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00:00:03Live from Singapore now on BBC
00:00:07News, Business Today. MUSIC
00:00:14MUSIC The The US Federal Reserve has raised raised interest rates for the first
00:00:17first time in three years as it tries
00:00:19tries to combat rising prices and
00:00:22and snap launches new augmented reality reality glasses as it targets the
00:00:25the next generation of wearable technology.
00:00:33technology. Hello and welcome to to Business Today with me Steve Lai.
00:00:36Lai. US interest rates have been been raised for the first time in
00:00:39in more than three years, with the the Federal Reserve lifting its benchmark
00:00:42benchmark rate to between 3.75 and
00:00:45and 4%. The decision was unanimous, unanimous, despite President Donald
00:00:48Donald Trump calling for rates to
00:00:49to be cut to 1 or 1% or less. Fed
00:00:53Fed Chair Kevin Walsh says inflation inflation remains too high and has
00:00:56has not improved enough. Yet. For
00:00:58For more than five years, inflation
00:01:01inflation has been running above above target. So our predominant
00:01:04predominant focus is on the price price stability side of our mandate.
00:01:08mandate. The plain fact is that inflation
00:01:11inflation is too high and has been
00:01:14been for too long. This summer's
00:01:17summer's inflation readings do not
00:01:19not tell me that underlying trends trends have meaningfully improved.
00:01:22improved. US stocks fell after the
00:01:25the decision, with the Dow dropping dropping more than 600 points. Markets
00:01:28Markets here in Asia, though, are are trading mixed as investors assess
00:01:31assess the implications of this latest
00:01:32latest hike. I spoke with Diane Swonk,
00:01:36Swonk, chief economist and managing managing director at KPMG. She says
00:01:39says the Fed's move marks the beginning
00:01:41beginning of a rate hiking cycle.
00:01:43cycle. It's exactly the right decision decision and it's the beginning of
00:01:46of a rate hiking cycle, which I think think is very important to take in
00:01:50in context as well as we saw, not
00:01:52not only was this decision there,
00:01:55there, but the larger participants participants at the meeting, the
00:01:58the larger group of participants participants actually had marked
00:02:01marked up another rate hike for the
00:02:03the end of this year. And in another
00:02:06another 1 in 2027. So that's three three quarters of a percent, which
00:02:09which I think it will take at least least that to derail the inflation
00:02:12inflation that we've got, which has has persisted for more than five
00:02:15five years now. We thought we got got close to a soft landing, but
00:02:19but that was not the case. It's unclear
00:02:21unclear we'll able to actually manoeuver
00:02:24manoeuver that elusive soft landing
00:02:26landing again. And I think another
00:02:28another important point right now
00:02:30now is that the vote was unanimous. unanimous. That's important for the
00:02:33the Fed's credibility that they acted acted independently and together
00:02:37together to shore up not only the the Fed's credibility, which has
00:02:41has been damaged by the persistence persistence of inflation, but also
00:02:44also in the context of the political political pressure on The Fed to
00:02:47to cut rates right now. Yeah, we'll we'll get to the political pressure pressure in just a moment. I just
00:02:50just want to get your take on what what this these series of rate hikes,
00:02:54hikes, rate hikes will mean for us us consumers, for mortgages, for
00:02:57for businesses, for hiring. Well,
00:03:00Well, if we only get three quarters quarters of a percent increase in
00:03:03in interest rates, we could see a
00:03:07a modest slowdown. But the economy economy is currently accelerating accelerating a point that Chairman
00:03:10Chairman Morris actually made today. today. And so you're really starting
00:03:14starting to have to lean against against the wind a little bit heavier.
00:03:17heavier. And I think the next discussion
00:03:20discussion will be not how many just just whether it's, you know, a couple
00:03:23couple of more rate hikes, but whether whether or not it might require more
00:03:26more than that to actually derail derail this inflation now. And just
00:03:30just coming back to the politics politics of it, then, President Trump Trump blamed the decision on The
00:03:34The Fed board and not on his appointed appointed fed chair Warsh, which
00:03:37which is quite a different from singling singling out his predecessor, Jerome
00:03:40Jerome Powell. That is different. different. But at the end of the
00:03:44the day, this was a unanimous vote. vote. And Kevin Warsh was quite clear
00:03:48clear today that he voted in favour favour of this as well. And I think
00:03:51think that was an important statement statement for the Federal Reserve
00:03:54Reserve to make at this time. And
00:03:57And at this juncture, given the extraordinary extraordinary pressure that they
00:04:00they have seen publicly, it's not not that politically a lot of politicians
00:04:04politicians do not like what central central banks do, and that is not
00:04:08not uncommon. But the extraordinary extraordinary public pressure on
00:04:11on the Federal Reserve to cut it
00:04:13it was important that he look aligned
00:04:16aligned with his leadership within within The Fed system, and they are
00:04:19are aligned with him. They spoke spoke as one today. The US is not
00:04:23not alone in facing pressure from from higher inflation. The European European Central Bank raised rates
00:04:27rates last week, while the Bank of of England is due to make its decision
00:04:30decision on Thursday. Here in Asia, Asia, the Bank of Japan will unveil
00:04:32unveil its policy decision on Friday.
00:04:36Friday. Food security risks across across South and South East Asia
00:04:38Asia are rising as the Gulf conflict conflict pushes up fuel and fertiliser
00:04:42fertiliser costs, while a potentially potentially record breaking El Nino
00:04:45Nino threatens harvests. New analysis
00:04:48analysis from Verisk Maplecroft warns
00:04:50warns these pressures could be particularly particularly serious for countries
00:04:53countries including India, Indonesia Indonesia and the Philippines, where
00:04:55where food insecurity and civil unrest unrest risks are already elevated.
00:04:59elevated. Now for more on this. Reema Reema Bhattacharya, head of Asia
00:05:03Asia research for various Maplecroft Maplecroft global global risk data
00:05:06data company. She joins me here in in studio. Reema, always good to
00:05:09to speak to you. What I thought interesting interesting about this report though
00:05:12though was that you see this see
00:05:14see 2027 as being even worse than
00:05:16than 2026. Yeah. Thank you for having
00:05:18having me. So yes, 2027 is shaping
00:05:21shaping up to be a pretty crucial
00:05:24crucial year for Asia. And honestly, honestly, we thought this year was
00:05:26was bad. I think there is a scope
00:05:29scope for situations to get a lot lot worse before things get better,
00:05:32better, because our data clearly clearly shows that food security,
00:05:35security, heat and water stress and and geopolitics are converging across
00:05:39across South and South East Asia Asia in a way that could seriously
00:05:42seriously destabilise key agri exporters. exporters. Now we are several months
00:05:46months into the Gulf crisis, so a a lot of the early disruption has
00:05:49has been sort of priced in, but I
00:05:52I really don't think that regional regional governments are prepared
00:05:55prepared for what a record breaking breaking El Nino can add on top of
00:05:59of that. So the real test, I think, think, will be whether farmers can
00:06:02can afford inputs for the next planting
00:06:05planting season and also what that that geopolitical and the sort of
00:06:09of socio economic fallout would be be in case they're not able to. Yeah. Yeah. And I suppose you're connecting
00:06:13connecting the dots here between between what's happening in the Middle Middle East with how it's affecting
00:06:16affecting fertiliser supplies around around the region, and then extrapolating extrapolating that into what happens
00:06:20happens if it coincides with other other factors like climate. Yeah,
00:06:23Yeah, it's already coinciding. And And our data is saying that, no,
00:06:26no, this is an early trend which which is going to intensify next
00:06:29next year. Yeah. So which of the the countries most at risk and why
00:06:32why are they so vulnerable. So South
00:06:35South Asia I think is probably going
00:06:37going to take the hardest hit. So
00:06:40So whether it's Pakistan, India, India, Bangladesh, Nepal, the I mean,
00:06:44mean, they're as I said, they kind kind of have compounding risks. They're
00:06:48They're you know, they're in the the extreme risk category for a lot
00:06:51lot of these issues. I would watch
00:06:54watch Bangladesh and Nepal most closely. closely. If you remember, you know,
00:06:57know, they kind of went through their their own violent protest movements.
00:06:59movements. There are new incumbent incumbent governments in place who who are still kind of finding their
00:07:03their feet. So this is going to be
00:07:06be a test for political survival survival for them. Honestly. It really
00:07:09really is interesting that it ties ties in to as well with the pressure
00:07:12pressure that it puts on governments governments and how civil unrest
00:07:15unrest could also play a part in in this in the South East Asian region.
00:07:19region. Where do you see that as as being most mostly a concern? I
00:07:22I think Indonesia is quite vulnerable. vulnerable. We are seeing it's you
00:07:26you know, there's a lot happening happening in Indonesia. It used to
00:07:28to be I mean, it is the largest market
00:07:30market in Asean. But current executive
00:07:33executive overreach, the flight of of foreign capital again is is a
00:07:37a perfect storm of risks. So I think
00:07:40think Indonesia is definitely on on my list and I think followed by
00:07:43by Philippines. OK. Thanks so much much for coming in and shedding some
00:07:46some light on this and some of the the concerns that we should be looking looking at paying attention to going
00:07:50going forward. Rima Bhattacharya, Bhattacharya, the head of Asia research
00:07:52research at Verisk Maplecroft. Thank
00:07:54Thank you. Now snap launches its
00:07:57its new specs augmented reality glasses
00:07:59glasses are priced at over $2,000
00:08:01$2,000 as it bets on a new generation generation of wearable computing. computing. The glasses have built
00:08:05built in displays, hand tracking
00:08:07tracking and AI with apps for navigation, navigation, entertainment and live
00:08:10live translation. But their size size and high price could make them
00:08:13them a product mainly for early adopters.
00:08:15adopters. Let's bring in Anshel SAG SAG Vice President and principal
00:08:18principal analyst at Moor Insights Insights and Strategy. He joins us
00:08:21us from Beverly Hills in Los Angeles.
00:08:24Angeles. Thanks for joining us. First, First, tell us how these glasses
00:08:27glasses will separate themselves
00:08:28themselves from the competition. competition. Well, they're very different
00:08:32different in the sense that they
00:08:35they are a standalone AR headset. headset. So they have the ability
00:08:37ability to run completely independently independently of a computer or a
00:08:40a phone. OK. And with that in mind, mind, I suppose, does that add to
00:08:44to the size? Is that why we see them them so chunky? Because they just
00:08:46just have so much more hardware built built in? Yeah, I mean, that's part
00:08:50part of it. The batteries. The processors,
00:08:53processors, the cooling, everything's everything's in, in the glasses. glasses. So it makes it much more
00:08:56more difficult to actually build build something that's very thin
00:08:59thin and sleek. And the reality is is that someone needs to build something
00:09:02something like this in order to be be able to iterate to a product that's
00:09:05that's much slimmer. Yeah. And what what are the use cases for this product product then? I mean, who's it targeting
00:09:08targeting or who's it targeted at?
00:09:12at? The reality is that they're trying trying to target everybody. The way
00:09:15way they've designed this platform platform is very open source and
00:09:18and it's actually going to target target enterprise and consumers at
00:09:21at the same time, which I think a
00:09:24a lot of previous AR and VR companies companies have made the mistake of
00:09:27of doing, which was going for consumer
00:09:29consumer first like Magic Leap and and then realising that enterprise
00:09:32enterprise is actually where the the dollars are today. And with Snap
00:09:36Snap being able to do both and attract
00:09:38attract both audiences, they don't don't have to worry about consumer
00:09:42consumer adoption being slow because because of the price or developers developers being slow to develop
00:09:46develop apps. They can work with with enterprises to fill the gap
00:09:49gap that HoloLens and other AR glasses glasses have left behind. Yeah. So
00:09:51So tell us a bit more about enterprise enterprise then, and where you see
00:09:54see them being most useful. Yeah,
00:09:57Yeah, the enterprise space is vast.
00:10:01vast. There's a lot of places for
00:10:02for training. There's also enterprise
00:10:06enterprise for defence and there's there's a lot of training and remote remote service applications that
00:10:10that are already in use today that
00:10:12that are making serious impacts on
00:10:14on enterprise ability to actually actually grow their training and
00:10:18and fill gaps in their labour force. force. All right. Thanks very much
00:10:22much for that, Angela. I appreciate appreciate that and Chilsag Vice
00:10:26Vice President and principal analyst
00:10:27analyst at Moor Insights and Strategy.
00:10:31Strategy. Now let's just remind you you of our top story today. US interest interest rates have been raised for
00:10:34for the first time in more than three three years with the Federal Reserve
00:10:38Reserve lifting its benchmark rate
00:10:42rate to between 3.75% and 4%. That
00:10:45That decision was unanimous, despite despite opposition from President President Donald Trump calling for
00:10:49for the rates to be cut to 1% or
00:10:52or less. I'll be back with more at at the top of the hour on Newsday.
00:10:55Newsday. Do keep it here on BBC News.
00:11:09MUSIC
00:14:31I was here at the very first
00:14:33protest. The Janta Party had organised
00:14:35organised about a month ago, and
00:14:37and this is so much bigger. We've We've been driving towards the site
00:14:41site of this wildfire, but we've we've just stopped at the side of of the road here because of what
00:14:44what we saw out the window. This This man has been pulled out successfully.
00:14:48successfully. It's taken a mammoth mammoth mammoth rescue effort. This
00:14:51This morning. You get very little little sense of the terrible scenes
00:14:54scenes that were witnessed here last last night. There when the story
00:14:57story breaks. BBC News. And on BBC
00:15:03BBC News, a round up of the day's day's sporting action plus talking
00:15:06talking points analysis and original
00:15:08original journalism. BBC Sport. Hello
00:15:18Hello there. Great to be with you you at the BBC Sports Centre. I'm
00:15:21I'm Ben Croucher. It's a memorable memorable return to Europe for Sunderland.
00:15:25Sunderland. We'll tell you about about another difficult night for for Manchester United in the League
00:15:29League Cup as well. Golf's DP World World Tour gets ready for Wentworth,
00:15:32Wentworth, but find out why one player player is not comfortable with where
00:15:36where the season is ending and the
00:15:39the British racing driver. Ollie Ollie Millroy, who crashed during
00:15:42during a race in China, calls his his Dutch rival Luke Hartog a super
00:15:46super hero for pulling him from the
00:15:49the wreckage.