CPD IN THE NEWS

These organizations are helping with immediate needs—like food—and long-term efforts, including rebuilding...

Read the full article here.

The Federal Reserve announced on Wednesday that it will keep its benchmark interest rate at current levels in response to lackluster job creation in recent months and other discouraging economic data.

The decision will shield American consumers from higher borrowing costs, but it also reflects the fragility and unpredictability of the current economic recovery, some seven years after the Great Recession officially ended.

The central bank’s Federal Open Market Committee is keeping the influential target federal funds rate — the Fed-set interest rate banks charge one another for overnight lending — at a range of 0.25 to 0.5 percent. Since the rate is a benchmark for lending throughout the economy, leaving it unchanged will likely prevent higher interest rates on mortgages, car loans and other household debts.

The Fed has a dual mandate to craft monetary policy that both maximizes employment and keeps inflation in check. The FOMC lowers the federal funds rate to accelerate job growth by reducing borrowing costs. It raises the rate to limit price inflation by slowing the pace of job growth.

The FOMC’s decision not to do the latter in June was widely expected. Fed officials signaled earlier this month that disappointing job creation had undermined the case for a rate hike. The economy created just 38,000 jobs in May, and new data show that the preceding two months produced fewer jobs than previously believed, according to the Bureau of Labor Statistics.

The central bank is also responding to tepid inflation. The price of consumer goods, excluding food and energy, rose 1.6 percent in the 12 months ending in April, according to the price index favored by the Fed — well below the Fed’s 2-percent target. And a University of Michigan survey revealed on Friday that U.S. households’ expectations of long-term inflation are lower than they have been at any point since the survey began collecting data in 1979.

In a press conference following the announcement, Federal Reserve Chairwoman Janet Yellen acknowledged the role that those developments played in the central bank’s decision, noting that “recent economic indicators have been mixed.”

Yellen also said that the prospect of a “Brexit,” or British exit from the European Union, was “one of the factors” that led the central bank to hold off on an interest rate hike. The United Kingdom will vote on the country’s membership in the EU on June 23.

If the U.K. chooses to leave the EU, which functions as a single market, it could ultimately have adverse effects on the U.S. economic outlook, Yellen suggested. A higher percentage of British voters supported Brexit than opposed it in a poll released on Monday.

The Fed last raised the federal funds rate by one-quarter of a percentage point in December, the first increase since the financial crisis. The rate had been at or near zero — 0 to 0.25 percent — since December 2008.

With the December interest rate increase, the Fed seemed to express confidence that the economic recovery had entered a new phase, indicating it was time to pivot to the work of preventing inflation. Yellen predicted that the move would be the first in a series of small interest rate hikes that would gradually raise rates to levels that are more historically normal.

Since then, however, disappointing economic data have repeatedly delayed the pace of those increases. Slower global demand reduced the availability of credit, and wage growth remained sluggish, prompting the Fed not to raise the federal funds rate in March.

Fed officials suggested in May that economic conditions would finally permit them to raise the rate again in June. But the May job creation data, released on June 3, rapidly dashed those plans.

The central bank’s next opportunity to announce a rate hike will be July 27, after a meeting of the FOMC.

Wednesday’s announcement will come as welcome news to many progressive economists and activists who have long argued that the job market has much more room to grow before inflation becomes a serious problem.

While the official unemployment rate is 4.7 percent, much of its recent decline is due to people dropping out of the workforce altogether. The labor force participation rate, which measures the percentage of people actively seeking work in addition to those who are working, is significantly lower than it was in 2000.

In fact, when you exclude workers 55 or older who may have retired voluntarily, labor force participation is lower now than it was at its worst point during the past two business cycles, according to an analysis by the Economic Policy Institute.

A job market where people continue to give up on finding work is part of the reason wage growth has failed to meet expectations, since employers still have little reason to compete for workers, progressive economists argue. Average hourly pay rose 2.5 percent in the 12-month period ending in May, not enough for a significant boost in most Americans’ paychecks.

The Fed Up campaign, a coalition of progressive groups that advocates for Fed policy that is favorable to workers and communities of color, cites figures like those when pleading with the Fed to hold off on raising rates. Fed Up has called on the Fed not to raise the benchmark interest rate until “the economic recovery reaches all communities,” said Jordan Haedtler, Fed Up campaign manager.

Progressives were overjoyed when presumptive Democratic presidential nominee Hillary Clinton expressed her sympathy with these concerns last month. The campaign said in a statement that as president, Clinton would appoint Fed officials who take seriously the central bank’s mandate to maximize employment, in addition to its duty to tamp down inflation.

Clinton stands to benefit politically from Wednesday’s announcement, since voters typically judge the candidate of the incumbent party for the economy’s performance. A rate increase would have squeezed economic demand, risking even slower job growth in the months ahead of the general election.

Donald Trump, the presumptive Republican presidential nominee, has expressed a wide variety of views about the Fed. He most recently suggested that he supports low interest rates, but that he plans to replace Yellen as Fed chair.

Yellen said Wednesday that the central bank will act based on economic data in the coming months, even if its actions are perceived as affecting the general election in November. “We are very focused on assessing the economic outlook and making changes that are appropriate without taking politics into account,” she said.

This piece has been updated with Yellen’s comments.

By Daniel Marans

Source

The Fed Up campaign, a coalition of groups led by the nonprofit Center for Popular Democracy, will converge on Jackson Hole, Wyoming, later this week to urge the Federal Reserve to be more responsive to the needs of American workers. In doing so, it will focus on both “economic and racial inequality,” campaign director Ady Barkan told reporters on a Monday press call previewing the campaign’s plans.

The gathering is aimed at influencing Fed officials attending the Kansas City Fed’s annual Jackson Hole symposium.

A major theme of Fed Up's parallel conference on Thursday and Friday will be “Whose Recovery,” based on the premise that the economic recovery has yet to reach many workers, particularly those of color. They note that the official African-American unemployment rate -- 9.1 percent -- is much higher than the 5.3 percent rate for the overall population.

“Although there has been a strong recovery for Wall Street, that recovery has not reached Main Street,” Barkan said. At Jackson Hole, Barkan said, “We will be asking not only, ‘Whose recovery is this?’ but also, ‘Whose Federal Reserve is this?’” 

The Fed Up campaign’s immediate goal is to stop an interest rate hike that would slow economic growth, which it says would disproportionately hurt people of color. The Federal Reserve has indicated it will raise interest rates in September, though some economic analysts are speculating that Monday’s stock market slide and turmoil in emerging-market economies will give the central bank pause. Over the longer term, Fed Up hopes to reform the selection process for regional Federal Reserve bank presidents, which it believes currently reflects the interests of financial elites more than the broader public.

(For more on the Fed Up campaign's efforts and the broader debate over monetary policy, head over here.)

Fed Up will bring an estimated 50 low-income workers and representatives of communities of color from across the country to the Jackson Hole gathering -- an increase from the 10 activists it brought last year.

“We see racial justice and racial economic equality as part of the same agenda," Barkan added, referencing the persistent racial disparity in employment. 

The campaign has reserved conference rooms where activists will hold “teach-ins” making the case for monetary policy that prioritizes full employment and wage growth, and plan to share their views in informal conversations with Fed officials and members of the media.

The activists will also deliver to Fed officials an as-yet-undetermined number of petition signatures opposing an interest rate hike absent greater wage growth. Last year, Fed Up amassed 10,000 signatures for a similar petition, but this year it hopes to submit a much larger number thanks to the campaign’s collaboration with progressive online heavyweights CREDO Action, Daily Kos and Working Families Party, and a promotional video from popular liberal economist Robert Reich that has already been viewed over 150,000 times.

Asked whether Fed Up planned any public and potentially disruptive protests at the Jackson Hole gathering, Barkan refused to disclose any specific plans, but did not rule them out either.

While Fed Up since its inception has focused on the disproportionate impact of Federal Reserve interest rates on people of color, its events at Jackson Hole this year explicitly appeal to the themes of the Black Lives Matter movement, which has gained steam since last year’s conference. The campaign will host back-to-back teach-ins entitled “Do Black Lives Matter To The Federal Reserve?” on Thursday and Friday that Barkan said will explain how a “weak economy causes racial discrimination and disparities.” The sessions will be organized by activists from the St. Louis and Wichita, Kansas, metropolitan areas, many of whom have also been active in protests against police mistreatment of, and use of force against, black people. 

Barkan said that because Black Lives Matter is not a centralized movement, however, it has no formal affiliation with Fed Up. 

Dawn O’Neal and Keesha Moore, two African-American rank-and-file Fed Up activists who are attending the Jackson Hole gathering, shared their reasons for lobbying the Fed.

O’Neal described the challenges of earning just $8.50 an hour as a teaching assistant for 3-year-old children in Dekalb County, Georgia, just outside Atlanta. Her husband is unemployed and stands in line at 5 a.m. every day for odd construction jobs at a local gathering point for day laborers. If her husband is lucky, he is one of 30 or 40 men among a group of 300 predominantly black men to be chosen for work that pays roughly the federal minimum wage of $7.25 an hour. They lack health insurance and must choose which bills to pay at the end of every month.

“When the Fed says the economy is recovering, I do not see recovery in my community. I see the struggle of my neighbors, lines of people looking for work, people trying to make ends meet on McDonald’s salaries,” O’Neill said Monday on the press call. “I do not think those at the Fed know how life is here in South Dekalb county when they say the economy is recovering.” 

Moore, a 36-year-old single mother of four in Philadelphia, described her dogged and disheartening search for work after being laid off as a data entry specialist seven months ago. She lamented a Catch-22 of job hunting: Getting a good job often requires a car, and she will only be able to afford a car when she has a job.

Moore suspects that being African American has impeded her job search. “They always ask me when I apply what my race is,” Moore said. “I am not quite sure what that has to do with getting a job.”

Moore, like O’Neal, wants to tell the Fed about her community’s urgent need for more jobs and “fair” wages.

Fed Up and its allies say even a modest interest rate hike will slow down a job market that is already inadequate for the size of the population and has yet to produce significant wage growth. That would disproportionately hurt people of color, who are already more likely to be out of work, and often experience discrimination in hiring that they are more likely to overcome in a high-demand economy supported by low interest rates.

Proponents of a Federal Reserve interest rate increase, which include many Fed officials, center-right economists and politicians, argue that rates must rise to prevent excessive price and asset inflation. And some economists are also expressing concerns that prolonged low interest rates will limit the Fed’s ability to stimulate the economy by cutting rates if and when a significant slowdown occurs, The Wall Street Journal reported on August 17.

The Kansas City Federal Reserve Bank, which is hosting the Jackson Hole symposium that Fed Up is targeting, is aware of the planned counter-conference, Barkan said, but has not expressed opinions about it. Fed Up’s actions last year led to a meeting between activists and Kansas City Fed president Esther George.

Barkan said that Atlanta Fed president Dennis Lockhart had expressed interest in attending Fed Up’s sessions.

"President Lockhart’s first obligation is to the Kansas City Fed’s conference that he is in Jackson Hole to attend," Jean Tate, a spokeswoman for the Atlanta Fed, told HuffPost. "He has some other commitments on his schedule as well. If time permits, he may be able to briefly listen to some of the conversation at the Fed-Up event, but it is not something that we can confirm."

This post has been updated with a response from the Atlanta Fed about whether President Dennis Lockhart plans to attend Fed Up events.

Source: Huffington Post

Message delivered, message received — Queens-style.

Outerborough activist Ana Maria Archila, after angrily confronting Sen. Jeff Flake in a Capitol Hill elevator over his support of Supreme Court nominee Brett Kavanaugh, said the accounts of America’s abused women were no longer falling on deaf ears after the Arizona Republican delayed a vote on the judge’s candidacy for a week.

Read the full article and watch the video here.