The New York Times reported today in a nice article of the current state of play with US monetary policy. ‘WASHINGTON — Federal Reserve officials left interest rates unchanged at their June meeting but opened the door to a future cut if President Trump’s trade fight intensifies and risks to the American economy increase.
‘While the Fed still expects a strong labor market and inflation near its goal, “uncertainties about this outlook have increased,” according to the central bank’s post-meeting statement, released Wednesday.
‘The Fed is worried about weak inflation, slowing global growth, and Mr. Trump’s trade war, and that’s pushing them closer to a rate cut. But officials suggested on Wednesday they are not yet ready to pull the trigger and want to keep an eye on how things shake out before making a move.
‘Fed Chairman Jerome H. Powell, in a news conference following the meeting, referenced Mr. Trump’s trade disputes and softening global growth as factors that could influence the Fed’s decision to shift away from the “patient” stance it adopted earlier this year.’ Read on here.
It is a matter of record that President Trump has threatened to fire or ‘demote’ President Powell.
President Trump has complained that the Fed has raised interest rates too abruptly. Since then the US China trade situation has deterioated, raising the possibility of a trade war that would slow the world economy. Other signs of slowing economies are also worrying central bankers which have little room to move without implementing so called ‘Quantitative easing’, in which the central banks sells bonds to the private sector using new bank notes printed a few weeks ago.
Nor is there much room to ease monetary policy given the size and lack of reduction in government debt. And in many economies, including Australia, household debt is at a point where households will become unable to spend more due to banks’ concern that their debts need cutting to avoid large scale household insolvency.
Joys of travel
Henry has just finished one of the toughest airline trips in the world. Melbourne to LA, LA to New York. It is a couple of years since he did this trip but the first Dreamliner today (?) had what seemed like less space in Business class. The second leg, to New York, had a newer Dreamliner with one/two/one configuration and with a seat on the right-hand side of the plane, this meant a more traditional business class seat that was comfortable, easy to get in to and out from the seat and far easier to use the movie system. Staff were thoughtful and helpful, and food and booze were fine.
The main problem was what can only be described as chaos at LA airport. We arrived on time, indeed a bit earlier than scheduled not long after 6 am. So did many other planes and queues were long and involved 400 metre sections that snaked around so there were six or more layers to be negotiated. No paperwork to provide quick access. Hope was kindled when Henry passed the test of using his electronic passport but then had to queue again to be passed by a human. When Henry finally got to see the human he was pleasant and passed him quickly on.
Henry palled up with a young women who had even less time than Henry for the completion of transfer to NY. She asked people if she could cut across the snake several times. This girl reminded Henry of his daughter, as if we were travelling together, who was able to switch sections of the long queue three times that meant we did not hold up our (different) plane’s departures.
As time ticked on we had to retrieve our luggage which was a complicated matter. We were told this would involve pulling it off the rotating luggage rotisserie and leave it in a designated spot close by. We went to the rotisserie specified on the big board, no 3. After half an hour of fruitful waiting there was a message that if one was waiting for luggage for New York it was emerging from rotisserie number 2. This involved going back, struggling through several queues only in my case to again fail to see my bag. I tackled a nice man in the Qantas uniform who showed great concern for my problem and told me to go to the place to join the plane to NY and he would wait and bring my luggage to the place of boarding the plane.
This seemed odd to me, but I was exhausted, not having slept at all on the leg from Melbourne, instead watching 6 not very good films. Also it involved leaving the terminal and reentering. Believe it or not, this required another security check which in the USA involves removing shoes and belts as well as putting pcs, wallets, etc, so as to be clearly visible to the security team, and standing like a criminal to have photos taken side on and full on, and then standing facing the security man to be felt up and down both facing toward him and away from him. Then a very tough lady said she had to search my brief case and snaffled my brand new tooth paste. Finally made it to the mighty plane with 20 minutes to flight time. I spotted an Aussie economist who I knew, Steve Kates. With slight exaggeration I asserted I had now racked up 6 security checks. ‘Your reputation is obviously well known’ Steve responded with typical Aussie humour. I responded by saying if I was a bad man I'd have given up my plan and go home for several beers.
I am writing this missive around 24 hours after my arrival in New York. But my luggage has not yet arrived! So far I have not yet panicked. I have spent $US 50 for tooth brush, undies, tea (?) shirts and a plastic hairbrush. Worse, Qantas has provided contradictory news about whether the bag has been found. If it were found it would have been on an American airlines plane that left at 12,30 am last night and should have been delivered to my hotel this morning. If it does not arrive by tomorrow morning I will face the issue of buying a least one new suit, several shirts, etc, etc, as I have a meeting tomorrow afternoon that I feel demands a suit and nice shirt and tie. Then at 6 am Friday I need to take a bus to Cornell university in upstate New York. Gor Blimey, mates, its not the fun it once was sitting at the front of the plane and visiting airports where there are enough humans to move the people on as quickly as they do in Australia.
Perhaps Henry needs a duck?
[Stop press: The bag arrived Friday morning and Henry was able to get the bus to Ithica. All is well for the Workshop that starts next Monday.]
Lovely story in the New York Times about the benefits of a pet animal to help persistent human worriers or subjects with acute anxiety. The hero of the story is a man who has acquired a pet white duck, which has supposedly helped his peace of mind.
Here is a lovely article, and a truly beautiful photograph. But not everyone is happy about this situation.