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US is worried after regional country’s attention toward Taliban

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It has been reported recently that the US has been looking for the possibility to reopen its consulate in Afghanistan under the control of the Taliban. “With the Taliban, we advocate for consular access, transparency and accountability for Americans; we also support the work of the Special Presidential Envoy for Hostage Affairs to obtain the release of Americans unjustly detained,” reads the Integrated Country Strategy Afghanistan.

But at the same time a State Department spokesman rejected the news and said that there is no plan for the US in near-term to return any diplomatic functions to Kabul, stating that Washington’s position on Afghanistan has not changed.

However, the report had stated that Washington is trying to proceed cautiously in this direction, without intending to officially recognize the Taliban group.

Whatever the reason could be, one thing is for sure that the US is somehow interested in opening its consulate in Kabul as other countries are actively operating there.

To further develop the issue, it is important to take a glance and pay more attention to some important points.

US to reopen consular services in Afghanistan

1. Voice of America has claimed that a new strategic document has been drawn up in the US State Department, which talks about the possibility of reopening the consulate in Afghanistan under the administration of the Taliban. So, the basis of this media’s claim is not the statement of a person, but the document of the State Department.

The report says that the US understands the need for American citizens to have access to consular services in Afghanistan. It’s also reported that for the release of American hostages from Taliban prisons, it is important to establish communication with the Taliban.

In the strategic document, it is stated that the US does not recognize the Taliban, but it needs to establish a relationship with them in order to advance its goals.

US Special Representative for Afghanistan Reconciliation Zalmay Khalilzad and Taliban co-founder Mullah Abdul Ghani Baradar sign an agreement ending the US’s 18-year war in Afghanistan, Doha, Feb. 29, 2020.

The document also mentions and covers various areas such as fighting terrorism, economic aid, local partnership, providing consular services for Americans and helping Afghans at risk, etc.

As claimed by Voice of America, the above items are included in the strategic document of the US State Department. If this document is not available, it seems difficult for the media to provide information with these details.

US ignoring Taliban killing of former Afghan soldiers

2. A few days ago, the Foreign Relations Committee of the United States House of Representatives held a meeting in connection with the condemnation of the killing of the soldiers of the former Afghan government by the Taliban.

The participants of that meeting, each in turn, stated that the former soldiers are subject to systematic killing by the Taliban. Also, some members of the House of Representatives openly criticized the so-called appeasement of Joe Biden’s administration with the Taliban.

A day after that meeting, Matthew Miller, spokesperson for the United States Department of State, who was present at the press conference, in response to a question about the statements of the members of the Foreign Relations Committee of the House of Representatives regarding the killing of former soldiers by the Taliban, expressed ignorance and said he is “not willing to comment on this matter.”

However, later on that day some media outlets reported, citing the US State Department that Washington is worried about the killing of former soldiers by the Taliban, but does not have strong evidence in this regard.

Afghanistan is becoming safe havens for terrorist groups

3. Recently, the United Nations Security Council in its latest report claimed that al-Qaeda, ISIS, Tehreek-e-Taliban Pakistan (TTP) and other terrorist groups are actively present in Afghanistan under the rule of the Taliban.

It has been stated that al-Qaeda has nearly eight training bases in several provinces of the country and claimed that the Taliban have maintained their relationship with al-Qaeda, but they are trying not to make it public. ISIS is also mentioned as a strong threat to the security of Afghanistan and the region, whose first target is the Shiites Muslims, then the Taliban and civilians.

Following that, the UN experts published a 23-page report on the presence and activities of al-Qaeda and ISIS groups in Afghanistan. In this report, it is stated that ISIS has the ability to operate in the region and beyond.

The US Special Inspector General for Afghanistan Reconstruction (SIGAR) also claimed that the al-Qaeda threat in Afghanistan is re-emerging.

In its quarterly report to the Congress, SIGAR stated that the current leader of al-Qaeda is most likely in Afghanistan. It has also been said that al-Qaeda plans to attack the embassies of European countries, US and Israel in some countries following war between Hamas and Israel.

These three sources that have published reports on the presence and activities of terrorist groups in Afghanistan, have no connection with the Taliban and are apparently neutral.

It was expected that the spokespersons of the White House would express their opinion on this matter and support the contents of the reports, but they did not. The silence of the White House strengthens the suspicion in the minds of observers that it may not agree with the report of the above institutions.

US remained largest donor to Afghanistan

4. SIGAR also announced that the US remained the largest donor to Afghanistan and made available $11.21 billion in assistance to Afghanistan since the withdrawal of its troops from Afghanistan in August 2021. The flow of the aid explains nothing but Washington’s satisfaction with the current rule by the Taliban.

In this regard, there are two points: First, there is a possibility of the Taliban misusing the US aid, and international organizations have repeatedly expressed concern about this. For instance, the Foreign Relations Committee of the US House of Representatives claimed several times in its previous meetings that the Taliban despise the financial aid sent by Washington.

Second; many believe that if the Taliban do not benefit directly they will benefit indirectly.

This means that with the existence of these aids, part of the needs of the people will be solved and the Taliban will write it as an achievement. However, still, a large part of the society would be unable to benefit from such assistance.

US afraid of strong ties between Taliban and regional countries

5. Recently, the Chinese President accepted the credentials of the Taliban ambassador in a ceremony held on the occasion of the acceptance of credentials of ambassadors of more than forty countries. However, the acceptance of credentials personally by the Chinese leader earned reactions and many considered it as recognition of the Taliban government by the government of China.

Even the United States reacted and said that the Chinese government should make it clear whether this action means the recognition of the Taliban or not.

However, a later Chinese Foreign Ministry Spokesman stated that the recognition of the Taliban regime is conditional on the establishment of an inclusive government and a decisive fight against terrorism.

Not long after that, Uzbekistan also accepted the representative of the Taliban as an ambassador in the Afghan embassy in Tashkent. A move that can be affected and motivated by Beijing’s actions.

The excessive appreciation of Iran to the Taliban, the attempt to establish a regional contact group, the recent Taliban’s hosting of a regional meeting in Kabul, and etc., has generated concern for the United States that the Taliban might become more close with the regional countries.

AMERICA

Fed cuts interest rates, dollar surges to two-year high

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The U.S. Federal Reserve reduced interest rates by a quarter percentage point but signaled a slower pace of easing next year. This move drove the U.S. dollar to its highest level in two years and triggered a sell-off in both domestic and international stock markets.

The Federal Open Market Committee (FOMC) voted on Wednesday to lower the benchmark interest rate to 4.25–4.5%, marking the third consecutive cut. The lone dissenting vote came from Cleveland Fed President Beth Hammack, who favored maintaining the current rates.

Officials highlighted concerns about persistent inflation, projecting fewer rate cuts for 2025 than previously expected. Reflecting these worries, policymakers also raised their inflation forecasts for the coming year. Following the announcement, Fed Chair Jay Powell remarked that the current policy settings were “significantly less restrictive,” indicating the Fed’s inclination to adopt a more cautious approach to further easing.

“This decision was a ‘closer call’ than prior meetings,” Powell noted, emphasizing that inflation trends remain “sideways” while risks to the labor market are “diminishing.”

Aditya Bhave, senior U.S. economist at Bank of America, described the Fed’s message as “unabashedly hawkish.” He pointed to the shift in officials’ 2025 forecasts, which now anticipate just two quarter-point rate cuts instead of three, calling it a “wholesale shift.”

JPMorgan Chase, a key player in U.S. bond markets, noted that money markets are pricing in only a 0.31 percentage point rate cut in 2025. This outlook, significantly tighter than the bank’s earlier 0.75-point forecast, underscores the magnitude of the Fed’s policy shift.

The decision triggered a sharp sell-off on Wall Street, with the S&P 500 falling 3% and the tech-heavy Nasdaq Composite dropping 3.6%. High-profile winners of the 2024 rally were hit hard, including: Tesla, down 8.3%; Meta (Facebook’s parent company), down 3.6%; Amazon, down 4.6%.

Smaller companies, often seen as more sensitive to US economic fluctuations, also suffered. The Russell 2000 index declined 4.4%.

In Asia, stocks fell in early Thursday trading. Benchmarks in South Korea and Taiwan dropped 1.8% and 1.6%, respectively. Meanwhile, U.S. government bond prices fell, driving the yield on two-year Treasuries—sensitive to Fed policy—up by 0.11 percentage points to 4.35%.

The U.S. dollar surged 1.2% against a basket of six major currencies, reaching its strongest level since November 2022. According to Wells Fargo senior economist Mike Pugliese, the currency had already been rising on expectations of inflationary pressures following Donald Trump’s election victory last month. However, Wednesday’s Fed decision “poured more petrol on the fire.”

The South Korean won dropped to a 15-year low against the dollar, while the Japanese yen weakened 0.5%.

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AMERICA

Amazon pledges $1 billion to Trump inauguration fund

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Amazon confirmed on Thursday that it will contribute $1 million to Donald Trump’s inauguration fund, a move mirroring similar actions by other major tech companies, including Meta, the parent company of Facebook and Instagram. Amazon also plans to broadcast Trump’s inauguration via its Prime Video service.

This announcement comes as major tech executives seek to establish ties with the incoming U.S. president, despite Trump’s longstanding criticisms of Big Tech. Trump has frequently accused technology companies of censorship and bias against conservative media.

Jeff Bezos, Amazon’s founder and CEO, is reportedly planning to meet Trump at his Mar-a-Lago resort next week, according to The Wall Street Journal, which first reported Amazon’s donation. Similarly, Google CEO Sundar Pichai and Apple CEO Tim Cook have expressed their congratulations to Trump since his election victory in November.

Trump’s relationship with Amazon has been fraught with challenges. During his first term, he accused the company of undercutting competition and criticized its tax policies. In 2018, Trump ordered a review of U.S. Postal Service package pricing, claiming the agency acted as Amazon’s “courier.”

Apple, meanwhile, faces potential risks from Trump’s proposed tariff policies, which could disrupt critical supply chains in China. However, during Trump’s first term, Cook secured exemptions for certain Apple products.

Meta’s CEO, Mark Zuckerberg, and other tech leaders have also engaged with Trump. According to The Information, Zuckerberg dined with Trump after the election. Pichai is also expected to meet Trump this week.

While Trump scrutinized Big Tech during his presidency, Amazon now faces mounting regulatory pressure under President Joe Biden. The U.S. Federal Trade Commission (FTC), led by Lina Khan, has been investigating Amazon for alleged monopoly practices, with several states filing lawsuits last year. The FTC is also examining major cloud service providers, including Amazon, over partnerships in artificial intelligence.

Despite earlier conflicts, Bezos recently praised Trump for his “tremendous grace and courage under real fire” in a post on X (formerly Twitter) following an assassination attempt. Bezos, who also owns The Washington Post, reportedly prevented the newspaper from endorsing Trump’s Democratic opponent Kamala Harris in the 2024 election.

Speculation about a tacit agreement between Bezos and Trump has surfaced, allegedly tied to Blue Origin, Bezos’s rocket company competing with Elon Musk’s SpaceX.

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AMERICA

Investors poured $140 billion into U.S. equities following Trump’s victory

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Nearly $140 billion has flowed into U.S. equity funds since last month’s election, as investors anticipate Donald Trump’s administration will implement sweeping tax cuts and regulatory reforms.

According to the Financial Times (FT), which cites data from EPFR, U.S. equity funds have seen inflows totaling $139.5 billion since Trump’s victory on November 5. This surge in investment made November the busiest month for equity inflows since records began in 2000.

The massive influx of funds has driven major U.S. stock indexes to a series of record highs, as investors appeared to shrug off concerns about potential economic risks, including inflation and its implications for the Federal Reserve’s interest rate policy.

“The growth agenda that Trump has put on the table is being fully embraced,” said Dec Mullarkey, Chief Executive of SLC Management. He added that Trump’s picks for top administration posts have been seen as “very market friendly.”

Trump has promised to fill his administration with financial experts, including Scott Bessent as Treasury Secretary, and Paul Atkins, a cryptocurrency advocate, as Chairman of the Securities and Exchange Commission (SEC).

The president-elect has outlined a pro-growth agenda, emphasizing reduced taxes, deregulation, and economic expansion. These proposals have spurred optimism among investors, fueling a rally in the market.

The S&P 500, Wall Street’s primary stock market indicator, has risen 5.3% since Election Day, bringing its total gains for the year to 28%. Smaller companies, which are often seen as more responsive to changes in the U.S. economy, have outperformed larger firms during this period. The Russell 2000 index recently hit a record high for the first time in three years.

While U.S. equity funds have enjoyed record inflows, other global markets have experienced outflows emerging market funds have seen net withdrawals of $8 billion, with China-focused funds accounting for $4 billion; funds investing in Western Europe have lost $14 billion; and Japan-focused funds have seen outflows of approximately $6 billion.

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