Daily briefing: Fed minutes, Unilever's Brexit, cold war diplomacy – Financial Times

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Janet Yellen’s final major act as Federal Reserve chair was to raise interest rates at last month’s meeting of the FOMC © EPA

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The US economic expansion is set to gain momentum, hardening the arguments for increases in short-term interest rates, Federal Reserve policymakers said at their latest meeting. A number of participants in the US central bank’s January 30-31 meeting said they had marked up their growth forecasts since the previous month, encouraged by firm global growth, supportive financial markets and the potential for US tax cuts to boost the economy more than expected. Others said the “upside risks” to growth may have increased, according to minutes of the gathering. (FT)

In the news

US proposes overhaul for ‘too big too fail’
The Trump administration is proposing to recast a central pillar of post-crisis financial regulation with a new “Chapter 14” bankruptcy process designed to eliminate the risk that taxpayers will have to pick up the cost of a bank failure. The Treasury, which was ordered to examine the area by President Donald Trump in April, has taken aim at the “orderly liquidation” regime established to deal with collapsing lenders. (FT)

Unilever’s Brexit?
Theresa May is bracing for Unilever to choose the Netherlands over the UK for its new unified headquarters, after months of political pressure from both sides and amid an “emotional” atmosphere supercharged by Brexit. UK officials have held talks with Unilever amid fears at the top of government that the Anglo-Dutch consumer group is about to decide to have its main base in Rotterdam, rather than London. Meanwhile, Britain is on a collision course with the EU over fundamental elements of the Brexit transition, as London seeks to potentially extend the period while giving itself the power to reject new EU laws. (FT)

Netanyahu confidant turns state’s witness
A longtime confidant of Benjamin Netanyahu has agreed to testify against the Israeli prime minister, deepening the legal woes that threaten his decade-long hold on power. Shlomo Filber, once nicknamed the “Black Box” for his loyalty to Mr Netanyahu and for his discretion, signed an agreement with prosecutors to turn state’s witness on Tuesday in a corruption investigation relating to the communications ministry, Israel’s main newspapers and television stations reported. (FT)

Russia probe latest
A Facebook executive who tweeted that the “main goal” of Russian propaganda was to “divide America”, rather than swing the election towards Donald Trump, was not expressing the company’s views, Facebook said. Meanwhile, Robert Mueller, the special counsel heading the Russia probe, has charged another person as part of his investigation. (FT)

Malicious AI
Malevolent new strains of fake news, cyber attacks and assaults on the world’s physical infrastructure — these could be the result if rapid advances in artificial intelligence are left unchecked, a report warns. (FT)

The day ahead

Anglo-American earnings
Anglo-American posts preliminary final-year results. The group reported first-half profits of $1.4bn against an $800m loss the previous year on the back of better production figures and improving commodity prices. A third-quarter update in October reported a rise in diamond and copper production, along with declines for iron ore, coal, nickel and platinum. Glencore’s head of South African assets attacked the country’s regulatory environment earlier this month, but said he was encouraged by the appointment of Cyril Ramaphosa as leader of the ruling ANC party, and investors will watch for developments now that Mr Ramaphosa has been appointed South Africa’s president. 

Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.

What we’re reading

Britain’s road to becoming the EU’s Canada
Martin Wolf on how the UK’s red lines rule out any post-Brexit trading options other than that it ends up playing a role similar to that of The Great White North. (FT)

What are Chinese tech darlings really worth?
Louise Lucas explores how shifting industrial dynamics make it difficult to decide what some high-flyers are actually worth. Meanwhile, John Gapper takes a look at how Alibaba’s social credit rating system is a risky game. (FT)

Cold war diplomacy
A spat over street names has reared its head between officials in Moscow and Washington. Frederick Studemann opines on the series of events that has led to Russian officials proposing to rename the street on which the US embassy in Moscow is located as “North American Dead End, 1”. (FT)

What’s going on at Newsweek?
An extraordinary exposé on Newsweek’s ties to a Christian university in the US — made more extraordinary by the treatment that Newsweek reporters received from their own company when trying to report on the story. The Manhattan district attorney’s office is now scrutinising the relationship as part of a long-running fraud probe. (Newsweek)

Bankers happy with Trump on regulation
Wall Street is pleased with the White House, despite the president not delivering on his promise to “do a big number” on Dodd-Frank, the 2010 law designed to rein in financial excesses. The new Republican administration was supposed to dismantle many of those restrictions, but there are three reasons why bankers don’t seem to mind. (FT)

‘Why are you a vegetarian?’
Our political correspondent says our love for pets and animals hasn’t translated much into politics. But the recent scandals around sexual harassment in various industries show that a tipping point can arrive, at which people stop dismissing certain practices and start condemning them. “One day that may happen in the food world, and people will be confronted over lunch with the question, ‘Why aren’t you a vegetarian?’” (FT)

Driverless cars and the trouble with 3D maps
Autonomous vehicles rely on highly complex 3D maps to function — even minute annual shifts in tectonic plates can have an outsized impact. But our San Francisco reporter says competition between companies to develop their own in-house maps is putting a brake on progress. (FT)

Counting calories is not crucial
The standard prescription for weight loss is to reduce calorie intake. But a new study may turn that advice on its head. (NYT)

Video of the day

Tapping graphene for healthier water
This one-atom-thick layer of carbon can be used to make water supplies safer. (FT)