Davos live updates: Iran sends warning to the U.S.; UBS CEO talks of ‘surreal’ return

Markets are “getting ahead of themselves,” with rate cut expectations which “might become self-defeating,” Dutch central bank President Klaas Knot told CNBC.

The European Central Bank member said that, while he and his peers are optimistic about a return to inflation at 2%, there are risks to that scenario.

“Underlying that projection is an interest rate path, assumed interest rate path, that contains significantly less easing than is currently embedded in market pricing. So that runs the risk to become self-defeating.”

Knot said that the euro zone’s central bank looks at overall financial conditions, and that “the more easing the market has already done for us, the less likely we will cut rates.”

— Jenni Reid

Sergio Ermotti, CEO of UBS, described taking the role as “quite a surreal experience,” having returned to the job in 2023 after running the bank for nine years between 2011 and 2020.

Clients and employees “were quite shocked in the first round, and now they embrace the new model,” Ermotti said of its acquisition of embattled rival Credit Suisse in March 2023 after a series of scandals and losses. Ermotti took over from former UBS CEO Ralph Hamers in April.

Ermotti, who was speaking to CNBC at the World Economic Forum in Davos, described the period since he took over as “pretty good.”

— Lucy Handley

The European Union’s investigation into state subsidies given to Chinese electric vehicle makers is progressing and should deliver its results within nine to 11 months, Valdis Dombrovskis, executive vice president of the European Commission, told CNBC on Wednesday.

The probe was launched by the European Union in September to address alleged market distortion from the price of Chinese EVs being kept artificially low.

“What we are assessing when launching this investigation, whether there is a threat of injury for EU industry,” Dombrovskis said.

“And if you look just at the fact that market share of Chinese brand battery electric vehicles in EU market in two, three years time has increased from less than 1% to 8%, and this growth is continuing, clearly we see this threat of injury and that’s why we’re acting.”

Dombrovskis also discussed the need for the EU to address its trade deficit with China, as well as its broader long-term competitiveness, and said the institution continued to have concerns about the U.S. Inflation Reduction Act.

— Jenni Reid

OpenAI founder and CEO Sam Altman said he felt “super confused” and “super caught off guard” the night when the company board removed him from his post, describing the experience as “wild.”

“I immediately just went to … thinking about what I was going to do next,” Altman said at an event held at the Bloomberg House in Davos on Tuesday.

Concerns over AI safety and OpenAI’s role in protecting consumers were at the center of Altman’s brief ouster from the company.

Altman was forced out in November and reinstated into the role less than a week later.

Read the full story here.

— Lucy Handley

Iranian Foreign Minister Hossein Amir-Abdollahian said his country wants to “stop the war in Gaza” and that U.S. cooperation with Israel is “the root of insecurity in the region.”

“The U.S. should not, Mr. [Joe] Biden should not tie their destiny to the fate of Netanyahu,” Amir-Abdollahian said, speaking to CNBC’s Dan Murphy at the World Economic Forum in Davos, Switzerland, on Tuesday.

The U.S. has expressed steadfast support for Israel in its war against Hamas in Gaza, and the minister’s comments came as the Israel-Hamas war dragged beyond its 100th day.

He sought to deny claims that the Islamic Republic is aiding Yemen-based Houthi rebels, who have disrupted global trade in their attacks on vessels in the Red Sea.

Read the full story here.

— Lucy Handley

U.S. Secretary of State Antony Blinken talked to CNBC about his meeting with Ukraine’s President Volodymyr Zelenskyy at Davos on Tuesday.

“We need to make sure that with Congress, we get the supplemental funding that President Biden’s asked for, we’re working very hard on that,” he said.

Blinken said he believed there was bipartisan support for this in both Houses but explained that this would be an issue if the funds were not secured.

“Look there’s no magic pot of money — if we don’t get that money, it’s a real problem,” he said.

— Vicky McKeever