Fed officials express concerns about global economy rate guidance wording

WASHINGTON – Federal Reserve officials, worried about weak growth overseas, agreed last month that they would begin raising interest rates only when measures of the economy’s health and inflation signalled the time was right.Minutes of the Fed’s discussions at the Sept. 16-17 meeting released Wednesday showed that officials expressed rising worries about lacklustre growth in Europe, as well as slowing growth in Japan and China.Stocks surged after the release of the minutes. Investors appeared to take the revealed discussion as a sign that the Fed was in no hurry to raise interest rates. The Dow Jones industrial average was up more than 270 points in afternoon trading.“The markets like the news that there is no urgency on the part of Fed officials to stop doing what they are doing,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.Fed officials also discussed the potential adverse impacts of a stronger dollar, which has gained strength recently against the euro, yen and British pound. A stronger dollar makes U.S. goods more expensive overseas and foreign goods cheaper in the United States, a development that can dampen inflation.“Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the U.S. dollar and have adverse effects on the U.S. external sector,” the minutes said.At the September meeting, the Fed voted 8-2 to keep its key short-term interest rate at a record low near zero and retained language that it expected the rate to remain at that level for a “considerable time” after it ends monthly bond purchases. The minutes showed that some officials didn’t think that was clear enough.The current language “could be misunderstood as a commitment rather than as data dependent,” the minutes said.But the minutes also showed that officials worried that any tweaks to the wording of the policy guidance could be misinterpreted as a fundamental shift in the Fed’s stance on interest rates, which could trigger an unintended rise in market rates.Many participants indicated that they wanted to clarify that monetary policy changes would be closely linked to the country’s economic performance.The Fed has emphasized that the timing of an interest rate hike will depend on officials’ views on how close the economy is to achieving the Fed’s goals for maximum employment and inflation running at an annual rate of 2 per cent.For the past two years, inflation has been running well below 2 per cent, giving the Fed room to keep rates at a record low in an effort to bolster the economy and generate more jobs. The government reported last week that the unemployment rate in September fell to a six-year low of 5.9 per cent, closer to the Fed’s goal of an unemployment rate in a range of 5.2 per cent to 5.5 per cent.The minutes were released with the customary three-week delay following the Fed’s last meeting.The consensus view among private economists is that the first rate hike will not occur until around June of next year. The Fed’s short-term rate has been at a record low near zero since December 2008.The Fed’s bond purchases, designed to keep long-term interest rates low, have been trimmed in seven consecutive $10 billion reductions at each meeting starting last December. The purchases are currently at $15 billion and a final reduction to zero is expected at the next meeting on Oct. 28-29.The two Fed officials who voted against the September action were Charles Plosser, president of the Fed’s regional bank in Philadelphia, and Richard Fisher, president of the Dallas Fed.Both objected to the decision to signal “considerable time” before the first rate increase. Plosser and Fisher are leading hawks, Fed officials who are concerned that low interest rates could generate unwanted inflation pressures in the future. They are also worried that the Fed’s policies could be inflating asset bubbles that could burst and destabilize financial markets. Fed officials express concerns about global economy, rate guidance wording AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email by Martin Crutsinger, The Associated Press Posted Oct 8, 2014 12:01 pm MDT read more

UN rights expert calls on Belarus to impose death penalty moratorium halt

The appeal by the Special Rapporteur on the situation of human rights in Belarus, Miklós Haraszti, comes after the reported execution of Pavel Sialiun and a Supreme Court ruling last week upholding the death sentence against Eduard Lykau, both convicted for murder. Mr. Haraszti expressed concern about the way death sentences are carried out in Belarus, and particularly the circumstances of Mr. Sialiun’s execution, including that the date of his execution is not known, and that his mother was not notified and only learned from his lawyer that the sentence had been carried out. “Information on death sentences remains limited for relatives and the general public and there is a lack of transparency about persons held on death row, and an inadequate procedure for appeals,” the expert stated in a news release. “Annual statistics on the use of the death penalty are not available, nor are the names of most of those who have been already executed.” He added that those facing the death penalty, and their relatives, are not informed of the scheduled date of execution, and that following the execution, the relatives are not informed of where the body is buried. “No reports of executions for a considerable time, despite the imposition of several new death sentences, had filled the international community with the hope that Belarus had started a practical moratorium, which would then lead to a legal moratorium, and finally to the abolition of capital punishment,” Mr. Haraszti said. An estimated 160 countries have either abolished the death penalty or no longer practice it since the General Assembly’s landmark vote in 2007 calling for a worldwide moratorium on the practice. Most recently, Pakistan, the United Arab Emirates and the state of Washington in the United States decided to either establish a moratorium or to suspend executions.While welcoming these developments, Secretary-General Ban Ki-moon deplored the fact that many States still execute people with little regard to due process. During a panel held yesterday in New York, he also voiced deep concern that some States with long-standing de facto moratoriums have suddenly resumed executions, or are considering reintroduction of the death penalty in their legislation.“The right to life is the most fundamental of all human rights. The taking of life is too irreversible for one human being to inflict it on another,” he told the event, calling for greater efforts to put a final stop to this “cruel and inhumane practice” once and for all.In the case of Belarus, Mr. Haraszti noted that the establishment in December 2012 of a parliamentary working group on the death penalty was a “promising development,” and called on legislators to begin effective work towards reform. In an October 2013 statement, he had urged the Government to start an immediate moratorium on executions before the relevant legislation and court system could be reformed and capital punishment removed from the country’s Criminal Code. He had also voiced disappointment that Belarusian courts continued to hand down death sentences. Independent experts or special rapporteurs are appointed by the Geneva-based UN Human Rights Council to examine and report back on a country situation or a specific human rights theme. The positions are honorary and the experts are not UN staff, nor are they paid for their work. read more