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
Activists: US Justice Department Response to Baltimore Police Racism Falls Short
Activists: US Justice Department Response to Baltimore Police Racism Falls Short
The response by the US Department of Justice to exposing Baltimore Police Department (BPD) violations of citizens’...
The response by the US Department of Justice to exposing Baltimore Police Department (BPD) violations of citizens’ constitutional rights falls short of addressing the systemic problem of racism in US policing, activists said.
Read the full article here.
ACORN-linked Center for Popular Democracy aims for big GOTV operation
ACORN-linked Center for Popular Democracy aims for big GOTV operation
A left-wing nonprofit called the Center for Popular Democracy is working with the ACORN-tainted Working Families...
A left-wing nonprofit called the Center for Popular Democracy is working with the ACORN-tainted Working Families Organization in a more than $7 million get-out-the-vote operation in battleground states in the upcoming presidential and U.S. Senate elections, reports Lachlan Markay of the Washington Free Beacon.
The WFB reports:
Documents detailing those efforts shed new light on how the left’s organizing apparatus is collaborating with prominent progressive groups such as MoveOn.org, labor unions, and foundations to build a campaign apparatus that can win short-term policy victories and translate those victories into a lasting political operation.
The nonprofit Center for Popular Democracy and its 501(c)(4) dark money arm, the Center for Popular Democracy Action, work with 42 partner organizations—including labor unions, community organizing groups, and other left-wing nonprofits—in 30 states to advance its goals.
The group’s $14 million budget supports a staff of more than 60 employees. In 2015, it sub-granted more than $7 million to its partner organizations. Those partners boast more than 400,000 members, 800 state-based staffers, and combined budgets of roughly $85 million.
That organizing power is diffused throughout the states, but a document obtained by the Free Beacon reveals that efforts have been underway since December to centralize decision-making in committees that represent both CPD and its local and state partners. […]
By MATTHEW VADUM
Source
Meet One of the Sexual Assault Survivors Who Confronted Jeff Flake & Triggered FBI Kavanaugh Probe
Meet One of the Sexual Assault Survivors Who Confronted Jeff Flake & Triggered FBI Kavanaugh Probe
Republican Senator Jeff Flake of Arizona was on his way to cast his vote, shortly after announcing his intentions to...
Republican Senator Jeff Flake of Arizona was on his way to cast his vote, shortly after announcing his intentions to confirm Trump’s Supreme Court nominee Brett Kavanaugh, when he was confronted in an elevator by two women who are sexual assault survivors. The women held open the elevator door, telling Flake, through their tears, that he was dismissing their pain. Soon after, Flake surprised his colleagues on the Senate Judiciary Committee by advancing Kavanaugh’s nomination but asking for an FBIinvestigation before the full Senate vote. President Trump has now ordered an FBIinvestigation into Kavanaugh. We speak with Ana María Archila, one of the women credited with helping to delay Kavanaugh’s confirmation.
Watch the video here.
New Report Says NYC Latino Construction Workers Disproportionately Die On The Job
Fox News Latino – October 24, 2013 - A disproportional number of Latino construction workers in New York City die...
Fox News Latino – October 24, 2013 -
A disproportional number of Latino construction workers in New York City die while on the job compared to their coworkers of other races, according to a new report.
From 2003 to 2011, three-fourths of construction workers who died were either U.S.-born Latinos or immigrants, according to a review of all of the fatal falls on the job investigated by the Occupational Safety and Health Administration, an agency of the federal Labor Department.
“The data we have demonstrates that Latinos and immigrants are more likely to die in these types of accidents,” Connie Razza, from the Center for Popular Democracy, which compiled the report, told the New York Daily News.
Construction safety advocates and a study by the New York State Trial Lawyers Association cited safety violations on job sites run by smaller, non-union contractors and an unwillingness by some undocumented workers to report violations as main reasons for the high number of deaths among Latino workers.
“Contractors aren’t taking simple steps to protect their workers,” said Razza. “They are not providing the training and the safety equipment that are required by law.”
While New York may have a surprisingly high number of deaths of Latino construction workers, numbers nationwide for Hispanic deaths on the jobs are also greater than any other group.
OSHA reported that 749 Latino workers were killed from work-related injuries in 2011— more than 14 deaths a week or two Latino workers killed every single day of the year. While 12 percent of all fatal work injuries in 2011 involved contractor work, Latinos made up 28 percent of fatal work injuries among contractors — well above their 16 percent share of all fatal work injuries in 2011.
Advocacy groups in New York are working to combat any changes to the state’s scaffolding law, which organizations like Razza’s the Center for Popular Democracy say gives incentive to keep workplaces safe.
Contractors argue that the law, which holds owners and contractors who did not follow safety rules fully liable for workplace injuries and deaths, has caused their insurance costs to skyrocket.
New York lawmakers, however, has historically blocked any of the proposed changes to the law.
“All we’re looking for is the ability to have the same right as anybody else would in the American jurisprudence system,” said Louis J. Coletti, president and CEO of the Building Trades Employers’ Association.
Source
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...
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
Richmond Fed President Jeffrey Lacker to Retire in October
Richmond Fed President Jeffrey Lacker to Retire in October
Federal Reserve Bank of Richmond President Jeffrey Lacker, one of the Fed system’s most outspoken advocates for higher...
Federal Reserve Bank of Richmond President Jeffrey Lacker, one of the Fed system’s most outspoken advocates for higher short-term interest rates in recent years, will retire Oct. 1 after 28 years at the bank, the regional Fed bank said Tuesday.
The Richmond Fed’s board of directors has formed a search committee led by Chairwoman Margaret Lewis to find a new president, and has hired the firm of Heidrick & Struggles to assist in the search, the bank said. The bank intends to conduct “a nationwide search to identify a broad, diverse and highly qualified candidate pool for this leadership role,” it said.
Mr. Lacker became the second Fed official to announce his plans to retire in 2017. Atlanta Fed President Dennis Lockhart will step down at the end of February.
“Jeff has been an outstanding leader for the Richmond Fed and has made many contributions to the Federal Reserve System,” Ms. Lewis said in a statement announcing his departure.
A Richmond Fed spokesman said Mr. Lacker wants to return to teaching, writing and academic research, though he had no details on where Mr. Lacker may go after he leaves the bank later this year.
Mr. Lacker joined the Richmond Fed in 1989 and served in various leadership positions before becoming president in August 2004. For the past decade he has anchored the Fed’s hawkish wing, warning of the risks of rising inflation and dissenting often in favor of a higher benchmark federal-funds rate, which officials held near zero for six years following the financial crisis.
He was a voting member of the Fed’s policy committee in 2006, 2009, 2012 and 2015, and dissented a total of 15 times out of 32 meetings.
Mr. Lacker also argued against the Fed’s interventions in financial markets throughout the financial crisis, and has said financial instability was worsened by expectations that the Fed would always provide a backstop for financial firms in trouble.
Over the past year, he has also argued against efforts to overhaul the Fed system, including measures that would subject the Fed’s interest-rate decisions to greater congressional scrutiny or tie its policy to a mathematical formula.
“I’m hoping that our leaders in Congress and the administration understand that our independence is of value and is important to the credibility of the country’s commitment to price stability and I hope they’re willing to proceed accordingly,” he said after the November presidential election.
Mr. Lacker said in a statement Tuesday he felt fortunate “to have participated in some of the most extraordinary policy deliberations in our nation’s history. It’s been my deepest privilege to lead the Richmond Fed and the dedicated people who work here.”
The search to replace Mr. Lacker is likely to face scrutiny from activists and congressional Democrats who have called for more diversity among the Fed’s upper ranks, as well as more openness about how it selects its regional bank leaders.
Following Mr. Lockhart’s announcement last year, the left-leaning Center for Popular Democracy’s Fed Up campaign said it hoped the next Atlanta Fed president would be black or Hispanic, which would be a first for a regional Fed bank.
In an unusual move, a group of African-American House members wrote to Fed Chairwoman Janet Yellen and the chairman of the Atlanta Fed’s board urging them to consider candidates of diverse racial, ethnic, gender and professional backgrounds. The lawmakers also noted that most of the presidents worked at major financial firms before their appointments.
“We hope that candidates from distinctive sectors like academia, labor, and nonprofit organizations are given due consideration,” they wrote.
Before joining the Richmond Fed, Mr. Lacker was an assistant professor of economics at the Krannert School of Management at Purdue University and previously worked at Wharton Econometrics in Philadelphia, the bank said.
The bank posted information about its search process on its website Tuesday.
By Kate Davidson
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Amazon’s ripple effects: Six things that might happen if Pittsburgh gets HQ2
Amazon’s ripple effects: Six things that might happen if Pittsburgh gets HQ2
Sarah Johnson, the Local Progress Director for national advocacy group Center for Popular Democracy, said she doesn’t...
Sarah Johnson, the Local Progress Director for national advocacy group Center for Popular Democracy, said she doesn’t expect Amazon to change how it operates.
Read the full article here.
Warren met privately with 'Draft Warren' supporters
Elizabeth Warren says she has no intention of jumping into the 2016 race, but she recently met behind closed doors with...
Elizabeth Warren says she has no intention of jumping into the 2016 race, but she recently met behind closed doors with members of a movement that’s urging her to run.
The Massachusetts senator held a private meeting April 22 with a small group of progressive leaders from across the country — including some vocal “Run Warren Run” supporters who continue to hold out hope that she’ll enter the presidential race.
In an hourlong meeting with her staff and a 30-minute meeting with Warren, the group of about a half-dozen top progressive activists — including three who are active in the movement — did not discuss the draft campaign. Instead, the conversation focused on issues of social and racial justice. The activists highlighted specific issues the senator can use to influence the presidential debate in 2016 and, they hope, push Hillary Clinton to the left on issues including police brutality, immigration reform, prison privatization, and reducing fees to promote naturalized citizenship, among others.
The meeting’s purpose was to see “how Elizabeth Warren, with her platform, could work with us to move a progressive vision for the country and really engage with communities of color,” said attendee Jonathan Westin, director of New York Communities for Change. “That goes hand in hand with what she’s already doing.” Warren is addressing problems that are “part and parcel of what we believe is wrong with this country,” he said.
An aide to Warren maintained that the senator did not know the group she was meeting with had any connection to the Run Warren Run campaign until POLITICO informed her office. “The point of the meeting was to discuss economic and social justice issues,” the aide said. “As Sen. Warren has said many times, she does not support the draft group’s efforts and is not running for president.”
But Westin is a vocal supporter of the campaign to draft Warren and, as a co-chair of New York’s Working Families Party, voted last February for the political party to join the “Run Warren Run” coalition. Just weeks before the sit-down with Warren, he wrote a blog post for MoveOn.org calling for her to run for president. His co-author on the piece, Katelyn Johnson, executive director of Chicago’s Action Now Institute, also attended the sit-down with Warren.
“Elizabeth Warren is not the only candidate who could ensure a robust presidential primary, but she is the best,” they wrote. “[Warren] is the one who can truly give Clinton a run for the money and yes, even has a shot to win the nomination. We urge Warren to acknowledge the importance of this political moment and enter the race.”
At the meeting with Warren, they were also joined by Daniel Altschuler, managing director of the Make the Road Action Fund, which is also on the advisory council of the Working Families Party and supports the draft Warren movement. But no effort was made during the meeting to urge the senator to enter the race.
“This was about someone who we want to be sharing the issues that are affecting communities of color and working-class communities to make her the strongest possible champion on those issues,” Altschuler said. “The senator has been a tremendous champion on issues of the financial system run amok and income inequality. We think that a lot of the issues affecting our communities are tied to those big financial systems; we wanted to share some of the issues we’re working on.”
Some in the group — which included Shabnam Bashiri from Rise Up Georgia; Bill Bartlett from Action United, a Pennsylvania group; and Brian Kettenring, co-executive director of the Center for Popular Democracy — privately pointed out that November 2016 is a long way off and insisted there is still plenty of time for Warren her to get in the race if she decides to do so.
If Warren wants the group to stand down, the meeting with some of its diehard supporters did little to advance that goal.
“I would still love to see her run for president,” said Westin, speaking after the meeting. “Connecting with the grass-roots groups is a very big piece of how we continue to amplify her message. People are getting away with murder — literally and figuratively, on Wall Street.”
The Run Warren Run campaign was launched in December by Democracy for America and MoveOn and coordinates with Ready for Warren, another group urging the senator to run. In a letter to the Federal Election Commission from her attorney last August regarding the Ready for Warren PAC, Warren said she “does not, explicitly or implicitly, authorize, endorse, or otherwise approve of the organization’s formation or activities.”
But many who met with her last month share the position that Clinton needs a serious primary challenger.
“The Democratic Party needs a contested primary,” said Jennifer Epps-Addison, director of Wisconsin Jobs Now, who also was in the Warren meeting. “Black folks in our communities have been systematically attacked. It’s not simply about police brutality. Our goal in talking to Warren was to make those connections the same way we did during the civil rights movement.” She said her goal is to get Warren “to be talking about racial justice as part of her progressive message.”
While she is not part of the movement to draft Warren, Epps-Addison added, “We feel that many Democrats are not speaking truthfully to the values that many of the base and voters are concerned about, including black folks.”
In the absence of a competitive Democratic primary, however, some progressives are hoping they can at least push Warren to be the party’s agenda-setter.
“For Sen. Warren, you’re seeing her evolve from a very effective advocate on a set of issues into more of a movement leader and a party leadership role,” said Kettenring. “We’re all evolving, and she is, too. That’s part of the dynamic at work here. Some of the people I know who were in the ‘draft Warren’ movement are people we work with and know, because they’re part of the broader progressive ecosystem. I’d say more of us are stepping up to define the terms of the debate.”
Read more: http://www.politico.com/story/2015/05/warren-met-privately-with-draft-warren-supporters-117671
Death Cab For Cutie shares a new, anti-Trump track
Death Cab For Cutie shares a new, anti-Trump track
Death Cab For Cutie is no fan of Donald Trump. The group has released a new song, “Million Dollar Loan,” inspired by...
Death Cab For Cutie is no fan of Donald Trump. The group has released a new song, “Million Dollar Loan,” inspired by the candidate’s dubious claims of rising from the bottom on his own when he was actually launched into the business world on the back of a million-dollar loan from his father. In a statement, Death Cab frontman Ben Gibbard said that he wrote the song after being “disgusted” by how “flippant” Trump was in his assertions. He goes on to say Trump is “beneath us,” noting that “Donald Trump has repeatedly demonstrated that he is unworthy of the honor and responsibility of being President of the United States of America, and in no way, shape, or form represents what this country truly stands for.”
“Million Dollar Loan” is the first song from the “30 Days, 30 Songs” project, launched by the writer Dave Eggers. Imagined as a continuation of his 2012 “90 Days, 90 Reasons” project, “30 Days, 30 Songs” will, as its title suggests, launch a new, anti-Trump song into the world every day until the election. According to a press release, tracks will be a mixture of new material and unheard songs, and this week’s offerings will include original cuts from Aimee Mann, Jim James, Thao Nguyen, Bhi Bhiman, and Daveed Diggs’ group Clipping, as well as a never-before-heard-unless-you-were-there live song from R.E.M.
All of the tracks will be available on the 30 Days, 30 Songs website, as well as on both Spotify and Apple Music. You can also pick up the songs on iTunes, and all proceeds will be donated to the Center For Popular Democracy, a group that is working to ensure universal voter registration for all Americans.
By Marah Eakin
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1 month ago
1 month ago