US Federal Reserves abandons rate hike for 2019
The US Federal Reserve Chairman, Jay Powell, Wednesday announced that there would be no more interest rate hikes in 2019. This comes after a two-day Fed meeting in Washington, where the members unanimously voted to keep the rate between 2.25 and 2.5 per cent.
The shift in monetary policy comes amid a realisation that the 3 per cent growth experienced in 2018, is unlikely to be sustained this year.
The boost from President Donald Trump’s tax cuts is starting to wane off and in the immediate short term, Fed’s fears are exacerbated by the never-ending China-America trade war and the possibility of UK leaving the European Union without a deal.
Over the long term, there is growing sense among Fed officials that a recession is somewhere in the horizon.
EU limits UK PM May’s options on Brexit
British Prime Minister Theresa May heads to the European Union (EU) summit Thursday amid a real risk that the country could end up with a no-deal Brexit.
The Prime Minister had Tuesday officially written to the European Council president Donald Tusk seeking an extension to the Brexit deadline, from the current 29 March to 30 June. The council is the European Union’s key intergovernmental body.
Tusk, however, responded saying that an extension was only possible if UK MPs backed her Brexit deal before the existing deadline. May’s Brexit bill has been voted down by the British parliament on two occasions in the past few weeks. And the possibility of getting the bill passed over the next week remains rather slim.
The fog of Brexit has been growing thicker with every passing day. A senior EU official who is dealing with Brexit told the Financial Times, “This is a circus that is beyond comprehension.”
Viktor Orban’s party suspended from the EU parliament coalition
Hungary’s ruling party Fidesz has been expelled from the centre-right coalition in the European Parliament, just ahead of the elections. The centre-right coalition, known as the European People’s party (EPP), voted to suspend Fidesz membership indefinitely.
Fidesz is Hungary’s far-right party and is headed by country’s populist-nationalist prime minister, Viktor Orban, who has been accused of systematically undermining the rule of law and subverting the judiciary in his country.
For months together the European Union at-large has been trying to find ways to impose some punitive costs on Orban for undermining the rule of law in his country. This is plausibly one of the most visible acts of the conventional EU parties expressing their anger with Orban’s policies.
In Other News:
Trump Says Tariffs Will Stay Until China Complies With Deal, Bloomberg
Thailand’s junta failing to win over voters in populous north-east, Financial Times