web analytics
a

Facebook

Twitter

Copyright 2015 Libero Themes.
All Rights Reserved.

8:30 - 6:00

Our Office Hours Mon. - Fri.

703-406-7616

Call For Free 15/M Consultation

Facebook

Twitter

Search
Menu
Westlake Legal Group > United States Economy

He’s the President Democratic Voters Don’t Want to Hear Criticized

In some of the tensest moments of the 2020 debates, a viewer might have concluded that Democrats were poised for a large-scale clash over the legacy of President Barack Obama.

There have been heated arguments about whether to stick with Mr. Obama’s architecture for health care policy or to pursue a single-payer system, and flashes of direct criticism over his record on immigration. In televised debates, Democratic rivals like Julián Castro have pressed his former vice president, Joseph R. Biden Jr., to repudiate the large-scale deportations carried out under Mr. Obama’s watch.

There have also been defiant professions of loyalty, delivered as though Mr. Obama were under siege from fellow Democrats. Mr. Biden, the Democratic front-runner, has made these moments a hallmark of his candidacy: “I stand with Barack Obama all eight years, good, bad, indifferent,” he said at the last debate.

Yet among the vast majority of Democratic voters, there is little appetite for a brawl over the merits of Mr. Obama’s record. And while Mr. Obama’s consensus-seeking liberalism appeals to many Democratic voters, few appear to be thinking about the 2020 primary as a forum for determining which candidate would follow Mr. Obama’s exact policy blueprint.

Interviews with Democratic voters and party leaders found near-unanimous admiration for the former president and his policies, a sense of nostalgia for what they recall as his dignified conduct — and, at the same time, a hunger for something new.

Mr. Obama remains immensely popular among Democrats: In a poll published Tuesday by NBC News and The Wall Street Journal, nine in 10 Democrats said they viewed him in positive terms. More than three quarters said they believed Mr. Obama “did as much as was possible at the time in addressing the issues facing the country.”

[Which Democrats are leading the 2020 presidential race this week?]

Mr. Obama has kept a low profile in the presidential race, meeting privately with many of the Democratic candidates but telling associates that he does not see it as his place to direct the party’s future. He has expressed interest, at different times, in rising stars like former Representative Beto O’Rourke of Texas and Mayor Pete Buttigieg of South Bend, Ind. Mr. Obama had issued a warm statement about Mr. Biden’s entry into the primary but had declined to endorse him or anyone else.

An Obama family photo on a bag at a campaign rally.CreditDemetrius Freeman for The New York Times At a rally for Joseph R. Biden Jr., a woman with a President Obama sweatshirt.CreditAlicia Vera for The New York Times

Some of the aura around Mr. Obama surrounds Mr. Biden, too, granting him much of the party’s good will.

“He was with President Obama,” said Tajshiek Nehemiah, 31, who watched Mr. Biden deliver a speech in Birmingham, Ala., last Sunday. “I like the way he spoke as vice president, what he stood for, what he believes.”

But Democrats supporting other candidates have no difficulty reconciling that preference with their affection for Mr. Obama. And they do not necessarily connect the social problems the left is most focused on, like economic inequality and health care costs, to the agenda Mr. Obama pursued on those issues.

“I love Obama,” Maureen Conboy, a lawyer in New York, said Monday after watching Senator Elizabeth Warren of Massachusetts give a speech in Washington Square Park. “He made mistakes but he’s honest, he really cared — you could just tell he’s a good person.”

Ms. Conboy also said that was the past.

“I think re-litigating what happened, making this about Obama, the Obama administration, is the wrong thing,” she said, adding, “We’ve got to look forward, and if it’s Biden, we’re going to do nothing but looking back.”

Patrick Dillon, Mr. Obama’s former deputy political director in the White House, said many Democrats shared that mind-set. He said candidates had to offer new ideas, but saw little evidence that skepticism of Mr. Obama was growing.

“I think every candidate has to talk about how they’re going to build forward from the Obama legacy,” said Mr. Dillon, who is married to Mr. O’Rourke’s campaign manager but is not working for the campaign. “The notion of ‘building on’ seems to have won the conversation, versus the notion of aggressively reassessing or tearing down.”

A spokesman for Mr. Obama declined to comment.

[Sign up for our politics newsletter hosted by Lisa Lerer and join the conversation around the 2020 presidential race.]

That any Democrat might consider running as an Obama clone underscores his unusual political stature. No recent former president has enjoyed a comparable glow immediately after leaving office. Even relatively popular presidents were seen as more tainted: for Ronald Reagan, there was Iran-Contra; for Bill Clinton, the lurid ripples of impeachment.

Mr. Obama is different, especially for Democrats. If elements of his political ethos have gone out of vogue — his peacemaking with Wall Street, for instance, or his championing of free-trade agreements — the Democratic candidates who have departed from his approach have shown no desire to make that split explicit.

A “miss you” shirt with President Obama’s photo.CreditJonathan Ernst/Reuters A supporter of Mr. Biden sports campaign material touting the Obama-Biden relationship.CreditMark Makela/Getty Images

The two most prominent liberals in the race, Ms. Warren and Mr. Sanders, have couched their calls for sweeping policy change within praise for Mr. Obama, all but erasing disagreements they had with him in the past. In demanding a single-payer health care system, they have praised the Affordable Care Act and called “Medicare for All” a logical next step. Whether Mr. Biden can successfully brand that stance as a rejection of Mr. Obama, as he attempted to do at the last debate, remains to be seen.

For now, the liberals’ approach has worked with some Democrats in the early-voting states. Zach Simonson, a Democratic county chairman in Wapello County, Iowa, said if Democrats took the view that Mr. Obama “made zero mistakes, or that he didn’t even leave anything unfinished, then we have nothing to run on but undoing the Trump presidency.”

“We can’t be the party of ‘Make America 2016 Again,’” Mr. Simonson said. “Being for hope and change and progress is the best way to carry on the Obama legacy.”

JoAnn Hardy, a party leader in Iowa’s Cerro Gordo County, said she saw Mr. Biden as “best positioned to carry on Obama’s legacy” because of their close relationship. But she said she believed all the candidates had “respect for Obama and his policies.”

“I think some of those proposing policies different from Obama are just moving the policies another step toward realization,” Ms. Hardy, who is neutral in the race, said.

More Coverage of Barack Obama and the Democratic Primary
Attacks on Biden in Debate Highlight Divide Over the Obama Legacy

Sept. 12, 2019

Obama Quietly Gives Advice to 2020 Democrats, but No Endorsement

Feb. 18, 2019

Democratic Candidates Praise Labor — and the Obama Legacy, Too

Aug. 3, 2019

Liberal Democrats Ruled the Debates. Will Moderates Regain Their Voices?

June 29, 2019

Blunter criticism of Mr. Obama has been left to more desperate candidates, like Mayor Bill de Blasio of New York City, who have sought traction by courting activists with intense but narrow grievances about Obama-era policies, particularly on immigration, trade and national security.

John Anzalone, a pollster for Mr. Biden who worked for Mr. Obama, said there was no strong Democratic constituency for such criticism. According to his research, Mr. Anzalone said, primary voters were pining not just for Mr. Obama as a person but for his steady, pragmatic approach, something he suggested Mr. Biden was well positioned to provide.

“They wish they could get back to the normalcy of someone like Barack Obama,” Mr. Anzalone said.

Mr. Obama’s enduring popularity owes much to his status as the first black president of the United States. And Mr. Biden’s standing in the race flows from his role as Mr. Obama’s steadfast defender, with his lead built on strong support from African-Americans.

“He had no problem with defending the president when asked to do so,” said Lashunda Scales, an Alabama Democrat who is president pro tempore of the Jefferson County Commission. She wasn’t making an endorsement, she said, but added, “that, to me, said a lot about his character.”

But African-American voters are far from uniform in preferring Mr. Biden, or in seeing the primaries as a referendum on Mr. Obama.

ImageWestlake Legal Group 18dems-obama-articleLarge He’s the President Democratic Voters Don’t Want to Hear Criticized United States Politics and Government United States Economy Presidential Election of 2020 Patient Protection and Affordable Care Act (2010) Obama, Barack Liberalism (US Politics) Democratic Party Debates (Political) Biden, Joseph R Jr

“We can’t be the party of ‘Make America 2016 Again,’” an Iowa county chairman said.CreditTravis Dove for The New York Times

Elizabeth Bowens, a retired hospitality worker in Myrtle Beach, S.C., said that she disliked the contentious tone of the Democratic race and that she longed for the Obama years. “Him and Michelle, that’s a beautiful couple,” she said.

But Ms. Bowens did not seem to be leaning toward Mr. Biden.

“It’s time for a woman,” she said.

To Mr. Obama’s sharpest critics on the left — chiefly activists and policy experts concerned with issues like financial regulation, drone warfare, immigration and criminal justice — his Teflon reputation can be frustrating.

Matt Stoller, a fellow at the liberal Open Markets Institute who is a scathing critic of Mr. Obama’s economic record, said he saw Democrats as caught between their personal reverence for Mr. Obama and the reality that the country faces “existential crises” — on matters like climate change and economic inequality — that Mr. Obama did not resolve.

At some point, Mr. Stoller said, Democrats might face a stark choice between Mr. Obama’s center-left policy framework and the agendas of liberal candidates they now favor. But Mr. Stoller acknowledged no such test had yet arrived.

“I’m still waiting for that moment when Democrats are going to have to make that choice,” he said.

There is no guarantee that it will ever arrive. And the choice Democratic primary voters see before them now has less to do with Mr. Obama’s policies than with the immediate challenge of ousting President Trump.

Susan Chase, a retiree in Southport, N.C., said candidates who attacked Mr. Obama would not get her vote, and she criticized Senator Kamala Harris for attacking Mr. Biden in the first debate.

But that does not mean she will vote for Mr. Biden.

“Part of me says it’s time for something really new and different,” Ms. Chase said, “but then the other part says we’ve got to have somebody who can beat Trump.”

Jonathan Martin contributed from Galivants Ferry, S.C., Katie Glueck from Birmingham and Reid J. Epstein from Washington.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Trade Conflicts Weigh on Confidence, Posing a Risk to Trump

Westlake Legal Group 19survey1-facebookJumbo Trade Conflicts Weigh on Confidence, Posing a Risk to Trump United States Politics and Government United States Economy Trump, Donald J Presidential Election of 2020 Polls and Public Opinion International Trade and World Market Customs (Tariff) Consumer Behavior

Economists and business leaders have been warning for months that President Trump’s trade war could damage the economy. The American public increasingly shares those concerns.

Consumers have been a bulwark of support for the economy, remaining confident even as hiring has slowed, the manufacturing sector has slumped and financial markets have grown volatile. But cracks are beginning to show. Several major measures of consumer sentiment have dipped in recent weeks, with many consumers citing tariffs as a reason for their pessimism.

Fifty-eight percent of Americans say the conflict with China will be bad for the United States, according to a survey this month for The New York Times by the online research platform SurveyMonkey. That’s up from 53 percent in June, the last time that question was asked. An even larger share of respondents, 63 percent, think Mr. Trump’s trade policies will be bad for the economy, at least in the short term, also up from an earlier survey.

There are signs the White House is taking notice. The administration is racing to secure limited trade deals with Japan and India before the end of the month that would open their markets to American farmers. And last week, the Trump administration said it would delay a round of tariff increases on China scheduled for next month. Mr. Trump described the decision as a “gesture of good will,” but some analysts saw a political motivation: Farmers, a key constituency for Mr. Trump, have grown increasingly frustrated with the administration’s trade policies.

Stories of struggling farmers are proving influential even with voters outside farm country.

“The trade war with China, I feel like, is just destroying farmers and agriculture industry,” said Ashley Connor, who sells beauty products from her home in Nashville.

Ms. Connor, a 39-year-old mother of two, is about to start a job with UPS. She is also considering working part time at an Amazon warehouse. But while plenty of jobs are available, few pay a living wage, at least for people like her who lack a college degree, she said. The trade fight, she added, is emblematic of Mr. Trump’s overall approach to the economy.

“He’s taking care of all his rich friends, and he’s kind of gutting every program for lower- and middle-class families,” she said. “I just don’t feel like the economy is set up for people like me.”

Consumer sentiment has proved resilient. One closely watched measure, from the University of Michigan, rebounded in September after falling sharply in August, although it is still down over the past year. Actual spending has stayed strong.

“There’s not one big crisis, just a general sense of unease,” said Laura Wronski, a research scientist for SurveyMonkey. “We have all these same underlying conditions of political uncertainty and uncertainty about the likelihood of a recession, but people are still, over all, optimistic about where things are.”

Aditya Bhave, an economist at Bank of America Merrill Lynch, said tariffs had done relatively little to dent consumer confidence so far. But he said that could change if the Trump administration followed through on threats to raise tariffs on consumer goods, and if the uncertainty around trade caused an economic slowdown or layoffs.

Those risks could be rising. In a report on Thursday, the Organization for Economic Cooperation and Development downgraded its economic outlook for the United States and the world as a whole, saying that “escalating trade policy tensions are taking an increasing toll on confidence and investment.” The Paris-based research and policy agency now expects United States economic output to grow 2.4 percent this year and 2 percent next year, more modest gains than estimated previously.

The administration has continued to defend its policies, arguing that Mr. Trump’s trade war will ultimately deliver benefits for the global economy by reforming China’s trading practices, and that naysayers are exaggerating the negative trends.

Speaking at the U.S. Chamber of Commerce on Tuesday, Larry Kudlow, the director of Mr. Trump’s National Economic Council, pointed to recent data showing that industrial production rebounded in August, and argued that the American economy had the potential to grow at 3 percent “or better.”

“The outlook for growth is good,” he said. “There’s certainly no recession.”

But business leaders who are bearing the costs of the trade war have been blunt.

On Wednesday, the Business Roundtable, an organization of corporate chief executives, said its members’ economic outlook had fallen sharply in the third quarter. More than half of the executives in the group’s survey reported that tariffs had caused a somewhat or very negative impact on their sales. Companies said they expected to hire fewer people and invest less in coming months.

“American businesses now have their foot poised above the brake, and they’re tapping the brake periodically,” Joshua Bolten, the organization’s president, said in a statement. “Uncertainty is preventing the full potential of the economy from being unleashed, limiting growth and investment here in the U.S.”

The trade war is particularly unpopular among people like Ms. Connor who disapprove of Mr. Trump’s broader performance in office. But the Times survey found concern even among those more sympathetic to the president. Two-thirds of independents say the fight with China will be bad for the United States, and support has also softened somewhat among Republicans. (Among those who strongly approve of Mr. Trump, however, only 11 percent say the conflict will be bad for the country.)

Travis Wolff, a recruiter for a trucking company in Lubbock, Tex., describes himself as a moderate who tends toward conservatism on economic issues. He didn’t vote for either major-party candidate in the last presidential election. While Mr. Trump has exceeded his expectations in office, Mr. Wolff said, he doesn’t like the president’s approach to trade.

“I don’t think tariffs are necessarily beneficial to either country,” he said. “It’s not like government is paying for that. We’re paying for that. We’re bearing the brunt of it.”

Mr. Wolff, 37, said the economy was doing well in his area now, thanks to the West Texas oil boom, but said he didn’t feel that Mr. Trump deserved much credit for that — and he thinks a recession is likely next year. He said he would consider voting for a Democrat in 2020, particularly if the nominee was one of the more moderate candidates, like former Vice President Joseph R. Biden Jr.

But Democratic presidential candidates have struggled to articulate to voters exactly what they would do differently from Mr. Trump on trade. While Senator Elizabeth Warren of Massachusetts and former Representative Beto O’Rourke of Texas have released detailed trade agendas, most of the other candidates have been vague on their plans, besides general criticism of Mr. Trump and a vow to work more closely with allies. In a debate last week, several candidates said they would not roll back Mr. Trump’s China tariffs immediately.

Bruce Friedman, a 67-year-old registered nurse in the Hudson Valley of New York, said tariffs were hurting farmers and consumers and were threatening the broader economy. He said Democrats should spend less time criticizing Mr. Trump and more time laying out their own plans.

“If they talked about trade and things like that, they might get ahead,” Mr. Friedman said. “That’s what they need to talk about, is how they’re going to help the working people, the middle class.”

But another survey respondent, Gustave Miracle, illustrated the delicate position facing Democrats. Mr. Miracle, a Catholic priest outside Boston, said he deeply opposed Mr. Trump’s immigration policies but appreciated his trade policies, which he saw as an effort to stand up for American workers.

“I appreciated the fact that there was a lot of talk about the blue collar in America,” he said of Mr. Trump’s 2016 campaign.

Mr. Miracle, 45, said he doubted that Mr. Trump’s policies would bring manufacturing jobs back to the United States. But he said they were worth trying.

“It’s moral to have that fight, to stand for the American laborer, for the American average citizen,” he said.

About the survey: The data in this article came from an online survey of 2,740 adults conducted by the polling firm SurveyMonkey from Sept. 2 to Sept. 8. The company selected respondents at random from the nearly three million people who take surveys on its platform each day. Responses were weighted to match the demographic profile of the population of the United States. The survey has a modeled error estimate (similar to a margin of error in a standard telephone poll) of plus or minus three percentage points, so differences of less than that amount are statistically insignificant.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

A Clash Over Barack Obama’s Legacy? Democratic Voters Don’t Want to Hear It

In some of the tensest moments of the 2020 debates, a viewer might have concluded that Democrats were poised for a large-scale clash over the legacy of President Barack Obama.

There have been heated arguments about whether to stick with Mr. Obama’s architecture for health care policy or to pursue a single-payer system, and flashes of direct criticism over his record on immigration. In televised debates, Democratic rivals like Julián Castro have pressed his former vice president, Joseph R. Biden Jr., to repudiate the large-scale deportations carried out under Mr. Obama’s watch.

There have also been defiant professions of loyalty, delivered as though Mr. Obama were under siege from fellow Democrats. Mr. Biden, the Democratic front-runner, has made these moments a hallmark of his candidacy: “I stand with Barack Obama all eight years, good, bad, indifferent,” he said at the last debate.

Yet among the vast majority of Democratic voters, there is little appetite for a brawl over the merits of Mr. Obama’s record. And while Mr. Obama’s consensus-seeking liberalism appeals to many Democratic voters, few appear to be thinking about the 2020 primary as a forum for determining which candidate would follow Mr. Obama’s exact policy blueprint.

Interviews with Democratic voters and party leaders found near-unanimous admiration for the former president and his policies, a sense of nostalgia for what they recall as his dignified conduct — and, at the same time, a hunger for something new.

Mr. Obama remains immensely popular among Democrats: In a poll published Tuesday by NBC News and The Wall Street Journal, nine in 10 Democrats said they viewed him in positive terms. More than three quarters said they believed Mr. Obama “did as much as was possible at the time in addressing the issues facing the country.”

[Which Democrats are leading the 2020 presidential race this week?]

Mr. Obama has kept a low profile in the presidential race, meeting privately with many of the Democratic candidates but telling associates that he does not see it as his place to direct the party’s future. He has expressed interest, at different times, in rising stars like former Representative Beto O’Rourke of Texas and Mayor Pete Buttigieg of South Bend, Ind. Mr. Obama had issued a warm statement about Mr. Biden’s entry into the primary but had declined to endorse him or anyone else.

An Obama family photo on a bag at a campaign rally.CreditDemetrius Freeman for The New York Times At a rally for Joseph R. Biden Jr., a woman with a President Obama sweatshirt.CreditAlicia Vera for The New York Times

Some of the aura around Mr. Obama surrounds Mr. Biden, too, granting him much of the party’s good will.

“He was with President Obama,” said Tajshiek Nehemiah, 31, who watched Mr. Biden deliver a speech in Birmingham, Ala., last Sunday. “I like the way he spoke as vice president, what he stood for, what he believes.”

But Democrats supporting other candidates have no difficulty reconciling that preference with their affection for Mr. Obama. And they do not necessarily connect the social problems the left is most focused on, like economic inequality and health care costs, to the agenda Mr. Obama pursued on those issues.

“I love Obama,” Maureen Conboy, a lawyer in New York, said Monday after watching Senator Elizabeth Warren of Massachusetts give a speech in Washington Square Park. “He made mistakes but he’s honest, he really cared — you could just tell he’s a good person.”

Ms. Conboy also said that was the past.

“I think re-litigating what happened, making this about Obama, the Obama administration, is the wrong thing,” she said, adding, “We’ve got to look forward, and if it’s Biden, we’re going to do nothing but looking back.”

Patrick Dillon, Mr. Obama’s former deputy political director in the White House, said many Democrats shared that mind-set. He said candidates had to offer new ideas, but saw little evidence that skepticism of Mr. Obama was growing.

“I think every candidate has to talk about how they’re going to build forward from the Obama legacy,” said Mr. Dillon, who is married to Mr. O’Rourke’s campaign manager but is not working for the campaign. “The notion of ‘building on’ seems to have won the conversation, versus the notion of aggressively reassessing or tearing down.”

[Sign up for our politics newsletter hosted by Lisa Lerer and join the conversation around the 2020 presidential race.]

That any Democrat might consider running as an Obama clone underscores his unusual political stature. No recent former president has enjoyed a comparable glow immediately after leaving office. Even relatively popular presidents were seen as more tainted: for Ronald Reagan, there was Iran-Contra; for Bill Clinton, the lurid ripples of impeachment.

Mr. Obama is different, especially for Democrats. If elements of his political ethos have gone out of vogue — his peacemaking with Wall Street, for instance, or his championing of free-trade agreements — the Democratic candidates who have departed from his approach have shown no desire to make that split explicit.

A “miss you” shirt with President Obama’s photo.CreditJonathan Ernst/Reuters A supporter of Mr. Biden sports campaign material touting the Obama-Biden relationship.CreditMark Makela/Getty Images

The two most prominent liberals in the race, Ms. Warren and Mr. Sanders, have couched their calls for sweeping policy change within praise for Mr. Obama, all but erasing disagreements they had with him in the past. In demanding a single-payer health care system, they have praised the Affordable Care Act and called “Medicare for All” a logical next step. Whether Mr. Biden can successfully brand that stance as a rejection of Mr. Obama, as he attempted to do at the last debate, remains to be seen.

For now, the liberals’ approach has worked with some Democrats in the early-voting states. Zach Simonson, a Democratic county chairman in Wapello County, Iowa, said if Democrats took the view that Mr. Obama “made zero mistakes, or that he didn’t even leave anything unfinished, then we have nothing to run on but undoing the Trump presidency.”

“We can’t be the party of ‘Make America 2016 Again,’” Mr. Simonson said. “Being for hope and change and progress is the best way to carry on the Obama legacy.”

JoAnn Hardy, a party leader in Iowa’s Cerro Gordo County, said she saw Mr. Biden as “best positioned to carry on Obama’s legacy” because of their close relationship. But she said she believed all the candidates had “respect for Obama and his policies.”

“I think some of those proposing policies different from Obama are just moving the policies another step toward realization.,” Ms. Hardy, who is neutral in the race, said.

More Coverage of Barack Obama and the Democratic Primary
Attacks on Biden in Debate Highlight Divide Over the Obama Legacy

Sept. 12, 2019

Obama Quietly Gives Advice to 2020 Democrats, but No Endorsement

Feb. 18, 2019

Democratic Candidates Praise Labor — and the Obama Legacy, Too

Aug. 3, 2019

Liberal Democrats Ruled the Debates. Will Moderates Regain Their Voices?

June 29, 2019

Blunter criticism of Mr. Obama has been left to more desperate candidates, like Mayor Bill de Blasio of New York City, who have sought traction by courting activists with intense but narrow grievances about Obama-era policies, particularly on immigration, trade and national security.

John Anzalone, a pollster for Mr. Biden who worked for Mr. Obama, said there was no strong Democratic constituency for such criticism. According to his research, Mr. Anzalone said, primary voters were pining not just for Mr. Obama as a person but for his steady, pragmatic approach, something he suggested Mr. Biden was well positioned to provide.

“They wish they could get back to the normalcy of someone like Barack Obama,” Mr. Anzalone said.

Mr. Obama’s enduring popularity owes much to his status as the first black president of the United States. And Mr. Biden’s standing in the race flows from his role as Mr. Obama’s steadfast defender, with his lead built on strong support from African-Americans.

“He had no problem with defending the president when asked to do so,” said Lashunda Scales, an Alabama Democrat who is president pro tempore of the Jefferson County Commission. She wasn’t making an endorsement, she said, but added, “that, to me, said a lot about his character.”

But African-American voters are far from uniform in preferring Mr. Biden, or in seeing the primaries as a referendum on Mr. Obama.

ImageWestlake Legal Group 18dems-obama-articleLarge A Clash Over Barack Obama’s Legacy? Democratic Voters Don’t Want to Hear It United States Politics and Government United States Economy Presidential Election of 2020 Patient Protection and Affordable Care Act (2010) Obama, Barack Liberalism (US Politics) Democratic Party Debates (Political) Biden, Joseph R Jr

“We can’t be the party of ‘Make America 2016 Again,’” an Iowa county chairman said.CreditTravis Dove for The New York Times

Elizabeth Bowens, a retired hospitality worker in Myrtle Beach, S.C., said that she disliked the contentious tone of the Democratic race and that she longed for the Obama years.“Him and Michelle, that’s a beautiful couple,” she said.

But Ms. Bowens did not seem to be leaning toward Mr. Biden.

“It’s time for a woman,” she said.

To Mr. Obama’s sharpest critics on the left — chiefly activists and policy experts concerned with issues like financial regulation, drone warfare, immigration and criminal justice — his Teflon reputation can be frustrating.

Matt Stoller, a fellow at the liberal Open Markets Institute who is a scathing critic of Mr. Obama’s economic record, said he saw Democrats as caught between their personal reverence for Mr. Obama and the reality that the country faces a “existential crises” — on matters like climate change and economic inequality — that Mr. Obama did not resolve.

At some point, Mr. Stoller said, Democrats might face a stark choice between Mr. Obama’s center-left policy framework and the agendas of liberal candidates they now favor. But Mr. Stoller acknowledged no such test had yet arrived.

“I’m still waiting for that moment when Democrats are going to have to make that choice,” he said.

There is no guarantee that it will ever arrive. And the choice Democratic primary voters see before them now has less to do with Mr. Obama’s policies than with the immediate challenge of ousting President Trump.

Susan Chase, a retiree in Southport, N.C., said candidates who attacked Mr. Obama would not get her vote, and she criticized Senator Kamala Harris for attacking Mr. Biden in the first debate.

But that does not mean she will vote for Mr. Biden.

“Part of me says it’s time for something really new and different,” Ms. Chase said, “but then the other part says we’ve got to have somebody who can beat Trump.”

Jonathan Martin contributed from Galivants Ferry, S.C., Katie Glueck from Birmingham and Reid J. Epstein from Washington.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Wall Street Is Buzzing About Repo Rates. Here’s Why.

Investors take for granted that the Federal Reserve controls interest rates. Rarely do they have to think about how.

But a surprisingly lively couple of days in short-term money markets has meant that the “how” became nearly as important as the “why.”

The stress started on Monday in the market for repurchase agreements, or repos. The repo market channels more than $1 trillion in funds through Wall Street every day, usually without fanfare. That money is used to pay for the day-to-day operations of big banks and hedge funds.

Then the Fed’s key interest rate, known as the federal funds rate, hit 2.3 percent on Tuesday. That’s above the central bank’s target, and the rise reflected unexpected strains.

The central bank on Wednesday cut interest rates by a quarter percentage point as part of its effort to ensure that the economic expansion continues. In addition, it took a series of steps to make sure short-term interest rates do what it wants. The Fed poured new money into markets for a second straight day and said that it would cut what it pays banks to keep excess reserves parked with it.

In the past, when the repo markets managed to make headlines, it was in exceptional episodes of market stress — for instance, in the early days of the financial crisis.

This time, there is little reason to worry that an economic catastrophe is in the offing. But the movement highlighted the importance of a market that usually operates in the background.

Repos are short-term loans mainly used by banks and hedge funds in their daily bond trading and brokerage businesses.

These firms typically pay for their investments with borrowed money, and the repo market provides those large sums of money on a daily basis. The money comes from other financial institutions like money market mutual funds that lend it out
for very short periods. A borrower in the repo market could take that cash for a single night, for example, to cover purchases made the day before.

But something went awry this week: The cost of taking out a loan in the repo market shot sharply higher starting on Monday, which caught people off guard.

An Unusual Rise in Interest Rates Roils a Crucial Financial Market

Sept. 16, 2019

Westlake Legal Group merlin_160914108_fa35b117-03c1-4493-9f36-3ef55714bdab-threeByTwoSmallAt2X Wall Street Is Buzzing About Repo Rates. Here’s Why. United States Economy Money Market Mutual Funds Interest Rates Federal Reserve System Credit and Debt Banking and Financial Institutions

Interest rates on overnight loans, which have averaged roughly 2.2 percent since early August, jumped to 2.88 percent on Monday. Then on Tuesday, they rose to as high as 6 percent.

Repo rates are meant to reflect the federal funds rate, and that’s falling as the central bank lowers its interest rate target to bolster the economy.

When there is a lot of money available for the big banks to borrow each night, rates stay low.

But in recent days, a number of factors had drained funds out of the market. Monday was a tax payment deadline for big companies and a holiday in Japan, which meant a large source of funds was shut off. And after a recent auction of government bonds, people had to divert cash to pay for those.

Those were the likely trigger events for this week’s surge. But the amount of money pooled in this market has been declining for a while. And that’s because of the Fed.

Since 2018, the Fed has been shrinking its holdings of bonds and reversing its crisis-era policy of pushing money into the financial system.

The change has effectively reduced the supply of money available in the short-term lending markets. The surge in short-term rates suggests that the Fed might have removed a bit too much, making reserves too scarce.

“The problem is, we don’t know what that minimum level is and we just smacked right into it,” said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities USA.

The repurchase market is just one of the short-term money markets where short-term cash and bank reserves are channeled to borrowers, and rate increases in one can influence others.

In the market for commercial paper — unsecured loans to banks and other large corporations — rates for overnight borrowing also surged.

The good news is, a brief increase in short-term interest rates will probably not mean much to the broader economy.

It could briefly raise the cost of trading at financial firms, hurting their profits. And if it persists, it could undermine the belief of those in the financial markets that the Federal Reserve can effectively apply monetary policy as it intends.

The main reason that the surge in the repo market has received attention is because it reminds people of the last time the market went haywire.

In August 2007, the repo markets suddenly tightened, in what turned out to be one of the earliest indications that there were deep problems in the financial system.

Then, the problems in the market were centered around the market for mortgage-backed securities, which were often labeled AAA, and were used by borrowers as collateral in the repurchase markets.

As investors began to become aware of the deep troubles of the American mortgage market, they began to avoid lending against mortgage collateral. Repo rates surged, reflecting the realization of increased credit risk in these kinds of bonds that were often built out of poorly made home loans.

Fed Jumps Into Market to Push Down Rates, a First Since the Financial Crisis

Sept. 17, 2019

Westlake Legal Group merlin_158555928_5e08d9c6-382d-4306-bf98-9bcab8a935cf-threeByTwoSmallAt2X Wall Street Is Buzzing About Repo Rates. Here’s Why. United States Economy Money Market Mutual Funds Interest Rates Federal Reserve System Credit and Debt Banking and Financial Institutions

The surge in repo rates does not mean that investors now think Treasury bonds are risky. If that were the case, interest rates in the bond market would be higher. In fact, they’re quite low. The yield on the 10-year note was roughly 1.8 percent on Wednesday.

“While these issues are important for market functioning and market participants, they have no implications for the economy or the stance of monetary policy,” the Fed chair, Jerome H. Powell, said a news conference on Wednesday.

Basically, the story of the repo market this week is essentially a hiccup for the technocrats at the central bank, leaving the markets without enough cash to go around.

That’s not great to see, but there is no reason to think this is the leading indicator of another financial crisis.

Jeanna Smialek contributed reporting.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Wall Street Is Buzzing About Repo Rates. Here’s Why.

Investors take for granted that the Federal Reserve controls interest rates. Rarely do they have to think about how.

But a surprisingly lively couple of days in short-term money markets has meant that the “how” became nearly as important as the “why.”

The stress started on Monday in the market for repurchase agreements, or repos. The repo market channels more than $1 trillion in funds through Wall Street every day, usually without fanfare. That money is used to pay for the day-to-day operations of big banks and hedge funds.

Then the Fed’s key interest rate, known as the federal funds rate, hit 2.3 percent on Tuesday. That’s above the central bank’s target, and the rise reflected unexpected strains.

The central bank on Wednesday cut interest rates by a quarter percentage point as part of its effort to ensure that the economic expansion continues. In addition, it took a series of steps to make sure short-term interest rates do what it wants. The Fed poured new money into markets for a second straight day and said that it would cut what it pays banks to keep excess reserves parked with it.

In the past, when the repo markets managed to make headlines, it was in exceptional episodes of market stress — for instance, in the early days of the financial crisis.

This time, there is little reason to worry that an economic catastrophe is in the offing. But the movement highlighted the importance of a market that usually operates in the background.

Repos are short-term loans mainly used by banks and hedge funds in their daily bond trading and brokerage businesses.

These firms typically pay for their investments with borrowed money, and the repo market provides those large sums of money on a daily basis. The money comes from other financial institutions like money market mutual funds that lend it out
for very short periods. A borrower in the repo market could take that cash for a single night, for example, to cover purchases made the day before.

But something went awry this week: The cost of taking out a loan in the repo market shot sharply higher starting on Monday, which caught people off guard.

An Unusual Rise in Interest Rates Roils a Crucial Financial Market

Sept. 16, 2019

Westlake Legal Group merlin_160914108_fa35b117-03c1-4493-9f36-3ef55714bdab-threeByTwoSmallAt2X Wall Street Is Buzzing About Repo Rates. Here’s Why. United States Economy Money Market Mutual Funds Interest Rates Federal Reserve System Credit and Debt Banking and Financial Institutions

Interest rates on overnight loans, which have averaged roughly 2.2 percent since early August, jumped to 2.88 percent on Monday. Then on Tuesday, they rose to as high as 6 percent.

Repo rates are meant to reflect the federal funds rate, and that’s falling as the central bank lowers its interest rate target to bolster the economy.

When there is a lot of money available for the big banks to borrow each night, rates stay low.

But in recent days, a number of factors had drained funds out of the market. Monday was a tax payment deadline for big companies and a holiday in Japan, which meant a large source of funds was shut off. And after a recent auction of government bonds, people had to divert cash to pay for those.

Those were the likely trigger events for this week’s surge. But the amount of money pooled in this market has been declining for a while. And that’s because of the Fed.

Since 2018, the Fed has been shrinking its holdings of bonds and reversing its crisis-era policy of pushing money into the financial system.

The change has effectively reduced the supply of money available in the short-term lending markets. The surge in short-term rates suggests that the Fed might have removed a bit too much, making reserves too scarce.

“The problem is, we don’t know what that minimum level is and we just smacked right into it,” said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities USA.

The repurchase market is just one of the short-term money markets where short-term cash and bank reserves are channeled to borrowers, and rate increases in one can influence others.

In the market for commercial paper — unsecured loans to banks and other large corporations — rates for overnight borrowing also surged.

The good news is, a brief increase in short-term interest rates will probably not mean much to the broader economy.

It could briefly raise the cost of trading at financial firms, hurting their profits. And if it persists, it could undermine the belief of those in the financial markets that the Federal Reserve can effectively apply monetary policy as it intends.

The main reason that the surge in the repo market has received attention is because it reminds people of the last time the market went haywire.

In August 2007, the repo markets suddenly tightened, in what turned out to be one of the earliest indications that there were deep problems in the financial system.

Then, the problems in the market were centered around the market for mortgage-backed securities, which were often labeled AAA, and were used by borrowers as collateral in the repurchase markets.

As investors began to become aware of the deep troubles of the American mortgage market, they began to avoid lending against mortgage collateral. Repo rates surged, reflecting the realization of increased credit risk in these kinds of bonds that were often built out of poorly made home loans.

Fed Jumps Into Market to Push Down Rates, a First Since the Financial Crisis

Sept. 17, 2019

Westlake Legal Group merlin_158555928_5e08d9c6-382d-4306-bf98-9bcab8a935cf-threeByTwoSmallAt2X Wall Street Is Buzzing About Repo Rates. Here’s Why. United States Economy Money Market Mutual Funds Interest Rates Federal Reserve System Credit and Debt Banking and Financial Institutions

The surge in repo rates does not mean that investors now think Treasury bonds are risky. If that were the case, interest rates in the bond market would be higher. In fact, they’re quite low. The yield on the 10-year note was roughly 1.8 percent on Wednesday.

“While these issues are important for market functioning and market participants, they have no implications for the economy or the stance of monetary policy,” the Fed chair, Jerome H. Powell, said a news conference on Wednesday.

Basically, the story of the repo market this week is essentially a hiccup for the technocrats at the central bank, leaving the markets without enough cash to go around.

That’s not great to see, but there is no reason to think this is the leading indicator of another financial crisis.

Jeanna Smialek contributed reporting.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Fed Cuts Interest Rates by Another Quarter Point

WASHINGTON — The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, its second cut since late July, and suggested it was prepared to move aggressively if the United States economy shows additional signs of weakening.

For now, a growing number of Fed officials expect just one more cut this year, based on economic projections released following the meeting, in line with investor and economist expectations.

Fed Chair Jerome H. Powell, speaking at a news conference said that the United States economy remains strong and unemployment is low but that “there are risks to this positive outlook.” If the economy weakens, a “more extensive” series of rate cuts would be appropriate, he said.

“Our eyes are open, we’re watching the situation,” Mr. Powell said, explaining that the Fed will stop cutting rates to sustain the expansion “when we think we’ve done enough.”

“There may come a time when the economy weakens and we would have to cut more aggressively,” he said. “We don’t know.”

The Fed’s announcement on Wednesday did little to appease President Trump, who has been pushing the central bank to cut interest rates to zero — or even into negative territory. The Fed’s policy interest rate is now set in a range of 1.75 to 2 percent, and not a single official sees it falling lower than 1.5 to 1.75 percent through the end of 2022.

“Jay Powell and the Federal Reserve Fail Again,” Mr. Trump said in a tweet shortly after the Fed’s announcement. “No ‘guts,’ no sense, no vision! A terrible communicator!”

Stocks, which were down slightly before the announcement, fell further afterward. Shortly before 2:30 p.m., the S&P 500 index was down 0.7 percent and the Nasdaq was down 1 percent. The yield on the 10-year Treasury note was down on the day, at roughly 1.77 percent.

The Fed’s decision-making has been complicated by mixed economic signals. While risks cloud the horizon, economic data remain solid, creating a complicated backdrop. Businesses are hiring and consumers are spending, but Mr. Trump’s trade war and prospects of an unruly British withdrawal from the European Union have markets on edge. Inflation has been stuck below the Fed’s 2 percent target, giving officials room to lower rates without worrying about runaway price gains.

Mr. Powell said the decision to cut rates stemmed from a need to guard against “some notable developments” and “ongoing risks.” Mr. Powell said trade uncertainty and geopolitical tensions necessitated action.

ImageWestlake Legal Group merlin_160978143_aba2961c-c178-480b-bd1b-169e1261c53a-articleLarge Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

The Fed’s decision to cut rates was not unanimous. Three officials dissented, with two objecting to a cut and one pushing for an even bigger cut.CreditT.J. Kirkpatrick for The New York Times

“Since the middle of last year, the global growth outlook has weakened,” Mr. Powell said. “Trade policy tensions have waxed and waned,” and “elevated uncertainty” is weighing on business investment and exports, he said.

In its official statement after its meeting, the Fed said policymakers “will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.”

While the median Fed official expects rates to stay at the current level through the end of the year, seven of 17 expect another rate cut. Not a single official expected three rate cuts in 2019 when the central bank last released economic projections in June, suggesting that momentum is shifting toward additional accommodation.

Mr. Powell addressed that shift, saying the change in the Fed’s policy stance over the course of the year is “the main takeaway.”

But officials are increasingly divided over what happens next. Three members of the rate-setting Federal Open Market Committee dissented in this month’s vote. James Bullard, the president of the Federal Reserve Bank of St. Louis, wanted a more drastic half-point rate cut and voted against moving by just a quarter point. Esther George, who heads the Federal Reserve Bank of Kansas, and Eric Rosengren, who heads the Federal Reserve Bank of Boston, thought that the central bank should keep borrowing costs steady. Ms. George and Mr. Rosengren also voted against the July rate cut.

Mr. Powell acknowledged the divisions, calling it “a time of difficult judgments” but saying he welcomed “diverse perspectives.”

He added that the bulk of the committee is going “meeting by meeting.”

The dissents underscore the economic and political challenges facing the Fed.

While the Fed operates independently of the White House and answers to Congress, Mr. Trump has made a regular habit of criticizing Mr. Powell and his colleagues.

“The Federal Reserve should get our interest rates down to ZERO, or less,” Mr. Trump tweeted on Sept. 11. “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.”

Officials regularly say they set policy with an eye to the longer-term economic outlook, not short-term political concerns, but Mr. Trump’s onslaught creates an optics problem for the Fed. Some share of the population could see rate cuts, like Wednesday’s, as a sign that the central bank is caving to political pressure, particularly given that it was not a unanimous decision.

But there is an economic rationale for lowering rates sooner rather than later, since doing so could keep credit flowing, helping to keep consumer and business spending as uncertainty climbs.

Westlake Legal Group fed-second-rate-cut-promo-1568827337935-articleLarge-v2 Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

Why the Fed Lowered Interest Rates Again

The Federal Reserve lowered interest rates for the second time this year, as it tries to guard the United States economy against trade-related uncertainty and slowing global growth.

The University of Michigan consumer sentiment index has drifted lower recently on the back of trade concerns, and jitters about the United States economy were also reflected in the Business Roundtable’s C.E.O. Economic Outlook Index, which declined to a three-year low in the third quarter.

Chief executives of the nation’s largest corporations have sharply lowered their plans for capital investment and their expectations for sales. Trade tensions were cited as a major factor for the worry that companies are feeling.

At the same time, employers are still hiring, wages are gradually rising and Americans in their prime have been coming back into the labor force. As households take home better paychecks, their spending is holding up, fueling strong retail sales. Even the housing market, which has struggled this year, shows signs of firming.

But global risks abound. Germany seems to be teetering on the brink of recession. Britain’s exit from the European Union remains fraught, and the United States’ trade war with China is dragging on.

Mr. Trump has placed tariffs on $360 billion worth of Chinese goods and plans to impose levies on nearly all Chinese imports by the end of the year. While the two nations are back at the negotiating table, it is unclear whether and when a deal could be reached.

The Fed has also struggled to coax inflation up to its 2 percent goal. The central bank aims for steady inflation that is low enough to allow for consumer comfort but high enough to leave policymakers extra headroom to cut interest rates, which include price gains, during a downturn.

Inflation came in at 1.6 percent in July, based on the Fed’s preferred gauge, and has been mired below its target for years. Inflation expectations, as measured by one New York Fed survey, have slipped both in the short- and the longer-term.

The Fed also lowered the rate of interest it pays on reserves — money commercial banks park at the central bank — to 1.8 percent, 0.2 percentage point below the top of the Fed’s preferred range. That technical tweak is meant to keep the Fed funds rate, which has been creeping up, anchored within its range.

It also directed the Federal Reserve Bank of New York’s trading desk to execute open market transactions as necessary and “until instructed otherwise,” to keep short-term lending rates from rising above the Fed’s target.

The move came after several days of wild activity in an important corner of financial markets.

The overnight rate on Treasury repurchase agreements, which are short-term loans used by financial institutions like hedge funds and banks, surged at the start of the week amid a shortage of dollars. A few technical factors seemed to contribute to the spike — including a corporate tax date, recent government bond issuance that sopped up cash and the aftereffects of the Fed’s shrinking of its balance sheet.

The jump pushed up the Fed’s key policy tool, the Fed funds rate, and forced the Federal Reserve Bank of New York to spring into action to keep it in line, a first since 2008.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Fed Cuts Interest Rates by Another Quarter Point

WASHINGTON — The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, its second cut since late July, and suggested it was prepared to move aggressively if the United States economy shows additional signs of weakening.

For now, a growing number of Fed officials expect just one more cut this year, based on economic projections released following the meeting, in line with investor and economist expectations.

Fed Chair Jerome H. Powell, speaking at a news conference said that the United States economy remains strong and unemployment is low but that “there are risks to this positive outlook.” If the economy weakens, a “more extensive” series of rate cuts would be appropriate, he said.

“Our eyes are open, we’re watching the situation,” Mr. Powell said, explaining that the Fed will stop cutting rates to sustain the expansion “when we think we’ve done enough.”

“There may come a time when the economy weakens and we would have to cut more aggressively,” he said. “We don’t know.”

The Fed’s announcement on Wednesday did little to appease President Trump, who has been pushing the central bank to cut interest rates to zero — or even into negative territory. The Fed’s policy interest rate is now set in a range of 1.75 to 2 percent, and not a single official sees it falling lower than 1.5 to 1.75 percent through the end of 2022.

“Jay Powell and the Federal Reserve Fail Again,” Mr. Trump said in a tweet shortly after the Fed’s announcement. “No ‘guts,’ no sense, no vision! A terrible communicator!”

Stocks, which were down slightly before the announcement, fell further afterward. Shortly before 2:30 p.m., the S&P 500 index was down 0.7 percent and the Nasdaq was down 1 percent. The yield on the 10-year Treasury note was down on the day, at roughly 1.77 percent.

The Fed’s decision-making has been complicated by mixed economic signals. While risks cloud the horizon, economic data remain solid, creating a complicated backdrop. Businesses are hiring and consumers are spending, but Mr. Trump’s trade war and prospects of an unruly British withdrawal from the European Union have markets on edge. Inflation has been stuck below the Fed’s 2 percent target, giving officials room to lower rates without worrying about runaway price gains.

Mr. Powell said the decision to cut rates stemmed from a need to guard against “some notable developments” and “ongoing risks.” Mr. Powell said trade uncertainty and geopolitical tensions necessitated action.

ImageWestlake Legal Group merlin_160978143_aba2961c-c178-480b-bd1b-169e1261c53a-articleLarge Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

The Fed’s decision to cut rates was not unanimous. Three officials dissented, with two objecting to a cut and one pushing for an even bigger cut.CreditT.J. Kirkpatrick for The New York Times

“Since the middle of last year, the global growth outlook has weakened,” Mr. Powell said. “Trade policy tensions have waxed and waned,” and “elevated uncertainty” is weighing on business investment and exports, he said.

In its official statement after its meeting, the Fed said policymakers “will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.”

While the median Fed official expects rates to stay at the current level through the end of the year, seven of 17 expect another rate cut. Not a single official expected three rate cuts in 2019 when the central bank last released economic projections in June, suggesting that momentum is shifting toward additional accommodation.

Mr. Powell addressed that shift, saying the change in the Fed’s policy stance over the course of the year is “the main takeaway.”

But officials are increasingly divided over what happens next. Three members of the rate-setting Federal Open Market Committee dissented in this month’s vote. James Bullard, the president of the Federal Reserve Bank of St. Louis, wanted a more drastic half-point rate cut and voted against moving by just a quarter point. Esther George, who heads the Federal Reserve Bank of Kansas, and Eric Rosengren, who heads the Federal Reserve Bank of Boston, thought that the central bank should keep borrowing costs steady. Ms. George and Mr. Rosengren also voted against the July rate cut.

Mr. Powell acknowledged the divisions, calling it “a time of difficult judgments” but saying he welcomed “diverse perspectives.”

He added that the bulk of the committee is going “meeting by meeting.”

The dissents underscore the economic and political challenges facing the Fed.

While the Fed operates independently of the White House and answers to Congress, Mr. Trump has made a regular habit of criticizing Mr. Powell and his colleagues.

“The Federal Reserve should get our interest rates down to ZERO, or less,” Mr. Trump tweeted on Sept. 11. “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.”

Officials regularly say they set policy with an eye to the longer-term economic outlook, not short-term political concerns, but Mr. Trump’s onslaught creates an optics problem for the Fed. Some share of the population could see rate cuts, like Wednesday’s, as a sign that the central bank is caving to political pressure, particularly given that it was not a unanimous decision.

But there is an economic rationale for lowering rates sooner rather than later, since doing so could keep credit flowing, helping to keep consumer and business spending as uncertainty climbs.

Westlake Legal Group fed-second-rate-cut-promo-1568827337935-articleLarge-v2 Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

Why the Fed Lowered Interest Rates Again

The Federal Reserve lowered interest rates for the second time this year, as it tries to guard the United States economy against trade-related uncertainty and slowing global growth.

The University of Michigan consumer sentiment index has drifted lower recently on the back of trade concerns, and jitters about the United States economy were also reflected in the Business Roundtable’s C.E.O. Economic Outlook Index, which declined to a three-year low in the third quarter.

Chief executives of the nation’s largest corporations have sharply lowered their plans for capital investment and their expectations for sales. Trade tensions were cited as a major factor for the worry that companies are feeling.

At the same time, employers are still hiring, wages are gradually rising and Americans in their prime have been coming back into the labor force. As households take home better paychecks, their spending is holding up, fueling strong retail sales. Even the housing market, which has struggled this year, shows signs of firming.

But global risks abound. Germany seems to be teetering on the brink of recession. Britain’s exit from the European Union remains fraught, and the United States’ trade war with China is dragging on.

Mr. Trump has placed tariffs on $360 billion worth of Chinese goods and plans to impose levies on nearly all Chinese imports by the end of the year. While the two nations are back at the negotiating table, it is unclear whether and when a deal could be reached.

The Fed has also struggled to coax inflation up to its 2 percent goal. The central bank aims for steady inflation that is low enough to allow for consumer comfort but high enough to leave policymakers extra headroom to cut interest rates, which include price gains, during a downturn.

Inflation came in at 1.6 percent in July, based on the Fed’s preferred gauge, and has been mired below its target for years. Inflation expectations, as measured by one New York Fed survey, have slipped both in the short- and the longer-term.

The Fed also lowered the rate of interest it pays on reserves — money commercial banks park at the central bank — to 1.8 percent, 0.2 percentage point below the top of the Fed’s preferred range. That technical tweak is meant to keep the Fed funds rate, which has been creeping up, anchored within its range.

It also directed the Federal Reserve Bank of New York’s trading desk to execute open market transactions as necessary and “until instructed otherwise,” to keep short-term lending rates from rising above the Fed’s target.

The move came after several days of wild activity in an important corner of financial markets.

The overnight rate on Treasury repurchase agreements, which are short-term loans used by financial institutions like hedge funds and banks, surged at the start of the week amid a shortage of dollars. A few technical factors seemed to contribute to the spike — including a corporate tax date, recent government bond issuance that sopped up cash and the aftereffects of the Fed’s shrinking of its balance sheet.

The jump pushed up the Fed’s key policy tool, the Fed funds rate, and forced the Federal Reserve Bank of New York to spring into action to keep it in line, a first since 2008.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Fed Cuts Interest Rates by Another Quarter Point

WASHINGTON — The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, its second cut since late July, and suggested it was prepared to move aggressively if the United States economy shows additional signs of weakening.

For now, a growing number of Fed officials expect just one more cut this year, based on economic projections released following the meeting, in line with investor and economist expectations.

Fed Chair Jerome H. Powell, speaking at a news conference said that the United States economy remains strong and unemployment is low but that “there are risks to this positive outlook.” If the economy weakens, a “more extensive” series of rate cuts would be appropriate, he said.

“Our eyes are open, we’re watching the situation,” Mr. Powell said, explaining that the Fed will stop cutting rates to sustain the expansion “when we think we’ve done enough.”

“There may come a time when the economy weakens and we would have to cut more aggressively,” he said. “We don’t know.”

The Fed’s announcement on Wednesday did little to appease President Trump, who has been pushing the central bank to cut interest rates to zero — or even into negative territory. The Fed’s policy interest rate is now set in a range of 1.75 to 2 percent, and not a single official sees it falling lower than 1.5 to 1.75 percent through the end of 2022.

“Jay Powell and the Federal Reserve Fail Again,” Mr. Trump said in a tweet shortly after the Fed’s announcement. “No ‘guts,’ no sense, no vision! A terrible communicator!”

Stocks, which were down slightly before the announcement, fell further afterward. Shortly before 2:30 p.m., the S&P 500 index was down 0.7 percent and the Nasdaq was down 1 percent. The yield on the 10-year Treasury note was down on the day, at roughly 1.77 percent.

The Fed’s decision-making has been complicated by mixed economic signals. While risks cloud the horizon, economic data remain solid, creating a complicated backdrop. Businesses are hiring and consumers are spending, but Mr. Trump’s trade war and prospects of an unruly British withdrawal from the European Union have markets on edge. Inflation has been stuck below the Fed’s 2 percent target, giving officials room to lower rates without worrying about runaway price gains.

Mr. Powell said the decision to cut rates stemmed from a need to guard against “some notable developments” and “ongoing risks.” Mr. Powell said trade uncertainty and geopolitical tensions necessitated action.

ImageWestlake Legal Group merlin_160978143_aba2961c-c178-480b-bd1b-169e1261c53a-articleLarge Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

The Fed’s decision to cut rates was not unanimous. Three officials dissented, with two objecting to a cut and one pushing for an even bigger cut.CreditT.J. Kirkpatrick for The New York Times

“Since the middle of last year, the global growth outlook has weakened,” Mr. Powell said. “Trade policy tensions have waxed and waned,” and “elevated uncertainty” is weighing on business investment and exports, he said.

In its official statement after its meeting, the Fed said policymakers “will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.”

While the median Fed official expects rates to stay at the current level through the end of the year, seven of 17 expect another rate cut. Not a single official expected three rate cuts in 2019 when the central bank last released economic projections in June, suggesting that momentum is shifting toward additional accommodation.

Mr. Powell addressed that shift, saying the change in the Fed’s policy stance over the course of the year is “the main takeaway.”

But officials are increasingly divided over what happens next. Three members of the rate-setting Federal Open Market Committee dissented in this month’s vote. James Bullard, the president of the Federal Reserve Bank of St. Louis, wanted a more drastic half-point rate cut and voted against moving by just a quarter point. Esther George, who heads the Federal Reserve Bank of Kansas, and Eric Rosengren, who heads the Federal Reserve Bank of Boston, thought that the central bank should keep borrowing costs steady. Ms. George and Mr. Rosengren also voted against the July rate cut.

Mr. Powell acknowledged the divisions, calling it “a time of difficult judgments” but saying he welcomed “diverse perspectives.”

He added that the bulk of the committee is going “meeting by meeting.”

The dissents underscore the economic and political challenges facing the Fed.

While the Fed operates independently of the White House and answers to Congress, Mr. Trump has made a regular habit of criticizing Mr. Powell and his colleagues.

“The Federal Reserve should get our interest rates down to ZERO, or less,” Mr. Trump tweeted on Sept. 11. “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.”

Officials regularly say they set policy with an eye to the longer-term economic outlook, not short-term political concerns, but Mr. Trump’s onslaught creates an optics problem for the Fed. Some share of the population could see rate cuts, like Wednesday’s, as a sign that the central bank is caving to political pressure, particularly given that it was not a unanimous decision.

But there is an economic rationale for lowering rates sooner rather than later, since doing so could keep credit flowing, helping to keep consumer and business spending as uncertainty climbs.

Westlake Legal Group fed-second-rate-cut-promo-1568827337935-articleLarge-v2 Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

Why the Fed Lowered Interest Rates Again

The Federal Reserve lowered interest rates for the second time this year, as it tries to guard the United States economy against trade-related uncertainty and slowing global growth.

The University of Michigan consumer sentiment index has drifted lower recently on the back of trade concerns, and jitters about the United States economy were also reflected in the Business Roundtable’s C.E.O. Economic Outlook Index, which declined to a three-year low in the third quarter.

Chief executives of the nation’s largest corporations have sharply lowered their plans for capital investment and their expectations for sales. Trade tensions were cited as a major factor for the worry that companies are feeling.

At the same time, employers are still hiring, wages are gradually rising and Americans in their prime have been coming back into the labor force. As households take home better paychecks, their spending is holding up, fueling strong retail sales. Even the housing market, which has struggled this year, shows signs of firming.

But global risks abound. Germany seems to be teetering on the brink of recession. Britain’s exit from the European Union remains fraught, and the United States’ trade war with China is dragging on.

Mr. Trump has placed tariffs on $360 billion worth of Chinese goods and plans to impose levies on nearly all Chinese imports by the end of the year. While the two nations are back at the negotiating table, it is unclear whether and when a deal could be reached.

The Fed has also struggled to coax inflation up to its 2 percent goal. The central bank aims for steady inflation that is low enough to allow for consumer comfort but high enough to leave policymakers extra headroom to cut interest rates, which include price gains, during a downturn.

Inflation came in at 1.6 percent in July, based on the Fed’s preferred gauge, and has been mired below its target for years. Inflation expectations, as measured by one New York Fed survey, have slipped both in the short- and the longer-term.

The Fed also lowered the rate of interest it pays on reserves — money commercial banks park at the central bank — to 1.8 percent, 0.2 percentage point below the top of the Fed’s preferred range. That technical tweak is meant to keep the Fed funds rate, which has been creeping up, anchored within its range.

It also directed the Federal Reserve Bank of New York’s trading desk to execute open market transactions as necessary and “until instructed otherwise,” to keep short-term lending rates from rising above the Fed’s target.

The move came after several days of wild activity in an important corner of financial markets.

The overnight rate on Treasury repurchase agreements, which are short-term loans used by financial institutions like hedge funds and banks, surged at the start of the week amid a shortage of dollars. A few technical factors seemed to contribute to the spike — including a corporate tax date, recent government bond issuance that sopped up cash and the aftereffects of the Fed’s shrinking of its balance sheet.

The jump pushed up the Fed’s key policy tool, the Fed funds rate, and forced the Federal Reserve Bank of New York to spring into action to keep it in line, a first since 2008.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Fed Cuts Interest Rates by Another Quarter Point

WASHINGTON — The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, its second cut since late July, and suggested it was prepared to move aggressively if the United States economy shows additional signs of weakening.

For now, a growing number of Fed officials expect just one more cut this year, based on economic projections released following the meeting, in line with investor and economist expectations.

Fed Chair Jerome H. Powell, speaking at a news conference said that the United States economy remains strong and unemployment is low but that “there are risks to this positive outlook.” If the economy weakens, a “more extensive” series of rate cuts would be appropriate, he said.

“Our eyes are open, we’re watching the situation,” Mr. Powell said, explaining that the Fed will stop cutting rates to sustain the expansion “when we think we’ve done enough.”

“There may come a time when the economy weakens and we would have to cut more aggressively,” he said. “We don’t know.”

The Fed’s announcement on Wednesday did little to appease President Trump, who has been pushing the central bank to cut interest rates to zero — or even into negative territory. The Fed’s policy interest rate is now set in a range of 1.75 to 2 percent, and not a single official sees it falling lower than 1.5 to 1.75 percent through the end of 2022.

“Jay Powell and the Federal Reserve Fail Again,” Mr. Trump said in a tweet shortly after the Fed’s announcement. “No ‘guts,’ no sense, no vision! A terrible communicator!”

Stocks, which were down slightly before the announcement, fell further afterward. Shortly before 2:30 p.m., the S&P 500 index was down 0.7 percent and the Nasdaq was down 1 percent. The yield on the 10-year Treasury note was down on the day, at roughly 1.77 percent.

The Fed’s decision-making has been complicated by mixed economic signals. While risks cloud the horizon, economic data remain solid, creating a complicated backdrop. Businesses are hiring and consumers are spending, but Mr. Trump’s trade war and prospects of an unruly British withdrawal from the European Union have markets on edge. Inflation has been stuck below the Fed’s 2 percent target, giving officials room to lower rates without worrying about runaway price gains.

Mr. Powell said the decision to cut rates stemmed from a need to guard against “some notable developments” and “ongoing risks.” Mr. Powell said trade uncertainty and geopolitical tensions necessitated action.

ImageWestlake Legal Group merlin_160978143_aba2961c-c178-480b-bd1b-169e1261c53a-articleLarge Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

The Fed’s decision to cut rates was not unanimous. Three officials dissented, with two objecting to a cut and one pushing for an even bigger cut.CreditT.J. Kirkpatrick for The New York Times

“Since the middle of last year, the global growth outlook has weakened,” Mr. Powell said. “Trade policy tensions have waxed and waned,” and “elevated uncertainty” is weighing on business investment and exports, he said.

In its official statement after its meeting, the Fed said policymakers “will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.”

While the median Fed official expects rates to stay at the current level through the end of the year, seven of 17 expect another rate cut. Not a single official expected three rate cuts in 2019 when the central bank last released economic projections in June, suggesting that momentum is shifting toward additional accommodation.

Mr. Powell addressed that shift, saying the change in the Fed’s policy stance over the course of the year is “the main takeaway.”

But officials are increasingly divided over what happens next. Three members of the rate-setting Federal Open Market Committee dissented in this month’s vote. James Bullard, the president of the Federal Reserve Bank of St. Louis, wanted a more drastic half-point rate cut and voted against moving by just a quarter point. Esther George, who heads the Federal Reserve Bank of Kansas, and Eric Rosengren, who heads the Federal Reserve Bank of Boston, thought that the central bank should keep borrowing costs steady. Ms. George and Mr. Rosengren also voted against the July rate cut.

Mr. Powell acknowledged the divisions, calling it “a time of difficult judgments” but saying he welcomed “diverse perspectives.”

He added that the bulk of the committee is going “meeting by meeting.”

The dissents underscore the economic and political challenges facing the Fed.

While the Fed operates independently of the White House and answers to Congress, Mr. Trump has made a regular habit of criticizing Mr. Powell and his colleagues.

“The Federal Reserve should get our interest rates down to ZERO, or less,” Mr. Trump tweeted on Sept. 11. “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.”

Officials regularly say they set policy with an eye to the longer-term economic outlook, not short-term political concerns, but Mr. Trump’s onslaught creates an optics problem for the Fed. Some share of the population could see rate cuts, like Wednesday’s, as a sign that the central bank is caving to political pressure, particularly given that it was not a unanimous decision.

But there is an economic rationale for lowering rates sooner rather than later, since doing so could keep credit flowing, helping to keep consumer and business spending as uncertainty climbs.

Westlake Legal Group fed-second-rate-cut-promo-1568827337935-articleLarge-v2 Fed Cuts Interest Rates by Another Quarter Point United States Politics and Government United States Economy Trump, Donald J Recession and Depression Powell, Jerome H Labor and Jobs Interest Rates Inflation (Economics) Federal Reserve System Federal Open Market Committee

Why the Fed Lowered Interest Rates Again

The Federal Reserve lowered interest rates for the second time this year, as it tries to guard the United States economy against trade-related uncertainty and slowing global growth.

The University of Michigan consumer sentiment index has drifted lower recently on the back of trade concerns, and jitters about the United States economy were also reflected in the Business Roundtable’s C.E.O. Economic Outlook Index, which declined to a three-year low in the third quarter.

Chief executives of the nation’s largest corporations have sharply lowered their plans for capital investment and their expectations for sales. Trade tensions were cited as a major factor for the worry that companies are feeling.

At the same time, employers are still hiring, wages are gradually rising and Americans in their prime have been coming back into the labor force. As households take home better paychecks, their spending is holding up, fueling strong retail sales. Even the housing market, which has struggled this year, shows signs of firming.

But global risks abound. Germany seems to be teetering on the brink of recession. Britain’s exit from the European Union remains fraught, and the United States’ trade war with China is dragging on.

Mr. Trump has placed tariffs on $360 billion worth of Chinese goods and plans to impose levies on nearly all Chinese imports by the end of the year. While the two nations are back at the negotiating table, it is unclear whether and when a deal could be reached.

The Fed has also struggled to coax inflation up to its 2 percent goal. The central bank aims for steady inflation that is low enough to allow for consumer comfort but high enough to leave policymakers extra headroom to cut interest rates, which include price gains, during a downturn.

Inflation came in at 1.6 percent in July, based on the Fed’s preferred gauge, and has been mired below its target for years. Inflation expectations, as measured by one New York Fed survey, have slipped both in the short- and the longer-term.

The Fed also lowered the rate of interest it pays on reserves — money commercial banks park at the central bank — to 1.8 percent, 0.2 percentage point below the top of the Fed’s preferred range. That technical tweak is meant to keep the Fed funds rate, which has been creeping up, anchored within its range.

It also directed the Federal Reserve Bank of New York’s trading desk to execute open market transactions as necessary and “until instructed otherwise,” to keep short-term lending rates from rising above the Fed’s target.

The move came after several days of wild activity in an important corner of financial markets.

The overnight rate on Treasury repurchase agreements, which are short-term loans used by financial institutions like hedge funds and banks, surged at the start of the week amid a shortage of dollars. A few technical factors seemed to contribute to the spike — including a corporate tax date, recent government bond issuance that sopped up cash and the aftereffects of the Fed’s shrinking of its balance sheet.

The jump pushed up the Fed’s key policy tool, the Fed funds rate, and forced the Federal Reserve Bank of New York to spring into action to keep it in line, a first since 2008.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

The Fed Is Poised to Cut Rates Again. Here’s What to Watch.

Westlake Legal Group 18dc-fedpreview2-facebookJumbo The Fed Is Poised to Cut Rates Again. Here’s What to Watch. United States Politics and Government United States Economy Powell, Jerome H Interest Rates Federal Reserve System Federal Open Market Committee Banking and Financial Institutions

WASHINGTON — Federal Reserve officials are expected to cut interest rates for a second time on Wednesday, a move that could prove divisive among Fed officials and aggravate President Trump’s anger toward the central bank.

The Fed’s rate decision, which will be announced at 2 p.m. in Washington, will be accompanied by a fresh set of quarterly economic projections and followed by a news conference at 2:30 p.m. with the chair Jerome H. Powell.

That means markets will have plenty of information to digest as they try to game out what comes next for the Fed, which lowered its policy interest rate by a quarter point for the first time in more than a decade in July as officials tried to protect the economy against uncertainty created by Mr. Trump’s trade war and a global economic slowdown.

Mr. Trump has been pushing for an extensive cut, one that leaves rates at or below zero, but investors anticipate another quarter-point move — setting rates in a range of 1.75 to 2 percent. Here’s what else to watch out for.

The Fed will release an updated version of its postmeeting statement Wednesday, and economists are looking for any changes to the language that could provide clues about whether officials are becoming more or less concerned with the economic outlook.

Perhaps more crucially, the Fed’s 17 participants will publish new economic projections at this meeting, giving an updated snapshot of where the group believes growth is headed and whether officials believe the Fed might need to provide additional support.

“The most important question” coming out of this meeting, according to Goldman Sachs economists, “is how many participants will project additional rate cuts.”

The last set of Fed funds rate projections — commonly referred to as the “dot plot” because it depicts rate expectations as blue dots on a graph-paper background — showed that as of June, not one policymaker expected more than two rate cuts by the end of 2019.

But risks have mounted since then, putting the Fed under increasing pressure to help keep America’s record-long economic expansion going.

Mr. Trump ramped up his trade war with China immediately after the Fed’s rate cut in July.

While China and the United States plan to resume talks next month, a resolution is hardly assured and the global economy continues to wobble. Manufacturing data has been deteriorating globally, job growth in the United States is decent but moderating, Britain’s smooth exit from the European Union is still a question mark and airstrikes on Saudi oil facilities could heighten geopolitical tensions.

Will it be enough to tip some officials in favor of future rate cuts? Probably, based on their public remarks. James Bullard, the president of the Federal Reserve Bank of St. Louis, suggested in a recent interview with Reuters that he would favor a half-point rate cut — the equivalent of a third cut, for dot-plot purposes.

But not everyone is expected to agree with even a moderate cut. Esther George and Eric Rosengren, who are also voting members of the rate-setting Federal Open Market Committee, have been less enthusiastic about getting ahead of risks before they turn into economic reality. They dissented against the July rate cut and could do so again at this meeting.

When it comes to the data, things actually look pretty good. At 3.7 percent, unemployment is hovering near a 50-year low. Overall growth has held up, and consumers are still spending strongly, though the University of Michigan survey suggests that they are becoming less confident as the trade war spooks many.

Inflation is still stuck below the Fed’s target of 2 percent — as it has almost been pretty regularly since the central bank formally adopted that goal in 2012 — but it has been showing signs of creeping back up.

The Fed will release new projections for growth, joblessness and price gains through 2022, and those could offer insight into what officials are expecting. They previously forecast that the unemployment and inflation rates would climb slightly in the coming years while growth moderated.

Perhaps the biggest wild card at this meeting is Mr. Powell’s news conference. The Fed chair roiled markets after the July meeting because investors interpreted his statement that the Fed’s rate cut was a “mid-cycle adjustment” as a sign that the central bank did not plan to aggressively cut borrowing costs.

Mr. Powell has little to gain by making definitive promises: Trade policies are one of the major risks on the horizon, and they have the potential to change quickly. The Fed could face very different conditions by its Oct. 29-30 meeting, which comes after United States and Chinese officials are scheduled to meet.

“We think Powell will steer clear from the phrase mid-cycle adjustment that caused waves in July, favoring instead an open-minded recalibration of rates,” economists at Evercore ISI wrote in a research note previewing the meeting.

Whatever Mr. Powell says seems likely to draw a reaction from the White House. While Mr. Trump has no ability to directly influence Fed policy — the central bank is insulated from politics and answers to Congress, not the White House — he has made a habit of weighing in on its decisions.

Mr. Trump has ramped up his attacks on Twitter in recent months, figuratively calling Mr. Powell a bad golfer, labeling him an enemy and saying that he and his colleagues are “boneheads.” He has even suggested that the Fed should adopt negative rates, a policy intact in the eurozone and Japan, which have very low inflation and more fragile economies.

You might also hear the phrase “standing repo facility” bandied about around 2 p.m.

A little background: There has been some turmoil in the money markets this week as a corporate tax due date and Treasury bond issuance combined to fuel a cash shortage. That creates problems for the Fed — it makes it harder for it to keep its policy rate under control, and risks tightening financial conditions in ways that slow down borrowing and spending.

As a result, some economists believe the Fed will discuss ways to keep those markets chugging along smoothly — while also steadying the Fed funds rate — at their meeting. Analysts think options might include a technical tweak to the Fed’s rate-setting tool, a resumption of bond-buying that will keep the Fed’s balance sheet growing alongside the economy to guard against future cash crunches in money markets, and a standing repo facility.

“Repo” is short for Treasury repurchase agreements, short-term loans taken out overnight by financial institutions like hedge funds and banks. The “standing facility” refers to a regular Fed program that allows banks to convert Treasury securities into reserves — money holdings at the central bank — on demand, at a rate the Fed sets.

In theory, such a tool would keep reserves, which banks sometimes prefer to hold for regulatory reasons, from becoming scarce. That would help money markets function better at times of stress, because banks would be less likely to hoard their reserves. As a result, it would keep the Fed from having to step in to cool things down. The central bank had to do so twice this week, a first since the financial crisis.

It is not clear whether the Fed is going to make any big changes at this meeting. Its officials tend to be a contemplative bunch, and they have not foreshadowed a shake-up. But market conditions could drive the institution’s hand, so it is worth watching for moves in that direction.

“I had been skeptical that they were going to introduce a standing repo facility — I think now the probability on that has gone up,” said Seth Carpenter, chief United States economist at UBS.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com