U.S. Government

  • 2020-07-10 07:30

    By Greg Quinn

    (MNI) - Governments must keep fiscal stimulus going through the recovery from the Covid-19 pandemic, while making hard choices about ending support for industries like airlines and fossil fuels facing a long-term reduction in demand, the IMF said Friday.

    "Fiscal policy will need to remain supportive and flexible until a safe and durable exit from the crisis is secured," Fiscal Affairs Director Vitor Gaspar and Research Director Gita Gopinath wrote in a blog post.

    "It will be necessary to facilitate the transfer of resources from sectors that may permanently shrink, such as air travel, to sectors that will be expanding, such as digital services. Support should move from maintaining jobs to supporting people as they retrain or relocate across sectors.

  • 2020-07-09 12:00

    By Greg Quinn and Brooke Migdon

    WASHINGTON (MNI) - Congress should extend fiscal stimulus as damage from Covid-19 lingers while the Federal Reserve should be ready with forward guidance and expanded QE if the economy weakens further, the OECD said Thursday.

    The banking system also faces risks if stimulus is withdrawn and there is a surge in bankruptcies from highly leveraged companies, the Paris-based group said in an annual review of the world's largest economy.

    "A sharp fiscal retrenchment would be counter-productive and as such the temporary provisions in the recent tax reform should not be allowed to expire. Furthermore, automatic stabilizers and additional measures implemented as part of the crisis reaction should be allowed to play out," the OECD report said.

  • 2020-06-24 09:00

    By Greg Quinn

    WASHINGTON (MNI) - The IMF reduced its 2020 global GDP forecast to -4.9% from -3% and said every region will contract for the first time ever as the Covid-19 pandemic continues adding damage to the deepest slump since the Great Depression.

    Output next year will only recover to around 2019 levels or 6.5pp less than what the IMF expected at the start of this year, according to a report Wednesday. Consumption has fallen far more than in other recessions, investment has tumbled, and a "catastrophic hit to the global labor market" will hobble the recovery.

    "Downside risks, however, remain significant," the Washington-based fund said, including a second wave of the virus that could reduce GDP another 4.9pp next year.

  • 2020-05-28 15:43

    By Ryan Hauser

    WASHINGTON (MNI) - The U.S. is unlikely to completely strip Hong Kong's special trade status amid China's effort to control the city, Derek Scissors, chief economist at China Beige Book and an American Enterprise Institute scholar, told MNI.

    Policy makers will seek deterrence over quick punishment, likely including the new Toomey-Van Hollen legislation calling for targeted sanctions, Scissors said in an interview Thursday.

    The U.S. will "seek to remove specific protections in order to allow sanctions against Chinese entities based and/or acting in Hong Kong," he said.

    China's recent security law "is another log on the fire, not gasoline," Scissors said.

  • 2020-05-28 13:53

    By Greg Quinn

    OTTAWA (MNI) - Mark Carney warned leaders from the UK, Germany, France and Canada at a UN conference Thursday not to remove stimulus too soon through the Covid-19 pandemic, and said traditional fiscal action is less powerful with households skittish about spending.

    "Countries will need to use all of their policy instruments," Carney told the conference. "We have to be careful not to withdraw that stimulus too soon as we saw shortly thereafter" the global financial crisis in 2009, he said.

    "Coming out of this crisis, some of traditional stimulus measures will be less effective than usual, think of income transfers or temporary tax cuts, because they will be dampened by heightened risk aversion" Carney said.

  • 2020-05-14 16:08

    By Evan Ryser

    WASHINGTON (MNI) - Fed Vice Chair Randal Quarles told a Congressional committee he isn't considering an emergency facility to support mortgage-backed securities, and downplayed the chance that further coronavirus waves will trigger a financial crisis.

    "We are not currently considering an additional facility," Quarles said before the House Financial Services Committee with regulators on Wednesday, that was taped and released on Thursday. The Fed's position on MBS lines up with the view Treasury Secretary Steven Mnuchin gave last month that he wasn't looking at a Fed facility.

  • 2020-05-13 10:47

    --Unlikely China Will Meet Import Commitments, Advisors Say
    --China Wants More Time, Or Reduction In Commitments
    --But Wants To Preserve Phase 1 Deal

    BEIJING (MNI) - China may propose extending the implementation period of its Phase 1 trade agreement with the U.S.

  • 2020-05-12 15:41

    By Ryan Hauser

    WASHINGTON (MNI) - China's WTO ambassador said the group is losing momentum on negotiations amid a lack of leadership and meetings hobbled due to Covid-19.

    Ambassador Zhang Xiangchen said Tuesday that while the WTO continues to meet via teleconference, in-person talks have stopped in Geneva.

  • 2020-05-06 15:58

    --Bostic Sees No Shift In Rates For Some Time

    WASHINGTON (MNI) - Atlanta Fed President Raphael Bostic on Wednesday said mortgage-market strains are easing as policy makers allow loan forbearance and push liquidity into the banking system.

    Federal Housing Finance Agency rule changes have checked dangers in the market for jumbo mortgages and signs lenders were pulling back on loans in places like California, as well as "risk that it would spread into the single-family purchase market," Bostic said.

    The Fed continues to buy a "significant number" of securities providing liquidity in the market, Bostic said, but "if there are signs of stresses starting to emerge" then he would expect Fannie Mae and Freddie Mac to act again.

  • 2020-05-06 08:30

    The U.S. Treasury Department released the following statement Wednesday:

    The U.S. Department of the Treasury is offering $96 billion of Treasury securities to refund approximately $57 billion of privately-held Treasury notes and bonds maturing on May 15, 2020. This issuance will raise new cash of approximately $39 billion. The securities are:

    - A 3-year note in the amount of $42 billion, maturing May 15, 2023;

    - A 10-year note in the amount of $32 billion, maturing May 15, 2030; and

    - A 30-year bond in the amount of $22 billion, maturing May 15, 2050.

    The 3-year note will be auctioned on a yield basis at 1:00 p.m. EDT on Monday, May 11, 2020. The 10-year note will be auctioned on a yield basis at 1:00 p.m. EDT on Tuesday, May 12, 2020.