15 June 2019 FT — Articles to Read

Question: According to MSN: Money, on average, Americans carry how much in student loan debt?

US consumers ease fears of slowdown and curb rate cut expectations – Pg. 4

  • US consumers splashed out on autos, electronic gadgets and appliances last month, easing fears of an economic slowdown and damping expectations of a quick interest rate cut by the Federal Reserve
  • The strong data on consumer spending caused some forecasters to upgrade estimates for US economic growth in the second quarter of the year, …
  • …economists tempered their expectations for monetary easing in light of the stronger data

Swiss women take to streets and alpine pastures to protest against inequality – Pg. 4

  • The so-called Frauenstreik draws attention to a patchy record on gender equality in Switzerland, which has lagged behind its EU neighbours in trying to improve women’s rights
  • Women only gained the vote in 1971 and until 1985 needed permission from their husbands to work or open a bank account.  Paid maternity leave was only put into law in 2005

The Fed tries to predict politics – Pg. 7

  • Further complicating the Fed’s calculations are the frequent attacks by Mr Trump on the central bank and regular appeals to keep the economy well juiced as he heads into his 2020 re-election campaign
  • …most economists are now expecting the US central bank to keep interest rates on hold next week….
  • Rates had fallen to near zero after the financial crisis, and the Fed added more firepower to its monetary stimulus by proceeding with three rounds of bond purchases, known as quantitative easing, to sustain the recovery.  Under Janet Yellen, Mr Powell’s predecessor, the Fed began to raise rates – although at 2.25-2.5%, they are still less than half of their level in September 2007
  • Fed officials are not, however, looking at the current situation through the lens of 2007 – which would spook markets by signaling a looming recession – but through the frame of the 1990s.  Alan Greenspan, then Chair, cut rates in two cycles, first in 1995 and then in 1998 during the Asian financial crisis, to help sustain the US expansion that took place under Bill Clinton
  • The main factor that has soured the US outlook in recent months has been the escalation in trade tensions between the US and major trading partners
  • Growth in GDP of 3.1% in the first quarter has given way to expectrations collected by the Atlanta Fed of 2.1% growth in the second quarter, yet forecasters are not predicting that the US is sliding towards a recession.

Answer: $35,359