Global News December 13, 2017

  1. BBC
  2. Global News December 13, 2017

“Fed 2018 Dots in Focus for Yellen Finale: Decision Day Guide.”

As investors await 2018 direction from Federal Reserve chairman nominee Jerome Powell, they will get one last chance to hear Janet Yellen’s take on the U.S. economy.
If all goes as expected, she will use her final scheduled press conference before stepping down at the helm of the U.S. central bank to explain why officials raised rates a third time this year.
The rate-setting Federal Open Market Committee is expected to lift the target range for the benchmark federal funds rate by a quarter percentage point to 1.25 percent to 1.5 percent at the conclusion of its two-day meeting in Washington on Wednesday. A policy statement will be released at 2 p.m. and her press conference begins 30 minutes later.
The move will mark Yellen’s fifth hike since she began raising rates from zero in December 2015, but the key for markets will be the FOMC’s dot-plot projections of interest rates for 2018, 2019 and beyond. Some participants could edge forecasts higher in light of a strengthening U.S. economy and Congress’s likely passage of tax cuts. “People are going to be focused almost exclusively on the dots,” said Stephen Stanley, chief economist at Amherst Pierpont Securities and a former researcher at the Richmond Fed. “Everything at the margin would argue for more rather than less tightening.”
In September, Fed officials projected three hikes in 2018 and two more in 2019, with rates settling at 2.75 percent in the longer run, according to the median estimate. While those forecasts are not expected to change, there is a chance they could edge higher.
The U.S. economy is heating up, with growth tracking about 2.9 percent for the fourth quarter, according to the Atlanta Fed, following two quarters above 3 percent. President Donald Trump and Republican lawmakers are also closing in on a package of corporate tax cuts which could also help lift growth.


“Trump loses his big bet on Alabama U.S. Senate race.”

In backing Roy Moore in Alabama’s U.S. Senate race even though the candidate faced allegations of sexual misconduct with teenage girls, President Donald Trump made a risky bet – and lost big.
The victory by Democrat Doug Jones over the Republican Moore in the Alabama special election on Tuesday was a catastrophe for Trump, portending a Democratic wave next year that could cost Republicans control of one or both houses of Congress.
The stakes in Alabama were that high. Democrats already were confident they had a strong chance to retake the U.S. House of Representatives in next year’s congressional elections. Jones’ narrow victory increases their once-long odds of retaking control of the Senate as well.
If Democrats were to recapture both chambers, they would serve as a check on Trump’s agenda and might even initiate impeachment proceedings against him. “That Republicans lost in one of the most Republican states in the nation is a wake-up call no matter how flawed their candidate was,” said Jesse Ferguson, a Democratic strategist and former aide to Democrat Hillary Clinton’s presidential campaign.
Democrats never expected to have a chance in Alabama, where they had not won a U.S. Senate race in 25 years. But the combination of Trump’s unpopularity, the sexual misconduct allegations that erupted against Moore in November, and Trump’s enthusiastic support of him anyway gave them the opportunity, experts said. “Trump was the one who got Jones within firing range, and Moore allowed Jones to win,” said Kyle Kondik, a political analyst at the University of Virginia.
Even as Democrats lost several special congressional elections this year, they consistently showed higher levels of turnout and engagement, which is attributable to Trump, Kondik said.


BBC News
“Yemen war: Air strikes on rebel prison in Sanaa ‘kill 30’.”

At least 30 people are reported to have been killed in Saudi-led coalition air strikes on a rebel military police camp in Yemen’s capital, Sanaa. Most of the dead were said to be detainees at a prison inside the camp.
A guard said an initial attack damaged one wing of the jail, prompting some inmates to try to escape. Then another strike almost demolished the building. The coalition backs Yemen’s government in its war against the Houthi rebel movement.
More than 8,670 people have been killed and 49,960 injured since the coalition intervened in the conflict in 2015, according to the UN. The fighting and a blockade by the coalition has also left 20.7 million people in need of humanitarian aid, created the world’s largest food security emergency, and led to a cholera outbreak that is thought to have killed 2,219 people since April.
The raid on the camp in eastern Sanaa began in the early hours of Tuesday. One of the guards at the camp’s prison, Mohammed al-Aqel, told AFP news agency that it was hit at least five times, and that several buildings and a perimeter wall were heavily damaged.
There was no immediate comment from the coalition. However, it has carried out a series of air strikes on Houthi positions in Sanaa since clashes erupted two weeks ago between Houthi fighters and supporters of their former ally, ex-President Ali Abdullah Saleh.
Saleh was killed in an attack outside Sanaa on 4 December, two days after he declared that he was breaking with the Houthis and that he was ready to «turn a new page» with the Saudi-led coalition if it stopped attacking Yemen.
The street fighting in Sanaa trapped civilians in their homes for days and left at least 234 people dead, according to the International Committee of the Red Cross. On Sunday, security sources told AFP that coalition air strikes on a Houthi training camp in Hajja province, north-west of the capital, had killed 26 rebels.


“U.S. core CPI slows in November, apparel prices tumble.”

Underlying U.S. consumer inflation slowed in November amid weak healthcare costs and the biggest drop in apparel prices since 1998.
The moderation in underlying prices will likely attract the attention of Federal Reserve officials meeting on Wednesday for a second day. There are concerns among some policymakers that the factors behind the tame inflation could prove more persistent.
The Labor Department said its Consumer Price Index excluding the volatile food and energy components ticked up 0.1 percent also as prices for airline fares and household furnishing fell. The so-called core CPI advanced 0.2 percent in October.
As a result, the annual increase in the core CPI slowed to 1.7 percent in November from 1.8 percent in October.
The Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, has consistently undershot the U.S. central bank’s 2 percent target for almost 5-1/2 years.
The overall CPI increased 0.4 percent in November after edging up 0.1 percent in October. That raised the year-on-year increase in the CPI back to 2.2 percent from 2.0 percent in October.