Reuters World News - Gulf tensions, Epstein, Fed and tax

Episode Date: December 31, 2025

The United Arab Emirates is withdrawing forces from Yemen after tensions flare with Gulf ally Saudi Arabia. The Justice Department needs 400 lawyers to help it review 5.2 million pages of Epstein files.  Minutes from the Fed’s last rate-setting meeting show deep divisions at the central bank. Plus, a new year means big tax changes ahead. Listen to Morning Bid podcast here. Sign up for the Reuters Econ World newsletter ⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠⁠⁠. Listen to the Reuters Econ World podcast ⁠here⁠. Find the Recommended Read⁠ here. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices.You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, I'm Tara Oaks in Liverpool. It's Wednesday, December 31st. Today, the UAE pulls its troops from Yemen after a flare-up in tensions with Saudi Arabia. The DOJ needs hundreds of lawyers to help review millions of pages of Epstein files. Bed minutes show deep divisions on rates. And it's nearly 2026, and that means big changes

are coming on the tax front. This is Reuters World News, bringing you everything you need to know in the front lines in 10 minutes, 7 days a week. The UAE is pulling its forces out of Yemen. The withdrawal comes after a dramatic escalation in tensions with Saudi Arabia over the conflict, with Riyadh calling on the UAE to leave the war-torn country within 24 hours. And a Saudi airstrike on a Yemeni port targeting what Riyadhens... said was a UAE-linked weapons shipment. Abu Dhabi says the shipments did not contain weapons.

Reuters Gulf Bureau Chief Maher al-Dah al-Dahan has more. The Saudis and the Emirates are allies. They often call each other brothers, but they have differed on multiple issues in the Middle East and globally the past decade and even before that. So in Yemen they see quite differently. They were working together within the same coalition,

backing the internationally recognized government against the Iran-Allied Houthis. However, within that government, there are a lot of different Yemeni groups, and they were backing different groups within the Yemeni Presidential Council. And so ultimately now they have their forces between groups that have decided to go against each other. Mahasasda Rift could have financial consequences. Both Saudi Arabia and the UAE, as we know, are major oil exporters. are both very powerful players in OPEC, the oil producers group. And so this kind of friction between them can play out quite quickly within OPEC meetings.

We have one coming up soon. And if they can't sit down together and agree oil output quotas or oil output policy, then that has quite a significant and immediate impact on oil prices. The Justice Department has 5.2 million. pages of Epstein files left to review. It needs 400 lawyers to help with the process. That's according to a government document reviewed by Reuters. It means the final release of the documents is likely to be much later than expected. Congress had set a December 19th deadline for their release. In Germany, dozens of angry bank customers gather outside their local branch

shouting, letters in. They're demanding answers after thieves' street. drilled through a concrete wall at a Sparkasa bank branch in Gelsenkirchen, making off with at least 10 million euros worth of cash and valuables. While the bank was closed for days during Christmas, they broke into several thousand safe deposit boxes, making off with customers' jewelry and savings. One man saying he hadn't slept since learning his retirement savings stored there for 25 years might be gone. Tatiana Schlossberg, the granddaughter of US President John F. Kennedy, has died at the age of 35.

She'd revealed in a New Yorker essay last month that she had acute myeloid leukemia, an aggressive blood cancer. Schlossberg used that platform to criticise her cousin, Robert F. Kennedy Jr., now US Health Secretary, for being a vaccine sceptic and cutting cancer research funding. The Federal Reserve's decision to cut interest rates in December was far from a sure thing. In fact, minutes released Tuesday show it was something of a coin toss. The unusual level of disagreement with dissents on both sides signals the Fed will likely hit pause on further rate cuts until it gets more clarity on the state of the economy.

Howard Schneider covers the Fed. The last two meetings have generated dissents in both directions. directions, and that's unusual. There are always differences of opinion, but right now you've got sort of groups within subgroups, and even some of the people who voted in favor of the rate cut in December indicated that they were, you know, also okay with leaving a rate steady. And that is probably going to remain the case for the next, I would say, couple meetings at least, unless and until the new data, now that the impact of the shutdown and the data lags from all of that back in the fall are starting to sort of fade a little bit and the government statistical

agencies are caught up in their reporting. Unless that starts to show a very clear deterioration in the job market or a very clear deceleration and inflation, this minutes sort of indicated that there's a goodly number of policymakers who are ready now to just sort of sit tight and wait until their economy clearly points them in one direction or the other. You know, perhaps it's not unusual that they are divided right now. It's just a sign of the fact that it's a very ambiguous kind of moment. And as the Fed tries to gain more clarity on next year's outlook, it's about time you started thinking about your own. I'm talking, of course, about your taxes. I know, not a happy topic. But today is the last day of the year, after all. And if you live in the US, you might notice some big

differences when you file next year, thanks to President Trump's big, beautiful bill. reporter Andy Sullivan has the details. So the law creates a bunch of new exemptions for things like tipped incomes. Or if you're a bartender, if you're somebody like that who gets a lot of your income from tips, that could mean you take home more money. There's another break for overtime pay up to $1,200. So people who are hourly workers could be keeping more of their money. And significantly, there is a deduction for seniors.

Trump had wanted to exempt Social Security from taxes. The law doesn't do that, but it does give people over 65 years old a deduction of $6,000. So that's more money for them, too. All of this means these people will be paying less in taxes. They'll have more money in their pockets, more money to circulate around the economy. Economists say that that could lead to a short-term bump in economic growth. Now, there are bigger changes on the business side. it allows full expensing for research and development costs and certain equipment purchases.

So normally businesses would have to sort of take these costs and spread them out over a number of years. This means they can write off those expenses immediately. Tax experts say that that could lead to a significant economic boost. All of this, of course, means that the U.S. government is going to be taking in less tax revenue than it would otherwise. that can worsen the government's budget picture over the long term. And economists say that 10 years from now, that could lead to slower economic growth, higher interest rates, things like that. But in the near term, it definitely is a boost to the economy.

It's been quite the year. Perhaps it's time for a bit of horse laughter. That's what some residents and visitors came together for at Japan's Oroaji Shinji-Sinji ritual, where participants gather to laugh continuously in the belief that it brings positivity and hope. The traditional ceremony at the Hirooka Shrine draws on a story from Japanese mythology in which a sun goddess emerges from a cave after being enticed by the gods' laughter, restoring light to the world. Organizers say the ceremony is less about humour than discipline and unity,

requiring participants to maintain laughter regardless of discomfort or self-concounter. which can often shift from forced to genuine chuckles. Before you head off to celebrate the new year, we have a recommended read for you. Record gold prices are shaking up demand in India. People are opting for gold coins and bars rather than gold jewelry to get more bang for their buck. We'll put a link to the story in the show notes. For more on any of the stories from today, check out Reuters.com and the Reuters app. Don't forget to follow us on your favourite podcast player

and if you're listening on a smart speaker, just ask for the latest news from Reuters seven days a week. A very happy new year from all of us to all of you. Have fun tonight. We'll be back tomorrow with your daily headlines show.