The US Federal Reserve showed no appetite for employing in the future the controversial negative rates as a policy tool, minutes from the central bank’s October FOMC meeting released on Wednesday showed.
Fed Gives No Chance to Negative Rates
All the 17 policymakers of the Federal Open Market Committee (FOMC) agreed that below-zero interest rates “did not appear to be an attractive monetary policy tool in the United States,” a view going against what President Donald Trump has been pushing for the US to be able to compete in trade with China, EU and Japan. The minutes also stated that the participants were deeply suspicious of the use of negative rates even in the event of a future recession.
At the late October policy debate, the Fed voted 8–2 to slash federal funds rates by 25 basis points, for the third time this year to shore up the economy against any fallout from the effects of the trade war with China and slowing growth abroad.
“Most participants judged that the stance of policy, after a 25 basis point reduction at this meeting, would be well-calibrated to support the outlook of moderate growth, a strong labor market and inflation near the committee’s symmetric 2% objective,” the FOMC minutes read.
Doubts Over Sino-US Deal Grow
Citing people close to the Trump’s administration, Reuters reported on late Wednesday that the Phase-1 deal to end the trade war between the US and China may not be done this year.
The complication was caused by the Chinese pressure to roll back existing tariffs. The report comes at a time of high tension and division in Washington as the Democratic-led House investigates Trump for wrongdoing in his dealings with Ukraine with a year less to go for the 2020 presidential elections.
“I don’t think they’re stepping up to the level that I want,” Trump told reporters at an Apple production facility in Texas when asked about the China negotiations.
Chinese commerce and foreign ministry spokespeople made contrary remarks, stating that Beijing was striving to reach a deal.
However, the passing of two bills supporting anti-Communist Hong Kong protesters at the US House of Representatives on Wednesday further strained ties between the world’s two largest economies. Reports suggest Trump is expected to sign them into law, a move that could derail the trade talks.
Johnson Widens Lead Over Labour
UK Boris Johnson’s ruling Conservative Party widened its domination over its main rival the opposition Labour Party to 11 points this week, an opinion poll published on Wednesday by the Telegraph newspaper showed.
The poll conducted by Savanta ComRes put the support for the Conservatives at 42%, only less than a month before the December 12 snap general elections. The one-point rise from the last poll over the weekend widened the gap with the Labour came down two points to 31%.
in Oil News
The US Energy Information Administration’s weekly report on Wednesday showed that US crude oil stocks increased by 1.4 million barrels last week, compared to market expectations of a 1.5 million-barrel build.
Russia’s President Vladimir Putin said on Wednesday that Moscow is will continue its cooperation the Organization of the Petroleum Exporting Countries (OPEC) when it came to curbing oil output per a deal signed last year to prevent oversupplies.