Bloomberg
“Trump Leans Toward Jay Powell As Next Fed Chairman.”
President Donald Trump is leaning toward appointing Federal Reserve Governor Jerome Powell to be the next chairman of the Fed, according to three people familiar with the matter.
The decision isn’t yet final, the people cautioned, and Trump could change his mind at any time. Yet his preference for Powell dims current Fed Chair Janet Yellen’s chances for a second term at the helm of the world’s leading central bank.
Yellen’s first term ends in February, and Trump has been working from a shortlist of five candidates developed by his advisers that includes the current chair and Powell. Other candidates he’s considering are Stanford University economist John Taylor, former Fed governor Kevin Warsh and National Economic Council Director Gary Cohn.
The president has promised to make a decision soon and White House officials have said he would reveal his choice before his Nov. 3 trip to Asia.
A lawyer by training, Powell managed the Fed’s response to the 2014 flash crash in Treasury debt. The 64-year-old, who goes by Jay, served at the Treasury Department under President George H.W. Bush, eventually ending up as undersecretary for domestic finance.
Reuters
“Inventories, trade support U.S. third-quarter economic growth.”
The U.S. economy unexpectedly maintained a brisk pace of growth in the third quarter as an increase in inventory investment and a smaller trade deficit offset a hurricane-related slowdown in consumer spending and a decline in construction.
ross domestic product increased at a 3.0 percent annual rate in the July-September period, also supported by strong business spending on equipment, the Commerce Department said on Friday. The economy grew at a 3.1 percent pace in the second quarter.
The government said while it was impossible to estimate the overall impact of hurricanes Harvey and Irma on third-quarter GDP, preliminary estimates showed that the back-to-back storms had caused losses of $121.0 billion in privately owned fixed assets and $10.4 billion in government-owned fixed assets. Economists had forecast the economy growing at a 2.5 percent pace in the third quarter.
Businesses accumulated inventories at a $35.8 billion pace in the third quarter in anticipation of strong demand. As a result, inventory investment contributed 0.73 percentage point to third-quarter GDP growth, after adding just over a tenth of a percentage point to output in the prior period.
While export growth slowed, that was eclipsed by the steepest pace of decline in imports in three years, leaving a smaller trade deficit, which added four-tenths of a percentage point to GDP growth. Trade has contributed to output for three quarters in a row.
The Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) price index excluding food and energy, increased at a 1.3 percent rate. That followed a 0.9 percent pace of increase in the second quarter.
BBC News
“Barnaby Joyce: Australia deputy PM disqualified from office.”
Australian Deputy PM Barnaby Joyce and four other politicians were wrongly elected because they held dual citizenship, a court has ruled. The other four politicians – Fiona Nash, Malcolm Roberts, Larissa Waters and Scott Ludlam – had been elected to the Senate.
The High Court of Australia decision means three of the politicians, including Mr Joyce, are disqualified from office. The others quit in July. Australia’s constitution prohibits dual citizens from being elected. Mr Joyce’s exit narrows the government’s paper-thin majority, but he could return through a by-election.
The deputy prime minister, who renounced New Zealand citizenship in August, has pledged to re-contest his lower house seat. «I respect the verdict of the court,» Mr Joyce said immediately after the verdict. «We live in a marvellous democracy, with all the checks and balances they have given us all the freedoms we see. I thank the court [for] their deliberations.»
With Mr Joyce disqualified, Prime Minister Malcolm Turnbull’s numbers slip to 75 in the 150-seat House of Representatives. However, Mr Turnbull could regain his 76-seat majority if Mr Joyce wins the by-election on 2 December. Mr Joyce is eligible to run now he is a citizen of Australia alone. Mr Turnbull has reshuffled his cabinet because both Mr Joyce and Ms Nash held ministerial portfolios.
Bloomberg
“Catalan Lawmakers Vote for Independence in Defiance of Spain.”
Catalan lawmakers voted to set up an independent state, an irrevocable step that augured a dramatic confrontation with Spanish authorities while delighting their supporters in the streets.
The resolution approved by the parliament in Barcelona said a new republic independent from Spain had been set in motion. The portion of the text submitted to a vote included measures to ask all nations and institutions to recognize the Catalan Republic. Separatist lawmakers broke into the Catalan anthem while opposition parties boycotted the vote.
“We constitute the Catalan Republic, as an independent and sovereign country, under the rule of law,” said the preamble to the resolution, read out by speaker Carme Forcadell before the secret ballot.
Catalonia’s tumultuous push for independence reached its climax with regional President Carles Puigdemont squeezed by the irreconcilable demands of his own hardliners and authorities in Madrid. In the past 48 hours, the Catalan leader sought to avoid the chaos of an illegal secession without provoking anger among his base.
Spain’s 10-year bonds dropped on the news, with the spread against benchmark German bunds widening by seven basis points to 119 basis points. The country’s benchmark stock index, the Ibex, fell 1.8 percent, erasing Thursday’s gain when it looked like all-out declaration of independence might be avoided.
Pro-independence activists had called for a human shield around government buildings to thwart Spanish efforts to take control and protect their representatives. Yesterday, they focused their ire on Puigdemont, calling him a “traitor,” as his commitment to declaring independence wavered.