January 24, 2020
United States:
Even the Fed Struggles to Nail Down the Meaning of ‘Full Employment’
“The year 2019 was humbling for the Federal Reserve. The central bank was forced to unwind a series of interest-rate hikes it had implemented the year before, citing strains on the U.S. economy from President Donald Trump’s trade wars and a global slowdown. In the process, the central bank appeared to be sacrificing its autonomy by caving in to Trump’s relentless demands for cheap money. There was still another reason for the Fed’s reversal, one that goes to the heart of the institution’s dual mandate of ensuring full employment and stable prices. It had underestimated how many jobless Americans were still out there—not technically counted as unemployed but willing to work.”
Europe:
Brexit Deal Passes Penultimate EU Hurdle With Committee Approval
“Boris Johnson’s Brexit deal won support from the European Parliament’s most influential members on Thursday, making the agreement’s approval effectively a formality. The assembly’s constitutional affairs committee voted by 23 to 3 in favor of the withdrawal deal agreed between Johnson and the bloc in October. Earlier on Thursday, the agreement passed into U.K. law after being signed by Queen Elizabeth II.”
Asia:
Bank Indonesia Holds Key Rate, Leaves Door Ajar for Future Cuts
“Indonesia’s central bank left its benchmark interest rate unchanged for a third straight month, saying the economic outlook is improving even as the door remains open for future rate cuts. Bank Indonesia kept the seven-day reverse repurchase rate unchanged at 5% Thursday, as predicted by 29 of 34 economists surveyed by Bloomberg. The others expected a reduction of 25 basis points.”
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