No hike: Fed keeps benchmark rate near zero
WASHINGTON--Not yet. Citing global economic weakness and financial market turmoil, the Federal Reserve agreed Thursday...
WASHINGTON--Not yet.
Citing global economic weakness and financial market turmoil, the Federal Reserve agreed Thursday to keep its benchmark interest rate near zero despite the rapidly improving U.S. labor market.
But Fed policymakers' forecast indicates they still expect to bump up the federal funds rate this year for the first time in nearly a decade, with meetings scheduled for October and December. Their projections, however, show they expect to raise it even more gradually over the long-term than they previously signaled.
Richmond Fed chief Jeffrey Lacker was the lone dissenter.
The decision capped the most dramatic run-up to a Fed meeting in recent memory, with economists split on whether the central bank would raise its key rate, which has been near zero since the 2008 financial crisis and affects borrowing costs for consumers and businesses across the economy.
"An argument can be made for a rise in interest rates at this time," Fed Chair Janet Yellen said at a news conference.But she added, "We want to take more time to evaluate the likely impact on the United States" from the overseas slowdown and market gyrations.
She said Fed policymakers also want to see if further improvement in the labor market "will bolster our confidence that inflation will move back" to the Fed's annual 2% target over the medium term..
In a statement after a two-day meeting, the Fed said, "Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near-term."
Fed policymakers now expect just one rate hike this year that would push the funds rate to 0.375% from the current 0.125%, according to their median forecast. They also expect a slower rise that would leave the rate at 2.625% by the end of 2017 and a longer-run normal rate of 3.5%, down from their previous estimate of 3.75%.
The central bank said "the labor market continued to improve, with solid job gains and declining unemployment." It said consumer spending and business investment have advanced moderately while the housing market "has improved further." But amid the overseas troubles, it said exports have been "soft."
With the U.S. economy rebounding more strongly in the second quarter after a slowdown early in the year, the Fed raised its median forecast for economic growth this year to 2.1% from 1.9% in June. But after the recent global and market troubles, it lowered its projection for 2016 to 2.3% from 2.5% in June.
And with the 5.1% unemployment rate already below the Fed's previous year-end forecast, it now expects the jobless rate to be 4.8% by the end of 2016, below its June forecast of 5.1%.
Yet the central bank also expects a more modest rise in inflation, providing it more leeway to nudge up rates gently. It slightly lowered its inflation forecast to 1.7% in 2016 and 1.9% in 2017, leaving it below its 2% annual target even in two years.
Supporting the case for a Fed move was a 5.1% unemployment rate that's already at the central bank's long-run target, average monthly job gains of 212,000 this year and healthy economic growth of 3.7% at an annual rate in the second quarter. "The economy has been performing well and we expect it to continue to do so," Yellen said.
Waiting too long to act might force the Fed to hoist rates more rapidly when currently meager inflation eventually heats up, a move that could destabilize markets. Yellen said that could be "disruptive to the real economy." "I don't think it's good policy to have to slam on the brakes," she said
Yellen said she continues to expect tepid inflation to pick up as low oil prices and a strong dollar stabilize, but she said it will take "a bit more time" for those effects to dissipate.Some economists say the 5.1% unemployment rate already heralds a coming surge in wages and prices as employers compete for fewer available workers.
But annual pay growth has been stuck near a sluggish 2% pace, possibly reflecting an excess labor supply that includes part-time workers who prefer full-time jobs and discouraged Americans resuming job searches after years on the sidelines. If that's the case, the Fed may want to keep rates low longer to stimulate the economy so more of those workers can find full-time jobs.
Yellen told reporters the unemployment rate likely "understates the degree of slack in the labor market."
Meanwhile, recent news of China's economic slowdown, and the resulting turmoil in global and U.S. stocks, prompted Fed officials to temper expectations for a rate hike this week.
"The outlook abroad appears to have become more uncertain of late and heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets," Yellen said.
She added, "We don't want to respond to market turbulence," but the volatility is prompting the Fed to investigate its cause in the global economy.While U.S. exports to China comprise less than 1% of the nation's gross domestic product, Chinese trade with other countries could have stronger ripple effects on the U.S. economy.
Before the release of the Fed's statement to reporters, a coalition of worker advocacy groups called Fed Up gathered outside holding signs such as, "Whose recovery?" and chanting, "Don't raise the interest rates!"
"The Fed should not make a decision to slow down the economy without hearing from the people it will affect," said Ady Barkan, the head of the group.
Source: USA Today
Nina Tassler, Denise Di Novi Launch New Studio PatMa Productions
Nina Tassler, Denise Di Novi Launch New Studio PatMa Productions
The studio has already set up partnerships with a number of organizations promoting diversity, inclusion, and human...
The studio has already set up partnerships with a number of organizations promoting diversity, inclusion, and human rights, among them the Geena Davis Institute on Gender in Media, the Center for Popular Democracy, and Planned Parenthood.
Read the full article here.
Groups sue feds over foreclosure fighting tactic
The Washington Post - December 5, 2013 - The American Civil Liberties Union has sued the Federal Housing Finance...
The Washington Post - December 5, 2013 - The American Civil Liberties Union has sued the Federal Housing Finance Agency, asking it to disclose efforts to stop municipalities from using eminent domain to bail out underwater homeowners and make its dealings with the financial industry more transparent.
The ACLU, Center for Popular Democracy and other nonprofits filed a freedom of information lawsuit against the agency Thursday in federal court in San Francisco.Richmond, Calif., was the first city to officially codify the divisive foreclosure fighting plan, which has drawn zealous opposition from Wall Street and Washington. Two lawsuits challenging the use of eminent domain have been thrown out, but will likely be refiled. The city has not yet used eminent domain to seize a mortgage.Irvington, N.J., is moving forward with the strategy, and the city council in Newark took its first steps toward moving forward with a plan Wednesday. Yonkers, N.Y., is considering it, but other places have scrapped the idea because of opposition from banks or legal hurdles.The agency said in August it may initiate legal challenges against municipalities that want to use eminent domain to fight foreclosures and could direct regulated entities to stop doing business in those places. The nonprofits said most of the cities exploring the use of eminent domain have been besieged by foreclosures and have predominantly low-income, minority populations.The nonprofits filed freedom of information requests with the agency in October, seeking communication between agency leadership and representatives of the banking, mortgage and financial industry, and records of meetings between the agency and financiers, among other requests.FHFA acknowledged, but did not complete, the requests, according to the lawsuit, so the groups sued. The nonprofits are asking for the documents to be procured on an expedited basis.“The FHFA has taken an aggressive stance on this issue in a way that has harmed minority communities. The public deserves to know why,” said Linda Lye, a staff attorney with the ACLU of Northern California, in a statement.A FHFA spokeswoman said the agency is not commenting on the lawsuit.By using eminent domain, municipalities can circumvent mortgage contracts, acquire loans from bondholders, write them down and give them back to the bondholders with reduced principals. According to Cornell University law professor Robert C. Hockett, who devised the plan, only government has the power to forcibly sidestep mortgage contracts.The tactic only works with so-called private label security mortgages, or ones that are not backed by the federal government.FHFA oversees government-backed loans owned by Fannie Mae or Freddie Mac. They cannot be seized by eminent domain.The lawsuit said one of the agency’s “statutory mandates is to help the housing market recover,” and threatening to sue municipalities that try to use eminent domain conflicts with that obligation.“By threatening legal action,” the suit said, the agency “effectively blocks the communities hit hardest by the foreclosure crisis from pursuing one potentially effective solution on behalf of their residents.”The suit also said the agency’s threats to deny credit to communities raises Fair Housing Act and Equal Credit Opportunity Act concerns.Members of the financial industry have said they fear using eminent domain could be a slippery slope, and penalizes people who save and invest in mortgage-backed securities.In Washington, Texas Republican Rep. Jeb Hensarling and Calif. Republican Rep. John Campbell proposed legislation that would bar the federal government from backing mortgages in places that use eminent domain to seize mortgages. SIFMA, a group that represents security firms, banks and asset managers and 11 other groups sent a letter to Congress opposing the use of eminent domain.Last month, 10 members of Congress sent a letter asking the head of FHFA to rescind its threat to sue places that use eminent domain.Source
A Campaign for Full Employment, and the Federal Reserve
A Campaign for Full Employment, and the Federal Reserve
Fed Up Field Director Shawn Sebastian with the Center for Popular Democracy joins us to talk about their campaign...
Fed Up Field Director Shawn Sebastian with the Center for Popular Democracy joins us to talk about their campaign pushing the Federal Reserve to adopt pro-worker policies, keeping interest rates low, and how they re getting public support to build a better economy.
CHARLES SHOWALTER AND SHAWN SEBASTIAN
Source
IDNYC: Fuente de Dignidad para Miles
El Diario - January 30, 2015, by Ana Maria Archila - Se puede palpar la emoción este mes en las comunidades inmigrantes...
El Diario - January 30, 2015, by Ana Maria Archila - Se puede palpar la emoción este mes en las comunidades inmigrantes pues los neoyorquinos, incluidos miles de inmigrantes indocumentados deseosos de más acceso e igualdad, acudieron en masa a inscribirse para IDNYC. El éxito del programa es claro, ya que más de 12,000 residentes ya se han inscrito y más de 100,000 otros tienen cita para hacerlo.
Los beneficios de tener tal identificación son básicos, pero la tarjeta de identificación gubernamental es absolutamente necesaria para quienes de lo contrario enfrentarían muchos desafíos en el diario vivir.
Guadalupe Paleta, madre indocumentada y residente de Queens, hizo cita la semana pasada. Con identificación, podrá visitar la escuela de sus hijos sin necesidad de preocuparse. No le molesta tener que esperar unas cuantas semanas para solicitarla. "Esta identificación indica que estamos acá, que nos ven", dijo.
Para las familias inmigrantes como la de Guadalupe, el programa de identificación ofrece mucho más que una tarjeta con foto. Nos dice que, independientemente de nuestra situación, si hemos echado raíces aquí, pertenecemos aquí.
El entusiasmo por IDNYC es enorme. Ante la oportunidad de tener una tarjeta que simboliza su estatus como neoyorquinos, los inmigrantes acudieron en masa. Nuestras familias atestaron oficinas e hicieron largas filas. Fue prueba de la labor hecha por la oficina del alcalde, como también la comunidad –organizaciones de servicio y de activismo, medios de prensa y otros– para informar a los neoyorquinos sobre el programa.
Pero no todos nuestros vecinos tuvieron la sensatez necesaria para darse cuenta del valor histórico y cívico de lo sucedido. Opositores al programa no pudieron resistir la tentación de armar escándalo.
Hicieron que otros en el entorno de comentarios noticiosos cayeran en la trampa de perder la perspectiva y fueran tendenciosos en su opinión sobre el programa.
La indignación y las protestas sobre las fallas del programa provinieron de quienes nunca apoyaron IDNYC, y a muchos nos parecieron poco sinceras. Simplemente no se percataron de la verdadera noticia que se producía ante sus ojos: la ciudad de NY sirve de inspiración al incluir cada vez más a todo tipo de personas.
Sin embargo, este programa es demasiado importante para demasiados neoyorquinos como para convertirse en una serie de golpes editoriales bajos al alcalde.
A todos nos deben alentar y conmover las imágenes de familias inmigrantes que se inscriben para IDNYC. Confirman la importancia de una política municipal dinámica que facilita la inclusión de los inmigrantes.
Para ver el articulo original, haga un clic aqui.
5 days ago
5 days ago