Date: September 11, 2019
Trump Adds to Pressure on Fed, Seeking Rates of Zero ‘Or Less’
“President Donald Trump urged the Federal Reserve to lower interest rates to a level typically reserved for recessions or periods of persistently weak growth, suggesting that such a setting could allow the government to refinance Treasury debt at a lower cost. The Fed should “get our interest rates down to ZERO, or less,” Trump said in an early Wednesday tweet that went beyond his previous attacks and demand for a cut of one percentage point. “We should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term.” Monetary authorities such as the European Central Bank, the Swiss National Bank and the Bank of Japan have had policies on interest rates that are effectively below zero, as a way to boost demand for loans and stimulate sluggish economies. The Fed’s benchmark rate is currently 2%-2.25% following a quarter-point reduction on July 31 — the first cut since the Fed lowered rates effectively to zero in 2008, during the worst financial crisis and economic downturn since the Great Depression. With Trump polling behind several Democratic candidates in his 2020 re-election campaign and Americans fearing a recession within the next year, the president is seeking to deflect blame for any economic ills. He has repeatedly blamed the Fed and Chairman Jerome Powell, who goes by Jay, for raising interest rates too steeply in 2018 and constraining the economy as the president pursues a trade war with China. “No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing,” Trump continued in the post. “A once in a lifetime opportunity that we are missing because of ‘Boneheads.’” ”
Boris Johnson’s Suspension of Parliament is Unlawful, Scottish Court Rules
Prime Minister Boris Johnson lost a Scottish court ruling on the suspension of Parliament, throwing the deadlocked British political system into even greater confusion ahead of the Oct. 31 Brexit date. “The court, in a short ruling, said that the purpose of the Prime Minister’s move was to unlawfully “stymie” Parliament. The unanimous decision Wednesday by a panel of Edinburgh appeal judges will set up a showdown in the U.K. Supreme Court, which will take up the issue next week. “My message to Boris Johnson is you are playing fast and loose with the law,” Ian Blackford, a Scottish member of Parliament, said in a tweet. “You have acted in an anti-democratic manner and need to respond by recalling Parliament.” While Johnson had suffered several political defeats in Parliament, until now he had fared better in court with victories in London and at a lower court in Edinburgh. The threat of prorogation galvanized Labour politicians and a group of Conservative rebels into passing a bill requiring the prime minister to push back the date when the U.K. leaves the European Union if he can’t get a deal in Brussels. A group of more than 70 lawmakers had argued that the prime minister’s move — which took effect Monday night — was unconstitutional because it curtailed debate in the run-up to the deadline for Britain’s exit from the EU. “I have never been able to contemplate the possibility that the law could be that our sovereign Parliament might be treated as an inconvenience by the Prime Minister,” Jolyon Maugham, the attorney spearheading the Scottish case, said after the ruling. “I am pleased that Scotland’s highest court agrees.” “
China Exempts Certain Products From Tariffs
“China announced a range of U.S. goods to be exempted from 25% extra tariffs put in place last year, as the government seeks to ease the impact from the trade war without lifting charges on major agricultural items like soybeans and pork. Pharmaceuticals and lubricant oil are among exclusions to levies on imports announced by the Ministry of Finance on its website on Wednesday. The exemptions, effective from Sept. 17 to Sept. 16 2020, will cover 16 categories of products worth about $1.65 billion, according to Bloomberg calculations based on China’s 2018 trade data. Other products on the list include alfalfa, fish meal and pesticides. Today’s exemptions apply to the round of tariffs China imposed on U.S. goods starting last July in retaliation for higher U.S. levies. The Chinese government began accepting applications for tariff exemptions in May, but it is the first time they have stated which products will be excluded. The U.S. Trade Representative’s Office has announced six rounds of exclusions for the punitive tariffs on $34 billion in Chinese goods since December.”
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