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Fed’s Robert Kaplan ‘calling out’ US tariff risk before it worsens

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An escalation of U.S. trade tariffs would harm the economy’s prospects, according to a Federal Reserve official who is making it his business to raise the alarm with lawmakers and government officials.

“What’s going on in the short-run certainly isn’t positive, but for me it isn’t sufficient yet – yet – to materially change my outlook,” Dallas Fed President Robert Kaplan told Reuters in an interview on Friday. Still, he said, he would need to downgrade his outlook if tensions between the U.S. and its trade partners escalate. Even though the Fed’s job is not to set trade policy, it must react to it, he said.

“I’m not doing my job if we don’t call out this trade analysis,” to the public, Republican and Democratic policymakers, and to appointed and elected officials, he said. “It is also part of my job to call out relevant issues that affect economic growth in the United States, even if they are not in the purview of the Fed.” 

The Trump administration earlier this week again raised the stakes in its tit-for-tat trade war with China, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports. U.S. trade disputes are also escalating with Europe, Canada and Mexico that could slow business investment at home.

Kaplan, whose district heavily relies on exports to Mexico, said this is already having a “chilling effect” on capital expenditures plans and is hurting, for example, soybean shipments and companies reliant on aluminum. Longer-term impacts like currency fluctuations and geopolitical instability could be even worse, he said.

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For now, Kaplan, who already leans dovish on monetary policy, continues to expect one more interest rate hike this year and a bit more tightening next year. And if tariffs expand to more goods or North American automobiles in particular, he said, “obviously that would cause me to rethink.”

The U.S. central bank is careful not to overstep its inflation and employment mandates into fiscal decisions like trade. A Fed report to Congress on Friday barely addressed the impact of the Trump administration’s protectionist policies aside from noting that uncertainty was a concern to markets.

Yet a Reuters review of Fed chair Jerome Powell’s public calendar showed that in his first four months as head of the U.S. central bank, he spent more time with lawmakers and White House advisers than did his predecessor, Janet Yellen.

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In an interview with radio show Marketplace on Thursday, Powell said: “I’m going to wear the carpets of Capitol Hill out by walking those halls and meeting with members” to explain Fed decisions and respond to concerns.

Kaplan said it was yet too soon to predict how trade policy will unfold. “I still have as a possibility if not a probability that we look back two years from now, we’ll look back on this period as rhetoric and some actions but this ultimately won’t intensify,” he said. “But I don’t know.”

Reporting by Ann Saphir and Jonathan Spicer, Editing by Chizu Nomiyama


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‘None of this is normal’: Maddow revolted by child sex trafficking charges against Trump pal George Nader

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MSNBC anchor Rachel Maddow connected the dots between the President Donald Trump's administration and George Nader, who served time for child pornography prior to Trump's 2016 campaign and has subsequently been arrested on child sex trafficking charges.

"In what is an astonishingly scandal-ridden presidency, populated by an astonishingly strange cast of characters, he remains one of the most unsettling figures in all of Trump world. Again, to be clear, to disambiguate here, we are not talking about Jeffrey Epstein, seen here with the president, who is also now in custody awaiting child sex trafficking charges," Maddow explained. "No, this is a whole different guy who you can see in this picture with the president who is now in federal custody awaiting a different set of sex trafficking charges as well as serious child porn charges and not for the first time."

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Trump ‘will get worse’ because he does not fear Democrats impeaching him: Chairwoman Maxine Waters

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Rep. Maxine Waters (D-CA) predicted on Friday that President Donald Trump "will get worse" because of the lack of impeachment proceedings.

Waters, who chairs the House Financial Services Committee, was interviewed on MSNBC by Chris Hayes.

"I want to switch gears on the last question here, just to talk about what’s happened over the last several days with the president’s attacks on your colleagues, the chants of 'Send her Back,' which the president sort of very, very tepidly and meekly sort of disavowed yesterday, but then essentially reavowed today when given an opportunity to talk about it, he sort of reembraced his supporters who were chanting that," Hayes noted.

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Fox News hires former Trump spokesman as Senior Vice President: report

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The revolving door between the White House and Fox News was spinning on Friday as a former spokesman for President Donald Trump was hired by Fox News.

"A bit of news: Raj Shah, the former spokesman in the White House, is joining Fox as a senior Vice President," Washington Post White House correspondent Josh Dawsey reported on Friday.

https://twitter.com/jdawsey1/status/1152374273522241537

After Hope Hicks left her job as White House communications director, she was hired to lead corporate communications for New Fox, the parent company of Fox News.

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