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Federal Reserve to Suspend until 2023: CNBC Review

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Federal Reserve to Suspend until 2023: CNBC Review

Federal Reserve Chairman Jerome H. Powell speaking on March 3, 2020 in Washington, DC.

Mark Makela / Getty Images

Firstly CNBC Fed Review since the Federal Reserve announced its new, softer monetary policy strategy, respondents now do not forecast interest rate increases by the central bank until 2023.

The results are a potential first sign that the Fed’s new strategy of allowing inflation to exceed its 2% target for an indefinite period of time has an immediate impact on the rate forecast.

The new average forecast, which the Fed postponed until February 2023, is six months after the July poll and amid more optimistic outlooks for the economic recovery and higher inflation forecasts. Under the previous strategy, when the Fed was aiming for a symmetrical target of 2%, these conditions could push the prospect of rate hikes.

“The Fed’s adoption of flexible targeting of average inflation gives (it) considerable leeway to tolerate excess inflation, and rates will remain at an effective lower bound for several years,” said John Ryding, chief economic advisor to Brean Capital.

The central bank kicks off a two-day policy meeting on Tuesday.

An overwhelming majority of 37 respondents, which include economists, fund managers and strategists, believe the Fed will sit idly by if inflation surpasses the 2% target. Forty-eight percent said the Fed would tolerate inflation above its target of six months to a year without a hike, while 41% said the Fed would tolerate higher inflation for a year or longer.

How high?

CNBC specifically asked what the average inflation was in the six months before the Fed hike. The average response was 3.2%.

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While CNBC data is among the first to introduce real numbers into the Fed’s new policy, respondents said they wanted the central bank to do so directly.

“Low unemployment has been dismissed as a factor in inflation, but we do not know which culprit we must now watch … neither how long nor how much overfulfillment will be tolerated,” said Lynn Reaser, chief economist at Point Loma Nazarene University.

Some respondents were concerned that inflation could become an issue sooner than the Fed expects. Sixty-five percent now consider the actions of Congress and the Fed to combat the economic impact of the virus inflationary, up from 44% in the July poll.

“Has everyone forgotten that economic policy has large lags, and the impact of the policies already implemented this year is likely to have a significant positive impact in 2021?” Said Jim Paulsen, chief investment strategist at Leuthold Group. “It is time for political officials to take a step back and take a breath.”

To which Peter Boquvar, chief investment officer of Bleakley Advisory Group, added: “There is so much talk going on about what else the Fed can do. Instead, I want to hear / see how they think about changing this extraordinary policy when we get an effective vaccine that may well appear in the next few months. “

Is the recession over yet?

Overall, economists have improved their forecasts for the economy. Just over half believe that the current recession is over and, on average, ended in May. Of the 47% of those who think that there is more to come, they predict that, on average, it will end in April.

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Forecasts are generally better, with GDP expected to contract 2.6% this year, compared with a 4.5% fall expected in July. The outlook for the unemployment rate also improved by several points, and forecasters see the CPI at the end of the year was 1.4%, more than a percentage point higher than the July survey.

Overall, 69% of respondents say the recovery is progressing faster than they originally predicted.

“The economy recovered much earlier and faster than expected in the spring,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “Real GDP growth, inflation and unemployment are well ahead of schedule.”

But there are significant risks to the forecast. Fifty-three percent of respondents believe there is a likelihood of a second wave of the virus in the fall and winter, just 5 points less than in the July survey.

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Meeting of black candidates from the Northeast discusses a political project against racism

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Photo: Tylynn Barrett / DP Photo

“He who enters has the task of taking others.” Those were the words spoken by one of the I Vote Black coordinators, Monica Oliveira, during the Northeast Black Women’s Meeting – Smearing Parliament, which took place on the floor of Parliament this Friday. Esuda Faculty of Science, Recife Center. Bringing together 36 of more than 50 candidates assisted by the project in the Northeast, the meeting discussed the importance of black women’s representation, not only as a quantitative factor, but also as a means of implementing policies to combat racism. The event is an initiative of the Black Women’s Network of Pernambuco and Casa da Mulher do Nordeste as part of the Black Women’s Project to Spaces of Power.

In an audience filled with candidacies of black women, social movements and supporters, voices jumbled together, chanting the same thing: denigrate the political scene with anti-racist women candidatures. Even though they make up 28% of the Brazilian population, black women are still underrepresented in these areas of power. In 2020, these women accounted for only 2% of the National Congress, according to the National Household Continuous Sample Survey (Pnad) conducted by IBGE, which is a reality according to which the “Eu Voto em Negra” project, which operates after the 2020 municipal elections, aims to eradicate.

“The idea is to strengthen the candidacy of cis and transgender black women so that we can expand our presence in parliament and in the executive branch,” explains Monica Oliveira. “In our understanding, this stage is especially aimed at strengthening the presence in the legislature as a step towards the executive,” he adds. Media training, communications services, political and technical training are some of the jobs offered by Eu Voto em Negra to women who have been referred to promote these candidacies in an election year “more challenging” than 2020, according to Monika’s assessment.

“We are approaching the fourth year of Bolsonaro’s rule, so there is a resurgence of various forms of violence such as racism, misogyny, LGBT phobia,” he emphasizes. “All this set of violence that affects women, especially the black population.”

candidates

In an effort to circumvent this scenario, several black women from nine northeastern states committed to anti-racism have come forward to run for seats in the legislature and executive. As part of a collective mandate, Pretas sang Bahía, candidate for the state of Marcia Minister (Psol), who also ran for councilor in El Salvador’s 2020 municipal elections, says she recognizes the difficulty of entering places that are normally inaccessible to women like she is. , but even though he didn’t win the contest that year, he reiterates the importance of not giving up. “We cannot refuse to fight, we send a signal that we are ready to take these positions,” he said.

In the same stance, Crisiel (PT), Maranhao’s state candidate, classifies the meeting as a “very symbolic moment” and an exchange of experiences in search of reinforcement. “It’s a very happy and very symbolic moment to bring together so many black women’s candidatures at a time of so many failures in the country, we’ve come to reaffirm our fight,” she says.

Pernambuco federal candidate Robyonce Lima (Psol), who is part of the first collective mandate (Juntas Codexepoutadas) elected to the Legislative Assembly of Pernambuco (Alepe) in the 2018 elections, says there is a need to expand on achievements and regulate national politics in view of the onset of conservatism in country. “We need more and more women in politics to vilify these spaces, to tie our plans to gender and race,” she comments. “We need to change this story, we will have a transvestite, a black bench in the Federal Chamber after 200 years of Brazilian independence. This is a historical reparation.”

letter of commitment

During the meeting, the political project announced by the women present was presented with a signed letter titled “Black Women of the Northeast Smearing Parliament” consisting of 13 commitments read by Monica Oliveira. While citing small gains in representativeness in institutional policy, the paper highlights points that need to be considered and worked on.

    (Photo: Tylynn Barrett/DP Photo)
Photo: Tylynn Barrett / DP Photo

“We want a democracy that goes beyond voting every two years. We want democracy, which means not only the right to speak, but also the right to be heard and jointly shape the direction of the country,” the excerpt from the letter explains.

Commitments that recognize black heritage, place political spaces at the service of the fight against racism, strengthen alliances with anti-racist organizations, and build on the principle of collectivism were some of the agendas presented.

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From the “executive department” to the main political hero, the Assembly has achieved unprecedented results in the current legislature.

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From the "executive department" to the main political hero, the Assembly has achieved unprecedented results in the current legislature.

Catering Monitoring Consulting

Since the Legislative Assembly had a larger base of parliamentarians, there have been periods in the last few decades when the governors of the states have exercised great influence over the Parliament of Minas Gerais. The contractor’s projects were approved almost always without any restrictions. Because of this connection between the two powers, civil servants and even deputies used to wittily refer to the Assembly as a simple “department of the executive.”

Something unprecedented happened in the current legislature: unlike what had happened in previous governments, the president of the Minas Gerais State Assembly was not connected to the governor. And a good part of the parties, once allies of the governors, do not support the current government. Among them are PP, PTB, Tsidadaniya (former PPP) and MDB.

This happened to some extent due to the position of the new governor. Elected with a speech that largely echoed here in the state the same platform that Jair Bolsonaro took during the 2018 election campaign, Romeu Zema declared during the campaign that there would no longer be political “conchavos” in his government. .

At that time, segments of the right, characterized by anti-political discourse, viewed as “conchavos” alliances or agreements made between politicians and parties. These methods are supposed to be forms of corruption. Following this logic, the then candidate Zema introduced himself as a successful business administrator and promised to objectively and technically manage the state. Then there would be no need for negotiations, which were considered a typical practice of the “old policy”.

A government was installed that was not flexible and showed little readiness for dialogue. However, in the first few months of his reign, Zema’s rule was already under threat. There were only three deputies in his Novo party at that time. It would be very difficult to govern with such a disproportion of power, with only three allies in the universe of the 77 deputies that make up the Legislative Assembly. Supporters were deputies from the same party as the governor: Barto (today in the PL), Guilherme da Cunha and Laura Serrano.

While Zema was reluctant to join the parliamentarians, four blocs were formed in the Assembly for the first time. Prior to that, the formation of a maximum of three blocs was common: the opposition, the “neutrals” (as they called themselves) and the pro-government ones. As of 2019, by contrast, two “neutral” blocs (instead of one) have been formed in addition to the opposition and government blocs.

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Each of the “neutrals” was led by MDB and PSD. In total, both political groups started the legislature with 40 of the 77 seats in parliament. Therefore, any governmental movement depended, first of all, on articulation with two groups of deputies. In cases where the opposition, due to a coincidence of interests, joined these groups claiming independence, the government had no chance of approving their projects.

To have a minimum of controllability, Zema mainly turned to PSDB. Thanks to its rich experience and political skill, this party managed to attract other abbreviations to the ruling base. Thus, in the first half of 2019, 21 parliamentarians were on the side of the governor. The PT-led opposition had 16 members. Thus, it was a minority bloc.

During 2019, the alliance with the PSDB became closer. For most of Zema’s term, this party was important to the government. It is worth recalling that Zema won the election in the second round against the PSDB candidate (former Governor Antonio Anastasia, now in TCU). Thus, it was not a very common case that a party that was defeated in an election then assumed a central role in the conduct of an elected government.

In the first half of 2019, Custódio Mattos (PSDB) took over the management of the Secretariat of the Government, the body responsible for the dialogue between the Assembly and the executive branch. Luisa Barreto (PSDB) also became Deputy Minister of Planning. Today she leads the portfolio.

Even though he managed to make a base, Zema still tried to maintain his position of not practicing “konchavos”. This means, at least apparently, that efforts to create a parliamentary base will not be made, since many other agreements were concluded in the process of forming the government. Without commitment or identification with the executive branch, parliamentarians inflicted severe defeats on the governor, whose projects to correct the state machine were generally unpopular and in many cases meant the demise of politics or public services. The single most effective government project approved in 2019 was the administrative reform, which reorganized the structure of government.

This situation of political weakness on the part of the executive branch is not common in recent history, except in very specific cases. The Assembly began to set the tone for politics in Minas. In addition to approving the mining project, the Parliament also held discussions on the public debt of Minas and the loss of revenue resulting from the Kandir law. He also increased his power over public accounts by including in the state constitution the government’s obligation to amend the budget for parliamentarians and blocs.

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In addition, the Assembly attempted to further increase government oversight when it introduced secretaries of state accountability every four months in 2019.

Also in 2019, a draft was sent to the parliament, which the government considers the most important for the state. We are talking about joining the Tax Collection Regime (RRF) established by Supplementary Law No. 159 of 2017. It is assumed that the purpose of the RRF is to provide financial assistance to the state. In short, this is a temporary suspension of Minas’ debt collection to the federal government. On the other hand, the state must take a number of unpopular measures, including the sale of companies such as Cemig and Copasa, as well as a long-term ban on wage increases.

Joining the RFF has been put on hold until today in the Assembly and is facing significant voting difficulties even in this legislature.

In 2020, due to the pandemic, the government abandoned the protection of the SBR. Efforts have been focused on other fronts, especially health. In connection with the moment of the natural disaster, many government directives were approved. However, those not directly related to the pandemic, such as destination and resource checks stemming from the agreement with Vale, have been blocked or changed.

With the beginning of the slowdown of the pandemic, at the end of 2021, the government resumed the defense of the RRF. However, his weak political articulation prevented him from moving forward. Then the governor requested urgently in working out the tax regime. This regimental instrument prevents other projects from being considered in plenary until the urgent matter is assessed. However, the Assembly ignored the request and did not decide to place this project on an emergency basis.

In this regard, the Governor sued the Legislative Assembly, claiming that the Parliament violated the Minas Gerais State Constitution by failing to comply with its demands. The President of the Legislative Assembly, Agostinho Patrus (PSD), then responded to a request and explained the urgency of joining the RRF. In view of this, the governor withdrew from the trial.

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Another confusion was caused by the executive branch, announcing a 37% increase in the salaries of security personnel in 2019. Zema was criticized even outside the state for this decision, which was considered reckless. There was a conflict that only recently found a solution, in 2022. After tense negotiations, the government achieved a 10.06% readjustment.

The State Parliament realized that this setting could not apply only to security servers. The Governor then again turned to justice to try to withhold the additional pay raise granted by the Assembly. In addition to the expansion of the groups that will receive the increase, the percentages proposed by the Assembly have reached 40%. This conflict ended only when the Federal Supreme Court granted Zema’s request and prevented the application of higher rates set by MPs.

During this period of litigation, the chief executive lost more support in parliament. Zema’s base has been reduced from 21 in 2019 to 16 this year. And to top it all off, it disbanded in April 2021. This is because with the departure of MP Neliando Pimenta (PSB), it was reduced to 15 parliamentarians. For it to exist as a bloc, an Assembly Regiment requires that it be composed of at least 16 members.

However, in early July, the ruling bench was reorganized. This is because União Brasil decided to join Zema. Thus, today there are 16 parliamentarians again on the side of the governor.

Now the “neutral” blocs have recently merged into a single bloc of 36 parliamentarians. It is still the largest political group in the Assembly. Since the beginning of the work of the legislative body, the opposition has received 7 deputies. Today it has 23 parliamentarians. At least since the redemocratization of the country, the opposition has never had such a large number of members. And for the first time, pro-government members are in the minority in the Legislative Assembly of Minas Gerais.

In the Contextus Bulletin, Nesp’s Public Powers Monitoring Advisory Board deepens its analysis of the Assembly’s situation in this legislature. The approach focuses on projects approved by MPs, as well as the transfer of resources promoted by them.

Letter: Marcelo Gomes – 09.08.2022
Source: ALMG/Daniel Protzner.

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Political secret | WATCH

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Political secret |  WATCH