Fed Officials Say a September Rate Increase Is Still on the Table
The comments, uncoordinated but generally consistent, suggested that some investors and analysts had been too quick to discount a September rate increase, particularly as global markets finished...
The comments, uncoordinated but generally consistent, suggested that some investors and analysts had been too quick to discount a September rate increase, particularly as global markets finished the week on a relatively quiet note on Friday.
“We haven’t made a decision yet, and I don’t think we should,” Stanley Fischer, the Fed’s vice chairman and a close adviser to the Fed chairwoman, Janet L. Yellen, said in an interview with the cable network CNBC. “We’ve got time to wait and see the incoming data and see what exactly is going on now in the economy.”
The Fed’s policy-making committee is scheduled to meet Sept. 16 and 17.
Mr. Fischer offered an upbeat assessment of the domestic economy. He described job growth as “impressive” and said there had been a “pretty strong case” to raise rates in September before the latest round of global turmoil. He did not sound inclined to wait much longer than September to start raising rates.
“We’re getting back to normal and at some point we will want to show that, by beginning to normalize interest rates,” he said, speaking during a break at the annual conference hosted here by the Federal Reserve Bank of Kansas City.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta and a centrist on the Federal Open Market Committee, told Bloomberg that he saw roughly even odds of a September rate increase. But if the Fed did choose to wait, he said it wouldn’t be for long — he suggested that it could raise rates at its next meeting in October.
James Bullard, president of the Federal Reserve Bank of St. Louis, said in an interview that he was reserving final judgment, but that he did not see strong reasons for the Fed to delay. “I would like to see the whole panoply of data before I make a decision but I’m certainly leaning in that direction,” Mr. Bullard said.
The march toward higher rates has inflamed some critics who argue that the central bank should continue or even expand its stimulus campaign.
Joseph Stiglitz, a Columbia University economist and Nobel laureate, said Thursday that the Fed was on the verge of repeating an old mistake by raising interest rates sooner than necessary to control inflation. He pointed out that the share of Americans with jobs remained unusually small and wages were rising only slowly.
“There hasn’t been a recovery for the majority of Americans and so to me this is a no-brainer,” Mr. Stiglitz told a coalition of community groups who call themselves “Fed Up” that met just outside the main conference to advocate against a rate increase. “I don’t even know why we’re talking about” tightening monetary policy, he said.
The Fed’s preferred measure of inflation was updated on Friday. The new data showed that prices rose just 0.3 percent during the 12 months that ended in July. A narrower measure excluding food and oil prices, which the Fed regards as more predictive, increased by 1.2 percent over that period. The Fed aims to maintain inflation at a 2 percent annual pace, a goal it has not achieved for several years.
Mr. Stiglitz said the Fed should try to keep inflation at about 4 percent a year. Even with a stated target of 2 percent a year, he said, actual inflation is significantly lower. “We wind up with a monetary policy that has been consistently too tight,” he said.
Most Fed officials say they expect inflation to increase as the economy expands. Mr. Fischer said on Friday that his confidence was “pretty high” that inflation would rebound.
Still, Mr. Fischer said there was a continuing “discussion” among Fed officials, some of whom see the strength of domestic growth as a reason to raise rates, while others argue the sluggishness of inflation means there is no reason to rush.
Mr. Bullard, a member of the first camp, said that he viewed recent global economic developments as unlikely to change his economic forecast. The sharp fall of oil prices and the decline of long-term interest rates should increase growth, while a stronger dollar and a weaker global economy are likely to have an offsetting impact.
“I want to take the time I have between now and the September meeting to evaluate all the economic information that’s come in, including recent volatility in markets and the reasons behind that,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, told The Wall Street Journal. “But it hasn’t so far changed my basic outlook that the U.S. economy is solid and it could support an increase in interest rates.”
Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, reiterated his contrasting view that the Fed should not raise interest rates this year. Instead, he argued, the central bank should consider expanding its stimulus campaign to address the persistence of low inflation, which can harm consumer spending and business plans for expansion. Mr. Kocherlakota said the volatility of financial markets should be seen as further evidence of the weakness of the economy.
Both camps, however, agree that the Fed should not start raising rates in the middle of market volatility. William C. Dudley, the president of the Federal Reserve Bank of New York, said this week that the gyrations of financial markets made the case for raising rates in September “less compelling.”
Mr. Fischer in his interview Friday said he did not want to judge the current situation, because it was new. But if volatility persisted, the Fed would be less likely to move.
“If you don’t understand the market volatility, and I’m sure we don’t fully understand it now — there are many, many analyses of what’s going on — then yes, it does affect the timing of a decision you might want to make,” he said.
Both Mr. Dudley and Mr. Fischer, however, noted that the current situation might be fleeting. Mr. Fischer said markets “could settle down fairly quickly.”
And Mr. Fischer emphasized that Fed officials could not afford to wait until all of their questions were answered and all of their doubts resolved. “When the case is overwhelming,” he said, “if you wait that long, then you’ve waited too long.”
Source: New York Times
Can We Forgo Wells Fargo?
When disgraced Wells Fargo CEO John Stumpf was forced to resign a few weeks ago, it was a victory for economic justice. But this move, however dramatic, does not go far enough to fix the problems...
When disgraced Wells Fargo CEO John Stumpf was forced to resign a few weeks ago, it was a victory for economic justice. But this move, however dramatic, does not go far enough to fix the problems with Wells Fargo and Wall Street.
Christina Livingston, executive director of the Alliance of Californians for Community Empowerment (ACCE).
A diverse array of progressive organizations are joining forces to not only end Wells Fargo's predatory practices, but also increase the pressure for broad Wall Street reform that puts people and communities first.
Through a new "Forgo Wells" campaign, they are pushing city councils, state legislatures, school boards, and other public bodies to stop doing business with Wells Fargo. And they've already scored some wins.
The groups launching this divestment campaign include national organizations like Jobs with Justice, the Communications Workers of America, and Center for Popular Democracy, as well as local groups like New York Communities for Change, Minnesota-based Isaiah, and the Alliance of Californians for Community Empowerment (ACCE).
Inequality.org co-editor Sarah Anderson interviewed ACCE's executive director, Christina Livingston, about her involvement in the Forgo Wells campaign.
Sarah Anderson: How did you come to be involved in this campaign?
Christina Livingston: Since our doors opened in 2010, Wall Street accountability work has been a staple issue. That's because so many of the issues people are battling have connections to Wall Street banks. From the foreclosure crisis, to wealth stripping of cities and municipalities, to student debt, and beyond, Wall Street banks and hedge funds are behaving in ways that harm you and me for the sake of unchecked power and greed.
Last year we engaged in a campaign organizing bank workers under our worker justice campaign umbrella and quickly realized that bank workers were being treated poorly by the big banks in many ways, including the use of unrealistic sales goals.
Working with the Communications Workers of America (CWA), we began to research how widespread these sales goals were and the impact they were having on workers. We didn't know then that because of these sales goals Wells Fargo workers were being compelled to open fraudulent accounts. However, given our interactions with Wells Fargo in the past, we were not surprised to find that such a widespread fraudulent practice existed. In fact, this is very reminiscent of the robo-signing practice Wells Fargo was found guilty of during the height of the foreclosure crisis.
What role will ACCE be playing in the Forgo Wells campaign?
Given that Wells Fargo is based in San Francisco, we felt compelled to immediately begin working with some of our largest California cities to call on the city government to take action. Already the Los Angeles City Council and the San Francisco Board of Supervisors have moved to suspend business with Wells Fargo and we plan to move at least 2-3 other cities in the coming months to take action. We are also encouraging organizing groups in other states to work with their legislators to suspend business with Wells at the state or city level.
Why is this a strategic moment for targeting Wells Fargo?
First, hubris and exploitation is in their DNA. They have never worked with community organizations, and racially biased marketing and fraud is baked into their way of doing business. It is sort of like a game of Jenga (or house of cards). Once you pull out that piece that makes the tower fall, which in this case was the fraud that front-line workers were forced to commit, you unearth many more parts of fraudulent behavior, and realize it is pervasive through everything.
Just a couple days ago, Wells reached a $50 million settlement for mortgage appraisal fraud. There are so many ways in which they are corrupt, and their tentacles are everywhere. They are invested big in private prisons, police foundations, the Dakota Access pipeline, Puerto Rican bonds. Basically, they are invested everywhere, and bad things come from their investments.
Do you see any potential for building alliances that cut across partisan lines in this campaign?
We think so. Part of the right-wing pushback against Hillary Clinton is that she has been friends with Wall Street. People do not trust her to stand up to the banks and hedge funds. Some of Trump's economic appeal has been his willingness to "tell it like it is." And there are unfortunately some Bernie followers who are supporting Trump. The anti-Wall Street message holds both major parties accountable.
Is this campaign just about Wells Fargo or are you trying to address broader problems with Wall Street?
This is absolutely not just a campaign about Wells Fargo, it is about all the big banks and hedge funds that are implementing practices and policies that hurt communities in order to deliver for the wealthy few at the top. Wells is emblematic of what everyone else is doing.
What would victory look like for you?
If we are really successful, we would see the break-up of Wells Fargo and would send a message that banks will be held responsible for the ways they treat their workers, shareholders, and customers. Along the way, we hope to get a fair amount of justice in monetary settlements, rights for workers, and divestment from a host of racist and exploitative investments.
This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.
By Sarah Anderson
Source
Who is Jerome Powell, Trump’s pick for the nation’s most powerful economic position?
Who is Jerome Powell, Trump’s pick for the nation’s most powerful economic position?
"Yellen's background as a trained economist and experienced Fed official gave her needed independence from the influence of Wall Street,” says Jordan Haedtler, campaign manager for Fed Up, a grass...
"Yellen's background as a trained economist and experienced Fed official gave her needed independence from the influence of Wall Street,” says Jordan Haedtler, campaign manager for Fed Up, a grass roots Democratic effort. He says it's concerning that Powell would be Trump's second Carlyle Group veteran appointed to the Fed board. Earlier this year, Trump nominated Randal Quarles, another Carlyle Group alum, to an open Fed board seat overseeing bank regulation.
Read the full article here.
City Councils Call On President And Congress To Avoid Cutting Services
Young Philly Politics - December 18, 2012, by Councilmember Wilson Goode - As the federal government faces major decisions regarding our nation’s budget and fiscal policies,...
Young Philly Politics - December 18, 2012, by Councilmember Wilson Goode - As the federal government faces major decisions regarding our nation’s budget and fiscal policies, cities around the country are passing resolutions calling on the President and Congress to prioritize the revitalization of the economy, the creation of millions of new jobs, and a return to broadly-shared prosperity.
Led by members of Local Progress, the new national municipal policy network, over the past two weeks the cities of Baltimore, Cambridge, Chicago, Hallandale Beach, Philadelphia, New York, Seattle, and Yonkers have signaled their official support for a solution that avoids cuts to vital services for the most disadvantaged members of society or to Social Security, Medicare, or Medicaid benefits and that raises crucial revenue from the wealthiest two percent of Americans.
“Unwise cuts to federal spending inevitably shift costs onto states and municipalities, which, unlike the federal government, cannot cope with them through deficit spending,” said Joe Moore, a Chicago City Council Alderman. “Cuts to funding for housing, community development, public health, and public safety will deprive millions of poor Americans of basic necessities like food, medicine, and a home in a safe community.” The resolution introduced by Moore was supported by all 50 Aldermen.
“The American economy continues its slow and inadequate recovery from the Great Recession; twenty million people want to work full time but cannot; and a weak economy undermines the nation’s social fabric and deprives future generations of the opportunity to live rich and fulfilling lives,” said Chuck Lesnick, the Yonkers City Council President. “We need growth, not austerity.”
Source
Already Low Wages Fell Further in February
03.04.2016
Derek Laney, Co-Director of Missourians Organizing for Reform and Empowerment, released the following statement on behalf of the Fed Up coalition:
...03.04.2016
Derek Laney, Co-Director of Missourians Organizing for Reform and Empowerment, released the following statement on behalf of the Fed Up coalition:
“Although the US economy added jobs last month, economic activity slowed in cities like my hometown of St. Louis. Too many workers here and elsewhere are still waiting to benefit from a sluggish economic recovery.
In December, the Fed ignored the voices of our coalition and the advice of many economists by voting to slow down the economy. We are seeing the consequences. Today’s jobs report showed that wages, which were already too low, fell further last month.
Low- and middle-income families, particularly in Black and Latino communities, know that our economy is still far too weak. There aren’t enough good jobs to go around, and millions of people are still struggling to get the hours and wages that they need. The Fed needs to pay attention to the data and pay attention to the voices of the American public. It must do all it can to let our wages grow."
www.whatrecovery.com
### Fed Up is a coalition of community organizations and labor unions across the country, campaigning for the Federal Reserve to adopt pro-worker policies for the rest of us. The Fed can keep interest rates low, give the economy a fair chance to recover, and prioritize full employment and rising wages.
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
Media Contacts:
Anita Jain, ajain@populardemocracy.org, 347-636-9761
Sofie Tholl, stholl@populardemocracy.org, 646-509-5558
A Party Within the Democratic Party
“Organizer Ady Barkan of the Center for Popular Democracy, honored at the summit for his work fighting for health care, acidly noted, “We have a lot of house cleaning to do.””
...
“Organizer Ady Barkan of the Center for Popular Democracy, honored at the summit for his work fighting for health care, acidly noted, “We have a lot of house cleaning to do.””
Read the full article here.
Fed policymakers see rate hikes, blurring dove-hawk divide
Whitehurst’s group of activists, Fed Up, has printed pamphlets to distribute at the conference venue that say George, along with other traditionally hawkish policymakers, “wants more people to be...
Whitehurst’s group of activists, Fed Up, has printed pamphlets to distribute at the conference venue that say George, along with other traditionally hawkish policymakers, “wants more people to be unemployed.”
Read the full article here.
FED UP ACTIVISTS: 'It has taken Gary Cohn almost 2 weeks to find the backbone to gently criticize Trump'
FED UP ACTIVISTS: 'It has taken Gary Cohn almost 2 weeks to find the backbone to gently criticize Trump'
A group of liberal activists who have pressured the Federal Reserve to keep interest rates low are calling on Gary Cohn, head of Donald Trump’s National Economic Council and a potential candidate...
A group of liberal activists who have pressured the Federal Reserve to keep interest rates low are calling on Gary Cohn, head of Donald Trump’s National Economic Council and a potential candidate to replace Janet Yellen as Fed chair, to resign.
Cohn, who is Jewish, told the Financial Times in an interview that he was disturbed by the events in Charlottesville and disappointed with the response of the president, who appeared to equate neo-Nazis and white supremacists with counterprotesters.
Read the full article here.
The Left's Fed Up Makes A Naked Power Grab For Control Of The Fed
The left is undertaking an amazing back door plan to dramatically increase its influence over the Fed’s interest-rate-setting Open Market Committee.
The key activist group, a division of...
The left is undertaking an amazing back door plan to dramatically increase its influence over the Fed’s interest-rate-setting Open Market Committee.
The key activist group, a division of the Center for Popular Democracy, is working to kick the bankers off the boards of directors of the district Federal Reserve banks. Those boards choose the presidents who serve, in rotation, as voting members on the FOMC. Brilliant.
In scope, the left’s plan makes trivial by comparison Auric Goldfinger’s “Operation Grand Slam” to contaminate America’s gold holdings at the US Treasury Depository at Fort Knox. Goldfinger planned to turn them radioactive. Those holdings amounted, in 1964, to about $14 billion. They are now valued at close to $200 billion.
Either way, a tidy sum. Yet it’s just a nickel compared to the Fed’s more than $4 trillion holdings.
Most impressive. The left is undertaking its own Operation Super Grand Slam.
It is doing so proficiently and systematically. Unfortunately for the left, fortunately for America, it has run into a real life James Bond: House Monetary Policy Subcommittee Chairman Bill Huizenga (R-MI). The irresistible force has met its immovable object.
Fed Up, the left’s instrumentality, was repelled during the most recent skirmish. This occurred last week at a hearing of a subcommittee of the House Financial Services Committee, “Federal Reserve Districts: Governance, Monetary Policy, and Economic Performance.”
Fed Up is a project of the Center for Popular Democracy, which, according to Wikipedia (citing a paywalled article by John Judis from the National Journal) is the successor, at least in part, to the somewhat notorious ACORN. According to the Center’s website:
The Federal Reserve has tremendous influence over our economy. Although our communities continue to suffer through a weak recovery and economic inequality keeps growing, corporate and financial interests are demanding that the Fed put the brakes on growth so wages don’t rise. There is a real danger that in early 2015 (sic), the Fed will cut the legs out from the recovery before the economy reaches full acceleration, costing our communities millions of jobs and workers tens of billions in wages.
True, and fair, enough. Let it be said that I, along with much of the right, also am highly critical of the Fed. I, a dues paying member of the AFL-CIO, am of the wing of the right wing that is in full solidarity with Fed Up’s commitment to wage growth.
We share identification of the Fed as a main perp in the failure of workers to thrive. From the right check out, for example, Put Growth First. Its website is headlined “End the Fed’s War on Wage Growth: Restore Prosperity for the Striving Majority.”
I, while opposing tokenism, am in sympathy with Fed Up’s stand that the Federal Reserve is unacceptably deficient in social, gender, and ethnic diversity. I have great admiration for Fed Up’s tactical proficiency, clarity of message, and decency in presenting that message. I, too, am fed up with the Fed.
That said, I am on record as dubious about the Fed’s power to “set” interest rates outside the trivial, and mostly symbolic, impact of setting the discount rate. I also am not part of the “raise interest rates” cheerleader squad on the right. I’m for allowing the credit markets to organically set interest rates based on … wait for it … supply and demand.
I part company with the left on its proposed solution of taking over district Federal Reserve Bank governance. Hola, Venezuela! Upon encountering Fed Up’s representatives while we were waiting to enter the Congressional hearing I requested the opportunity to engage in further conversation. Waiting, eagerly, to hear back.
Fed Up is a class act. Making the voices of the have-nots heard is commendable. Bring it on.
By Ralph Benko
Source
How Trump’s Pick To Police Wall Street Endangers The Economy
How Trump’s Pick To Police Wall Street Endangers The Economy
As the country reeled from news that Donald Trump Jr. apparently tried to collude with Russia against former Democratic presidential contender Hillary Clinton, his father, President Donald Trump, ...
As the country reeled from news that Donald Trump Jr. apparently tried to collude with Russia against former Democratic presidential contender Hillary Clinton, his father, President Donald Trump, announced a decision that will have ripple effects on the American economy for years to come.
Trump, distressing advocates of tough financial rules and pro-worker monetary policy, on Monday nominated veteran Wall Street lawyer Randal Quarles to serve as the Federal Reserve’s top finance regulator.
Read the full article here.
6 days ago
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