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Fed’s George: Framework ‘Less’ a Promise to Engineer Inflation Than ‘Tolerance’ of It | Investing News

October 9, 2020

(Reuters) – The U.S. Federal Reserve’s new framework for managing monetary policy shows a “tolerance” for higher inflation, but not necessarily a full-blown promise to engineer it, Kansas City Federal Reserve president Esther George said Thursday.

The Fed last month, as part of applying a new strategy to let inflation run higher in hopes of encouraging further job gains in a “hot” economy, said it would not raise rates until inflation has both reached its 2% target and is on track to “moderately exceed 2% for some time.”

“I interpret the revised consensus statement as a tolerance – and less as a promise to engineer,” higher inflation, George said, adding her voice to the disparate views among Fed officials about how the new framework will be applied in practice.

Minutes of that September meeting released on Wednesday showed a broad divergence of views on that front, and George, traditionally among

Florida rapper bought Ferrari with COVID-19 relief money, feds say

October 8, 2020

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Boston Fed President Eric Rosengren tells FOX Business’ Edward Lawrence that there is a ‘definite need for additional stimulus’ and the U.S. won’t get back to record-low unemployment for at least three years.

A Florida rapper allegedly pocketed more than $1 million in COVID-19 relief funds, which he used to buy a Ferrari and other luxe items, federal prosecutors said.

Diamond Blue Smith — who is a member of the group Pretty Ricky — was charged this week for his role in a $17 million coronavirus relief scheme, according to the US Attorney’s Office for the Southern District of Florida.

Prosecutors allege that Smith — who also appears on the show “Love & Hip Hop: Miami” — obtained $427,000 through his company, Throwbackjersey.com, by falsifying documents for a Paycheck Protection Program (PPP) loan.

The PPP program was meant to help struggling small businesses during the coronavirus pandemic.

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Fed’s Powell: Lack of further stimulus threatens pandemic recovery

October 7, 2020

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“The expansion is still far from complete,” Powell said in a speech to the National Association for Business Economics, a group of corporate and academic economists. “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses. Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth.”

Powell noted that the economic recovery has slowed in recent months compared with its rapid improvement in May and June. Incomes fell in August. And job growth weakened in September, slowing to just 661,000, less than half the gains of 1.5 million in August and 1.8 million in September. The economy has recovered only slightly more than half the 22 million jobs that were lost in March and April.

“A prolonged slowing in the pace of improvement over time could trigger typical recessionary dynamics, as weakness feeds

Feds ask judge to put away 78-year-old ex-California legislator convicted of money laundering

October 2, 2020

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SAN FRANCISCO — Federal prosecutors have asked for a “year of imprisonment” for a 78-year-old attorney and former California legislator convicted of laundering $685,000 meant for the construction of coffee shops at BART stations, court records show.

Terry Goggin, a San Bernardino-based legislator during the 1970s and 80s, is awaiting sentencing after pleading guilty to money laundering in a deal with federal prosecutors. His attorneys, citing Goggin’s age, heart problems, and the COVID-19 pandemic, have asked for a federal judge to sentence Goggin to home confinement and probation in lieu of jail.

But, citing the need to deter other white-collar criminals, prosecutors are holding the line on a jail or prison sentence for the former politician. The U.S. Attorney’s recommendation, 12 months and one day, is three months less than the term of incarceration recommended by U.S. Probation.

“While this risk is real, the government believes that it can be

The Fed’s Policy Drift | Seeking Alpha

October 1, 2020

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The unanimous decision of the Federal Open Market Committee (FOMC) to shift from inflation targeting to average inflation targeting is another step away from its mandate to achieve long-run price stability. Section 2A of the Federal Reserve Act does not say the Fed’s long-run objective should be 2 percent inflation. It calls for maintaining the growth of money and credit to “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” The legal basis for price stability has not changed, but the Fed’s interpretation of that responsibility has drifted, so that “price stability” now means an increase in the price level (P) that averages 2 percent over time, with the proviso that the average inflation target (AIT) must be “flexible.”

The Fed began to target inflation in 2012, when it moved to a 2 percent inflation target (IT), specified in the FOMC’s “Statement on Longer-Run Goals

Race track settles with feds for manure, urine discharges

September 30, 2020

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NEW ORLEANS (AP) — The owners of the horse racing track in New Orleans have agreed to pay a $2.8 million penalty for letting horse manure and urine into the city’s drainage system for at least six years and to spend twice that on ending the discharges, federal prosecutors say.

The U.S. Justice Department described the fine to be paid by Churchill Downs Inc., owner of the Fair Grounds Race Course & Slots, as the largest ever paid by a “concentrated animal feeding” operation under the Clean Water Act, news outlets reported.

The agreement settles a federal complaint alleging that the Fair Grounds violated that law and the track’s state permit more than 250 times between 2012 and 2018.

“This consent decree will stop the flow of untreated process wastewater into the local sewer system, which leads to local waters used for fishing and ultimately Lake Pontchartrain, in a way

Feds fault operator, regulators in limo crash that killed 20

September 29, 2020

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Michael Hill, Associated Press

Updated

5:06 pm CDT, Tuesday, September 29, 2020

FILE – In this Oct. 7, 2018, file photo, a New York state trooper and members of the National Transportation Safety Board view the scene of a fatal crash that killed 20 people in Schoharie, N.Y. Federal investigators examining the 2018 crash of a stretch limousine that killed 20 people said Tuesday, Sept. 29, 2020, that state regulators repeatedly failed to oversee a poorly maintained vehicle with corroded brakes. less

FILE – In this Oct. 7, 2018, file photo, a New York state trooper and members of the National Transportation Safety Board view the scene of a fatal crash that killed 20 people in Schoharie, N.Y. Federal … more

Photo: Hans Pennink, AP

FILE – In this Oct. 7, 2018, file photo, a New York state trooper and members of the National Transportation Safety Board view the scene

Fed’s Williams says he’s not worried about inflation

September 29, 2020

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A key top Federal Reserve official said Tuesday that he is not worried about inflation.

New York Fed President John Williams, who is a key adviser to Fed Chairman Jerome Powell, said that he doesn’t see any sign of high inflation.

“I”m not worried about inflation. Obviously if there were significant inflationary pressures with inflation taking off, we know how to respond to that. But I don’t see any signs of that,” Williams said, during a discussion sponsored by the Fisher Center for Real Estate & Urban Economics at the University of California, Berkeley.

Some analysts and Fed officials think that the economy is recovering so strongly that there will be bottlenecks that push up prices. Other economists note that wage growth, a critical component of inflation, remains subdued.

The Fed has promised to allow inflation to run moderately above its 2% target for some time before lifting rates off

Fed’s new inflation strategy will lift profits and reduce risks for stock investors, Goldman Sachs says

September 28, 2020

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The Federal Reserve’s new target of averaged-out 2% inflation should create a favorable environment for stock market participants, Goldman Sachs strategists said Friday.
Investors tend to fear rising inflation, but price growth will lift earnings in the near term by driving faster revenue growth, the team said.
The central bank’s updated target suggests inflation will run above 2% to make up for periods of slow growth. Accordingly, inflation-related headwinds should only emerge “near the new target inflation rate,” Goldman said.
Value and cyclical stocks are already expected to outperform once economic activity rebounds, yet Goldman also sees the Fed’s “lower-for-longer” interest rate policy aiding growth names that benefit from near-zero rates.
Visit the Business Insider homepage for more stories.

Investors fearing that rising inflation will eat away at stock market gains need not worry. If anything, they should scoop up more shares, Goldman Sachs said Friday.

The

Feds: Fraudster blew $30K in Vegas with virus loan money

September 26, 2020

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PROVIDENCE, R.I. — A convicted bank robber from Rhode Island fraudulently obtained $600,000 in forgivable federal business loans and spent $30,000 in Las Vegas before being caught, federal prosecutors said Tuesday.

Michael Moller, 41, of Middletown, was held without bail pending trial at an appearance Tuesday in federal court.

Moller in April filed for $4.7 million in loans through the Paycheck Protection Program to pay employees at businesses he said were based in Fall River, Massachusetts, prosecutors said. There was no evidence those businesses existed, authorities said.

In addition to filing for loans in his own name, he applied for loans using his father’s name, his girlfriend’s brother’s name, and his girlfriend’s son’s name, authorities said.

The federal program’s funds are intended for businesses struggling because of the coronavirus pandemic.

He actually received $600,000 through the program, and spent $30,000 of it on a trip to Las Vegas, authorities said.