The Fed was just trying to keep a low profile

Last Wednesday’s FOMC statement was a classic of the genre, but it won't stop the New Year’s renewed debate over government funding and the debt ceiling from hovering into view.

If nothing else, I think we’d all agree that drafting the post-FOMC statement must surely be a huge lexicographical challenge, with tens of thousands of teenage scribblers, traders, investors and politicians crawling over every word to try and discover significance where, in many cases, none may exist. In this sense, last Wednesday’s statement was a little classic of the genre.

Some were surprised to see the pace of expansion of economic activity still described as "moderate" rather than "modest". True, the housing sector had now "slowed somewhat", whereas last time it had "been strengthening", there was even debate over whether the inclusion of the word "some" in the FOMC’s assessment of the labour market as having "shown some further improvement" was a downgrade.

The truth is, this was just a holding statement, and we should watch their lips - any change in policy will be data dependent. They dropped the previous comment which suggested that tighter financial conditions could damage the recovery-hardly surprising since 10-year yields had virtually doubled from the Spring's low of 1.6 per cent to 3.0 per cent just before the September meeting, but they have since dropped to 2.5 per cent and the stock market has resumed its climb.

It’s also possible that the FOMC was keen to sound tough in advance of the Senate confirmation hearings on Janet Yellen’s candidacy as Fed Chairman. Not all FOMC members may like her dovish stance, but she’s one of theirs, and they certainly don’t want to encourage the sort of uncomfortable scrutiny of the Fed advocated by Senator Rand Paul and his father. Hence their assiduous and conspicuous failure to suggest tapering would be further delayed.

The week of 4th November will be key, recent data having been somewhat contradictory, with weak consumer confidence, but a rather robust Manufacturing ISM Survey; the former may portend a weak non-Manufacturing ISM report - much the larger part of the economy, and then of course, the most important data of the week, October's employment report, due on the 8th. We may see some asymmetry in market reaction here again, with a strong report being dismissed as distorted by the shutdown, whereas weak data would support a further delay in tapering.

It is also certainly the case that by the time of the next FOMC meeting in December the Fed will have little, if any, further clarity on the economy’s health and the New Year’s renewed debate over government funding and the debt ceiling will be hovering into view.

Traders react to the Federal Open Market Committee report, 18 September 2013. Photograph: Getty Images.

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.