THE DAILY NEWS

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USA TODAY

"Andrew McCabe: prosecutors recommend charges for former FBI official"


Bart Jansen, USA TODAY

13 SEPTEMBER 2019

WASHINGTON – Federal prosecutors recommended seeking criminal charges against Andrew McCabe, the former deputy director of the FBI and a frequent target of criticism by President Donald Trump, according to people familiar with the decision Thursday.

McCabe was fired from the FBI just before his retirement in March 2018 after the Justice Department's internal watchdog concluded that he improperly authorized a leak about a federal investigation into the Clinton Foundation in the final weeks of the 2016 presidential campaign.

Investigators concluded that he displayed a lack of candor when asked about the leak.

The U.S. attorney in Washington, Jessie Liu, recommended moving forward with unspecified charges against McCabe, according to people familiar with the situation who were not authorized to comment publicly.

McCabe's lawyers appealed that decision to Deputy Attorney General Jeffrey Rosen, who rejected their request, one of the people said.


McCabe's lawyers were informed of that decision Thursday.

The decision clears the way for prosecutors to ask a grand jury to indict McCabe, though it was unclear Thursday whether that would happen.

Whether McCabe is indicted will be up to a federal grand jury in Washington.

The U.S. Attorney's Office in Washington declined to comment.

The recommendation that McCabe be charged is the latest fallout from the FBI's handling of investigations around the 2016 presidential election, when agents investigated both of the major-party candidates.

Those investigations – into Russian meddling to help Trump win the presidency and Democrat Hillary Clinton's use of a private email server – inserted the FBI into the center of fraught political controversies.


Then-Attorney General Jeff Sessions fired McCabe after a Justice Department Inspector General’s report found he misstated his involvement in a leak to The Wall Street Journal days before the election about an FBI investigation into the Clinton Foundation.

He was ousted days before he could begin collecting retirement benefits.

McCabe, who became acting FBI director after Trump fired James Comey in May 2017, has been the target of the president's attacks.

Trump accused law enforcement officials of partisan investigations of him, his campaign and his administration.

Inquiries led to charges against a half-dozen of Trump's aides and advisers.

Trump applauded the decision to fire McCabe in March 2018, calling it "a great day for democracy.”

Trump called McCabe a "major sleazebag" and argued that his conduct was akin to treason for favoring Clinton, Trump's Democratic rival in 2016.

The election-year investigations roiled the top ranks of the FBI.

Internal investigators faulted McCabe and Comey for violating Justice Department rules in the final months of the campaign.

Lower-level staffers were fired or reassigned.


The Justice Department announced Aug. 29 that Comey violated bureau policies for keeping private memos about his conversations with Trump, then having a friend describe the contents of one memo to The New York Times for a story.

The department didn't charge Comey criminally.

McCabe's firing came after the inspector general investigated the information behind a Wall Street Journal story about the Clinton Foundation to determine whether it was an unauthorized leak and if so, who was the source.

The story appeared online Oct. 30, 2016, and in print Oct. 31, which was a week after another story reported that McCabe terminated the foundation probe under pressure from the Justice Department.


Investigators determined that McCabe, to promote his impartiality, authorized associates to disclose a call Aug. 12 between McCabe and the principal associate deputy attorney general to The Wall Street Journal.

The call effectively confirmed the existence of the Clinton Foundation investigation, which Comey refused to do.

The inspector general found McCabe “lacked candor” when he said he hadn't authorized the disclosure and didn't know who did while talking to Comey, when questioned under oath by FBI agents, then when questioned under oath by investigators for special counsel Robert Mueller.

McCabe filed a lawsuit in August challenging his dismissal, alleging that Justice Department officials demoted him in January 2018 and fired him two months later to cater to Trump’s “unlawful whims.”

McCabe's termination came after he had announced his intention to resign and days before his full retirement benefits would have set in.

Trump's political accusations against McCabe stemmed from his wife running unsuccessfully for state Senate as a Democrat in Virginia.

Trump seized on contributions Jill McCabe received from a political action committee tied with Virginia Gov. Terry McAuliffe, a Clinton ally.

Trump said McCabe took “massive amounts of money” for his wife’s campaign.

Internal FBI documents stated that McCabe didn't oversee the Clinton investigation while his wife was running for office and that he didn't have a conflict of interest.

McCabe argued in television interviews that top congressional leaders were notified about the counterintelligence inquiry into Russian influence on Trump's campaign and nobody objected.

The decision about McCabe comes amid several investigations of how the Justice Department and the FBI began inquiries into Russian interference in the 2016 election.


Attorney General William Barr assigned one internal probe in May.

Inspector General Michael Horowitz’s review launched in March 2018 focuses on an FBI wiretap of Carter Page, a former policy adviser to Trump's campaign.

The inspector general looked into whether the FBI violated the Foreign Intelligence Surveillance Act, or FISA, when it sought court-ordered surveillance of Page in late 2016.

Horowitz examined the FBI's relationship and communication with Christopher Steele, a former British intelligence officer who was hired by a research firm working for Clinton's campaign and compiled a "dossier" alleging links between Russia and the Trump campaign.

Republicans complained that the FBI concealed its reliance on Steele's findings in the surveillance applications for Page.

Copies of those applications released after USA TODAY and others sued showed investigators disclosed to judges that Steele sought information to "discredit" Trump and that investigators had broader suspicions about Page's ties to the Russian government.

Mueller took over the Russia investigation in May 2017 after Trump fired Comey.

Mueller's report, released in April, detailed a "sweeping and systematic" effort by the Russian government to intercede in the election to help Trump win but "did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.”

Contributing: Kristine Phillips

This article originally appeared on USA TODAY: Andrew McCabe: prosecutors recommend charges for former FBI official

http://www.msn.com/en-us/news/politics/ ... P17#page=2
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CNBC

"US budget deficit smashes $1 trillion mark, highest in 7 years"


Jeff Cox

12 SEPTEMBER 2019

The U.S. government's red ink for fiscal 2019 swelled past the $1 trillion mark in August, the first time that level has been eclipsed in seven years, the Treasury Department reported Thursday.

The total shortfall rose to nearly $1.07 trillion, thanks to a difference between revenue and expenses of more than $214.1 billion in August.

The government last saw that large of a fiscal deficit in 2012, when the gap was nearly $1.1 trillion.


During his presidential campaign, President Donald Trump promised economic growth that would easily take care of the tax cuts and new spending he planned.

His 2017 tax break for corporations and individuals has helped contribute to a deficit that has grown from $584.6 billion in 2016.

Revenue has accelerated slightly in 2019 to about $280 billion a month, but so have expenditures, which are averaging $377 billion a month, or about $25 billion a month more than in 2018.

Last year closed with a $779 billion deficit.

As the deficit has grown so has the national debt, which is now at $22.5 trillion, up 13% since Trump took office.

http://www.msn.com/en-us/money/markets/ ... P17#page=2
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THE HILL

"O'Rourke at Democratic debate: 'Hell yes we're going to take your AR-15s'"


Jordain Carney

15 SEPTEMBER 2019

Former Rep. Beto O'Rourke (D-Texas) defended his proposed mandatory buyback of assault weapons during Thursday's Democratic debate in Houston.

"I am, if it's a weaponed that's designed to kill people on a battlefield."

"If the high impact, high velocity round shreds everything inside of your body."

"... When we see that being used against children," O'Rourke said, asked if he was proposing taking away AR-15's and AK-47's.

"Hell yes we're going to take your AR-15, your AK-47."


"We're not going to allow it to be used against our fellow Americans anymore," he continued.

O'Rourke, whose home town of El Paso, Texas, was rocked by a mass shooting last month, has pitched gun reform proposals, including the mandatory buyback of assault weapons.

Under O'Rourke's plan an individual who did not hand over a banned weapon would be fined.

Lawmakers have been debating potential gun reforms after almost 40 people were killed in mass shootings in Dayton, Ohio, and Texas cities Odessa and El Paso.

O'Rourke, during Thursday night's debate, argued there was potential common ground on a gun buyback program.

He referenced a recent trip to Conway, Ark., where he spoke with gun owners who he characterized as willing to give up assault weapons.

"You might be surprised there was some common ground there," he said.

"Let's do the right thing but let's bring everyone in America into the conversation."

http://www.msn.com/en-us/news/politics/ ... P17#page=2
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THE WASHINGTON EXAMINER

"'Racism that is still respectable': Biden attacked over 'record player' remark"


Joseph Simonson

14 SEPTEMBER 2019

HOUSTON — For many Americans watching the Democratic debate on Thursday night, Joe Biden's "record player" comment was yet another sign of his age.

But to others, his suggestion that black parents "don't know quite what to do" with their children was a worrying instance of the former vice president being tone deaf on race.


In a question on racism in the United States, moderator Linsey David asked Biden, 76: "In a conversation about how to deal with segregation in schools back in 1975, you told a reporter, ‘I don’t feel responsible for the sins of my father and grandfather.'"

"'I feel responsible for what the situation is today, for the sins of my own generation, and I’ll be damned if I feel responsible to pay for what happened 300 years ago.'"

"You said that some 40 years ago," he continued.

"But as you stand here tonight, what responsibility do you think that Americans need to take to repair the legacy of slavery in our country?”

Biden responded: “Well, they have to deal with the — look, there’s institutional segregation in this country."

"From the time I got involved, I started dealing with that."

"Redlining banks, making sure we are in a position where — look, you talk about education."

"I propose that what we take is those very poor schools, the Title I schools, triple the amount of money we spend from $15 to $45 billion a year."

"Give every single teacher a raise, the equal raise to getting out -— the $60,000 level."

"Number two, make sure that we bring in to help the teachers deal with the problems that come from home."

"The problems that come from home, we have one school psychologist for every 1,500 kids in America today."

"It’s crazy."

"The teachers are — I’m married to a teacher, my deceased wife is a teacher."

"They have every problem coming to them."

"Make sure that every single child does, in fact, have 3-, 4-, and 5-year-olds go to school."

"School."

"Not daycare."

"School."

"We bring social workers in to homes and parents to help them deal with how to raise their children."

"It's not that they don't want to help."

"They don't — they don't know quite what to do."

"Play the radio, make sure the television — excuse me, make sure you have the record player on at night, the — the — make sure that kids hear words."

"A kid coming from a very poor school — a very poor background will hear 4 million words fewer spoken by the time they get there."

Biden hadn't answered the question and his response was characteristically rambling.

More significantly, on his final tangent, he had suggested that black parents did not know how to raise their children and needed social workers to explain parenting to them.

Anand Giridharadas, an author and editor-at-large at Time magazine, described Biden's musing as "a textbook example of the racism that is still respectable.”

Veteran political commentator Jeff Greenfield wondered: "Did he mean that black parents depended on an army of white people with degrees to help them raise their kids?"

As soon as Biden had finished his answer, his rival Julián Castro seemed to notice the problem with Biden's answer.

“Well, that was quite a lot,” the former Obama housing secretary said.

Cory Booker, one of two black Democrats in the 2020 field, castigated Biden after the debate, though he focused on the retro mention of record players.

"He’s talking about people in communities like mine listening to record players."

"There are definitely moments when you listen to Joe Biden and you just wonder," the New Jersey senator told reporters.

Democratic strategist and former executive director and general counsel to the Congressional Black Caucus Angela Rye tore into Biden on CNN Friday evening.

"I don't know what he was answering, but it wasn't the question," she said.

"I think it also is highly problematic that Joe Biden has not yet dealt with whether or not he has a black agenda."

"When we talk about racism in this country, it's not about whether parents know how to raise their children."

"And then for him to say that on stage at Texas Southern University, which is a historically black college ... I don't know if he's not listening to his black advisers."

Rolling Stone writer Jamil Smith said Biden's comments were disqualifying.

"Democrats need an antiracist nominee to run against a racist like Donald Trump."

"The third debate confirmed Biden isn’t up to the task," the black author wrote.

Biden's racially-charged comments Thursday were far from the first to have landed him in hot water.

In June, he boasted about working in the Senate with segregationists like James O. Eastland of Mississippi and Herman Talmadge of Georgia.

"Well, guess what?"

"At least there was some civility."

"We got things done."

"We didn’t agree on much of anything."

"We got things done," Biden said of his relationship with Eastland and Talmadge.

"We got it finished."

"But today, you look at the other side and you’re the enemy."

"Not the opposition, the enemy."

"We don't talk to each other anymore.”

Weeks later, in July, Biden apologized for those remarks, saying he was "sorry for any of the pain" they might have caused.

During the first Democratic presidential debate in June, Sen. Kamala Harris of California defined the night by hammering Biden's history on racial issues.

"It was hurtful to hear you talk about the reputations of two United States senator who built their reputations and career on the segregation of race in this country," Harris said.

"It was not only that, but you also worked with them to oppose busing," she added, referencing his embrace of segregation in 1975, which he said at the time was a matter of "black pride."

Maintaining support from black voters is one of Biden's key campaign strategies, especially as young and highly-educated white voters flock to candidates like Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts.

Despite his controversies, a Quinnipiac poll released last month showed he currently receives support from 46% of black Democrats.

http://www.msn.com/en-us/news/politics/ ... P17#page=2
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MARKETWATCH

"Cheaper gas puts a cap on consumer prices in August, but inflation appears to be rising, CPI shows"


By Jeffry Bartash

Published: Sept 12, 2019 10:42 a.m. ET

The numbers:

Cheaper gasoline kept consumer U.S. inflation in check in August, but rising costs for staples such as health care and housing pointed to a buildup in price pressures that could complicate the Federal Reserve’s job of managing the economy.

The consumer price index rose 0.1% last month, the government said Thursday, matching the MarketWatch forecast.

The increase in the cost of living has risen just 1.7% over the past 12 months, government figures show, largely because of a sharp drop in the cost of oil.

Yet if gas prices are set aside, inflation appears to have accelerated since the start of summer.

Another closely watched measure of inflation that strips out food and energy rose 0.3% for the third month in a row.

The yearly increase in the so-called core rate advanced to 2.4%, matching a 13-month high.


The last time the core rate of inflation was higher was in 2008.

The latest stirring of inflation is unlikely to deter the Federal Reserve from cutting interest rates next week, but the central bank could face a quandary if prices keep rising and the economy continues to slow.

What happened:

Gas prices fell in August more than they usually do as the summer driving season tapered off.

The cost of food was also flat.

Prices rose for medical care, including prescription drugs.

In a bad sign, the cost of medical care has risen in the past 12 months at the fastest pace in two and a half years.


The cost of rent, used vehicles, airfares and recreational goods also rose.

After adjusting for inflation, hourly wages jumped 0.4%.

They have risen a solid 1.5% in the past year.

Big picture:

Inflation appears to be climbing back toward the Fed’s 2% target after a big drop early in the year, but most central bank officials simply aren’t bothered about inflation right now after years of weak readings.

They are more worried about the damage the U.S. trade war with China could cause to the economy.

So far tariffs have had little effect on inflation, but the spat has harmed exports and business investment.

The Fed will cut rates again if the senior officials believe the threat is grave enough.

What they are saying?:

“It is not clear that inflation fires are breaking out, but we’re starting to see some pretty substantial smoke,” said chief economist Stephen Stanley of Amherst Pierpont Securities.

Market reaction:

The Dow Jones Industrial Average and S&P 500 roses in Thursday trades, aided by reports that the U.S. and China might call a truce of sorts in their trade spat.

The 10-year Treasury yield rose to 1.75%.

https://www.marketwatch.com/story/cheap ... 2019-09-12
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MARKETWATCH

"U.S. jobless claims fall to nearly 5-month low of 204,000 around Labor Day holiday"


By Jeffry Bartash

Published: Sept 12, 2019 10:46 a.m. ET

The numbers:

The number of people who applied for U.S. unemployment benefits around Labor Day fell sharply to a nearly five-month low of 204,000, an extremely low reading that was likely exaggerated by the holiday and possibly Hurricane Dorian.

Initial jobless claims, a rough way to measure layoffs, dropped 15,000 to 204,000 in the seven days ended Sept. 7, the government said Thursday.

That matches the third lowest level of the current economic expansion that began more than 10 years ago.

The only time new claims have been lower was when they dipped below 200,000 in April around the Easter holiday.

Economists polled by MarketWatch estimated new claims would total a seasonally adjusted 213,000.

Even if the holiday and the hurricane caused the big drop in applications, the low level of new claims still shows a muscular labor market that has shown little wear and tear from a slowing U.S economy

What happened:

Actual or unadjusted jobless claims fell the most in the largest states: California, New York, Illinois, Texas and Pennsylvania.

No state reported any big increases.

The more stable monthly average of new claims fell by a smaller 5,250 to 212,500, an almost two-month low.

The four-week average gives a more accurate read into labor-market conditions than the more volatile weekly number.

The number of people already collecting unemployment benefits, known as continuing claims, dipped by 4,000 to 1.67 million.

Big picture:

The trade war with China, a slump among American manufacturers and a slowing U.S. economy have done little so far to cool off the most vibrant labor market in decades.

Hiring has slowed, but companies aren’t cutting many jobs, either.

Economists are watching closely to see if layoffs start to rise, a sign that companies would be feeling more stress.

Yet as long as most Americans keep their jobs the U.S. is likely to keep growing steadily and avoid recession.

Market reaction:

The Dow Jones Industrial Average and S&P 500 rose in Thursday trades, aided by reports that the U.S. and China might call another truce of sorts in their trade spat.

The 10-year Treasury yield rose to 1.75%.

https://www.marketwatch.com/story/joble ... 2019-09-12
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MARKETWATCH

"The ECB’s challenge: Pushing rates further into negative territory without wrecking eurozone banks"


By William Watts

Published: Sept 10, 2019 5:00 a.m. ET

The European Central Bank is widely expected to push its deposit rate further into negative territory Thursday, but the move comes as investors, economists and policy makers worry that the move could take a further toll on the region’s battered banking sector.

After all, the negative rate means banks must pay for the privilege of parking excess reserves at the central bank.


The worry for policy makers is that a further hit to the banking sector’s profitability would add to worries over financial stability while also limiting the ability of banks to provide new loans to the real economy.

In other words, further rate cuts could become counterproductive, effectively serving to tighten financial conditions in the eurozone, noted analysts at Rabobank, in a note.

The Stoxx Europe 600/ex-U.K. Banks Index has rallied 6.8% in September but is down 2.6% for the year to date and is off 18.8% over the last 12 months.

That’s compared with a 14.3% year-to-date rise for the pan-European Stoxx 600 Europe Index, which is up 3.3% over the last 12 months.

The S&P 500 is up 18.7% year-to-date and 3.6% over the last year.

So with that in mind, the ECB is also expected to take steps aimed at easing the pain.

In particular, policy makers have indicated the ECB could introduce a tiered system of deposits, which would see only a portion of deposits subject to negative rates.

But such a system would be complicated and would carry risks of its own.

Here’s a quick guide to what is being discussed:

What is the deposit rate?

The ECB’s deposit rate stands at -0.4%.

That means banks that park reserves overnight pay a 0.4% annual rate for the privilege.

The ECB’s past stimulus measures and other accommodative policies have left the eurozone flooded with massive excess liquidity — or liquidity in excess of that needed to meet short-term obligations.

As noted by Luca Cazzulani, deputy head of fixed-income strategy at Milan-based UniCredit Bank, that excess liquidity has pushed money-market rates toward the deposit rate, making it the ECB’s effective policy rate.

For the ECB, the key question centers on the minimum amount of excess liquidity that is needed to keep money-market rates anchored to the deposit rate, Cazzulani said in a note earlier this month.


Having banks pay the deposit rate beyond that amount is unnecessary and painful.

What’s the ECB expected to do?

Economists look for the ECB to cut its deposit rate by 10 to 20 basis points.

The jury is out on whether the ECB will also move to launch another round of asset purchases.

A previous program of monthly bond buys came to an end in December.

Expectations for a combination of rate cuts and renewed asset-buying were dented in recent weeks as some ECB policy makers appeared to push back against indications from fellow officials that an aggressive program was on the cards for September.

What is tiering?

The ECB isn’t alone in pushing official interest rates into negative territory or in worrying about the effect that move has on the banking sector.

Central banks in Switzerland, Japan and elsewhere have adopted tiering systems of various designs.

Switzerland, for example, exempts bans from paying negative rates on up to 20 times the reserve requirement, while Japan uses a three-tiered program, in which only a fraction of reserves are charged negative rates, Cazzulani noted.

The ECB’s task is made more complicated by the region’s 19-nation banking system and the uneven distribution of excess liquidity across the eurozone, economists said, noting differences in ratios of total reserves/required reserves.

What are the ECB’s options?

Economists largely expect the ECB to adopt a two-tiered system.

The Rabobank analysts described two options: The central bank could introduce a new, lower deposit facility for “‘excess’ excess liquidity,” or it could introduce a “reserves allowance” that comes on top of existing required reserves, with the balance remunerated at the refinancing rate of 0%, the same as required reserves.

In the first option, the lower deposit rate would apply only to excess reserves above a certain threshold, while all excess reserves below the threshold would still be charged the current -0.4% rate.

The second option, in which a certain amount of reserves in addition to required reserves are charged at the 0% refinancing rate, may be more appealing, they said, as it would allow the ECB to cut rates further without any additional costs for the banking sector.

To make it work, however, the allowance would need to be quite large, the Rabobank economists said, estimating that with excess liquidity seen at around €1.8 trillion ($1.99 trillion), the ECB would need to create an allowance worth around €800 billion to fully offset another 40 basis points of deposit rate cuts.

What would it say about future policy?

A tiered system would also see the ECB push back against the idea that it’s ability to drive rates further into negative territory is constrained, but it won’t fully dispel worries about the region’s banking sector.

“If implemented, tiering may weaken the perception of a floor in policy rates, leaving the door open to pricing several rate cuts if necessary,” wrote Cazzulani.

“However, while tiering may address direct costs that negative rates have on banks, the ECB would still have to consider the indirect effects that progressively lower rates have on banks (namely a flat curve in a low yield environment).”

https://www.marketwatch.com/story/the-e ... 2019-09-10
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MARKETWATCH

"Draghi puts heat on politicians to boost fiscal stimulus with his ECB swan song"


By William Watts

Published: Sept 12, 2019 2:28 p.m. ET

Once again, Mario Draghi did “whatever it takes” on monetary policy, overcoming opposition from fellow European Central Bank policy makers Thursday to deliver a sweeping package of seemingly open-ended stimulus in a bid to shore up a flagging eurozone economy and push up stubbornly low inflation.

But he also offered a sobering message on the limits of the ECB’s efforts.

Draghi, chairing his penultimate meeting before leaving the ECB presidency at the end of October, was more explicit than ever about the limited ability of monetary policy to cure the euro area’s longstanding economic ills.

In his news conference, Draghi said the ECB would have had to do less on the monetary policy front if fiscal policy had played a bigger role.

Moreover, he said it was “high time for fiscal policy” to take charge in shoring up the economy.

Draghi, at the height of the eurozone debt crisis in July 2012, uttered the three-word phrase that will forever be associated with his tenure when he pledged the ECB would do “whatever it takes” to preserve the euro.

Often overlooked, is that Draghi qualified the pledge with the words “within our mandate.”


Draghi has spent much of his term testing the limits of that mandate, which is focused solely on price stability as reflected in an annual inflation target of near but just below 2%.

Draghi gets a lot of sympathy from observers who note that the ECB had little choice but to pull out the stops on stimulus in the wake of the financial crisis and the eurozone’s debt woes.

The region’s elected politicians tended to dither, repeatedly kicking the proverbial can down the road when it came to bailouts while healthy economies, such as Germany, refused to contemplate fiscal stimulus.

Even now, with Germany seen in danger of slipping into recession, politicians in Berlin are offering little more than halfhearted indications they would be open to delivering stimulus, but only once the economy is already in contraction.

Several economists and analysts saw Thursday’s ECB package as part of Draghi’s effort to raise pressure on government officials to loosen the fiscal spigots.

“The central bank has long felt that monetary stimulus alone won’t be enough and by doubling down on a massive stimulus package, he’s put the ball in their court,” said Kathy Lien, managing director of FX strategy at BK Asset Management, in a note.

“With his bold curtain call, Draghi is taking the problem of low growth seriously and saying now its time for the governments to act.”

Lien argued that Draghi’s push for more fiscal stimulus was partly behind the euro’s bounceback from its initial post-announcement fall.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said Draghi made clear that the ECB believes it’s being pushed to take increasingly extreme actions as fiscal policy makers sit idle.

But the message could end up being too sobering.

It raises dangers in that the more the ECB argues that its own stimulus measures are being rendered ineffective due to a lack of stimulus, the higher the risk that markets stop believing in what the central bank is doing, he said.

Vistesen argued that while Draghi was flirting with danger, fiscal policy makers are, in fact, likely to step up eventually and that the combination of loose monetary and fiscal policy in the next 12 months should be enough to give asset prices and growth a boost down the road.

Meanwhile, Christine Lagarde, the former French finance minister and International Monetary Fund managing director who is set to take the reins from Draghi on Nov. 1, appears in harmony with Draghi’s tune.

In comments before the European Parliament earlier this month, Lagarde said central banks “are not the only game in town,” the Financial Times reported, saying richer eurozone governments with low deficits should be ready to spend more during downturns.

https://www.marketwatch.com/story/dragh ... 2019-09-12
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CNBC

"Senior White House official denies report US considering interim China trade deal"


Yun Li@YunLi626, Eamon Javers@EamonJavers

Published Thu, Sep 12 2019 • 10:50 AM EDT

* The U.S. is "absolutely not" considering an interim trade deal with China, a senior White House official told CNBC.

* Bloomberg News reported earlier Thursday the Trump administration has discussed putting together a limited trade deal that would delay and remove some China tariffs, citing five people familiar with the matter.


A senior White House official said the U.S. is "absolutely not" considering an interim trade deal with China.

Bloomberg News reported earlier Thursday that the Trump administration discussed putting together a limited trade deal that would delay and remove some China tariffs, citing five people familiar with the matter.


The news had driven stocks to session highs.

Stocks pared gains after the unnamed senior White House official denied the report of such an interim deal.

Trump on Wednesday announced he would delay the tariffs on $250 billion worth of Chinese goods from Oct. 1 to Oct. 15 as a "gesture of good will" to China.

The postponement was at the request of Chinese Vice Premier Liu He, the nation's top trade negotiator, Trump said.

China said Thursday that domestic companies have reached out to inquire about prices of U.S. agricultural products.

Trump tweeted that it is expected China will be buying "large amounts" of U.S. farm goods.

The two countries agreed to meet in early October in Washington and hold deputy-level discussions leading up to the meeting to lay the groundwork for a possible deal.

Liu said Thursday that the talks next week will focus on trade balance, market access and investor protection.

https://www.cnbc.com/2019/09/12/senior- ... -deal.html
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MARKETWATCH

"ECB cuts key rate, relaunches QE to shore up eurozone economy"


By William Watts

Published: Sept 12, 2019 12:58 p.m. ET

The European Central Bank delved deep into its tool box on Thursday, cutting its deposit interest rate further into negative territory, launching a new round of monthly bond purchases and taking other steps to stimulate a flagging eurozone economy.

In outgoing ECB President Mario Draghi’s next-to-last meeting, the central bank, as expected, delivered a 10 basis point cut to the deposit rate that banks pay to park excess reserves with it.

The move pushed the rate to minus 0.5%.

In a news conference following the decision, Draghi said stubbornly low inflation, which remains well below the ECB’s target of near but just below 2%, was the main driver for the decision.

Draghi said risks to the eurozone outlook had increased as a result of prolonged global trade disputes and concerns about the prolonged process involving the U.K. exit from the European Union.

Risks of a eurozone recession remained “small,” he said, but had increased since the ECB’s last meeting.

Economists had been less certain whether the ECB would also move to relaunch its quantitative easing program at its September meeting, but policy makers did so.

The ECB said it would begin buying 20 billion euros a month worth of securities beginning Nov. 1.

Doubts had emerged in the runup to the meeting after a handful of ECB officials, in public remarks and media interviews, had questioned the need for relaunching asset purchases.

Draghi, in a news conference following the decision, said there had been broad support for the rate cut and an extension of the central bank’s forward guidance on rates, but acknowledged more “diversity” of views on relaunching bond purchases.

Still, there was a broad consensus in favor of the entire package.

Moreover, economists were describing the ECB’s asset-buying plan as “open-ended” QE, with policy makers pledging to continue purchases “as long as necessary to reinforce the accommodative impact of its policy rates” and to end shortly before the ECB begins to raise key interest rates.

“Today’s decisions have anchored and enshrined the Draghi legacy in future ECB decisions."

"‘Whatever it takes’ has just been extended by ‘as long as it takes,’ said Carsten Brzeski, chief economist at ING Germany, referring to Draghi’s famous 2012 pronouncement at the height of the eurozone debt crisis that the ECB would do “whatever it takes” to preserve the euro.


Among other steps taken by the ECB on Thursday, policy makers extended the so-called forward guidance on rates, saying they would remain at “present or lower levels” until the inflation outlook “robustly” converges with the bank’s target inflation rate of near but just below 2%.

Previously, the ECB said it intended rates to remain at present or lower levels through the first half of next year.

The ECB also made adjustments to its targeted long-term refinancing operations to further encourage lending and, in a bid to ease pressure on bank profitability from a lower deposit rate, announced it would introduce a tiered system that would exempt a chunk of excess reserves parked by banks with the ECB from the negative rate.

The decision drew the attention of U.S. President Donald Trump, who has previously accused the ECB of working to undercut the dollar.

On Thursday, he used the decision as an excuse to again bash the U.S. Federal Reserve via Twitter:

Asked about the tweet, Draghi responded that ECB policy makers “do not target the exchange rate, period.”

The euro fell to a two-year low versus the U.S. dollar in the wake of the decision, but later rebounded following a round of U.S. economic data and after a news report said Trump administration officials were weighing an interim trade deal with China.

The pan-European Stoxx 600 index was up 0.2%.

U.S. stocks pushed higher, with the S&P 500 up 0.5%, while the Dow Jones Industrial Average rose around 110 points, or 0.4%.

The bond-buying decision sent European bond yields sinking, dragging on U.S. Treasury yields.

But yields soon rebounded into positive territory as trade-deal hopes appeared to take center stage.

Yields and bond prices move in opposite directions.

https://www.marketwatch.com/story/ecb-c ... 2019-09-12
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