Fed Governor Bowman sees 'similarly sized' rate hikes ahead after three-quarter point moves | Big Indy News
Connect with us

Business

Fed Governor Bowman sees ‘similarly sized’ rate hikes ahead after three-quarter point moves

Published

on

Federal Reserve Bank Governor Michelle Bowman gives her first public remarks as a Federal policymaker at an American Bankers Association conference In San Diego, California, February 11 2019.

Ann Saphir | Reuters

Federal Reserve Governor Michelle Bowman said Saturday she supports the central bank’s recent big interest rate increases and thinks they are likely to continue until inflation is subdued.

The Fed, at its last two policy meetings, raised benchmark borrowing rates by 0.75 percentage point, the largest increase since 1994. Those moves were aimed at subduing inflation running at its highest level in more than 40 years.

In addition to the hikes, the rate-setting Federal Open Market Committee indicated that “ongoing increases … will be appropriate,” a view Bowman said she endorses.

“My view is that similarly sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way,” she added in prepared remarks in Colorado for the Kansas Bankers Association.

Bowman’s comments are the first from a member of the Board of Governors since the FOMC last week approved the latest rate increase. Over the past week, multiple regional presidents have said they also expect rates to continue to rise aggressively until inflation falls from its current 9.1% annual rate.

Following Friday’s jobs report, which showed an addition of 528,000 positions in July and worker pay up 5.2% year over year, both higher than expected, markets were pricing in a 68% chance of a third consecutive 0.75 percentage point move at the next FOMC meeting in September, according to CME Group data.

Bowman said she will be watching upcoming inflation data closely to gauge precisely how much she thinks rates should be increased. However, she said the recent data is casting doubt on hopes that inflation has peaked.

“I have seen few, if any, concrete indications that support this expectation, and I will need to see unambiguous evidence of this decline before I incorporate an easing of inflation pressures into my outlook,” she said.

Moreover, Bowman said she sees “a significant risk of high inflation into next year for necessities including food, housing, fuel, and vehicles.”

Her comments come following other data showing that U.S. economic growth as measured by GDP contracted for two straight quarters, meeting a common definition of recession. While she said she expects a pickup in second-half growth and “moderate growth in 2023,” inflation remains the biggest threat.

“The larger threat to the strong labor market is excessive inflation, which if allowed to continue could lead to a further economic softening, risking a prolonged period of economic weakness coupled with high inflation, like we experienced in the 1970s. In any case, we must fulfill our commitment to lowering inflation, and I will remain steadfastly focused on this task,” Bowman said.

Read the full article here

Business

US steps up pressure on European allies to harden China stance

Published

on

The US is pushing its European allies to take a harder stance towards Beijing as it tries to leverage its position on Ukraine to gain more support from Nato countries for its efforts to counter China in the Indo-Pacific.

According to people briefed on conversations between the US and its Nato allies, Washington has in recent weeks lobbied members of the transatlantic alliance to toughen up their language on China and to start working on concrete action to restrain Beijing.

US president Joe Biden identified countering China as his main foreign policy goal at the start of his administration, but his efforts have been complicated by the focus on Russia’s invasion of Ukraine in February.

But with Russian president Vladimir Putin’s invasion in its 10th month, Washington was making a concerted effort to push China back up Nato’s agenda, the people said.

They said the US was trying to leverage the action it had been taking on Ukraine — including being the largest supplier of weapons and aid for Kyiv — into more concrete support for its policies in the Indo-Pacific region.

“The shift from the Americans on this has been noticeable,” said one of the people, all of whom declined to be identified given the sensitivity of the matter. “It’s really quite clear that they have decided now is the time to move on this.”

Asked about the push, a senior US official noted that Nato agreed on a new “strategic concept” in June that “addressed the systemic challenges” posed by China. “Our conversations on these issues continue,” the official added.

Referring to the 30 Nato allies endorsing the new concept at a summit in Madrid in June, a US state department official said Nato foreign ministers would “address ways to strengthen our resilience and the challenges posed by the PRC [People’s Republic of China]” at their ministerial meeting in Bucharest, Romania, this week.

“We deeply value and encourage a united European approach to China,” the official added.

Coordinating Nato members’ approaches to China is high on the list of topics to be discussed at the two-day meeting, which starts on Tuesday.

“What we have begun doing across the Nato alliance is to think about ways in which the alliance can address that challenge [from China] in concrete terms,” Julianne Smith, US ambassador to Nato, said on Monday.

“Allies [will] look to implement what they signed up to,” she added, “to move from what we call assessing the problem to addressing the problem.”

The ministers will discuss a new report on China, designed to harden the stance of the alliance, which in June identified Beijing as a “challenge” to its “interests, security and values” for the first time.

The report would address China’s military development, its efforts to exert influence on Nato members and third countries, and Beijing’s relationship with Moscow, officials said.

But many European allies are anxious the discussions might distract from what they view as the more pressing need to cement unwavering support for Ukraine.

In addition, while the EU is also assessing ways to toughen up its trade relations with China, the vast majority of Nato countries including Germany and France are reluctant to fully align their China postures with that of Washington.

“Let’s say that the United States has a certain tendency to be prescriptive, not just on China but about everything,” said a senior EU official, who suggested Europe would ultimately align closer to the US position. “Will we become, let’s say, completely isolated and in the middle between China and the United States? I don’t think so.”

While Russia’s full-scale invasion of Ukraine has forced the White House to step up its commitment to European defence, the US has made clear that this is a temporary respite from a long-term shift to countering China as its main strategic defence and security policy.

Last month, the Biden administration released its national security strategy, which made clear that China was the security priority over Russia, despite the latter’s “immediate and ongoing” threat.

Canada on Sunday announced its first Indo-Pacific strategy, outlining new spending to deal with a “disruptive” China.

Nato secretary-general Jens Stoltenberg said last week that Beijing was “not an adversary” but stressed the alliance had to respond to China’s military modernisation, collaboration with Russia and attempts to “control critical infrastructure in Europe”.

“So all of this makes it necessary for allies to address this together,” he told reporters. “And that’s exactly what we will do when we meet in Bucharest.”

Additional reporting by Felicia Schwartz in Washington

Follow Henry Foy and Demetri Sevastopulo on Twitter



Read the full article here

Continue Reading

Business

Proud, Scared and Conflicted. What the China Protesters Told Me.

Published

on

They went to their first demonstrations. They chanted their first protest slogans. They had their first encounters with the police.

Then they went home, shivering in disbelief at how they had challenged the most powerful authoritarian government in the world and the most iron-fisted leader China has seen in decades.

Young Chinese are protesting the country’s harsh “zero-Covid” policy and even urging its top leader, Xi Jinping, to step down. It’s something China hasn’t seen since 1989, when the ruling Communist Party brutally cracked down on the pro-democracy demonstrators, mostly college students. No matter what happens in the days and weeks ahead, the young protesters presented a new threat to the rule of Mr. Xi, who has eliminated his political opponents and cracked down on any voice that challenges his rule.

Such public dissent was unimaginable until a few days ago. These same young people, when they mentioned Mr. Xi online, used euphemisms like “X,” “he” or “that person,” afraid to even utter the president’s name. They put up with whatever the government put them through: harsh pandemic restrictions, high unemployment rates, fewer books available to read, movies to watch and games to play.

Then something cracked.

After nearly three long years of “zero Covid,” which has turned into a political campaign for Mr. Xi, China’s future looks increasingly bleak. The economy is in its worst shape in decades. Mr. Xi’s foreign policy has antagonized many countries. His censorship policy, in addition to quashing challenges to his authority, has killed nearly all fun.

As a popular Weibo post put it, Chinese people are getting by with books published 20 years ago, music released a decade ago, travel photos from five years ago, income earned last year, frozen dumplings from a lockdown three months ago, Covid tests from yesterday, and a freshly baked Soviet joke from today.

“I think all of these have reached a tipping point,” said Miranda, a journalist in Shanghai who participated in the protest on Saturday evening. “If you don’t do anything about it, you could really explode.”

In the last few days, in interviews with more than a dozen young people who protested in Shanghai, Beijing, Nanjing, Chengdu, Guangzhou and Wuhan, I heard of a burst of pent-up anger and frustration with how the government implements “zero Covid.” But their anger and despair goes beyond that, all the way to questioning the rule of Mr. Xi.

Two of these people said that they don’t plan to have children, a new way to protest among young Chinese at a time when Beijing is encouraging more births. At least four of the protesters said that they were planning to emigrate. One of them refused to look for a job after being laid off by a video-game company in the aftermath of a government crackdown on the industry last year.

They went to the protests because they wanted to let the government know how they felt about being tested constantly, locked inside their apartments or kept away from family and friends in the Covid dragnet. And they wanted to show solidarity for fellow protesters.

They are members of a generation known as Mr. Xi’s children, the nationalistic “little pinks” who defend China on Weibo, Facebook and Twitter. The protesters represent a small percentage of Chinese in their 20s and early 30s. By standing up to the government, they defied the perception of their generation. Some older Chinese people said that the protesters made them feel more hopeful about the country’s future.

Zhang Wenmin, a former investigative journalist known under her pen name Jiang Xue, wrote on Twitter that she was moved to tears by the bravery of the protesters. “It’s hard for people who haven’t lived in China in the past three to four years to imagine how much fear these people had to overcome to take to the streets, to shout, ‘Give me liberty, or give me death,’” she wrote. “Amazing. Love you all!”

As first time marchers, most of them did not know what to expect. A Beijing protester said that she was so tense that she felt physically and emotionally exhausted the next day. More than one person told me that they needed a day to collect their thoughts before they could talk. At least three cried in our interviews.

They are proud, scared and conflicted about their experiences. They have different views about how politically explicit their slogans should be, but they all said that they found shouting the slogans cathartic.

Miranda, who has been a journalist for eight years, said that she couldn’t stop crying when she shouted with the crowd, “freedom of speech” and “freedom of press.” “It was the freest moment since I became a journalist,” she said, her voice cracking.

All the people I interviewed asked me to use only their first name, family name or English name to protect their safety. They had felt a relative safety when marching with others just days earlier, but none dared to put their name to comments that would be published.

The slogans that they recalled chanting were all over the place, illustrating the wide frustration with their lives. “End the lockdown!” “Freedom of speech!” “Give back my movies!”

Quite a few of them were taken aback by how political the Saturday protest in Shanghai turned out to be.

They were equally surprised, if not more, when more people returned on Sunday to request the release of protesters who had been detained hours earlier.

All six Shanghai protesters I spoke with thought that they were going to a vigil on Saturday evening for the 10 victims who died in a fire Thursday in Urumqi, the capital of the Xinjiang region in China’s west. In the beginning, the atmosphere was relaxed.

When someone first chanted, “No more Communist Party,” the crowd laughed, according to Serena, a college student who is spending her gap year in Shanghai. “Everyone knew it was the redline,” she said.

Then it became increasingly charged. When someone yelled, “Xi Jinping, step down!” and “C.C.P., step down!” the shouts were the loudest, according to Serena and other protesters who were also there.

In Beijing, a marketing professional in her mid-20s with the surname Wu told her fellow protesters not to shout those politically explicit slogans because that would guarantee a crackdown. Instead, she shouted slogans that urged the government to implement the rule of law and release detained Shanghai protesters.

A protester in Chengdu and one in Guangzhou, separated by 1,000 miles, both said that they were stopped from shouting slogans that other demonstrators deemed too political and were told to stick to the Covid-related demands.

For many of them, this weekend was their first brush with the police. A protester named Xiaoli in Chengdu said that she had never seen so many police in her life. After being chased by them, she said that she could hear her heart beating fast when she passed by officers on her way home.

It was clear that many protesters blame Mr. Xi for the extremely unpopular “zero-Covid” policy. A young Shanghai professional with the surname Zhang said that Mr. Xi’s norm-breaking third term, secured at last month’s party congress, spelled the end of China’s progress. “We all gave up our illusions,” he said.

He cried when he mentioned an old man’s question during this year’s Shanghai lockdown, “Why has our country come to this?” Mr. Zhang, who said that he grew up poor in a village, was grateful for the government’s assistance in his education. “I thought we would only move upward,” he added.

The young protesters are most conflicted about the impact of their actions. They felt powerless about changing the system as long as Mr. Xi and the Communist Party are in power. They believe that many people in the public supported them because the unyielding Covid rules have violated what they see as baseline norms of Chinese society. Once the government relaxes the policy, they worry, the public’s support for protests would evaporate.

At the same time, some of them argued that their protests would make the public aware of their rights.

No one knows what the protests will become — a moment in history, or a footnote. The official state media has kept quiet, though some pro-government social media bloggers have pointed fingers at “foreign forces.” Police have enhanced their presence on the streets and called or visited protesters in an attempt to intimidate them.

I asked Bruce, a Shanghai finance worker in his 20s, whether the protests meant that people have changed their view of Mr. Xi. He responded, “It was probably not because the public’s opinion of him changed, but because those who are critical of him have spoken up.”

Read the full article here

Continue Reading

Business

‘Golden era’ for Britain and China’s relationship is over, UK PM Rishi Sunak says

Published

on

Sunak’s comments come shortly after groups of people across China held public demonstrations to protest the country’s stringent zero-Covid policy.

Daniel Leal | Afp | Getty Images

U.K. Prime Minister Rishi Sunak said the so-called “golden era” of relations with China was over, warning that Beijing’s move toward even greater authoritarianism posed a systemic challenge to Britain’s values and interests.

“Let’s be clear, the so-called ‘golden era’ is over,” Sunak said Monday in his first major foreign policy speech.

His reference to the “golden era” for the U.K.-China relationship echoed comments made by former U.K. Finance Minister George Osborne in 2015, who had claimed Britain could be China’s “best partner in the West.”

Sunak said it had been “naïve” to believe that closer economic ties over the previous decade could lead to social and political reform and accused Beijing of “conspicuously competing for global influence using all of the levers of state power.”

He warned, however, that Britain could not rely on “simplistic Cold War rhetoric.”

China’s embassy in London was not immediately available to respond to a request for comment.

Sunak has faced pressure from Conservative backbenchers to toughen his stance on China since he took over as party leader and prime minister last month.

“We recognize China poses a systemic challenge to our values and interests — a challenge that grows more acute as it moves towards even greater authoritarianism,” Sunak said in his speech at the Lord Mayor’s Banquet in London.

His comments come shortly after public demonstrations were held across China to protest the country’s stringent zero-Covid policy. A BBC journalist on Sunday was beaten and briefly detained by police while covering an anti-government protest in Shanghai.

“Instead of listening to their people’s protests, the Chinese government has chosen to crack down further, including by assaulting a BBC journalist,” Sunak said.

“The media and our parliamentarians must be able to highlight these issues without sanction, including calling out abuses in Xinjiang and the curtailment of freedom in Hong Kong.”

Sunak said the pace of geopolitical change was intensifying and “short-termism or wishful thinking will not suffice” in the face of challenges posed by Russia and China.

Read the full article here

Continue Reading
Advertisement

Newsletter

Subscribe to our newsletter to get the latest news directly to your inbox.


Trending