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Trump Fed nominee Shelton hits bipartisan skepticism in Senate hearing

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WASHINGTON (Reuters) – Federal Reserve board nominee Judy Shelton faced deep skepticism from Republicans and Democrats on the Senate Banking Committee on Thursday, as lawmakers challenged her independence from President Donald Trump and characterized her thinking as too far outside the mainstream to trust with the nation’s economy.

After the hearing, three Republican senators indicated she had not fully alleviated their concerns – enough to sink her nomination in a committee divided between 13 of Trump’s fellow Republicans and 12 Democrats, who are unlikely to vote in her favor.

Over the course of the roughly two-hour hearing she found herself having to back away from prior views, explain that she would not pursue a common North American currency with Canada and Mexico if confirmed as a Fed governor, and even apologize for comparing a currency forger’s challenge of the federal government’s dominance over money to civil rights pioneer Rosa Parks’ challenge of segregation laws.

“I apologize for the comparison. I truly do,” Shelton said of an incident raised by Alabama Democratic Senator Doug Jones in which a North Carolina man issued millions of dollars of his own precious-metal backed currency. “I believe he was testing the idea” that money needed to be backed by gold and silver, Shelton explained.

“Is that something you want to test?” Jones shot back, summing up committee concerns about past Shelton writings seeming to support a return to something like a gold or other asset-backed standard to keep the value of the dollar stable.

“No, senator,” said Shelton, a member of the Trump transition team and a long-time conservative author and commentator on financial issues.

It was one of a series of pointed exchanges between senators and Shelton, an economist with a long track record criticizing the Fed and questioning, at least in theory, whether central banks can even do the job assigned to them.

NOT IN THE MAINSTREAM

Four previous Trump appointees to the Fed failed to clear the Senate, a sign of the weight Congress has put on keeping the country’s monetary policy as free as possible of political interference, given Trump’s open verbal attacks on the Fed and demand for lower interest rates.

Asked about Trump’s war-by-tweet against the Fed, Shelton responded “I don’t censor what someone says.”

But during the hearing Pennsylvania Republican Senator Patrick Toomey called her views about using the Fed to manage the value of the dollar against other currencies “a very very dangerous path to go down.” Trump has often blamed the Fed for a rising dollar, which he argues has hurt exports. Shelton has often written about the need for a “sound” dollar.

A spokesman for Toomey said afterwards that the senator was undecided and that Shelton’s answers “didn’t alleviate” his concerns.

Alabama Senator Richard Shelby also “has not decided at this point, I know he still has some concerns,” the senator’s communications director, Blair Taylor, told Reuters.

Shelton, who holds a doctorate in business administration and has been sharply critical of the Federal Reserve in her writings and commentary, pledged broadly that she would be an independent thinker who would work well with existing Fed officials.

“I pledge to be independent in my decision-making, and frankly no one tells me what to do,” Shelton said, deflecting questions about her past writings that, for example, characterized the Fed’s setting of a short-term interest rate as similar to Soviet central planning.

“I don’t claim to be in the mainstream of economists….I would bring my own perspective. But I think the intellectual diversity strengthens the discussion.”

Senate Democrats said flatly that they do not trust her.

“Shelton has flip-flopped on too many issues to be confirmed,” said Ohio Democratic Senator Sherrod Brown. “She is far outside the mainstream. She is outside the ideological spectrum.”

TWO NOMINEES

A second nominee, Christopher Waller, a career economist who is currently the research director of the St. Louis Federal Reserve, faced few questions about his views.

Both were nominated by Trump to fill vacant seats on the Fed’s seven-member Washington-based Board of Governors.

Both Waller and Shelton released opening statements on Wednesday ahead of their hearings that offered few clues about their views on monetary policy beyond promising to promote policies that support financial stability and help the Fed meet its goals of full employment and price stability.

The two emphasized the Fed’s accountability to Congress, which oversees the central bank.

Both said they agreed with many of the opinions held by current Fed officials, including a reluctance to use negative interest rates as some other central banks have done, and a willingness to renew Fed bond purchases and expand the Fed’s balance sheet to fight a future downturn.For Waller, that is an extension of his 11 years working at the Fed and helping shape current policy as a key adviser to St. Louis Fed President James Bullard.

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie

For Shelton, it was a seeming reversal from her earlier views that “quantitative easing” amounted to an inappropriate Fed intervention in markets that was inflating stock prices but doing little for the economy.

After cutting rates to zero, quantitative easing “is your only alternative,” Shelton said in response to a sharp and insistent series of questions from Louisiana Republican Senator John Kennedy on how she would respond to a downturn. Following the hearing, he remained undecided on whether to support Shelton’s nomination, according to an aide.

“It seems like you are taking a 180 degree position on all of this just to be appointed,” said Nevada Democratic Senator Catherine Cortez Masto. “Who are we getting?”

Additional reporting by Ann Saphir in San Francisco; Editing by Chizu Nomiyama, Dan Grebler and Andrea Ricci

Our Standards:The Thomson Reuters Trust Principles.

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Divided Fed set to chop rates of interest this week, however then what?

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SAN FRANCISCO (Reuters) – Deep disagreements inside the Federal Reserve over the financial outlook and the way the U.S. central financial institution ought to reply is not going to cease policymakers from chopping rates of interest at a two-day assembly that begins on Tuesday.

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell testifies earlier than a Senate Banking, Housing and City Affairs Committee listening to on the “Semiannual Financial Coverage Report back to Congress” on Capitol Hill in Washington DC, U.S., July 11, 2019. REUTERS/Leah Millis/File Photograph

Whereas an oil worth spike after assaults on Saudi Arabian oil amenities over the weekend added to the checklist of dangers dealing with an financial system already slowed by ongoing commerce tensions and world weak spot, the deep divide evident across the Fed’s policymaking desk means additional charge cuts could possibly be removed from a accomplished deal.

At one finish of the Fed’s large boardroom sit St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari, who’re anticipated to argue for a steep discount in borrowing prices to counter low inflation and an inverted Treasury yield curve.

Pushback from the alternative finish is prone to come from Cleveland Fed President Loretta Mester, who opposed the Fed’s charge minimize in July, and Philadelphia Fed President Patrick Harker, who solely reluctantly supported it and says he needs to depart charges the place they’re “to see how issues play out.”

Fed Chair Jerome Powell, seated halfway down the desk, faces the fragile activity of taking over board these views and the disparate arguments of the opposite dozen policymakers to construct consensus.

(To chop or to not minimize? right here)

(Communications breakdown: right here)

A high problem: making sense of financial information that means the U.S. manufacturing trade could also be contracting and inflation stays weak, at the same time as households proceed to spend and employers total are including loads of jobs.

“The discord is extraordinarily seen,” mentioned Gregory Daco, chief U.S. economist at Oxford Economics. “Should you take a look at the financial system right now, you take a look at an financial system that’s bifurcated … The important thing query is whether or not that weak spot seeps by means of the financial system, and whether or not that’s aggravated.”

For the reason that Fed’s 8-2 resolution to chop charges in July, a transfer that Powell referred to as a ‘mid-cycle’ adjustment, the financial information has delivered combined indicators.

Sturdy retail gross sales and continued wage progress might add to Boston Fed President Eric Rosengren’s confidence that present financial circumstances don’t justify additional coverage easing. He dissented within the July coverage resolution.

The continuing U.S.-China commerce battle makes Dallas Fed President Robert Kaplan amongst others involved about slowing manufacturing unit output and a slide in enterprise funding. Kaplan supported July’s charge minimize.

‘MIXED OPINION’

The latest wild card to consider to the talk emerged unexpectedly in Saturday’s assaults on the Saudi oil amenities, which triggered the most important spike in oil costs in additional than 20 years. [nL5N2674W4][nL5N2672I3]

Fed officers might see the event both as a danger to an already fragile progress outlook, which might help the case for extra easing, or as a fine addition to inflation, which might again a case for standing nonetheless for now.

Merchants of futures contracts tied to the Fed’s coverage charge have been pricing in, as of Monday afternoon, a 65.8% probability that the central financial institution would minimize its benchmark in a single day lending charge by 1 / 4 of a proportion level to a variety of 1.75% to 2% on Wednesday.

And although the conviction for additional charge hikes has softened since final week, merchants total proceed to anticipate yet another discount in borrowing prices by the tip of the yr.

“If everybody was on the identical web page on the Fed I might perceive it,” mentioned Lee Ferridge, head of macro technique for North America at State Road World Markets.

“However clearly there’s disagreement on the Fed … If the Fed may be very cut up and Powell can’t give a powerful sign, doesn’t that indicate only a few strikes are possible, reasonably than these dramatic cuts?”

Fed policymakers will deliver to the assembly their very own views of the place charges ought to be by December. In June, the final time they printed their forecasts, about half of policymakers anticipated a complete of two charge cuts this yr; about half thought no charges can be applicable.

That divide within the so-called Fed “dot plot” has borne little relation to how coverage has truly formed up, but it surely might add to confusion over the speed outlook after the conclusion of this week’s assembly.

With extra dovish policymakers like Bullard, Kashkari and Chicago Fed President Charles Evans calling for extra easing, and extra hawkish policymakers like Mester, Harker and Kansas Metropolis Fed President Esther George extra skeptical, “anticipate the 2019 dots to mirror this combined opinion,” mentioned Jefferies economist Ward McCarthy.

Reporting by Ann Saphir; Enhancing by Dan Burns and Paul Simao

Our Requirements:The Thomson Reuters Belief Ideas.

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Zeitgeist: The Movie (2010)



Zeitgeist: The Movie is a 2007 documentary film by Peter Joseph. This movie was first presented as a public performance and was later published online, along with a website: This version includes…

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ZEITGEIST: THE MOVIE | 2007 (HD)



“Zeitgeist: The Movie” is the first film which is directed and produced by Peter Joseph in 2007. *PLEASE SHARE WITH EVERYONE* More information can be found here: http://www.zeitgeistthefilm.com…

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