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Powell Focuses on Economic Need at Key Moment in Markets and Politics – The New York Times

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The Federal Reserve will continue to support the economy, its chair, Jerome H. Powell, pledged at a Senate hearing, even as concerns about inflation rise.

The American economy remains far from healed and the Federal Reserve is in no hurry to dial back its support, Jerome H. Powell, the central bank’s chair, told lawmakers during a closely watched hearing on Tuesday.

It’s a pledge Mr. Powell has made many times in the last 11 months, but on Tuesday it came against a tense backdrop: As Democrats try to move a $1.9 trillion relief package through Congress, Republicans argue that it’s too big and could lead to inflation that would hurt consumers and businesses. Markets have also begun to quiver, as investors worry that an overheating economy will prompt the Fed to pull back on its efforts to bolster growth.

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Speaking before the Senate Banking Committee, Mr. Powell declined to weigh in on the Biden administration’s spending plans but pushed back on the idea raised by multiple Republican senators that the economy is on the cusp of running too hot. The economy is down nearly 10 million jobs since last February, inflation has been too low rather than too high in recent decades, and prospects for a rapid recovery — while brighter — remain far from assured, he said.

“The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain,” Mr. Powell said. “There is a long way to go.”

The Fed plans to hold interest rates near zero, where they have been since March, while continuing to buy government-backed bonds at a pace of $120 billion a month as it waits for the economy to heal. Investors have grown concerned that the Fed might slow those bond purchases sooner rather than later if inflation begins to rise.

That worry is helping to push up interest rates on longer-term government debt; they rose to their highest point in a year this week. Those rates are the basis for corporate borrowings and mortgages, and their rise has set stock markets on edge as well.

But on Tuesday, Mr. Powell reiterated that the Fed plans to keep buying bonds until it sees “substantial further progress” toward its twin goals of full employment and stable inflation. America can “expect us to move carefully, and patiently, and with a lot of advance warning” when it comes to slowing that support, Mr. Powell said.

The reassurance seemed to help. The S&P 500 closed higher on Tuesday, snapping back from a loss of nearly 2 percent earlier in the day and breaking a weeklong losing streak.

“We’re in one of these market mania moments, in which there’s an intense focus on inflation” and “he was very sanguine, very calm,” said Julia Coronado, founder of MacroPolicy Perspectives and a former Fed economist. “He kept turning attention back to the labor market.”

Unemployment has come down sharply after surging last year, but the official unemployment rate remains nearly double its February 2020 level. And job losses have been more acute for members of minority groups and those with less education. Though spending has bounced back, activity in the service industry is still subdued.

Vaccines are feeding hopes for a stronger and more complete 2021 rebound. Prices are expected to rise temporarily in the coming months, both compared with the weak readings from last year and, potentially, as consumers spend down savings amassed during the lockdown on restaurant dinners and vacations.

But Fed officials have been clear that they do not expect inflation to pick up in a lasting way and that they plan to look past temporary increases when thinking about their policies. Price pressures have been stubbornly tepid, rather than too high, for decades and across many advanced economies.

Mr. Powell said on Tuesday that longer-running inflation trends do not “change on a dime” and that if prices start to rise in an alarming way, the Fed has the tools to fight that.

“I really do not expect that we’ll be in a situation where inflation rises to troubling levels,” Mr. Powell said. “This is not a problem for this time, as near as I can figure.”

He also pushed back on the idea that government spending is poised to send prices rocketing out of control.

“There perhaps once was a strong connection between budget deficits and inflation — there really hasn’t been lately,” Mr. Powell said. He noted that while he does expect inflation to jump around in coming months, there is a distinction between a temporary pop in prices and a sustained increase.

Still, he declined to weigh in on how much more government support is appropriate.

“I, today, will really stay away from fiscal policy,” he said near the very start of the hearing. He went on to tiptoe around or simply decline to answer questions about the minimum wage and the size and various components of the White House’s spending proposal. At one point, he was asked whether he would be “cool” with passing the spending bill or not.

“I think by being either cool or uncool, I would have to be expressing an opinion,” Mr. Powell said.

The Fed is politically independent and steers away from partisan issues, but it has been providing advice to policymakers in Congress and weighing in on socioeconomic disparities and financial risks tied to climate change over the last year. Some of that outspokenness has drawn Republican attention.

Senator Patrick J. Toomey, Republican of Pennsylvania, warned on Tuesday that the central bank should avoid moving beyond its core duties.

“As noble as the goals might be, issues such as climate change and racial inequality are simply not the purview of our central bank,” Mr. Toomey said.

Mr. Powell did talk about how strong labor markets help people on the margins — those who aren’t trained or those with criminal records — to succeed. He made it clear that the central bank is hoping to return to a strong labor market, like the one that preceded the pandemic.

The Fed’s bond purchases can help to bolster the economy by lowering longer-term interest rates and by prodding investors out of safer assets, like government bonds, and into stocks and other more active uses of their cash.

Mr. Powell said the economy over the last three months hasn’t “really been making” the substantial progress the Fed is looking for as a precondition for slowing its purchases, as job gains have slowed. But he said there’s an expectation that progress should “pick up as the pandemic subsides.”

When it comes to the Fed’s main interest rate, federal funds rate, which helps to guide borrowing costs across the economy, Mr. Powell also struck a cautious tone. The Fed wants to achieve full employment, hit 2 percent on inflation, and believe that the economy is on track for even faster price gains before raising that rate.

“Right now, our focus is on providing the economy the support it needs,” Mr. Powell said at one point, summing up his message.

Matt Phillips contributed reporting.

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Opinion: Canada's foreign policy and its domestic politics on Israel's war against Hamas are shifting – The Globe and Mail

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The vote in the House of Commons last week on Israel’s war against Hamas represents a shift in both Canada’s foreign policy and its domestic politics.

The Liberal government is now markedly more supportive of the rights of Palestinians and less supportive of the state of Israel than in the past. That shift mirrors changing demographics, and the increasing importance of Muslim voters within the Liberal coalition.

Both the Liberal and Conservative parties once voiced unqualified support for Israel’s right to defend itself from hostile neighbours. But the Muslim community is growing in Canada. Today it represents 5 per cent of the population, compared with 1 per cent who identify as Jewish.

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Although data is sparse prior to 2015, it is believed that Muslim Canadians tended to prefer the Liberal Party over the Conservative Party. They were also less likely to vote than the general population.

But the Conservative Party under Stephen Harper deeply angered the community with talk about “barbaric cultural practices” and musing during the 2015 election campaign about banning public servants from wearing the niqab. Meanwhile, Liberal Leader Justin Trudeau was promising to bring in 25,000 Syrian refugees to Canada if elected.

These factors galvanized community groups to encourage Muslims to vote. And they did. According to an Environics poll, 79 per cent of eligible Muslims cast a ballot in the 2015 election, compared with an overall turnout of 68 per cent. Sixty-five per cent of Muslim voters cast ballots for the Liberal Party, compared with 10 per cent who voted for the NDP and just 2 per cent for the Conservatives. (Telephone interviews of 600 adults across Canada who self-identified as Muslim, were conducted between Nov. 19, 2015 and Jan. 23, 2016, with an expected margin of error of plus or minus 4 percentage points 19 times out of 20.)

Muslim Canadians also strongly supported the Liberals in the elections of 2019 and 2021. The party is understandably anxious not to lose that support. I’m told that Foreign Affairs Minister Mélanie Joly often mentions the large Muslim community in her Montreal riding. (According to the 2021 census, 18 per cent of the people in Ahuntsic-Cartierville identify as Muslim.)

This is one reason why the Liberal leadership laboured so mightily to find a way to support last week’s NDP motion that would, among other measures, have recognized the state of Palestine. The Liberal caucus was deeply divided on the issue. My colleague Marieke Walsh reports that dozens of Liberal MPs were prepared to vote for the NDP motion.

In the end, almost all Liberal MPs ended up voting for a watered-down version of the motion – statehood recognition was taken off the table – while three Liberal MPs voted against it. One of them, Anthony Housefather, is considering whether to remain inside the Liberal caucus.

This is not simply a question of political calculation. Many Canadians are deeply concerned over the sufferings of the people in Gaza as the Israel Defence Forces seek to root out Hamas fighters.

The Conservatives enjoy the moral clarity of their unreserved support for the state of Israel in this conflict. The NDP place greater emphasis on supporting the rights of Palestinians.

The Liberals have tried to keep both Jewish and Muslim constituencies onside. But as last week’s vote suggests, they increasingly accord a high priority to the rights of Palestinians and to the Muslim community in Canada.

As with other religious communities, Muslims are hardly monolithic. Someone who comes to Canada from Senegal may have different values and priorities than a Canadian who comes from Syria or Pakistan or Indonesia.

And the plight of Palestinians in Gaza may not be the only issue influencing Muslims, who struggle with inflation, interest rates and housing affordability as much as other voters.

Many new Canadians come from societies that are socially conservative. Some Muslim voters may be uncomfortable with the Liberal Party’s strong support for the rights of LGBTQ Canadians.

Finally, Muslim voters for whom supporting the rights of Palestinians is the ballot question may be drawn more to the NDP than the Liberals.

Regardless, the days of Liberal/Conservative bipartisan consensus in support of Israel are over. This is the new lay of the land.

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Recall Gondek group planned to launch its own petition before political novice did – CBC.ca

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The third-party group helping promote the recall campaign against Mayor Jyoti Gondek had devised plans to launch its own petition drive, as part of a broader mission to make Calgary council more conservative.

Project YYC had planned with other conservative political organizations to gather signatures demanding Calgary’s mayor be removed, says group leader Roy Beyer. But their drive would have begun later in the year, when nicer weather made for easier canvassing for supporters, he said.

Those efforts were stymied when Landon Johnston, an HVAC contractor largely unknown in local politics, applied at city hall to launch his own recall drive in early February. Since provincial recall laws allow only one recall attempt per politician per term, Project YYC chose to lend support to Johnston’s bid.

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“Now we have to try to do door-knocking in the winter, and there’s a lot of preparation that you have to contemplate prior to starting. And Landon didn’t do that,” Beyer told CBC News in an interview.

Project YYC has helped gather signatures, created a website and erected large, anti-Gondek signs around town. It has supplied organizational heft that Johnston admits to lacking.

Their task is daunting.

According to provincial law, in order to force a recall plebiscite to oust the mayor before the term is up, they have two months to gather more than 514,000 signatures, an amount equal to 40 per cent of Calgary’s population in 2019.

They have until April 4 to collect that many signatures, and by March 21 had only 42,000.

Beyer criticizes the victory threshold for recall petition as so high that it’s “a joke,” and the province may as well not have politician recall laws.

So if he thinks it’s an impossible pursuit, why is he involved with this?

“You can send a message to the mayor that she should be sitting down and resigning … without achieving those numbers,” Beyer said.

Project YYC founder Roy Beyer, from a Take Back Alberta video in 2022. He is no longer with that provincial activist group. (royjbeyer screenshot/Rumble)

He likened it to former premier Jason Kenney getting 52 per cent support in a UCP leadership review — enough to technically continue as leader, but a lousy enough show of confidence that he announced immediately he would step down.

Gondek has given no indication she’ll voluntarily leave before her term is up next year. But she did emerge from a meeting last week with Johnston to admit the petition has resonated with many Calgarians and is a signal she must work harder to listen to public concerns and explain council’s decisions.

The mayor also told the Calgary Sun this week that she’s undecided about running for re-election in 2025. 

“There used to be this thing where if you’re the mayor, of course you’re going to run for another term because there’s unfinished business,” Gondek told the newspaper.

“And yes, there will be unfinished business, but the times are not what they were. You need to make sure you’re the right leader for the times you’re in.”

The last several Calgary mayors have enjoyed multiple terms in office, going back to Ralph Klein in the 1980s. The last one-term mayor was Ross Alger, the man Klein defeated in 1980.

Beyer and fellow conservative organizers launched Project YYC before the recall campaign. The goal was to elect a conservative mayor and councillors — “a common-sense city council, instead of what we currently have,” he said.

Beyer is one of a few former activists with the provincial pressure group Take Back Alberta to have latched themselves to the recall bid and Project YYC, along with some United Conservative Party riding officials in Calgary. 

Beyer’s acknowledgment of his group’s broader mission comes as Premier Danielle Smith and her cabinet ministers have said they want to introduce political party politics in large municipalities — even though most civic politicians have said they don’t want to bring clear partisanship into city halls.

Although Beyer admits Project YYC’s own recall campaign would have been a coalition effort with other conservative groups, he wouldn’t specify which ones. He did insist that Take Back Alberta wasn’t one of them.

A man in a grey baseball cap speaks to reporters.
Calgary business owner Landon Johnston speaks to reporters at City Hall on March 22 following his 15-minute conversation with Mayor Jyoti Gondek. (Laurence Taschereau/CBC)

Johnston says he was approached by Beyer’s group shortly after applying to recall Gondek, and gave them $3,000 from donations he’d raised.

He initially denied any knowledge of Project YYC when documents first emerged about that group’s role in the recall, but later said he didn’t initially realize that was the organizational name of his campaign allies.

“They said they could get me signatures, so I said, ‘OK, if you can do it by the book, here’s some money.’ And it’s worked,” he said.

Johnston has said he’s new to politics but simply wants to remove Gondek because of policies he’s disagreed with, like the soon-to-be-ended ban on single-use plastics and bags at restaurant takeouts and drive-thrus.

He’s no steadfast conservative, either. He told CBC’s Calgary Eyeopener that he voted for Rachel Notley’s NDP because one of its green-renovation incentives helped his HVAC business.

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Larry David shares how he feels about Trump – CNN

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Larry David shares how he feels about Trump

“Curb Your Enthusiasm” star Larry David shares how he feels about former President Donald Trump and the 2020 election. Watch the full episode of “Who’s Talking to Chris Wallace,” streaming March 29 on Max.


03:21

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