WASHINGTON: Since the Federal Reserve upped its benchmark interest rates by a notch in mid-March, the skies have grown a shade darker for the world’s largest economy.
The softening outlook may have sapped some of the justification for policymakers to make the two further rate hikes expected this year.
Even so, most analysts say the Fed looks poised to stick with the prevailing view of three increases in the key lending rate this year, likely in June and December.
The US central bank’s monetary policy committee meets Tuesday and Wednesday, and even before the recent soft data, they were not expected to move at this meeting.
The Fed raised rates in March and December amid the wave of economic optimism that greeted President Donald Trump’s rise to the White House, with Wall Street and consumer sentiment smashing records and while inflation ticked higher amid accelerating job gains.
But since the last meeting, weak consumer spending, with back-to-back drops in retail sales, saw quarterly growth sink to its lowest level in three years.
Job growth fell by more than half in March and the pace of new home construction slowed. So did durable goods orders, with orders of for big-ticket items excluding the transportation turning negative for the first time in six months.
Consumer confidence also began to dwindle in April after record highs.
Meanwhile, inflation, which the Fed is mandated to control, retreated after steady gains since the summer. The “core” Consumer Price Index (CPI), which excludes volatile food and fuel prices, actually contracted for the first time in seven years.
The core Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation indicator, held steady at an annual rate of 1.8 percent, below the Fed’s 2 percent target.
Earlier this month, the Fed’s influential vice chair, Stanley Fischer, said he still expects the central bank to raise rates a total of three times this year. But he sounded a note of caution.
“We are dependent on what happens in the economy,” he said. “We are not tied to three.”
Steven Ricchiuto, the chief US economist at Mizuho Securities USA, told AFP there was scant justification for the rate hike in March and he does not think the Fed will raise more than twice this year.
“The Fed moved simply because markets gave them a pass,” he said, predicting, “One more move this year instead of two.”
But as of Friday afternoon, futures markets were still banking on moves in June and December, and other analysts said the Fed was likely to look past a single batch of weak data and stick to its guns instead.
Tim Duy, a close Fed watcher and professor of economics at the University of Oregon, said a more careful reading of the data showed that underlying trends in the economy were unbroken.
“Altogether, I think the Fed will look through the first quarter GDP numbers and remain fairly comfortable in their expectations for two more rate hikes this year,” Duy told AFP.
First-quarter growth was held down by low consumption, largely due to seasonal adjustment issues. And business investment shot up while the dip in core CPI was due to a one-time adjustment for wireless prices. Further supporting the case for rate hikes, the Employment Cost Index (ECI), a measure closely watched by the Fed, had what one analyst called its strongest quarterly bump in a decade at 0.8 percent. That is a sign of rising wages in an increasingly tight labor market, which could boost inflation.
Unemployment also fell to its lowest level in a decade in March, and there are reports from employers who told the Fed they are having trouble filling vacancies and have had to raise wages and benefits.
Jim O'Sullivan of High Frequency Economics (HFE) agreed.
“Wage gains are unambiguously accelerating. Meanwhile, the trend in the unemployment rate still appears to be downward,” he wrote in a note to clients.
“These data will keep the pressure on the Fed to keep tightening.”
US economy softens but Fed likely to stay the course
US economy softens but Fed likely to stay the course
Saudi Arabia’s Red Sea dolphins signal a thriving marine environment
- Long-term monitoring aims to turn observations into data for conservation
JEDDAH: The waters of the Red Sea along Saudi Arabia’s coast have become a vibrant natural stage, with pods of dolphins appearing near shorelines and along shipping lanes. These captivating sightings are emerging as a positive indicator for the health of the Red Sea’s marine ecosystem.
Saudi Arabia’s Red Sea waters are a thriving sanctuary for marine life, hosting 12 species of dolphins and small whales, according to the National Center for Wildlife.
Nearshore and reef-adjacent waters are frequently visited by the Indo-Pacific bottlenose dolphin (Tursiops aduncus) and the spinner dolphin (Stenella longirostris). Common bottlenose dolphins (Tursiops truncatus) are also present, but tend to favor deeper offshore waters.
Beyond these familiar faces, the Red Sea is home to a wider array of cetaceans that are less often documented. These include the Indo-Pacific humpback dolphin (Sousa plumbea), which inhabits shallow coastal areas, the pantropical spotted dolphin (Stenella attenuata), Risso’s dolphin (Grampus griseus), and larger relatives such as the false killer whale (Pseudorca crassidens), which may be more common than sightings suggest. Rare visitors like killer whales (Orcinus orca) and offshore species such as the rough-toothed dolphin (Steno bredanensis), striped dolphin (Stenella coeruleoalba), long-beaked common dolphin (Delphinus capensis), and short-finned pilot whale (Globicephala macrorhynchus) are known to appear sporadically but require documented evidence for confirmation.
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Pods of dolphins are regularly spotted near shorelines and shipping lanes along Saudi Arabia’s Red Sea coast.
Reef-enclosed lagoons and sheltered nearshore waters serve as resting and social hubs for dolphins.
Human activities, including fisheries, coastal development and vessel traffic, can disrupt dolphin behavior.
Field identification is made easier by distinct physical traits. Indo-Pacific bottlenose dolphins are smaller and more slender than their common bottlenose cousins, while spinner dolphins are streamlined with a pronounced beak. Risso’s dolphins are stockier with blunt heads, often marked with noticeable scars. Indo-Pacific humpback dolphins remain close to shallow, sometimes murky, shorelines, making them challenging to document without dedicated surveys.
Researchers at KAUST emphasized the importance of ongoing conservation to maintain the Red Sea’s ecological balance. Research scientist Jesse Cochran told Arab News: “For Saudi waters, the biggest challenge is that we still don’t have the kind of long-term, standardized monitoring needed to estimate population sizes or trends confidently. We have important observations and some targeted surveys, but the baseline is still developing.”
Another research scientist, Royale Hardenstine, highlighted the need for broader coordination: “What we need most right now is connectivity across efforts. There are good observations in specific project areas, but without a shared framework and a broader network, it’s hard to turn those observations into coast-wide inferences about residency, movements, or trends.”
Dolphins are frequently seen in reef-enclosed lagoons and sheltered nearshore waters, where they rest and socialize. These locations are often predictable, as reef structures reduce wave action and currents, creating calm conditions favorable to dolphin behavior.
Christy Judd, a Ph.D. student at KAUST, noted: “Some reef-bounded lagoons appear to be used repeatedly as resting areas. These places matter because they offer shelter and calm conditions, not because they’re automatically the highest biodiversity sites.”
While dolphins sometimes feed and socialize near coral reefs, Prof. Michael Berumen explained that their ecological range extends well beyond reef systems. Dolphin activity in the Red Sea spans a wide seascape that includes open waters, channels, continental shelf edges, and coastal zones.
He said that reefs shape resting areas and can concentrate prey. Experts, however, caution against linking dolphin presence directly to reef health.
Hardenstine elaborated: “Where dolphins and reefs overlap, it’s often because reef structures create sheltered lagoons and predictable resting areas.”
Dolphin group sizes in the Red Sea vary by species and activity. Bottlenose and spinner dolphins may form large aggregations exceeding 100 individuals during social interactions or when moving through food-rich waters.
In contrast, Indo-Pacific humpback dolphins are more often observed in small groups. Mixed-species associations also occur: Indo-Pacific humpback dolphins may interact with bottlenose dolphins, and pantropical spotted dolphins frequently accompany spinner dolphins.
Berumen described these social dynamics: “Dolphin societies are typically dynamic, with groups that form and re-form over time (often described as ‘fission-fusion’ social structure). Individuals associate for feeding, travel, resting, and social interactions, and alliances can form, particularly in some bottlenose populations.”
Judd added a field perspective: “Calves are usually integrated into the pod’s normal behavior, but groups with calves can be more cautious, especially around disturbance.”
Seasonal patterns in dolphin distribution remain unclear. Hardenstine noted: “In Saudi waters seasonal patterns, if they exist, are not yet well-resolved because sighting data are often influenced by survey effort, weather, and where people are looking.”
Dolphins respond to prey availability, water temperature, and oceanographic features such as currents and productive zones. Cochran cautioned: “We expect environment and prey to influence where dolphins are seen, but data limitations mean we should treat seasonal conclusions as provisional until long-term monitoring is in place.”
Human activities pose additional pressures. Dolphins face risks from fisheries, occasional bycatch, coastal development, tourism, vessel traffic, and underwater noise. While the Red Sea does not experience the intensive industrial fishing seen in other regions, interactions with fisheries can displace dolphins or disrupt the marine food web. Vessel traffic can disturb resting behavior and increase stress.
Berumen explained: “Vessels can affect dolphin behavior by causing avoidance of certain areas, interrupting resting behavior, altering movement patterns, and increasing stress, particularly in areas where dolphins rest in sheltered lagoons.”
Hardenstine added: “While data related to these impacts in the Red Sea are sparse, some anthropogenic pressures are increasing throughout the region. This is exactly when collaborative monitoring and scientifically informed mitigation become most valuable.”
KAUST researchers study dolphins as part of broader ecosystem and megafauna monitoring, combining reef surveys, opportunistic sightings, and targeted research. The university collaborates closely with the Saudi Arabia’s National Center for Wildlife to develop a national marine mammal stranding network, assisting with identification, sampling, and necropsies when needed. Collaborative efforts with NCW and OceanX have also supported aerial surveys documenting Red Sea megafauna.
Cochran emphasized the goal: “The most responsible next step is building long-term monitoring that is coordinated between stakeholders nationally, so that observations turn into defensible data that can identify trends and guide conservation actions or policy.”
