.



Economists will be watching policymakers’ rhetoric closely for clues on the path of future rate hikes this year, as the three major central banks try to engineer a soft landing for their respective economies without allowing inflation to regain momentum.



All three banks are expected to re-emphasize commitments to returning inflation toward targets near 2%, but recent positive data have fueled hopes that central banks will eventually be able to slow the pace of rate hikes.



Nick Chatters, fixed income manager at Aegon Asset Management, said that the task for market watchers is to “telegraphically infer” from this week’s press conferences what Fed Chairman Jerome Powell and ECB President Christine Lagarde are thinking about the “terminal rate,” and how long they intend to keep monetary policy restrictive before starting to normalize.



The Federal Open Market Committee concludes its meeting on Wednesday, before the Bank of England and ECB deliver their decisions on Thursday.



<h3 class="wp-block-heading" id="h-the-fed">The Fed</h3>



Since the FOMC’s December meeting, economic data showing an easing of wage growth and inflation pressures, alongside some more concerning activity growth signals, have strengthened the case for the Fed to enact a 0.25 percentage point rate hike — a marked downshift from the jumbo moves seen in 2022.



The market is now pricing in this eventuality, but the key question is what the FOMC will indicate about further rate hikes in 2023.



“We think the Fed’s path this year is best thought of in terms of a goal to be accomplished rather than a target level of the funds rate to be reached,” Goldman Sachs Chief U.S. Economist David Mericle said in a note Friday.



“The goal is to continue in 2023 what the FOMC began so successfully in 2022 by keeping the economy on a below-potential growth path in order to steadily but gently rebalance the labor market, which should in turn create the conditions for inflation to settle sustainably at 2%.”



Fed officials have indicated there is still a way to go before they are confident that inflation will settle at this level. Mericle said substantial “labor market rebalancing” will be needed, as the gap between jobs and workers is still around 3 million above its pre-pandemic level.



This will necessitate a slower growth path for a while longer. Goldman expects a 25 basis point hike on Wednesday, followed by two further rises of the same scale in March and May — in steps that would take the target rate for the Fed funds rate to a peak of between 5% and 5.25%.



“Fewer hikes might be needed if the recent weakening in business confidence captured by the survey data depresses hiring and investment more than we think, substituting for additional rate hikes,” Mericle said.



“But more hikes might be needed if the economy reaccelerates as the drag on growth from past fiscal and monetary policy tightening fades.”



The uncertainty over the growth pace could lead the Fed to “recalibrate” and find itself in a “stop-and-go” pattern on rates later in the year, he suggested.



<h3 class="wp-block-heading">The ECB</h3>



The ECB has telegraphed a 50 basis point hike for Thursday and vowed to stay the course on tackling inflation, but uncertainty lingers around the future rate trajectory.



Euro zone inflation dropped for a second consecutive month in December, while Tuesday revealed that the bloc’s economy unexpectedly expanded by 0.1% in the fourth quarter of 2022, curbing recession fears.



The anticipated half-point hike will take the ECB’s deposit rate to 2.5%. The Governing Council is also expected to detail plans to reduce its APP (asset purchase program) portfolio by a total of 60 billion euros ($65 billion) between March and June.



In a Tuesday note, Berenberg projected that the ECB will “probably” confirm its prior guidance for a further 50 basis point hike in mid-March, followed by further tightening in the second quarter.



The German investment bank highlighted that, while there are positive signs in headline inflation, stickier core inflation — which came in at 5.2% in December — has not yet peaked.



“We expect the ECB to leave the size and number of its moves in Q2 open. The risks to our call for just one final 25bp rate hike in Q2 to take the deposit and main refinancing rates to peaks of 3.25% and 3.75%, respectively, on 4 May are tilted to the upside,” said Berenberg Chief Economist Holger Schmieding.



“In line with the ECB’s recent ‘higher for longer’ mantra, ECB President Christine Lagarde will likely push back against market expectations that the bank will start cutting rates again late this year or in early 2024.”



Upon slowing its rate hikes from 75 basis points to 50 basis points in December, the ECB spooked markets with the assertion that rates would need to “rise significantly at a steady pace to reach levels that are sufficiently restrictive.” Schmieding said this sentence will be one to watch on Thursday:



“The ECB will probably confirm that it is progressing at a ‘steady pace’ (read: 50bp in March and possibly beyond) without pre-committing to either a 25bp or 50bp move in May,” Schmieding said.



“But as rates will now be 50bp higher than at the last ECB press conference, the doves may suggest that the ECB should now use a slightly softer term than ‘significantly’.”



<h3 class="wp-block-heading">The Bank of England</h3>



A key distinction between the task of the Bank of England and those of the Fed and ECB is the persistently bleak outlook for the U.K. economy.



The Bank previously forecast that the U.K. economy was entering its longest recession on record, but GDP unexpectedly grew by 0.1% in November after also exceeding expectations in October, suggesting the recession may not be as deep as promised.



However, the International Monetary Fund on Monday downgraded its projection for U.K. GDP growth in 2023 to -0.6%, making it the world’s worst performing major economy, behind even Russia.



Most economists anticipate a split decision among the Monetary Policy Committee in favor of another 50 basis point hike on Thursday — taking the Bank rate to 4% — but expect a more dovish tone than in recent meetings.



Barclays expects a 7-2 split vote in favor of one final “forceful” 50 basis point rise, with communications foreshadowing a step down to 25 basis points in March.



“This may be signalled via removing, or softening, the ‘forceful’ component of the forward guidance. Such a tweak would be consistent with our call for a final two 25bp hikes in March and May, taking the terminal rate to 4.5%,” analysts at the British lender said in a note Friday.



Victoria Clarke, U.K. chief economist at Santander CIB, expects a far closer 5-4 majority at the MPC in favor of the 50 basis point hike, with the four dissenters split between “no change” and a 25 basis point increase. She said the Bank has “no easy options.”



“Given the concern over the damage embedded inflation would cause, we believe that a majority of the MPC will consider an increase in Bank Rate to 4.00% to be prudent risk management, but we still do not think it wishes to take Bank Rate far above this,” Clarke said in a note Friday.



Santander expects a “double but dovish hike” in February and March, and Clarke suggested that Governor Andrew Bailey is “optimistically” watching falling headline inflation, while becoming increasingly worried about the prospects for the U.K. housing market.

107145125-16674204972022-11-02t183820z_359868579_rc2udx98odbn_rtrmadp_0_usa-fed

Major central banks set to signal interest rate glide path in crucial week for monetary policy

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2-820x546.jpeg" alt="" class="wp-image-422845" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2-820x546.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2-768x511.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2-1536x1022.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



LONDON — More than half a million British workers are due to take strike action through Wednesday, with unions across a range of sectors in industrial disputes over pay and working conditions.



They include 300,000 teachers in England, who the National Education Union says have experienced at least a 23% real-terms pay cut since 2010; teachers across two unions in Scotland; around 100,000 civil servants across more than 100 departments, including driving instructors, coastguards and Department of Work and Pensions staff; 70,000 university workers, including lecturers and security staff; and roughly 100,000 train and bus drivers.



Such widespread strike action has not taken place since a dispute over public sector pay in 2011, when more than a million workers are estimated to have taken industrial action.



Tens of thousands of schools will be closed or partially closed, travel and other services will be disrupted, while workers will set up hundreds of picket lines and hold rallies.



Demands vary by union but include inflation-beating pay rises, including to redress historic real-terms pay falls; pensions reform; and no cuts in redundancy terms. The NEU says teaching is in “crisis” as staff are driven from the profession and is calling for an above-inflation pay rise.&nbsp;



Protests will also be over a bill that was passed in the lower house of Parliament on Tuesday which seeks to enforce minimum service levels in some sectors, with some workers able to be fired if they refuse to work when required on strike days.



The Trades Union Congress has described the bill as “wrong, unworkable, and almost certainly illegal.”



Most unions are holding several days of strikes, some, like rail, spread across months. Wednesday has been co-ordinated by the unions as a day of mass walkouts to send a message.



It follows strikes by National Health Service ambulance drivers and nurses, who are calling not only for a pay rise but say labor shortages have made working conditions near-impossible.



Postal workers have also been on strike, and firefighters have voted for future strike action.



Average pay excluding bonuses rose by 2.7% in the public sector between August and October, as inflation rose above 10%. That compared with a 6.9% pay increase in the private sector, according to national statistics.



While inflation has begun to&nbsp;<a href="https://www.cnbc.com/2023/01/18/uk-inflation-rate-dips-for-second-straight-month-to-hit-10point5percent.html">cool slightly</a>&nbsp;it remains at historic highs, and acute in areas that most impact workers on lower salaries. Grocery price inflation hit a record 16.7% in the four weeks to Jan. 22.



On Wednesday’s widespread strike action, a government spokesperson told CNBC: “Ever since these strikes were threatened, the government has been preparing to do all it can to mitigate any disruption caused and we have extensive contingency plans in place.” “Of course, the best mitigation would be for union bosses to call off planned strikes, to keep talking and to come to an agreement.”

107186484-1675172456383-gettyimages-1456863459-rmt-righttostrikedemo16-1-23-2

Britain hit by biggest strike in more than a decade with schools shut and rail networks disrupted

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="578" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/7M4ND6WFJBPGHMBR7QQYVC63II-820x578.jpg" alt="" class="wp-image-422800" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/7M4ND6WFJBPGHMBR7QQYVC63II-820x578.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/7M4ND6WFJBPGHMBR7QQYVC63II-300x211.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/7M4ND6WFJBPGHMBR7QQYVC63II-128x90.jpg 128w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/7M4ND6WFJBPGHMBR7QQYVC63II-768x541.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/7M4ND6WFJBPGHMBR7QQYVC63II-1536x1083.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/7M4ND6WFJBPGHMBR7QQYVC63II-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The logo of the Adani Group is seen on the facade of its Corporate House on the outskirts of Ahmedabad, India, January 27, 2023. REUTERS/Amit Dave</figcaption></figure>



MUMBAI, Jan 31 (Reuters) &#8211; U.S.-based short-seller Hindenburg Research severely criticised Indian conglomerate Adani in a Jan. 24 report ahead of its flagship company&#8217;s $2.5 billion share sale, triggering a $70 billion rout in the group&#8217;s domestically listed stocks and a sell-off in its bonds listed overseas.



Here are some of the points raised by the report, and Adani group&#8217;s responses.



<h2 class="wp-block-heading" id="h-who-are-adani-and-hindenburg">WHO ARE ADANI AND HINDENBURG?</h2>



Gautam Adani, from Gujarat in western India, built his empire from scratch after starting out as a commodities trader. India&#8217;s Prime Minister Narendra Modi is from the same state and their relationship has long come under scrutiny by Modi&#8217;s opponents.



From being a school drop-out, Adani rose to become Asia&#8217;s richest man. His $220 billion empire spans ports, power generation, airports, mining, edible oils, renewable power, media and cement.



Founded in 2017 by Nathan Anderson, Hindenburg Research is a forensic financial research firm which analyses equity, credit and derivatives. It has a track-record of finding corporate wrongdoings and placing bets against the companies.



<h2 class="wp-block-heading">WHAT DID HINDENBURG SAY?</h2>



Hindenburg disclosed that it holds short positions in Adani companies through U.S.-traded bonds and non-Indian-traded derivative instruments.



It released a report alongside that accused the conglomerate of improper use of tax havens and flagged concerns about its debt levels.



<h2 class="wp-block-heading">WHAT WAS ADANI&#8217;S RESPONSE?</h2>



The Adani group has called the report baseless and termed the allegations &#8220;unsubstantiated speculations&#8221;.



<h2 class="wp-block-heading">IS THIS THE FIRST TIME THESE ISSUES ARE BEING RAISED?</h2>



No. India&#8217;s capital markets regulator, the Securities and Exchange Board of India, has investigated some of these issues over the past year following local media reports.



Reuters reported the regulator will continue this scrutiny and draw on any fresh information in the Hindenburg report.



<h2 class="wp-block-heading">WHAT DOES HINDENBURG SAY ABOUT FINANCIAL CONTROLS AT THE GROUP?</h2>



The short-seller has said that listed Adani companies have seen a number of changes in chief financial officers (CFOs) and that auditors used by the group are relatively unknown.



It said Adani Enterprises has had five chief financial officers over the course of eight years, citing this a &#8220;a key red flag indicating potential accounting issues&#8221;.



<h2 class="wp-block-heading">HOW HAS ADANI RESPONDED TO THIS?</h2>



The Adani group said that several of the CFOs that the Hindenburg report points to have remained within the group and moved on to new roles.



On the quality of audits, it said that the audit committee of each of the listed companies is composed entirely of independent directors, and auditors are appointed on their recommendation.



On Tuesday, Mint newspaper reported that the group is considering an independent audit of group companies to provide comfort to investors. Reuters could not independently verify this.



<h2 class="wp-block-heading">HOW IS HINDENBURG VIEWING ADANI&#8217;S LEVERAGE AND WHAT IS THE GROUP&#8217;S RESPONSE?</h2>



The report says key listed Adani companies have substantial debt and are over-leveraged. It also says the group faces liquidity risks due to high short term liabilities, with five of the seven key listed companies having reported &#8220;current ratios&#8221; below 1, indicating near-term liquidity pressure.



Adani responded by saying leverage ratios of its companies continue to be healthy and are in line with the industry benchmarks of the respective sectors, further adding that this information is publicly disclosed regularly.



(Writing by Ira Dugal; Editing by Muralikumar Anantharaman)

FILE PHOTO: The logo of the Adani Group is seen on the facade of its Corporate House on the outskirts of Ahmedabad

Adani VS Hindenberg: What you need to know

<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/image.png" alt="" class="wp-image-422794" width="802" height="451" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/image.png 630w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/image-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/image-160x90.png 160w" sizes="auto, (max-width: 802px) 100vw, 802px" /><figcaption class="wp-element-caption">The IMF has revised its global economic outlook upwards. Norberto Duarte | Afp | Getty Images</figcaption></figure>



The International Monetary Fund on Monday revised upward its global growth projections for the year, but warned that higher interest rates and Russia’s invasion of Ukraine would likely still weigh on activity.



In its latest economic update, the IMF said the global economy will grow 2.9% this year — which represents a 0.2 percentage point improvement from its previous forecast in October. However, that number would still mean a fall from an expansion of 3.4% in 2022.



It also revised its projection for 2024 down to 3.1%.



“Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research department at the IMF, said in a blog post.



The outlook turned more positive on the global economy due to better-than-expected domestic factors in several countries, such as the United States.



“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas said, also noting that inflationary pressures have come down.



In addition, China announced the reopening of its economy after strict Covid lockdowns, which is expected to contribute to higher global growth. A weaker <a href="https://www.cnbc.com/quotes/.DXY/">U.S. dollar</a> has also brightened the prospects for emerging market countries that hold debt in foreign currency.



However, the picture isn’t totally positive. IMF Managing Director Kristalina Georgieva warned earlier this month that the economy was not as bad as some feared “but less bad doesn’t quite yet mean good.”



“We have to be cautious,” Georgieva said during a CNBC-moderated panel at the World Economic Forum in Davos, Switzerland.



The IMF on Monday warned of several factors that could deteriorate the outlook in the coming months. These included the fact that China’s Covid reopening could stall; inflation could remain high; Russia’s protracted invasion of Ukraine could shake energy and food costs even further; and markets could turn sour on worse-than-expected inflation prints.



IMF calculations say that about 84% of nations will face lower headline inflation this year compared to 2022, but they still forecast an annual average rate of 6.6% in 2023 and of 4.3% the following year.



As such, the Washington, D.C.-based institution said one of the main policy priorities is that central banks keep addressing the surge in consumer prices.



“Clear central bank communication and appropriate reactions to shifts in the data will help keep inflation expectations anchored and lessen wage and price pressures,” the IMF said in its latest report.



“Central banks’ balance sheets will need to be unwound carefully, amid market liquidity risks,” it added.

image

IMF hikes global growth forecast as inflation cools and household spending surprises

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185610-1675051943396-gettyimages-1246583940-INDIA_ADANI-820x462.jpeg" alt="" class="wp-image-422753" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185610-1675051943396-gettyimages-1246583940-INDIA_ADANI-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185610-1675051943396-gettyimages-1246583940-INDIA_ADANI-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185610-1675051943396-gettyimages-1246583940-INDIA_ADANI-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185610-1675051943396-gettyimages-1246583940-INDIA_ADANI-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185610-1675051943396-gettyimages-1246583940-INDIA_ADANI.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Adani companies lost billions in market after a short-seller report accused the group of fraud. Indranil Aditya | Bloomberg | Getty Images</figcaption></figure>



Stocks in the Asia-Pacific mostly fell on Monday as shares of Adani Group remained volatile after the conglomerate rebutted short seller firm Hindenburg’s accusations of embezzlement and fraud.



India’s Nifty 50 Index traded 0.3% lower after hitting three-month lows on last week’s rout of Adani shares.



Mainland Chinese markets rose on resuming trade after a week-long New Year break and are headed for a bull market&nbsp;—&nbsp;the CSI 300, which tracks the largest mainland-listed stocks, have gained about 20% from its recent lows seen at the end of October last year.



The Shenzhen Component rose 1% and the Shanghai Composite rose 0.42%, bucking the trend in the wider region. Hong Kong’s Hang Seng index traded 2.37% as property and technology stocks led losses.



In Japan, the Nikkei 225 gained 0.2% while the Topix was just below the flatline. South Korea’s Kospi fell 1.26% while the Kosdaq also shed 0.38%.



The S&amp;P/ASX 200 in Australia fell 0.16%. Investors also digested trade data from New Zealand.



Stocks on Wall Street ended the week last Friday higher, fueled by gains in Tesla shares and a better-than-expected GDP report on Thursday. All major averages posted a positive week and are on pace for a month of gains.



— CNBC’s Samantha Subin, Carmen Reinicke contributed to this report

107185610-1675051943396-gettyimages-1246583940-INDIA_ADANI

Adani shares volatile as group rebuts short-seller report, Chinese stocks head for bull market

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107127522-1664558505555-gettyimages-1127534595-20190225_DLI-SV-MN_Rising-005-820x462.jpeg" alt="" class="wp-image-422735" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107127522-1664558505555-gettyimages-1127534595-20190225_DLI-SV-MN_Rising-005-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107127522-1664558505555-gettyimages-1127534595-20190225_DLI-SV-MN_Rising-005-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107127522-1664558505555-gettyimages-1127534595-20190225_DLI-SV-MN_Rising-005-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107127522-1664558505555-gettyimages-1127534595-20190225_DLI-SV-MN_Rising-005-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107127522-1664558505555-gettyimages-1127534595-20190225_DLI-SV-MN_Rising-005.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chairman and founder of the Adani Group, Gautam Adani, at the News18 Rising India Summit on Feb. 25, 2019, in New Delhi, India. Since becoming a billionaire in 2008, Adani is now one of the richest people in the world, with a $113 billion fortune, according to the Bloomberg Billionaires Index. Hindustan Times | Hindustan Times | Getty Images</figcaption></figure>



Shares of Adani Group companies continued to see sharp losses for a second consecutive trading session in India, after short seller firm Hindenburg announced its short position in the conglomerate’s firms earlier this week.



In a lengthy report released earlier this week, Hindenburg detailed multiple allegations against the conglomerate’s companies, saying the group has “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”



Adani rejected the claims in two separate statements, describing the short seller’s claims as an “intentional and reckless attempt by a foreign entity to mislead the investor community and the general public,” according to a media release.



“We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hidenburg Research,” said Adani Group’s head of legal, Jatin Jalundhwala.



Mumbai-listed shares of Adani Enterprises fell more than 9% in India’s trading session on Friday. Adani Transmission fell 19.47%, Adani Green Energy shed 19.89% and Adani Power lost 5%. Adani Port’s share price also dropped 13.8%.



The moves follow Wednesday’s losses after the initial release of Hindenburg’s report. India’s stock market was closed on Thursday.



The short seller firm doubled down on its initial stance after Adani’s responses, emphasizing that the conglomerate has not answered any of the questions raised, adding any lawsuits filed against Hindenburg will be “meritless.”



“If Adani is serious, it should also file suit in the U.S. where we operate. We have a long list of documents we would demand in a legal discovery process,” it said.



“We fully stand by our report and believe any legal action taken against us would be meritless,” it said.



Billionaire investor and CEO of Pershing Square Capital Management, Bill Ackman, voiced his support for the short seller firm in a tweet posted shortly before India’s market open.



“I found the Hindenburg report highly credible and extremely well researched,” he wrote, adding that Adani Group’s response “speaks volumes.”



“Caveat emptor,” he added.



<h2 class="wp-block-heading" id="h-2-5-billion-share-offering"><a></a>$2.5 billion share offering</h2>



The latest back-and-forth between Asia’s richest man Gautam Adani’s group and the short seller firm comes as Adani Enterprises kicked off its bidding for retail investors for its 200 billion rupee ($2.45 billion) secondary share offering on Friday.



The firm last week set a floor price for the offering of 3,112 rupees per share, with a price cap of 3,276 rupees per share, according to a filing.



Reuters reported that anchor investors, institutions that are allotted shares at a fixed price before the offering opens to the public, made bids of shares worth 90 billion rupees and that Malaysia’s Maybank was allocated more than 34% of the shares reserved for institutional investors, while the Abu Dhabi Investment Authority picked up 2.56%.



Since becoming a billionaire in 2008, Adani is now one of the richest people in the world, with a $113 billion fortune, according to the Bloomberg Billionaires Index. His net worth dropped about $7 billion in the year to date, the index showed.



In August last year, the company sought a hostile takeover of Indian media group NDTV, which in a filing said the move was “carried out without any consent” from its founders.

107127522-1664558505555-gettyimages-1127534595-20190225_DLI-SV-MN_Rising-005

Adani shares plunge further as it weighs legal action against short seller firm

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1245757418-820x547.jpg" alt="" class="wp-image-422731" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1245757418-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1245757418-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1245757418-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1245757418-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1245757418-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1245757418-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">VIRGINIA, UNITED STATES &#8211; DECEMBER 20: The Boeing Company building is seen in Virginia, United States on December 20, 2022. Celal Gunes / Anadolu Agency</figcaption></figure>



FORT WORTH, Texas/WASHINGTON Jan 26 (Reuters)&nbsp;&#8211;&nbsp;Boeing Co&nbsp;BA.N&nbsp;pleaded not guilty on Thursday to a 737 MAX fraud conspiracy felony charge after families objected to a 2021 Justice Department agreement to resolve the investigation into the plane&#8217;s flawed design.



Boeing’s chief safety officer, Mike Delaney, entered the not-guilty plea on behalf of the planemaker at a three-hour hearing. A not-guilty plea is standard in deferred prosecution agreements.



U.S. District Judge Reed O&#8217;Connor last week ordered Boeing to appear to be arraigned after he ruled that people killed in the two Boeing 737 MAX crashes in 2018 and 2019 are legally considered &#8220;crime victims.&#8221;



The crashes in Indonesia and Ethiopia killed 346 people. They cost Boeing more than $20 billion, led to a 20-month grounding of the best-selling plane and prompted lawmakers to pass sweeping legislation reforming airplane certification.



Boeing in a statement said it had &#8220;made broad and deep changes across our company, and made changes to the design of the 737 MAX to ensure that accidents like these never happen again. We also are committed to continuing to comply scrupulously with all of our obligations under the agreement we entered into with the Justice Department two years ago.&#8221;



O&#8217;Connor imposed a standard condition that Boeing commit no new crimes but did not rule on other conditions sought by the victims, including a request he name an independent monitor to oversee Boeing&#8217;s compliance and disclose publicly as much as possible of the substance of Boeing’s corporate compliance efforts adopted since 2021.



O&#8217;Connor asked the Justice Department to follow up with an answer to his question about whether there were instances of the government pushing back on something Boeing did that &#8220;wasn’t up to snuff.&#8221;



The Justice Department in 2021 agreed to seek dismissal of the charge after the three-year agreement if Boeing complies with all terms. Boeing&nbsp;<a href="https://www.justice.gov/opa/pr/boeing-charged-737-max-fraud-conspiracy-and-agrees-pay-over-25-billion" target="_blank" rel="noreferrer noopener">admitted in court documents</a>&nbsp;that two of its technical pilots deceived U.S. regulators about a key flight control system linked to both fatal crashes.



Relatives of people who were killed in the crashes spoke on Thursday at the arraignment.



Naoise Connolly Ryan, who lost her husband in the Ethiopia crash, said she wanted justice for her children who had lost their father. &#8220;The deal between Boeing and the Department of Justice is not justice,&#8221; she said.



The relatives said in a filing that Boeing had &#8220;committed the deadliest corporate crime in U.S. history.&#8221;



Boeing and the Justice Department oppose reopening the $2.5 billion agreement, which included $500 million in victim compensation, a $243.6 million fine and $1.7 billion in compensation to airlines.



(Reporting by Sheila Dang and David Shepardson; Editing by Jonathan Oatis and Bernadette Baum)

The Boeing Company building

Boeing pleads not guilty to fraud charge in 737 MAX arraignment

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246262502-820x547.jpg" alt="" class="wp-image-422462" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246262502-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246262502-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246262502-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246262502-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246262502-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246262502-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">DAVOS, SWITZERLAND &#8211; JANUARY 15: The WEF annual meeting to be held from January 16 to 20 in Davos, Switzerland on January 15, 2023. Under the theme of &#8220;Cooperation in a Fragmented World,&#8221; top figures shaping global politics and the business world will attend this weekâs 53rd annual meeting of the World Economic Forum (WEF), in Davos-Klosters, Switzerland. The meeting, which starts Monday, will bring together more than 2,700 leaders from 130 countries including 50 heads of state or government, as multiple crises deepen divisions and fragment the geopolitical landscape. (Photo by Dursun Aydemir/Anadolu Agency via Getty Images)</figcaption></figure>



Over 200 millionaires are urging the elite echelons in attendance at this week’s World Economic Forum in Davos to “tackle extreme wealth” and “tax the ultra-rich” to help relieve the cost-of-living strain off ordinary households. &nbsp;



The Patriotic Millionaires — self-described as “a group of high-net worth Americans who share a profound concern about the destabilizing level of inequality in America” — called for similar measures in their&nbsp;campaign last year.



“Tax the ultra rich and do it now,” the group asks in a&nbsp;new “Cost of Extreme Wealth” open letter&nbsp;on Wednesday, also endorsed by PMUK, Tax Me Now and Millionaires for Humanity. “It’s simple, common-sense economics. It is an investment in our common good and a better future that we all deserve, and as millionaires we want to make that investment,” it said.



The message warns of an “age of extremes” marked by rising poverty, wealth inequality, anti-democratic nationalism, depressed ecological conditions and dwindling opportunities for average workers to make a living wage.



The letter questions the mission of the World Economic Forum in absence of concrete measures:



“The current lack of action is gravely concerning. A meeting of the ‘global elite’ in Davos to discuss ‘Cooperation in a Fragmented World’ is pointless if you aren’t challenging the root cause of division. Defending democracy and building cooperation requires action to build fairer economies right now &#8211; it is not a problem that can be left for our children to fix.”



The campaign numbers 206 signatories from 12 countries, including Abigail Disney, an heiress to the multimedia entertainment empire, and actor Mark Ruffalo.



&nbsp;“Extreme wealth is eating our world alive. It is undermining our democracies, destabilizing our economies, and destroying our climate,” Disney said. “But for all their talk about solving the world’s problems, the attendees of Davos refuse to discuss the only thing that can make a real impact — taxing the rich.”



She criticized, “I’ve been to Davos. I’ve sat in the same room with some of the richest and most powerful people in the world as they talk about how they can make a difference, so I can say this with firsthand experience – Davos is a farce. Until Davos attendees start talking about taxing the rich, the entire gathering will remain a very public example of how out of touch they really are.”



CNBC has reached out to the Davos World Economic Forum for comment.



A study produced by the Patriotic Millionaires&nbsp;finds that a progressive annual wealth tax — modeled at 2% on individuals worth $5 million, 3% on those with a net $50 million, and 5% on the ultra-rich with more than $1 billion — could have raised in excess of $1.7 trillion in 2022.



The world’s richest 1% have accrued nearly two-thirds of all new global wealth over the last two years, amassing $26 trillion out of $42 trillion created in that period,&nbsp;Oxfam found in a recent report.



Households around the world have been struggling to keep pace with surging costs in wake of the Covid-19 pandemic, tightening monetary policies and fuel price hikes stoked by sanctions against Russian energy supplies. Just one leader of the Group of Seven global economic — German Chancellor Olaf Scholz —&nbsp;was set to attend the Davos proceedings this week, as several of his counterparts battle the cost-of-living crisis.

World Economic Forum

Over 200 millionaires urge Davos elite to up taxes on the ultra-rich

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="574" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/TI3I347R2RPO5NVROFHLBT54JQ-820x574.jpg" alt="" class="wp-image-422391" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/TI3I347R2RPO5NVROFHLBT54JQ-820x574.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/TI3I347R2RPO5NVROFHLBT54JQ-300x210.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/TI3I347R2RPO5NVROFHLBT54JQ-129x90.jpg 129w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/TI3I347R2RPO5NVROFHLBT54JQ-768x538.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/TI3I347R2RPO5NVROFHLBT54JQ-1536x1076.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/TI3I347R2RPO5NVROFHLBT54JQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Job seekers stand outside a construction site ahead of the release of the unemployement numbers by Statistics South Africa, in Eikenhof, south of Johannesburg, South Africa, June 23, 2020. REUTERS/Siphiwe Sibeko/File Photo/File Photo</figcaption></figure>



Jan 16 (Reuters)&nbsp;&#8211;&nbsp;Barely two in five people believe their families will be better off in the future, according to a regular global survey that also identified growing levels of distrust in institutions among low-income households.



The Edelman Trust Barometer, which for over two decades has polled the attitudes of thousands of people, found that economic pessimism was at its highest in some of the world&#8217;s top economies such as the United States, Britain, Germany and Japan.



It further confirmed how societies have been divided by the impacts of the pandemic and inflation. Higher-income households still broadly trust institutions such as government, business, media and NGOs. But alienation is rife among low-income groups.



&#8220;This has really shown the mass class divide again,&#8221; said Richard Edelman, whose Edelman communications group published the survey of over 32,000 respondents in 28 countries interviewed from Nov. 1 to Nov. 28 of last year.



&#8220;We saw it in the pandemic because of differential outcomes in terms of health, now we see it in terms of the impact of inflation,&#8221; he added. The World Health Organisation and others have noted the higher toll of the pandemic on the poor, while those on low incomes suffer most from costlier basic items.



Globally, only 40% agreed with the statement &#8220;my family and I will be better off in five years&#8221; compared to 50% a year before, with advanced economies most downbeat: the United States (36%), Britain (23%), Germany (15%) and Japan (9%).



Fast-growing economies saw much higher scores &#8211; albeit lower than last year &#8211; with only China bucking the trend with a one percentage point rise to 65% despite the economic disruption caused by its now-relaxed &#8220;zero COVID&#8221; policies.



Such anxieties reflect deep uncertainty about the state of the global economy as the Ukraine war continues and central banks hike their lending rates to tame inflation. The World Bank on Tuesday&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N33U2I0&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">warned</a>&nbsp;it could tip into recession this year.



While Edelman&#8217;s longstanding Trust Index registered an average 63% trust level in key institutions among high-income U.S. respondents, that figure fell to just 40% among low-income groups. Similar income-based divergences were present in Saudi Arabia, China, Japan and the United Arab Emirates.



In some, that hinted at outright polarisation, with high levels of respondents agreeing with the statement &#8220;I see deep divisions, and I don’t think we’ll ever get past them&#8221; in countries as different as Argentina, the United States, South Africa, Spain, Sweden and Colombia.



While such attitudes inevitably reflect current events, the ebbing of trust in government in particular has been a key theme of the survey for several years, with its trust levels this year sharply lower than relatively healthy ones scored by business.



Edelman attributed that to positive perceptions of company furlough schemes during the pandemic, applause for company moves to exit Russia over the Ukraine war, and a sense that firms have started to up their games on diversity and inclusion.



He said respondents by a six-to-one margin wanted business to engage more on issues from reskilling to climate change and suggested this should encourage them to brush off accusations such as the &#8220;woke capitalism&#8221; charge voiced by U.S. Republicans.



&#8220;I think our data give a lot of ammunition to the CEOs who have recognised that business has to be an important force in societal issues,&#8221; he said.



Lack of confidence<a href="https://tmsnrt.rs/3CKKvFn" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/3CKKvFn</a>



(Writing by Mark John; Editing by Hugh Lawson)

FILE PHOTO: Job seekers stand outside a construction site in Eikenhof, south of Johannesburg,

Household wealth optimism collapses, global survey shows

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/104229007-GettyImages-506092136-820x462.jpg" alt="" class="wp-image-422357" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/104229007-GettyImages-506092136-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/104229007-GettyImages-506092136-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/104229007-GettyImages-506092136-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/104229007-GettyImages-506092136-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/104229007-GettyImages-506092136.jpg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">George Soros, billionaire and founder of Soros Fund Management, at the World Economic Forum in Davos, Switzerland, in Jan. 2016. Matthew Lloyd | Bloomberg | Getty Images</figcaption></figure>



The World Economic Forum in Davos, Switzerland, kicks off next week. It’s an annual meeting where a global elite of business leaders, politicians and economists make bold predictions and try to set the agenda for the year ahead — but they don’t always get it right.



Here’s a recap of some calls made in recent years.



<h2 class="wp-block-heading" id="h-european-recession"><a></a>European recession</h2>



The fate of Europe’s economy was a big concern at May’s 2022 WEF annual meeting, in the wake of Russia’s invasion of Ukraine.



Citigroup CEO Jane Fraser said at a panel, “I think much more concerning for Europe, that is right in the middle of the storms from supply chains, from energy crisis, and just the proximity to some of the atrocities that are occurring in Ukraine.”



When asked whether there would be a recession in Europe, Fraser gave a definitive answer: “Yes — and I hope I’m wrong.”



Though the region’s growth rate has taken a hit and inflation has surged, the EU has so far escaped a recession. A number of analysts predict there will be one in early 2023, but expect it to be “mild.” Berenberg, for example, expects GDP (gross domestic product) to fall by 0.1% in the euro zone this year.



But Goldman Sachs has improved its outlook on the region, saying this week it no longer forecasts a recession for the euro area.



“We maintain our view that euro area growth will be weak over the winter months given the energy crisis but no longer look for a technical recession. This reflects more resilient growth momentum at the end of last year, sharply lower natural gas prices and earlier China reopening,” Goldman analysts said in the note.



They pointed to a GDP growth rate of 0.6% for 2023, compared to consensus expectations for a 0.1% contraction.



<h2 class="wp-block-heading"><a></a>Nuclear war</h2>



Billionaire investor George Soros warned during a speech at Davos in 2018 that the United States could be heading for a nuclear war with North Korea.



“The United States is set on a course towards nuclear war by refusing to accept that [North] Korea has become a nuclear power,” he said at the time.



The Obama administration also said back in 2016 that this was a top national security risk.



So far, the United States has avoided any military conflict with North Korea. In fact, recent concerns along these lines are focussed on Russia, in the wake of its invasion of Ukraine.



<h2 class="wp-block-heading"><a></a>FTX crash</h2>



Cryptocurrency was rocky throughout 2022, but those in the market weren’t expecting the collapse of FTX — once a $32 billion crypto exchange.



Brett Harrison, who served as president of FTX U.S., told CNBC at Davos in 2022 that the company was in a “very good spot” regarding capital and was looking at acquisitions.



U.S. authorities arrested Sam Bankman-Fried, the former CEO, in December, and accused him of wire fraud, securities fraud and money laundering. Bankman-Fried has pleaded not guilty.



<h2 class="wp-block-heading"><a></a>Bitcoin goes to zero?</h2>



In 2019, Jeff Schumacher, founder of BCG Digital Ventures, said during a CNBC-hosted panel at Davos that the price of bitcoin could sink to zero.



Bitcoin has had a volatile run, but in 2021 and 2022 it reached levels well above those seen in 2019. It has since come down from its historic highs, but its trading levels this week are still above those of four years ago.



<h2 class="wp-block-heading"><a></a>U.S.-EU trade deal</h2>



At the 2020 WEF, then-German Finance Minister Olaf Scholz said he was confident that a trade deal between the United States and the European Union would be struck. Scholz, who’s now the country’s chancellor, said at the time: “In the end, we know that trade is most successful if there are not too many barriers.”



Both sides of the Atlantic have resolved some trade disputes since U.S. President Joe Biden took office in 2021 &#8211; but they still seem far from a comprehensive trade deal.



In fact, European countries have raised concerns about Biden’s Inflation Reduction Act, arguing it discriminates against European companies and doesn’t follow international trade rules.



<h2 class="wp-block-heading"><a></a>Credit Suisse reshuffle</h2>



Despite media reports in 2022 suggesting that Credit Suisse was considering replacing then-CEO Thomas Gottstein, when CNBC asked Credit Suisse chairman Axel Lehmann about it in Davos, he denied the reports.



“They didn’t speak to me and I know that has not taken place, so it is wrong,” he said.



The Swiss bank announced in July that Thomas Gottstein was stepping down.

104229007-GettyImages-506092136

The Davos elite likes to make bold predictions. But they often get them wrong

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="567" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1238751604-1-820x567.jpg" alt="" class="wp-image-422320" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1238751604-1-820x567.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1238751604-1-300x208.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1238751604-1-130x90.jpg 130w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1238751604-1-768x531.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1238751604-1-1536x1062.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1238751604-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Yorba Linda, CA &#8211; February 24: Chinese ambassador Qin Gang speaks at The Richard Nixon Library &amp; Museum to mark 50 years since Nixon visited China and began diplomatic relations. Photo taken at The Richard Nixon Library &amp; Museum in Yorba Linda Thursday, Feb. 24, 2022. Dr. Henry Kissinger led the commemoration with virtual remarks. Speakers included the Honorable Elaine Chao, who served as the first Chinese-American member of a Presidents Cabinet, 24th U.S. Secretary of Labor and 18th U.S. Secretary of Transportation, former U.S. Ambassador to the PRC Stapleton Roy, and PRC Ambassador to the United States Qin Gang. This is the first visit to the U.S. West Coast by Ambassador Qin Gang. (Allen J. Schaben / Los Angeles Times via Getty Images)</figcaption></figure>



ADDIS ABABA, Jan 11 (Reuters)&nbsp;&#8211;&nbsp;Africa should not be an arena for competition between world powers, China&#8217;s Foreign Minister Qin Gang said on Wednesday, opening a new headquarters for a pan-African health body at the start of five-country Africa tour.



Qin visited facilities of the African Union in Addis Ababa, including the new headquarters of the Africa Centres for Disease Control and Prevention. China financed the complex&#8217;s construction, as it previously did for the headquarters of the AU itself, also based in the Ethiopian capital.



China has been Africa&#8217;s largest trading partner for over a decade. It competes for influence with the United States &#8211; which&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N3331VZ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">hosted</a>&nbsp;leaders from 49 African countries last month &#8211; as well as with former colonial powers such as Britain and France.



&#8220;Africa should be a big stage for the international cooperation, not an arena for major countries competition,&#8221; Qin said at a news conference with AU Commission chair Moussa Faki.



A trusted aide of President Xi Jinping and former ambassador to the United States, Qin was appointed foreign minister last month. His visit marks the 33rd consecutive year that Africa has been the destination of the Chinese foreign minister&#8217;s first overseas tour of the calendar year.



Qin met on Tuesday with Ethiopian Prime Minister Abiy Ahmed and other government officials, and announced a partial cancellation of Ethiopia&#8217;s debt to China during the visit, though neither side provided details. Ethiopia has borrowed $13.7 billion from China since 2000 and has been&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N31G0C2&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">seeking to restructure</a>&nbsp;its debt to foreign lenders since 2021.



Qin will also visit Egypt, Angola, Benin and Gabon over the next week. Paul Nantulya, a research associate at the Africa Center for Strategic Studies, said the choice of countries reflected China&#8217;s diversity of interests in Africa.



China has strong security ties to Egypt and Angola. Visiting Benin and Gabon shows ambitions to expand Beijing&#8217;s Belt and Roads infrastructure-building drive &#8211; long focused mainly on the Indian Ocean region &#8211; into western Africa, he told Voice of America radio.



(Reporting by Dawit Endeshaw; Writing by Aaron RossEditing by Peter Graff)

GettyImages-1238751604-1

Africa should not be arena for international competition, says Chinese foreign minister

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107176166-1673369762103-james-820x461.jpg" alt="" class="wp-image-422311" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107176166-1673369762103-james-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107176166-1673369762103-james-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107176166-1673369762103-james-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107176166-1673369762103-james-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107176166-1673369762103-james-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107176166-1673369762103-james.jpg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Federal Reserve Chairman Jerome Powell on Tuesday emphasized the need for the central bank to be free of political influence while it tackles persistently high inflation.



In a speech delivered to Sweden’s Riksbank, Powell noted that stabilizing prices requires making tough decisions that can be unpopular politically.



“Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” the chairman said in prepared remarks.



“The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors,” he added.



Powell’s remarks came at a forum to discuss central bank independence and were to be followed by a question-and-answer session.



The speech did not contain any direct clues about where policy is headed for a Fed that raised interest rates seven times in 2022, for a total of 4.25 percentage points, and has indicated that more increases likely are on the way this year.



While criticism of Fed actions by elected leaders is often done in quieter tones, the Powell Fed has faced vocal opposition from both sides of the political aisle.



Former President Donald Trump ripped the central bank when it was raising rates during his administration, while progressive leaders such as Sen. Elizabeth Warren, D-Mass., have criticized the current round of hikes. President Joe Biden has largely resisted commenting on Fed moves while noting that it is primarily the central bank’s responsibility to tackle inflation.



Powell has repeatedly said that political factors have not weighed on his actions.



In another part of Tuesday’s speech, he addressed calls from some lawmakers for the Fed to use its regulatory powers to address climate change. Powell noted that the Fed should “stick to our knitting and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities.”



While the Fed has asked big banks to examine their financial readiness in case of major climate-related events such as hurricanes and floods, Powell said that’s as far as it should go.



“Decisions about policies to directly address climate change should be made by the elected branches of government and thus reflect the public’s will as expressed through elections,” he said. “But without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals. We are not, and will not be, a ‘climate policymaker.’”



The Fed this year will launch a pilot program that calls for the nation’s six biggest banks to take part in a “scenario analysis” aimed at testing institutions’ stability in the event of major climate events.



The exercise will take place apart from the so-called stress tests that the Fed uses to test how banks would fare under hypothetical economic downturns. Participating institutions are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo.

107176166-1673369762103-james

Powell says Fed might have to make unpopular decisions to stabilize prices

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107083077-1656593419933-gettyimages-1395062617-t_w16437_4934a878-972d-4bea-b6ef-b61f4ceeb787-820x462.jpeg" alt="" class="wp-image-422307" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107083077-1656593419933-gettyimages-1395062617-t_w16437_4934a878-972d-4bea-b6ef-b61f4ceeb787-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107083077-1656593419933-gettyimages-1395062617-t_w16437_4934a878-972d-4bea-b6ef-b61f4ceeb787-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107083077-1656593419933-gettyimages-1395062617-t_w16437_4934a878-972d-4bea-b6ef-b61f4ceeb787-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107083077-1656593419933-gettyimages-1395062617-t_w16437_4934a878-972d-4bea-b6ef-b61f4ceeb787-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107083077-1656593419933-gettyimages-1395062617-t_w16437_4934a878-972d-4bea-b6ef-b61f4ceeb787.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Theo Wargo | Wireimage | Getty Images</figcaption></figure>



Elon Musk can add a new title to his resume: Guinness World Record holder.



The “Technoking” of Tesla made it into the record books thanks to an abysmal 2022 which saw his fortune shrink by $182 billion, the organization announced Friday in a release that cited data from Forbes.



Guinness noted that although “the exact figure [of Musk’s loss] is almost impossible to ascertain,” with some outlets estimating that he lost more than $200 billion, the Twitter owner demolished the previous record: a $58.6 billion loss by Japanese investor Masayoshi Son in 2000.



Musk’s shrinking fortune was largely due to the steep slide of Tesla shares, which lost roughly 65% of their value during the company’s worst year on record.



The loss was enough to knock him off his perch as the richest man in the world — a title now held by luxury goods magnate Bernard Arnault.



Of course, Musk isn’t the only billionaire whose fortune took a hit in 2022. American billionaires collectively lost $660 billion last year, CNBC Make It previously reported.



The 53-year-old’s wealth decline spared Amazon founder Jeff Bezos from taking the Guinness World Record. Bezos’s $80 billion loss in 2022 would have firmly given him the “largest loss” title were it not for Musk.



Fellow tech CEO Mark Zuckerberg also broke Masayoshi Son’s record with his $78 billion loss.



Musk’s fortune once sat as high as $320 billion in late 2021. As of Jan. 10, Forbes estimates that his net worth sits at $142.1 billion, making him the No. 2 richest person in the world ahead of India’s Gautam Adani ($125.1 billion).

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International

Adani Enterprises plunges as rout deepens in Hindenburg fallout; Asia stocks mixed

Adani losses top $100 billion in wake of Hindenburg Research report

Fed raises rates a quarter point, expects ‘ongoing’ increases

Fed expected to slow rate hiking to a quarter point but will stay unrelenting in inflation battle

Major central banks set to signal interest rate glide path in crucial week for monetary policy

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Adani shares volatile as group rebuts short-seller report, Chinese stocks head for bull market

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Over 200 millionaires urge Davos elite to up taxes on the ultra-rich

Household wealth optimism collapses, global survey shows

The Davos elite likes to make bold predictions. But they often get them wrong

Africa should not be arena for international competition, says Chinese foreign minister

Powell says Fed might have to make unpopular decisions to stabilize prices

Elon Musk’s $182 billion net worth drop breaks Guinness World Record

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