US ECONOMICS

VENEZUELA

U.S. Department of State. 10/17/2019. Illegitimate Maduro Regime’s Election to the UN Human Rights Council. Michael R. Pompeo, Secretary of State

The UN High Commissioner report on Human Rights issued this past July documented egregious human rights abuses of the former Maduro regime in Venezuela.  It is sadly no surprise that Maduro shamelessly sought a seat on the UN Human Rights Council in an effort to block any limit to his repressive control of the Venezuelan people.  What is truly tragic, however, is that other nations voted to give Maduro’s representative for Venezuela a seat on the UN Human Rights Council.  This is a harsh blow not just against the victims of the Venezuelan regime, but also against the cause of human rights around the world.

The Human Rights Council ought to be a protector and defender of human rights of people the world over.  It should be speaking out about the daily abuses of the former Maduro regime, and others like it.  Instead, the Council has become an exercise in shameless hypocrisy – with some of the world’s most serious offenders sitting on the Council itself.  Its membership includes authoritarian governments with unambiguous and abhorrent human rights records, such as China, Cuba, and Venezuela.  These are among the reasons why the United States withdrew from the Human Rights Council in 2018.

The United States strongly supports multilateral organizations that sincerely and effectively work to protect human rights.  The election to the Human Rights Council of Maduro’s representative is a farce that further undermines the Council’s already frail credibility.  We desire to work with our allies and partners in support of Venezuelan interim President Guaidó’s efforts to restore human rights and democracy in Venezuela, a critical objective that reflects the United States’ commitment to human rights and freedom.

MONETARY POLICY

FED. October 17, 2019. Speech. Opening Remarks. Governor Michelle W. Bowman. At "Monetary Policy’s Impact on Workers and Their Communities," a Fed Listens event, sponsored by the Federal Reserve Bank of Chicago, Chicago, Illinois

Thank you, President Evans, for hosting this event today, and to our moderator and participants for taking part in this valuable discussion. Today's event is the last in our series of Fed Listens events held across the country to learn about how Americans think about monetary policy and how they think about the Federal Reserve.

In keeping with the purpose of Fed Listens, I would like to spend most of our time in conversation. But I do want to offer a few thoughts about why the Fed is reaching out to seek a broad range of views, and what we are hoping to accomplish through this initiative.

Fed Listens is a new comprehensive outreach to the public on monetary policy. For many decades there was a sense at the Board that the public wasn't interested or even willing to dive into the complexities of monetary policy. That view has changed in a fundamental way, especially in the aftermath of the financial crisis when it was urgently important that the public understand what we were doing. So we began explaining as accessibly and as clearly as we could what we were doing and why. Now we are listening carefully.

Since I became a Board member almost a year ago, it has become clear to me that people are not only willing to engage on complex economic issues, but they also want to know that their concerns are being taken into consideration on issues that affect their financial well-being. The Fed's movement toward greater transparency and public engagement is well underway, and advancing that effort is one of my top priorities.

At the same time, we recognize that the clear communication of our policies actually helps us achieve our goals. When we communicate our views on the economic outlook and our expectations for where interest rates may be heading, consumers and businesses take that information into account when making decisions on spending, investment, and hiring. For that reason, our policy communications are an important part of the Fed's toolkit for influencing the direction of the economy.

Fed Listens is a natural outcome of this commitment to public engagement. We have heard from many people from different parts of the country and from different sectors of the economy about how monetary policy affects them and their communities. It is our responsibility as a public institution to be accountable to the public. Hearing a broad range of perspectives on these issues will help us make good decisions as we consider new approaches to monetary policy.

As I mentioned before, this afternoon's discussion is the last in a series of Fed Listens events that we began back in February. Looking at the depth of experience of our panelists and of David Wessel, our distinguished moderator, I think we can make a strong case that we saved the best for last. Our first panel focuses on disadvantaged workers' long-term job prospects. I am eager to hear from our panelists how they think the labor market and our policies are impacting the communities they serve in Illinois, Michigan, and in other states in the Midwest.

As a former community banker, I am also very interested to hear from people who are implementing creative strategies to build wealth and support access to credit for low- and moderate-income communities. The panelists in our second session can speak to their experiences doing just that, because they are helping to bring credit and housing opportunities to Appalachia, Indianapolis as well as right here in Chicago.

Our monetary policy review will have implications for financial markets, but we also want to know more about what the impact will be on Main Street. My colleagues and I are keenly aware of our responsibility to focus on how the decisions we make affect the real economy for people in communities all across the country.

The two goals for monetary policy—maximum employment and stable prices—are determined by the Congress and are not subject to our framework review. How we reach those goals is the topic for discussion. One question I hope to explore is whether we need new strategies to more effectively achieve our goals. For example, inflation has run modestly below our 2 percent objective for many years. Given that, it would be helpful to hear whether you think the Federal Open Market Committee should consider strategies that aim to have inflation exceed our target for a period of time to make up for the earlier shortfall or whether you think that would threaten the decades of success the Fed has had keeping the public's inflation expectations low and stable.

Another question concerns the Fed's existing toolkit for monetary policy. Currently, our available policy tools include setting interest rates, purchasing longer-term assets, and forward guidance about the expected future path of policy. Are there other tools we should consider to help us reach and sustain our objectives more effectively? I also want to know how the Federal Open Market Committee's communication of its policy framework might be improved. How can we help you better understand our work so you can hold us accountable?

Your perspectives on questions like these are a vital part of this monetary policy review. So I want to thank you again for your time and your contributions. Once the policy review is complete, we will share our findings with the public, probably during the first half of next year. I look forward to our discussion.

INDUSTRY

FED. October 17, 2019. Industrial Production and Capacity Utilization

Industrial production fell back 0.4 percent in September after advancing 0.8 percent in August. For the third quarter, industrial production rose at an annual rate of 1.2 percent following declines of about 2 percent in both the first and the second quarters.

Manufacturing production decreased 0.5 percent in September, with output reduced by a strike at a major manufacturer of motor vehicles. Excluding motor vehicles and parts, the overall index and the manufacturing index each moved down 0.2 percent. Mining production fell 1.3 percent, while utilities output rose 1.4 percent.

At 109.5 percent of its 2012 average, total industrial production was 0.1 percent lower in September than it was a year earlier. Capacity utilization for the industrial sector decreased 0.4 percentage point in September to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2018) average.

Industrial Production and Capacity Utilization: Summary

Seasonally adjustedMake Full Screen

Industrial production	2012=100						Percent change
	2019						2019						Sept. '18 to Sept. '19
	Apr.[r]	May[r]	June[r]	July[r]	Aug.[r]	Sept.[p]	Apr.[r]	May[r]	June[r]	July[r]	Aug.[r]	Sept.[p]
Total index	109.0	109.3	109.3	109.1	109.9	109.5	-.6	.2	.1	-.2	.8	-.4	-.1
Previous estimates	109.0	109.2	109.4	109.2	109.9		-.6	.2	.1	-.1	.6
Major market groups
Final Products	102.5	103.0	103.6	103.4	103.7	103.4	-1.8	.5	.6	-.2	.3	-.3	-.6
Consumer goods	104.5	105.1	105.6	105.6	105.7	105.4	-1.9	.6	.5	.0	.1	-.2	-1.0
Business equipment	100.7	101.1	101.7	101.2	102.3	101.6	-1.9	.4	.6	-.5	1.1	-.7	-.8
Nonindustrial supplies	107.6	108.2	107.9	107.8	108.4	108.2	-.5	.5	-.2	-.2	.6	-.2	.1
Construction	115.2	115.9	116.7	115.3	116.2	116.2	-.7	.6	.7	-1.2	.7	.0	1.2
Materials	114.8	114.8	114.4	114.2	115.6	115.0	.3	-.1	-.3	-.2	1.2	-.5	.2
Major industry groups
Manufacturing (see note below)	104.3	104.5	105.0	104.7	105.2	104.8	-.9	.1	.6	-.4	.6	-.5	-.9
Previous estimates	104.3	104.5	105.1	104.7	105.2		-.9	.1	.6	-.4	.5
Mining	133.4	133.1	133.6	130.4	133.5	131.8	2.6	-.2	.4	-2.4	2.4	-1.3	2.6
Utilities	103.3	105.2	100.9	105.1	105.4	106.8	-3.3	1.8	-4.1	4.2	.2	1.4	1.2

Market Groups

The cutback in motor vehicle output in September contributed to a drop of nearly 2 percent for consumer durables and to declines of around 1 percent for transit equipment and for durable goods materials. The indexes for many of the other market groups were relatively little changed, but gains of more than 1 percent were posted by consumer energy products, by information processing equipment, and by defense and space equipment, while a loss of more than 1 percent was recorded by industrial and other equipment.

Industry Groups

Manufacturing output fell 0.5 percent in September but rose at an annual rate of 1.1 percent in the third quarter. In September, the motor vehicle industry strike contributed to a drop of 0.7 percent for durables; the index for nondurables declined 0.2 percent, while the index for other manufacturing (publishing and logging) rose 0.5 percent. Excluding the decrease of 4.2 percent for motor vehicles and parts, the output of durables edged down 0.1 percent, with decreases of nearly 1 percent or more in primary metals; machinery; and electrical equipment, appliances, and components. Gains of nearly 1 percent or more were recorded by computer and electronic products, by aerospace and miscellaneous transportation equipment, and by furniture and related products. Among nondurable goods industries, apparel and leather posted the largest gain (2.3 percent), while plastics and rubber products posted the largest loss (1.2 percent).

Mining output moved down 1.3 percent in September; reductions in crude oil extraction and well drilling contributed to the decline. The index for mining fell at an annual rate of 4.4 percent in the third quarter, its first quarterly decrease in three years. The output of utilities moved up 1.4 percent in September, as unseasonably warm weather boosted demand for electricity.

Capacity utilization for manufacturing decreased 0.4 percentage point to 75.3 percent in September, a rate that is 3.0 percentage points below its long-run average. The operating rate for durables dropped 0.7 percentage point, while the rate for nondurables decreased 0.3 percentage point. The utilization rate for mining fell to 88.9 percent yet was still almost 2 percentage points higher than its long-run average. The rate for utilities rose 0.9 percentage point but remained well below its long-run average.

FULL DOCUMENT: https://www.federalreserve.gov/releases/g17/current/g17.pdf

SINGAPORE

U.S. Department of the Treasury. 10/17/2019. United States and Singapore Sign Infrastructure Finance and Market Building Cooperation Framework

Washington – Today the United States and Singapore signed the Framework to Strengthen Infrastructure Finance and Market Building Cooperation during a meeting between U.S. Deputy Secretary of the Treasury Justin Muzinich and Singapore Minister in the Prime Minister’s Office and Second Minister for Finance and Education Indranee Rajah.

The framework, signed on the sidelines of the G20 Finance Ministers’ and Central Bank Governors’ Meeting and the 2019 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG), is designed to achieve the mutual goals of the United States and Singapore to meet the region’s significant infrastructure needs through market-oriented, private sector investment.

Under this cooperative framework, the United States and Singapore will address regulatory, market, and legal barriers to private sector investment in infrastructure in emerging markets in the Indo-Pacific region by focusing on local debt market development, strengthening utility creditworthiness, instituting transparent and competitive procurement processes, and mobilizing investments by institutional investors.

“This cooperative initiative will expand bilateral economic cooperation between the U.S. and Singapore and promote private sector investment in infrastructure, spurring economic growth for both countries,” said U.S. Treasury Secretary Mnuchin.

The engagement supports the broader U.S. Government Indo-Pacific Strategy by complementing ongoing efforts under the Enhancing Development and Growth through Energy (Asia EDGE) and the Infrastructure Transaction and Assistance Network (ITAN).

CHINA

U.S. Department of State. 10/16/2019. Briefing with Senior State Department Officials on Reciprocal Action Regarding Chinese Diplomats in the United States

MODERATOR: Hi, everybody. Good afternoon and thank you for joining us for this on-background conference call on reciprocal action regarding Chinese diplomats in the United States.

The State Department officials joining us today are . He will be referred to as Senior State Department Official Number One in the transcript. And also with us is . He’ll be referenced as Senior State Department Official Number Two.

Again, this call is on background and is embargoed until the end of the call. I would like to now turn it over to , who will open things up, and then we’ll take questions.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Good afternoon. I wanted to give you guys a heads-up on some actions that we are taking here at the State Department to basically add a little bit of reciprocity into the way that U.S. diplomats are treated in China as opposed to how Chinese diplomats are able to operate here in the United States of America. Of course, our job as diplomats is to improve mutual understanding, and to do that we need access to, of course, a broad range of stakeholders in the countries that we’re assigned to. Unfortunately, in China, U.S. diplomats do not have unfettered access to a range of folks that are important for us to do our job there. That includes local and provincial-level officials, academic institutions, research institutes, so on and so forth.

In contrast, PRC diplomats stationed here in the United States are, of course, able to take full advantage of our open society to meet with a whole range of Americans. Now we’re not looking to reduce those interactions at all. So I – the main purpose of this call is basically to make sure that the actions that we’re taking are not, in fact, misconstrued. Instead, what we’re trying to accomplish here is just to, I guess, get closer to a reciprocal situation, hopefully with the desired end effect of having the Chinese Government provide greater access to our diplomats in China.

Until that happens, we are going to take some actions that will, like I said, go some ways toward leveling the playing field. So starting from today, the State Department is going to be requiring that all of the PRC foreign missions – their embassy and their various consulates around the United States – will have to notify the Department of State in advance of official meetings with state officials, official meetings with local and municipal officials, official visits to educational institutions, and official visits to research institutions.

Now, I want to be very, very clear on this point. We absolutely value educational and cultural exchange. We absolutely encourage state and local officials, as well as educational and research institutions, to meet with and host foreign officials as they deem appropriate. We are not requiring that any Chinese official get permission from the State Department to have any of these sorts of meetings. We’re merely asking that they notify us in advance of such meetings – which, again, that’s different from what happens many times in China, where our diplomats are forced to seek permission and are often denied such permission.

Also worth noting here that we’re not placing the onus of this notification requirement on any of the U.S. stakeholders. State, local, educational officials – none of them have to take any actions whatsoever. The full onus will fall on the Chinese consulates and embassy to notify us in advance of meetings with these stakeholders.

Again, just to reiterate, this action is a response to what the PRC government does to limit the interactions our diplomats can have in China with Chinese stakeholders. Our goal is to get the Chinese authorities to allow our diplomats in China to engage with provincial and local leaders, Chinese universities, and other educational and research institutes freely, the same way that the Chinese diplomats are able to do here.

Thanks for letting me start off with those remarks, and I guess we can turn it over to the Q&A now.

OPERATOR: First question comes from the line of Bingru Wang. Please, go ahead.

QUESTION: Hi, this is Bingru Wang with Hong Kong Phoenix TV. I just – I’m wondering. You mentioned that this is not the U.S. is seeking for permission, it’s not ask the Chinese to seek for permission, but just require them to notify the United States State Department. And then what’s the consequence if they don’t do this? Are you going to take any action against them? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL TWO: We certainly expect that they will comply fully comply with the requirement, and if they fail to comply, then we will address that at that time.

QUESTION: Could you please specify what consequences they may face?

SENIOR STATE DEPARTMENT OFFICIAL TWO: No.

OPERATOR: Thank you. Our next question comes from the line of Adam Behsudi. Please go ahead.

QUESTION: Yeah, I just had a question about the timing of why this action is being taken now. Is it – is there any relation to the broader sort of administration’s policy on China with regards to trade and human rights and other issues? Is this part of a broad – the broader package of actions being taken against China?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Yeah, thanks for that question. Listen, this thing has been sort of in the works for some time. It’s not directly linked to any other part of the relationship. What I will tell you is across a broad range of the U.S.-China relationship – and there are many aspects where this administration is vigorously seeking to level the playing field. You say that in trade and any number of other areas. This is another one of those areas where for a number of years, many, many years, there’s a clear gap between the way our U.S. diplomats are able to do their job in China versus the liberties that Chinese diplomats posted here in the United States are able to do their job.

We’re not looking – our final objective is absolutely not to restrict their access to any stakeholders here. What we’re looking to do is impose a little bit of reciprocity. And again, we’re not even at the level where the Chinese are, but we’re hopeful that if we can get their attention, that we might be able to effect a more level playing field where both their diplomats here and our diplomats there are able to have much more free and open access to all the various stakeholders that are required to do a good job as a diplomat.

OPERATOR: Your next question comes from Matthew Lee. Please, go ahead.

QUESTION: Hi there. I realize that since this requirement hasn’t been around, you may not know the answer to this. But do – can you give me a rough idea of how many – roughly how many meetings this would – I mean, it sounds to me like if these things are very frequent, that the Office of Foreign Missions is going to have a hell of a lot more paperwork to deal with. I’m just curious, is it hundreds? Are there thousands of meetings that you expect will have to be notified?

SENIOR STATE DEPARTMENT OFFICIAL TWO: The – we will – we don’t have an answer today. Thus far, we’ve received our one notification, but we will – we’ll certainly see where this goes. We expect that there would be probably 50 a week. That’s just speculation, but we don’t know. But we are prepared to handle all the notifications that we receive.

QUESTION: Okay. I’m sorry, you said that – so you’ve already gotten one notification already just today? When – and when were the Chinese told about this?

SENIOR STATE DEPARTMENT OFFICIAL TWO: They – they were apprised of this the past week.

QUESTION: All right, thank you.

OPERATOR: Thank you. Your next question comes from Joel Gehrke. Please, go ahead.

QUESTION: Hi. Thanks for doing this. I just wondered is there any relationship between this decision and some of the concerns that we’ve heard from the Pentagon in particular? In their Report on Military Power earlier this year, they mentioned a – there was a special topic in that report focused on Chinese influence operations in the country, and I believe that the State Department said at the time that there was concern about Chinese officials cultivating influence among state and local actors. Do you expect this to give you visibility into those efforts at all or key any counter-efforts?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Look, this particular effort is aimed at one thing, and that’s achieving reciprocity. We would like to have much greater access for our diplomats in China. Again, as I said earlier, I mean, in any number of areas we’re looking to level the playing field here with China. This is certainly related to many other things going on in the relationship, but separate. I think I’ll leave it at that.

OPERATOR: Thank you. And next we’ll go to the line of Josh Rogin. Please, go ahead.

QUESTION: Hi, guys. Thanks for doing the call. I guess I assume that if you’ve taken this action, your efforts to diplomatically engage the Chinese Government on this issue have not borne fruit. Can you talk about those efforts, and what did they say when you asked them just to do it, and what made you conclude that those efforts now require actual action? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Yeah, great question. Look, we’ve been complaining informally and through formal channels to the Chinese for years now about limits on access of U.S. diplomats to various stakeholders in and around China – sorry, in China. I would say that the Chinese response is we give you access when it’s appropriate, and that clearly is not something that goes down well with us. We have not – as a matter of policy, we have never done anything to limit their access to stakeholders here in the United States, and we continue not to do that. We’re, again, only seeking notification. But we do think that after our complaints went unanswered for so long, that it was time for us to take some measures to let them know that we intend to do what we can to make this a bit more reciprocal. If this action has its intended results, these requirements and the requirements on U.S. diplomats in China would both be disbanded, and diplomats in both countries would be able to do their work much more freely.

OPERATOR: Thank you. And next we’ll go to the line of Nick Schifrin. Please, go ahead.

QUESTION: Hey, guys. Thanks for doing the call. Just to clarify one thing about Matt’s earlier question, I just wanted to make sure that you got one notification, whether that was today or in the last couple of days, if you could just elucidate that.

The main question, though, is kind of a follow-up to Josh’s. Why do you believe that restricting their access in the U.S. is the best way to achieve more access in China? Thanks.

SENIOR STATE DEPARTMENT OFFICIAL TWO: We received the notification that I referenced earlier today.

SENIOR STATE DEPARTMENT OFFICIAL ONE: On the second part of your question, we’re not looking to restrict their access. Again, I want to be crystal clear on this, so I’m glad you raised this again. We are not seeking any of the PRC diplomats posted in the United States to come to us and ask for permission to go to a university or to meet with a mayor or a state government official. We’re merely asking them to notify us beforehand. In China, U.S. diplomats have to seek permission, and such permission is frequently denied.

So I wanted to be really, really clear about that. We are not restricting access the Chinese diplomats have and have enjoyed for many years here in the United States. We’re merely seeking – we’re merely requiring them to notify. That said, notification is a – it’s a – it does place a little bit of a sort of a paperwork burden on them, and I think that, as I mentioned earlier, we’ve been complaining about this unfair treatment for many, many years to no effect. We’re hoping that by taking this action we might help convince the Chinese that we’re serious about achieving more reciprocity in this aspect of the relationship.

OPERATOR: Thank you, and next we’ll go to the line of Nick Wadhams. Please, go ahead.

QUESTION: Hi, thanks very much. Could you just tell us if this initiative originated in the State Department or the White House or some other agency? Whose idea was this originally? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Yeah, measures like this are always considered interagency, and I don’t want to go any further into it than that.

OPERATOR: Thank you, and next we’ll go to the line of Wen Checo. Please, go ahead.

You may have your line on mute.

And next we’ll go to the line of David Brunnstrom. Please, go ahead.

QUESTION: Hello? Yeah, can you hear me? Hello?

SENIOR STATE DEPARTMENT OFFICIAL ONE: We can hear you.

QUESTION: Okay, yeah, I just – the line garbled when you were listing the circumstances in which Chinese diplomats would require permissions. It was for meeting with state officials, education and research institutes, and one other, which we didn’t catch.

SENIOR STATE DEPARTMENT OFFICIAL ONE: So, to again clarify that they – we’re not requiring them to get our permission. We are requiring them to notify us.

QUESTION: I’m sorry. Notification, yes.

SENIOR STATE DEPARTMENT OFFICIAL ONE: So the categories are: they need to notify us of official meetings with representatives of state, local, and municipal governments; official visits to educational institutions; and official visits to research institutions; all in the United States. That’s it.

QUESTION: Thank you.

OPERATOR: Thank you, and next we’ll go to Nike Ching. Please, go ahead.

QUESTION: Sure. Thank you very much for this call. I would like to ask the numbers of Chinese diplomats in the United States who will be affected by today’s measures. And does today’s measure also include Chinese officials traveling to the United States in the name of touring, but in fact, conducting official business, such as attempts to repatriate Chinese nationals? And separately, after today’s announcement, can we rule out the prospect that the annual U.S.-China diplomatic and security dialogue – as well as other dialogues such as enforcement and cybersecurity and social and cultural issues dialogue – will be put on hold? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL ONE: To your latter part of your question, this has nothing to do with any of the dialogues that you just mentioned – no connection whatsoever, separate initiatives.

SENIOR STATE DEPARTMENT OFFICIAL TWO: And no impact.

SENIOR STATE DEPARTMENT OFFICIAL ONE: No, none whatsoever.

SENIOR STATE DEPARTMENT OFFICIAL TWO: As far as the numbers, this requirement is in effect for all members of Chinese foreign missions here in the United States as well as any Chinese Government officials traveling to U.S. for official business.

QUESTION: I see. Now may I – if I may, China is reportedly claiming to restrict visas for U.S. nationals with the so-called anti-China links. I would like to get your response on that. Thank you.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sorry, that’s a separate issue, and not related to this in any way whatsoever, so not going to be able to help you on that one.

MODERATOR: Next question, please.

OPERATOR: Next we’ll go to the line of Georgia Shafestern. Please, go ahead.

QUESTION: I think that’s Deirdre Shesgreen, and that’s my line. Can you just elaborate on what obstacles U.S. diplomats face in China and how it impedes their ability to work there? I mean, if you have a couple of examples that might be helpful. Thanks.

SENIOR STATE DEPARTMENT OFFICIAL ONE: I won’t provide specific examples, but I can tell you generically what will frequently happen is a U.S. diplomat based at our embassy or one of our consulates will seek to visit, say, a university or get a meeting with a mayor or a party secretary in a particular province or city. Sometimes those meeting requests are granted, and many times they are not. Of course, it makes it very tough for us to do our job if we’re prevented from meeting with Chinese stakeholders. But that’s a very common occurrence for our staff all around China.

OPERATOR: Thank you. And next we’ll go to the line of Matthew Russell Lee. Please, go ahead.

QUESTION: Sure, thanks a lot. I wanted to ask if this, in your view, it will have any impact on diplomats at the United Nations. There’s been some – at least a couple of cases of Chinese state enterprises convicted of bribery there, and I wanted to know, does it cover people affiliated with the government? And also, for example, if a Chinese diplomat sought to meet, I don’t know, Mayor de Blasio at the UN, would it cover that, or is that exempt from the coverage of this? And if the notices are subject to FOIA – those are my questions.

SENIOR STATE DEPARTMENT OFFICIAL TWO: The requirements that we’ve gone over do apply to members of the Chinese permanent mission to the United Nations, as well as all Chinese foreign missions in the United States. And so therefore a meeting with a municipal official, a mayor or otherwise, would require notification.

QUESTION: And are these going to be put online, or otherwise subject to FOIA?

SENIOR STATE DEPARTMENT OFFICIAL TWO: They’re not – they would not be put online. I’m not a FOIA expert, so I can’t address that, but —

QUESTION: Okay, thanks.

MODERATOR: We can take that as a taken question.

OPERATOR: Thank you. And next we’ll go to Bill Gertz. Please, go ahead.

QUESTION: Yes, I had a question. Two Americans have been detained in Jiangsu Province, and their detention coincided with the FBI’s arrest in New York of a Chinese official on visa fraud charges. Do you have any comment on this? And does this appear to be some type of retaliation?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure don’t. I can assure you that it has nothing to do with retaliation for anything other than the treatment of U.S. diplomats over many, many years in China.

QUESTION: Okay.

OPERATOR: Thank you. And I have no further questions in queue at this time.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Can I just – before anyone leaves the line, since a couple people have asked this multiple times, we are not restricting Chinese access to stakeholders here in the United States. We are not forcing them to seek permission. We’re merely asking them to notify. A couple people asked questions that seemed to presume that we were in fact going to be deciding yes or no on Chinese requests to meet with various officials. That is not the case. We are merely requiring that they notify us before such meetings. I just wanted to make sure everyone’s got that crystal clear. I would really not want to see any headlines that the U.S. Government is now prohibiting Chinese officials from meeting with mayors or universities. That’s absolutely not the case. They’re still free to meet with all those folks. In fact, we would encourage that. They merely have to notify before they do it now.

MODERATOR: All right. Thanks everyone for joining. I appreciate you being here. Again, this was provided on background, attributions to a senior State Department official. And as the call is concluded, the embargo is lifted. Thank you very much.

CENTRAL AMERICA

U.S. Department of State. 10/16/2019. United States Resumes Targeted U.S. Foreign Assistance for El Salvador, Guatemala, and Honduras. Michael R. Pompeo, Secretary of State

Today the Department informed Congress of my intent to resume targeted U.S. foreign assistance funding for El Salvador, Guatemala, and Honduras.  Earlier this year, pursuant to my authority over foreign assistance funds and the direction given to me by President Trump, I directed the Department of State and the United States Agency for International Development (USAID) to temporarily cease providing assistance to these countries until the governments of these countries took sufficient action to reduce the overwhelming number of migrants coming to the U.S. border.  Thanks to the President’s policy and to the response from these countries, we are seeing great progress.  Recently signed Asylum Cooperation Agreements (ACAs) are but one example.

To enable further progress in these countries’ efforts, some targeted Department of State and USAID funding will resume at this time.  This funding will support programs that are advancing our joint efforts to mitigate illegal immigration from El Salvador, Guatemala, and Honduras.  These programs will complement our joint security plans for each government; augment private sector efforts to create economic opportunity; promote rule of law, institution building, and good governance; and help these countries develop their capacities to implement the recently signed agreements to build stronger local asylum systems.

The United States commends the creative thinking and commitment of the governments of El Salvador, Guatemala, and Honduras to reaching our shared goal of reduced outward migration from these countries to the United States.  We look forward to continuing this important work with our dedicated partners in El Salvador, Guatemala, and Honduras.

INTERNATIONAL TRADE

DoC. October 15, 2019. Remarks By Secretary Wilbur Ross at the Federalist Society. Export and investment promotion. Wilbur Ross

Thank you, Dean, for that kind introduction. And for the opportunity to discuss the Trump Administration’s trade policy and how it fits into our long-term goals for the country.

The Federalist Society has always advocated for informed debate and a commitment to our constitutional government. The overall goal of our administration fits perfectly within the Federalists’ Charter. Only by maintaining a strong and viable economy can Americans live freely under the rule of law, with guaranteed individual liberties, and a separation of powers.

Today, thanks to policies focused on rebuilding American industry, American jobs, American communities, and American prosperity, we are turning the tide toward a far more prosperous and hopeful future. But you’d never know it by listening to liberal politicians hell-bent on impeaching the most successful President since Ronald Reagan; nor to the left-wing media’s desperate efforts to frighten Americans into a recession.

In fact, the U.S. has the strongest economy of any major economy in the world. Our unemployment rate of 3.5 percent is the lowest it’s been since 1969.

Since the election of President Trump, the United States has added 6.4 million new jobs; including 500,000 in the manufacturing sector alone; and 136,000 new jobs in the month of September itself. Income and wages are up. Poverty is at the lowest level in almost two decades. The number of Americans needing federal food assistance has fallen by more than 10 million, from 44.2 million in 2016 to 33.7 million this year. Retail sales are up by 4.6 percent over the past 12 months. And, interestingly, the U.S. import price index fell by 2 percent over the past year, despite the fears that people had about the impact of tariffs.

Last Friday, the President announced phase-one agreement in principal with China. This would phase in $40 to $50 billion of agricultural purchases over a two-year period, more than twice our prior annual peak sales. It would also address some of the issues regarding intellectual property. The remaining structural issues and their enforcement remain to be negotiated. In return, the U.S. has agreed not to raise tariffs from 25 percent to 30 percent on October 15th.  And, as a sign of good faith, the Chinese recently made substantial purchases of agriculture, especially soybeans and pork.

I believe that China came to the negotiations mainly because we imposed substantial tariffs on them, but also because of the personal relationship between President Trump and President Xi.  Now, they naturally retaliated to the tariffs we put on. But because they sell us more than four times as many goods as we sell them, the given amount of tariff action means that they will run out of bullets before we do. And also, their economy is only 60 percent the size of ours, therefore a given amount of tariffed product hurts them far more than us.

Fear of tariffs also caused the EU recently to agree to buy more ag products from us; and to begin negotiations on other topics. And it is the reason why Japan agreed to buy more meat, and why the Koreans renegotiated KORUS.

The tariffs are now having a direct impact on Chinese producers and — perhaps more importantly — are accelerating the hollowing-out of Chinese supply chains. China already was suffering some manufacturing emigration because of rising costs. Companies have begun to move operations elsewhere in Southeast Asia, to Africa, and to North America. That will be hard to stop.

China’s problem with Hong Kong also hinders its economy, and may further accelerate an exodus of foreign producers. Last week, the Commerce Department added 28 Chinese governmental and commercial organizations to the Entity List. That list restricts the export of items used to target Uighers and other ethnic minorities. We have also responded to China’s Belt-and-Road Initiative with our new Indo-Pacific Strategy.

Last week, I was in New Delhi, Bengaluru, Singapore, Canberra, and Sydney to discuss with the Prime Ministers and other ministers of the three countries our engagement with them and with others in the Indo-Pacific Region. In November, I will be in Bangkok, Jakarta, Hanoi, and possibly other cities in the region.

Through the Belt-and-Road Initiative, China has invested in 117 nations, and those nations account for two-thirds of the world’s population. Their state-owned enterprises use Chinese materials and Chinese nationals to build projects with very little local content and, if defaults occur, they foreclose on those assets rather than renegotiating the loans.

For example, in Sri Lanka, China has already foreclosed the Chinese-built port in Hambantota. It has also taken control of natural resources such as cobalt mining in the Congo, and hydrocarbons in Venezuela. Belt and Road is also effectively a jobs program for China that eases some of the impact of tariffs on their domestic employment.

By electing President Trump in 2016, the American people instead demanded free fair and reciprocal trade. The Section 232 tariffs imposed by the Department of Commerce are part of that strategy.

Prior to the imposition of the 232 tariffs in March of 2018, both the U.S. aluminum and steel industries were on the verge of collapsing. Now, utilization rates have improved noticeably, and $13 billion of vital expenditures have been committed to expanded and modernized capacity, including $1.3 billion from an Indian steel company.

Now that our corporate tax system and regulatory environment are so business-friendly, foreign companies are more eager than ever before to invest in our market. We have the largest foreign direct investment stock of any nation, totaling $4.3 trillion.

To foster rapid growth in FDI, I and other Commerce executives constantly speak to business leaders around the world. And every June, we host the SelectUSA conference here in Washington, a three-day summit promoting foreign direct investment. Last year, this event attracted 3,100 participants.

We have also created a ReSelect USA initiative to encourage American companies to re-select the United States as their domestic and export manufacturing hub.

And last, but not least, the Trump Administration aggressively pursues bilateral trade deals. We have signed an initial trade agreement with Japan that opens that market to U.S. farmers, and should generate $7 billion in sales. That’s about 40 percent of the ag trade we lost to Chinese retaliation.

The Japanese trade pact also will facilitate $40 billion in bilateral trade between the U.S. and Japan in digital services. This is close to 90 percent of what we would have achieved from the Trans Pacific Partnership, yet without the harmful TPP concessions that the U.S. would have made to other countries besides Japan.

And this is the third major trade deal announced by President Trump in less than three years, a remarkable achievement, since trade agreements normally take many years — often more than a decade — to execute. For the record, the other two agreements are the Korea Free Trade Agreement and the U.S. Mexico Canada Agreement, which is pending congressional approval.

Let me conclude by talking about the situation in Turkey. Yesterday, President Trump announced two actions against Turkey that involve the Department of Commerce. We are raising their steel tariffs back up to 50 percent, from the current level of 25 percent.

Turkey is the 8th largest steel producer in the world, and steel was about its largest export to the United States before the tariffs. Its exports of steel to the U.S. surged 303 percent — from 10,000 metric tons per month to 42,000 per month — when we dropped the tariffs originally back to the 25 percent.

The President also directed the Department to cease work on the plan we had been developing with the Turkish government to expand our bilateral trade from the current $20 billion annual total to $100 billion over the next few years. Already, 1,700 U.S. businesses operate in Turkey.

In September, I had traveled to Istanbul and Ankara vetting the detailed plan with leading Turkish businesses and government officials. The three major business associations there all endorsed it, and one of them hosted a large celebratory dinner at Cipriani on 42nd Street in New York City during the UN General Assembly week in September.

If achieved, the plan would increase Turkish GDP by 4 percent; and provide more than 150,000 direct jobs. The plan always was contingent on resolving the military differences between our two countries. These now include the incursion into Syria.

It would be an excellent time for Turkey to break into global supply chains in a big way, as many companies are reassessing their earlier decisions to concentrate so much on China. But there will be a cost to the Turkish economy if present military practices continue. Turkey will bear the costs of the war, and forego the potential trade benefits.

In conclusion, the Trump Administration is focusing more intently on trade than any prior administration. There are some short-term costs associated with this shift, but there are much greater long-term potential and probable gains. Millions of Americans have demanded that we put their interests first. That is what we are doing, and that is what we will continue to do.

Thank you, and I appreciate the Federalist Society’s discussions about these issues. They are critical to the health and preservation of our democracy.

DIGITAL CURRENCIES

FED. October 16, 2019. Speech. Digital Currencies, Stablecoins, and the Evolving Payments Landscape. Governor Lael Brainard. At The Future of Money in the Digital Age, Sponsored by the Peterson Institute for International Economics and Princeton University’s Bendheim Center for Finance, Washington, D.C.

Technology is driving rapid change in the way we make payments and in the concept of "money."1 There is a long history of technological advances challenging the prevailing notions of money, from the trading of coins to the use of paper currency, to the electronic debiting and crediting of funds on the accounts of banks. Today, efforts by global stablecoin networks such as Facebook's Libra to establish the next chapter in the story of money are raising threshold questions about legal and regulatory safeguards, financial stability, and monetary policy. Because of its potential global reach, Facebook's Libra imparts urgency to the debate over what form money can take, who or what can issue it, and how payments can be recorded and settled.2

Reassessing Money

Money has traditionally served three functions.3 Money facilitates payments as a medium of exchange, serves as a store of value that can be relied on for future use, and simplifies transactions by providing a common unit of account to compare the value of goods and services.

A decade ago, Bitcoin was heralded as a new kind of digital money that would address frictions in payments as well as serve as a unit of account and store of value without the need for centralized governance. Bitcoin's emergence created an entirely new payment instrument and asset class exchanged over a set of payment rails supported by distributed ledger technology. Distributed ledger technology may allow for a shared, tamper-resistant ledger that can be updated by anyone with sufficient computing power, in contrast to traditional recordkeeping systems built on a single ledger managed by a trusted central entity.4 But Bitcoin and some other early iterations of cryptocurrencies have exhibited extreme volatility, limited throughput capacity, unpredictable transaction costs, limited or no governance, and limited transparency, which have limited their utility as a means of payment and unit of account.5

Stablecoins were designed specifically to overcome the substantial volatility exhibited by first-generation cryptocurrencies, which limits their reach in payments and their utility as a unit of account. As the name implies, stablecoins aim to maintain stable value by tying the digital currency to an asset or basket of assets, such as commercial bank deposits or government-issued bonds. Stablecoins also differ from the initial set of cryptocurrencies in that they may be issued by a central entity and rely on third-party institutions for some aspects.

Just as any currency's value as a medium of exchange increases with the size of the network using it, so too the power of a stablecoin payment system will depend on its ability to achieve widespread adoption, due to the associated network externalities. In light of the 2.7 billion active monthly users on Facebook's platforms, the Libra stablecoin project stands out for the speed with which its network could reach global scale in a payment system.6

To assess the efforts by stablecoin issuers to provide the three functions of money, it is useful first to consider existing arrangements for the issuance, regulation, and transfer of money. Central bank money and commercial bank money are the foundations of the modern financial system. Central bank money is composed of physical cash and money held in deposits at a central bank. Central bank money is important for payment systems because it represents a safe settlement asset, allowing users to exchange central bank liabilities with confidence in their acceptance and reliability. In addition, central banks can play a critical role as providers of liquidity by lending central bank money at moments of stress.

Commercial bank money refers to money held in deposits at commercial banks. It is widely used in part because people are confident that they can convert it on demand to the liability of another commercial bank or the central bank, such as physical cash. This confidence comes in no small part because bank deposits are insured, and commercial banks are subject to supervision, regulation, and deposit insurance requirements.7 Consumers and businesses also use this money in transactions because of its convenience and availability, which in turn expand with the size of the network using this money.

Nonbank private money or assets can also facilitate transactions among a network of users. In some cases, such as airline miles, such assets may have value only within the network. In other cases, the issuer of an asset within a network may guarantee convertibility to a sovereign currency. Consumers trust that the company issuing such money will be able to honor these liabilities. Many U.S. consumers have experience with nonbank private money in the form of gift cards, loyalty points, and virtual gaming currencies. Although many of these are relatively limited in scale and purpose, some nonbank money networks are sizeable. Starbucks reported that it had $1.6 billion in stored value card liabilities as of September 2018—more than the deposits held at many depository institutions.8

As the scale and scope of such private networks grow, so too do the convenience and benefit of transacting within the network in a self-reinforcing dynamic, called network externalities. These network benefits may be augmented by the active use of network data for a host of purposes, from allocating and pricing credit to sharing reviews to prioritizing information that is pushed to users. In China, consumers and businesses participate in two mobile networks, Alipay and WeChatPay, which by some accounts handled more than $37 trillion in mobile payments last year.9 These networks operate within China based on the renminbi as the unit of account, and balances are transferable in and out of bank or credit card accounts.

Stablecoins with Global Scale and Scope

Stablecoins may resemble private nonbank liabilities depending on their design and claim structure. Stablecoins aspire to achieve the functions of traditional money without relying on confidence in an issuer—such as a central bank—to stand behind the money. Indeed, for some potential stablecoins, a close assessment suggests users may have no rights with respect to the underlying assets or the system overall.

We have seen the growth of massive payments networks on existing digital platforms, such as Alibaba and WeChat, and the issuance of stablecoins on a smaller scale, such as Tether, Gemini, and Paxos. What sets Facebook's Libra apart is the combination of an active-user network representing more than a third of the global population with the issuance of a private digital currency opaquely tied to a basket of sovereign currencies.10 It should be no surprise that Facebook's Libra is attracting a high level of scrutiny from lawmakers and authorities.11

Libra, and indeed any stablecoin project with global scale and scope, must address a core set of legal and regulatory challenges before it can facilitate a first payment. I will emphasize a few issues in particular.

First, compliance with know-your-customer rules and regulations are essential to ensure stablecoins are not used for illegal activities and illicit finance. Libra's business model is inherently cross-border, and, as such, each participant in the system deemed to be a financial institution would need to ensure compliance with each national jurisdictions' anti-money-laundering laws. Libra's intended global reach would likely necessitate a consistent global anti-money-laundering framework in order to reduce the risk of illicit transactions.

Second, issuers of stablecoins designed to facilitate consumer payments must clearly demonstrate how consumer protections would be assured. Consumers will need to be educated on how their rights differ with respect to digital wallets compared to bank accounts. In the United States, as elsewhere, statutory and regulatory protections have been implemented with respect to bank accounts so that consumers can reasonably expect their deposits to be insured up to a limit; fraudulent transactions to be the liability of the bank; transfers to be available within specified periods; and clear, standardized disclosures about account fees and interest payments. Not only is it not clear whether comparable protections will be in place with Libra, or what recourse consumers will have, but it is not even clear how much price risk consumers will face since they do not appear to have rights to the stablecoin's underlying assets. Consumers need to be cautioned that stablecoins are likely to be starkly different from sovereign-issued currency in legal terms. It will be important to get clarity on what legal entity can be held responsible for the security of personally identifiable information and transaction data and how personal data will be stored, accessed, and used. The large number of cyber breaches in the last few years highlight the importance of these issues.

Third, it will be necessary to define the financial activities that the various players in the Libra ecosystem are conducting in order for jurisdictions to assess whether existing regulatory and enforcement mechanisms are adequate. As the legal domicile of the Libra Association, Switzerland is of particular interest. Swiss authorities have established three new categories to facilitate their approach of regulating by function: "payment tokens" are cryptocurrencies that are meant for use in payments or value transfers; "utility tokens" are blockchain-based applications; and "asset tokens" are cryptoassets that are analogous to equities, bonds, and derivatives.12 To the extent that some innovations do not fit neatly within a single category, these classifications may not be mutually exclusive.

In the United States, regulators are closely examining the specific functions of particular stablecoins and cryptocurrencies more broadly to determine whether and where they fit in the existing regulatory structure and whether additional authorities or guidance is necessary. U.S. market regulators have authorities for products judged to be securities or commodity futures under relevant law. At the state level, the New York State Department of Financial Services has established a BitLicense for entities associated with virtual currencies.13 The Federal Reserve and the other federal banking agencies have supervisory authority over banks, including, in many cases, the ability to regulate and examine companies that provide services to banks. Neither the Federal Reserve nor any other regulator has plenary authority over payment systems operating in the United States. Although the Financial Stability Oversight Council does have the authority to designate systemically important nonbank financial companies; financial market utilities; or payment, clearing, and settlement activities based on the facts of the specific situation, it is not clear at this time whether any cryptocurrency issuer would meet the statutory requirements for designation.

Stablecoins, and cryptocurrencies more generally, challenge the long-held premise that payments must be recorded in a central ledger managed by a single entity. In fact, banks were established to perform this central ledger function. Distributed ledger technology allows for the direct peer-to-peer transfer of assets, potentially eliminating the need to transact through intermediaries. While distributed ledger technology could offer advantages by enhancing operational resilience, increasing transparency, and simplifying recordkeeping, the public and immutable nature of the transactions ledger also introduces risks, such as data privacy concerns and legal complexity.

Global stablecoin networks also may pose challenges to bank business models. In the extreme, widespread migration to one or more global stablecoin networks could disintermediate the role of banks in payments. If consumers and businesses reduce their deposits at commercial banks in favor of stablecoins held in digital wallets, this could shrink banks' sources of stable funding, as well as their visibility into transactions data, and thereby hinder banks' ability to provide credit to businesses and households. That said, many banks are likely to adapt by offering alternative methods of peer-to-peer settlement and by incorporating stablecoins into their business models, whether by partnering with fintech firms who issue stablecoins or by issuing their own, as some are already doing.14

Moreover, widespread adoption of stablecoins could have implications for the role of central banks and monetary policy. Payments are the economy's circulatory system. Large-scale migration into a new stablecoin network for purposes of payments may prove to be the leading edge of a broader migration. If a large share of domestic households and businesses come to rely on a global stablecoin not only as a means of payment but also as a store of value, this could shrink demand for physical cash and affect the size of the central bank's balance sheet. The central bank's approach to implementing monetary policy may be complicated to the extent that banks' participation in short-term funding markets is affected.

These effects are likely to be more significant for small, open economies or those with weak monetary institutions, where the migration away from the sovereign currency to a global stablecoin could weaken the scope for independent monetary policy through a process that is the digital analogue of dollarization.15 Large-scale stablecoin use could also affect larger, advanced economies with extensive connections to the global financial system, including by increasing market volatility and by transmitting shocks across borders.

Finally, there are likely to be financial stability risks for a stablecoin network with global reach. If not managed effectively, liquidity, credit, market, or operational risks—alone or in combination—could trigger a loss of confidence and a classic run. A global stablecoin network raises complicated issues associated with many legally independent but interdependent operations, and the lack of clarity about the management of reserves and the rights and responsibilities of various market participants in the network. The potential for risks and spillovers could be amplified by potential ambiguity surrounding the ability of official authorities to provide oversight and backstop liquidity and to collaborate across borders.

Central Bank Digital Currencies

Even before the advent of stablecoins, the rapid migration of payments to digital systems prompted interest in the issuance of central bank digital currencies. In some jurisdictions, there has already been a pronounced migration from cash to digital payments, which naturally prompts monetary authorities to explore moving to digital issuance of their own.

The potential for global stablecoin systems has intensified the interest in central bank digital currencies. Proponents argue that central bank digital currencies would be a safer alternative to privately issued stablecoins because they would be a direct liability of the central bank.16 For instance, Markus Brunnermeier, Harold James, and Jean-Pierre Landau provide important arguments.17

Of course, the Federal Reserve and other central banks already provide money digitally in the form of central bank deposits in traditional reserve or settlement accounts. However, in the current context, central bank digital currency typically refers to a new type of central bank liability that could be held directly by households and businesses without the involvement of a commercial bank intermediary. Under this definition, central bank digital currency could be a flexible form of central bank money that could differ from traditional reserves along three dimensions: a much broader set of institutions and individuals could access it, some types of balances might not pay interest, and it might entail greater government visibility into end users' transactions.

In the United States, there are compelling advantages to the current system. First, physical cash in circulation for the U.S. dollar continues to rise, suggesting robust demand.18 Second, the dollar is an important reserve currency globally, and maintaining public trust in the sovereign currency is paramount. Third, we have a robust banking system that meets the needs of consumers: our banks are many in number, diverse in size, and geographically dispersed. Finally, we have a widely available and expanding variety of digital payment options that build on the existing institutional framework and the applicable safeguards.

Moreover, central bank digital currency for general purpose use—that is, for individual consumer use—would raise profound legal, policy, and operational questions.19 Let's consider the balance between privacy and illicit activity. If it is designed to be financially transparent and provide safeguards against illicit activity, a central bank digital currency for consumer use could conceivably require the central bank to keep a running record of all payment data using the digital currency—a stark difference from cash, for instance. A system in which individual payments information would be recorded by a government entity would mark a dramatic shift. A related question is whether the Federal Reserve has the authority to issue currency in digital form and, if necessary, to establish digital wallets for the public.

There could also be profound monetary policy implications. Some economists have argued that a central bank digital currency could address the problems posed by the zero lower bound by potentially transmitting monetary policy directly to the public. Executing monetary policy in such a manner would effectively imply the elimination of all physical cash and the power to impose a negative rate, or a tax, on households' holdings of digital money. My own strong preference is to address the effective lower bound by using our existing tools vigorously, since I view the cost-benefit assessment of negative rates as unattractive for the current U.S. context.

Financial stability considerations are also important. The ability to convert commercial bank deposits into central bank digital currency with a simple swipe surely has the potential to be a run accelerant. Here, too, the role of banks in providing financial intermediation services could be fundamentally altered.

Finally, there could be operational risks to introducing a central bank digital currency. For starters, this might require the Federal Reserve to develop the operating capacity to access or manage individual accounts, which could number in the hundreds of millions. A myriad of other operational challenges would need to be addressed, including electronic counterfeiting and cyber risks. It is worth noting that the technologies used currently for private-sector digital currencies do not provide the same level of information technology reliability, integrity, and scalability as central bank systems in use today. Many of these technologies do not provide for clear, predictable, and final settlement, which is a core tenet of payment systems.20

That said, some jurisdictions may move in this direction faster than others, based on the particular attributes of their payments and currency systems. At the Federal Reserve, we will continue to analyze the potential benefits and costs of central bank digital currencies and look forward to learning from other central banks.

Supporting Payments Innovation

While prudence cautions against rushing into untested approaches to central bank digital currencies, we are actively investing in our payments infrastructure, so that everyone has access to real-time payments. Every day, U.S. payment and securities settlement systems turn over roughly $12.5 trillion.21 The Federal Reserve is committed to working closely with the private sector to promote a safer and more efficient payments system.22

This summer, we announced that the Federal Reserve will launch the first new payment service in more than 40 years to help make real-time payments available to everyone.23 The Federal Reserve will develop the FedNowSM Service as a platform for consumers and businesses to send and receive payments immediately and securely 24 hours a day, 7 days a week, 365 days a year. This initiative is intended to provide a neutral platform for new private-sector innovation in faster payment services. In addition to FedNow, we are exploring enhancements to same-day settlement of automated clearinghouse (ACH) transactions and expansion of Fedwire® Funds Service and National Settlement System operating hours. We are working with the industry to improve the security of the payments system by, for example, increasing understanding of synthetic identity fraud and identifying a fraud classification approach to improve information sharing.

As the public and private sectors work to reduce payment frictions, one of the most important use cases is for cross-border payments, such as remittances. Intermediation chains for cross-border payments are long, slow, cumbersome, and opaque. Technology enables e-commerce to transcend national borders, but current cross-border payments solutions often represent complicated workarounds rather than seamless end-to-end solutions. Authorities in different jurisdictions recognize the importance of cooperating across borders with each other and the private sector to address the very real cross-border frictions that exist today.

Concluding Thoughts

Our nation has rich and varied experiences to draw on as we assess various proposals for private money, from the period in our history when the colonial states each issued their own currencies to the many decades when the circulation of private commercial banknotes stood in for a national currency. The Federal Reserve was created in part to respond to the inability of many of these banks to make good on their obligations for the banknotes they issued and the panics and runs that ensued. Those experiences will help inform us as we potentially enter another phase in the evolution of money and payments.

Today, consumers and businesses have a variety of payment options, including physical cash, checks, ACH transfers, debit cards and credit cards, and mobile-based payment solutions, to name a few. These tend to have clearly defined legal rights and responsibilities. We will likely see far-reaching innovation in payments in the coming years, with a plethora of new and emerging options, including stablecoins.

The Federal Reserve remains confident in the power of technology and innovation to transform the financial system and reduce frictions and delays, while preserving consumer protections, data privacy and security, financial stability, and monetary policy transmission and guarding against illicit activity and cyber risks. Given the stakes, global stablecoin networks should be expected to meet a high threshold of legal and regulatory safeguards before launching operations. We are monitoring new technologies closely to ensure that the innovations that arise fit with our operational responsibilities and broader public policy goals, as reflected in the Federal Reserve Act. At the same time, we are upgrading our services to support innovation in new ways. And, we will continue to foster a safe and efficient payments system, including where money in all its myriad forms—present and future—is concerned, as we have for over a century.

Notes

1. I am grateful to Paul Wong and Jean Flemming of the Federal Reserve Board for assistance in preparing this text. These remarks represent my own views, which do not necessarily represent those of the Federal Reserve Board or the Federal Open Market Committee.
2. See https://libra.org/en-US/. 
3. In many jurisdictions, the term money is defined narrowly by the law as only sovereign currency.
4. See, e.g., Lael Brainard, "Distributed Ledger Technology: Implications for Payments, Clearing, and Settlement" (speech delivered at the Institute of International Finance Annual Meeting Panel on Blockchain, Washington, October 7, 2016); "The Use of Distributed Ledger Technologies in Payment, Clearing, and Settlement" (speech delivered at the Institute of International Finance Blockchain Roundtable, Washington, April 14, 2016); and Committee on Payments and Market Infrastructures (CPMI), Distributed Ledger Technology in Payment, Clearing, and Settlement (PDF), February 2017.
5. See, e.g., Lael Brainard, "Cryptocurrencies, Digital Currencies, and Distributed Ledger Technologies: What Are We Learning?" (speech delivered at the Decoding Digital Currency Conference sponsored by the Federal Reserve Bank of San Francisco, San Francisco, May 15, 2018).
6. Statistics (October 15, 2019), retrieved from https://newsroom.fb.com/company-info/.
7. Committee on Payment and Settlement Systems, The Role of Central Bank Money in Payment Systems (PDF) (Basel: Bank for International Settlements, August 2003). Return to text
8. Starbucks, Fiscal 2018 Annual Report, https://s22.q4cdn.com/869488222/files/doc_financials/annual/2018/2018-Annual-Report.pdf.
9. Frank Tang and Doug Palmer, "U.S.-China Trade War Deal Could Be Too Late for the Likes of Mastercard, American Express and Visa," South China Morning Post, April 2, 2019.
10. Based on staff calculations using statistics from Statistics (October 15, 2019), retrieved from https://newsroom.fb.com/company-info/, and U.S. and World Population Clock (October 15, 2019), retrieved from https://www.census.gov/popclock/.
11. See Benoît Coeuré, "Digital Challenges to the International Monetary and Financial System," (speech at the Future of the International Monetary System at the Banque Centrale du Luxembourg-Toulouse School of Economics, Luxembourg, September 17, 2019).
12. See Swiss Financial Market Supervisory Authority, "Guidelines for Enquiries Regarding the Regulatory Framework for Initial Coin Offerings (ICOs)," February 16, 2018. 
13. See https://www.dfs.ny.gov/apps_and_licensing/virtual_currency_businesses. 
14. See, e.g., https://www.jpmorgan.com/global/news/digital-coin-payments and https://newsroom.wf.com/press-release/innovation-and-technology/wells-fargo-pilot-internal-settlement-service-using.
15. See, e.g., Christine Lagarde, "Central Banking and Fintech—A Brave New World?" (speech delivered at the Bank of England conference, London, September 29, 2017). 
16. See, e.g., Martin Sandbu, "How Facebook's Libra Fuelled Push for Central Bank-Run Digital Currencies," Financial Times, September 23, 2019, https://www.ft.com/content/746808a0-d9f6-11e9-8f9b-77216ebe1f17; and Dave Michaels and Paul Vigna, "The Coming Currency War: Digital Money vs. the Dollar," The Wall Street Journal, September 22, 2019, https://www.wsj.com/articles/the-coming-currency-war-digital-money-vs-the-dollar-11569204540?mod=hp_featst_pos3. 
17. See e.g., Markus K. Brunnermeier, Harold James, and Jean-Pierre Landau, "The Digitalization of Money (PDF)," Working Paper, August 2019. 
18. See https://www.federalreserve.gov/paymentsystems/coin_data.htm. 
19. See, e.g., CPMI and Markets Committee, Central Bank Digital Currencies (PDF), March 2018. 
20. Many distributed ledgers in existence today rely on probabilistic settlement, meaning that the more times a transaction is confirmed on the ledger, the less likely it will be revoked, but a non-zero risk of settlement failure persists.
21. Based on staff estimates. 
22. See, e.g., https://fedpaymentsimprovement.org/. 
23. Lael Brainard, "Delivering Fast Payments for All" (speech delivered at the Federal Reserve Bank of Kansas City, Kansas City, Missouri, August 5, 2019); Lael Brainard, "Supporting Fast Payments for All," (speech delivered at the Fed Payments Improvement Community Forum, Chicago, October 3, 2018). 

FULL DOCUMENT: https://www.federalreserve.gov/newsevents/speech/files/brainard20191016a.pdf

________________

ECONOMIA BRASILEIRA / BRAZIL ECONOMICS

ONU / DIREITOS HUMANOS

MRE. DCOM. NOTA-263. 17 de Outubro de 2019. Eleição do Brasil para o Conselho de Direitos Humanos das Nações Unidas

O Brasil obteve hoje uma importante e justa vitória, ao ser reeleito, com expressiva votação, para o Conselho de Direitos Humanos das Nações Unidas (CDH). O Brasil continuará a ocupar assento no período 2020-2022. O mandato terá início em 1º de janeiro de 2020.

A eleição ocorreu, em Nova York, durante a 74ª Assembleia Geral das Nações Unidas. Com 153 votos recebidos, de 193 possíveis, o Brasil foi o país mais bem votado no grupo latino-americano e caribenho. Na eleição anterior, em 2016, o Brasil recebeu 137 votos. Esse resultado demonstra o sólido reconhecimento internacional das credenciais do Brasil em matéria de promoção e proteção dos direitos humanos.

O governo brasileiro cumprimenta Alemanha, Armênia, Coreia do Sul, Japão, Ilhas Marshall, Indonésia, Líbia, Mauritânia, Namíbia, Países Baixos, Polônia e Sudão, que também ganharam assento no órgão. Enaltece também a Costa Rica, que alcançou número significativo de votos, mesmo tendo entrado no pleito tardiamente.

Infelizmente, para a segunda vaga reservada ao grupo latino-americano e caribenho, foi eleita a Venezuela do regime ilegítimo de Nicolás Maduro. Tal fato revela que ainda há muito a ser feito para a conscientização da comunidade internacional a respeito do estado catastrófico dos direitos humanos naquele país e mostra as deficiências do sistema multilateral na área dos direitos humanos, por cuja correção o Brasil trabalhará. O Brasil atuará, inclusive, para que o ingresso da Venezuela no CDH neste momento não se torne, em hipótese alguma, fator de legitimação da ditadura Maduro.

O Brasil continuará a atuar no Conselho de Direitos Humanos e nos demais órgãos das Nações Unidas para promover a liberdade, a dignidade e os direitos humanos ao redor do mundo.

INFLAÇÃO

FGV. IBRE. 17/10/19. Índices Gerais de Preços. IPC-S Capitais. Inflação pelo IPC-S recua em cinco das sete capitais pesquisadas

O IPC-S de 15 de outubro de 2019 registrou variação de -0,01%, ficando 0,01 ponto percentual (p.p.) abaixo da taxa divulgada na última apuração. Cinco das sete capitais pesquisadas registraram decréscimo em suas taxas de variação.

A tabela a seguir, apresenta as variações percentuais dos municípios das sete capitais componentes do índice, nesta e nas apurações anteriores.

DOCUMENTO: https://portalibre.fgv.br/navegacao-superior/noticias/inflacao-pelo-ipc-s-recua-em-cinco-das-sete-capitais-pesquisadas-4.htm

EMPREGO

MEconomia. 17/10/2019. Rais. Emprego formal chega a 46,63 milhões em 2018. Dados da Relação Anual de Informações Sociais mostram crescimento no emprego celetista no país

Dados da Relação Anual de Informações Sociais (Rais), divulgados nesta quinta-feira (17/10), mostram o crescimento do emprego formal em 2018. O ano passado fechou com 46,63 milhões de vínculos, 349,52 mil a mais do que em 2017, o que corresponde a um aumento de 0,8% nos postos com carteira assinada no país.

Nos 12 meses de 2018, o emprego celetista registrou crescimento de 371.392 mil postos, 1,02% a mais do que em 2017. Houve crescimento em quatro das cinco regiões do país, sendo que o Nordeste teve o maior aumento relativo na oferta de vagas. Das 27 unidades da federação, 19 fecharam com desempenho positivo no emprego formal – principalmente, Maranhão, Mato Grosso, Amapá, Santa Catarina e Amazonas.

O aumento no emprego foi maior na faixa de trabalhadores com idades entre 40 e 49 anos. Em relação à escolaridade, a maior variação positiva foi no grupo dos empregados com ensino superior completo. E a diferença entre homens e mulheres diminuiu, sendo que o emprego feminino foi o que mais cresceu.

Setores

Dos oito setores econômicos, o maior crescimento absoluto em 2018 foi nos Serviços, que abriu 456 mil novas vagas em todo o país, um aumento de 2,72%. Se for considerado o tamanho do setor, os Serviços Industriais de Utilidade Pública registraram melhor desempenho, com uma expansão de 2,97% referentes ao acréscimo de 13 mil vagas.

Construção Civil abriu 23 mil novas vagas, apresentando crescimento de 1,24%, e Extrativa Mineral ficou estável com a contratação de aproximadamente 300 pessoas e crescimento de 0,14%.

Desempenho regional

Quatro das cinco regiões tiveram desempenho positivo em 2018. O emprego formal cresceu 1,21% no Nordeste; 1,10% no Sul; 0,96% no Norte e 0,67% no Sudeste. Na região Centro-Oeste houve queda de - 0,52%.

Em números absolutos, a concentração do emprego foi maior no Sudeste, que abriu 153,02 mil vagas no último ano. Já o estado com o maior crescimento relativo no emprego em 2018 foi o Maranhão, com aumento de 4,78% no estoque de empregos formais.

Considerando as vagas abertas, o principal empregador formal foi o estado de São Paulo, onde foram criadas 119,18 mil oportunidades de emprego. Minas Gerais aparece em segundo lugar, com 49,91 mil, seguido de Paraná (42,21 mil) e Bahia (37,78 mil).

Homens e mulheres

Houve crescimento tanto no emprego masculino quanto no feminino. As mulheres passaram de 20,36 milhões em 2017 para 20,54 milhões em 2018. A presença dos homens no mercado subiu de 25,91 milhões para 26,08 milhões no mesmo período.

A representatividade do emprego feminino, em relação ao total de vagas formais do mercado cresceu levemente. Passou de 40% em 2017 para 40,1% em 2018.

Faixa etária

Em 2018, as faixas etárias que apresentaram maior crescimento foram as de trabalhadores com mais de 30 anos. A maior parte das vagas que surgiram no último ano foi ocupada por empregados que tinham entre 40 e 49 anos – foram 258 mil postos a mais, um crescimento de 2,47% em relação a 2017. A faixa de quem tinha mais de 50 anos aumentou em 183 mil vagas, aumento de 2,19%, e a dos trabalhadores com idades entre 30 e 39 anos teve acréscimo de 83 mil vagas, variação de 0,57%.

A maioria dos trabalhadores formais brasileiros possui entre 30 e 39 anos. Eles são os responsáveis por 31% de toda a força de trabalho no país. Em seguida, vêm a faixa de 40 a 49 anos (23%) e dos 50 anos ou mais (18,3%). Os trabalhadores de até 24 anos e os que têm entre 25 e 29 anos respondem por 13,9% do mercado cada.

Escolaridade

Vagas destinadas a trabalhadores com maior escolaridade foram as que mais cresceram em 2018. Os postos destinados a quem tinha ensino superior completo tiveram um acréscimo de 458 mil, 4,46% a mais do que em 2017. Para superior incompleto, o incremento foi de 69 mil vagas, crescimento de 3,87%. No ensino médio completo, o aumento foi de 367 mil vagas, variação de 1,64% em relação ao ano anterior. As demais escolaridades tiveram fechamento de vagas.

Ensino médio completo é a escolaridade com maior presença no mercado formal de trabalho. Quase metade dos vínculos com carteira assinada no país são destinadas a trabalhadores que concluíram o ensino médio, mas não chegaram a entrar em uma faculdade. Em 2018, pessoas com este perfil preencheram 48,8% do total dos vínculos empregatícios.

Raça e cor

O emprego aumentou em 2018 para os trabalhadores que se autodeclararam pretos, pardos e indígenas e diminuiu para aqueles que se dizem brancos ou amarelos. Este cálculo não leva em conta aqueles trabalhadores que não tiveram a raça/cor informada pelos empregadores - o universo de empregados que tiveram essa informação incluída na Rais foi de 33,7 milhões (72,3% do estoque).

Pessoas com deficiência

A participação de pessoas com deficiência no mercado formal cresceu no último ano. Em 2017, elas ocupavam 0,95% das vagas formais. Em 2018, passaram a ocupar 1,04%. O número de vínculos cresceu de 441,33 mil para 486,75 mil. O aumento foi maior para os trabalhadores com deficiência múltipla (19,66%), visual (19,60%) e intelectual (18,09%). Mas a maior parte das pessoas com deficiência no mercado formal possui deficiência física, que representa 47,3% do total.

Imigrantes

Entre os imigrantes, os trabalhadores com maior presença no mercado formal em 2018 foram os haitianos, que ocuparam 46.820 vagas. A segunda nacionalidade com maior presença no mercado brasileiro foi a paraguaia (8.715), seguida da portuguesa (7.438) e da venezuelana (7.353). Esta última, embora apareça em quarto lugar no número de vagas, foi a que mais cresceu. Em 2017, os venezuelanos eram 2.711, o que significa que a expansão foi de 171,23%.

Estabelecimentos

Cerca de 8,08 milhões de estabelecimentos entregaram a Rais 2018, uma queda de -1,28% em relação a 2017, quando o número de estabelecimentos era de 8,18 milhões. Do total do último ano, 3,9 milhões, o que corresponde a 47,8%, tinham empregados e 4,2 milhões, 52,2%, não possuíam funcionários (Rais negativa).

A maior parte dos empreendimentos que entregaram a Rais é do setor de Serviços, que também concentra a maior parte das empresas sem funcionário – são 1.495 pessoas jurídicas que empregam trabalhadores e 2.254 que entregaram a Rais negativa.

Mais da metade dos empreendimentos com funcionários, 2,17 milhões, tinha, em 31 de dezembro de 2018, entre 1 e 4 empregados. No entanto, os principais empregadores foram as empresas com mais de 1000 funcionários. Enquanto o grupo de até 4 trabalhadores empregou 4,15 milhões de pessoas, o de mais de 1000 empregou 11,82 milhões.

MEconomia. 17/10/2019. Caged. Brasil criou mais de 157 mil empregos formais em setembro
Todas unidades da federação apresentaram resultado positivo, com destaque para os estados de São Paulo, Pernambuco e Alagoas

O Brasil gerou 157.213 vagas de empregos formais em setembro. É o melhor setembro desde 2013, quando foi registrado resultado positivo de 211.068 vagas. Pela primeira vez no ano, todas as 27 unidades da federação apresentaram resultado positivo na oferta de vagas formais de trabalho. Os dados são da mais recente edição do Cadastro Geral de Empregados e Desempregados (Caged), divulgado nesta quinta-feira (17/10), pela Secretaria de Trabalho do Ministério da Economia.

No acumulado dos nove primeiros meses de 2019, o país apresentou geração de 761.776 empregos, o que representa elevação de 1,98% no estoque total (que atingiu 39.172.204 empregos formais ao final de setembro deste ano). Nos nove primeiros meses do ano passado, o Brasil tinha gerado 719.089 novos empregos. O resultado acumulado entre janeiro e setembro deste ano, portanto, é 6% melhor que o de igual período do ano passado.

O emprego formal teve resultados positivos em sete setores econômicos em setembro e saldo negativo em apenas um setor. Os setores com números positivos foram Serviços (+64.533 vagas); Indústria da Transformação (+42.179); Comércio (+26.918); Construção Civil (+18.331); Agropecuária (+4.463); Extrativa Mineral (+745) e Administração Pública (+492). O único setor com resultado negativo foi o de Serviços Industriais de Utilidade Pública (-448 vagas).

Por regiões, o Nordeste apresentou o maior saldo positivo em setembro, com a oferta de 57.035 postos. Em segundo lugar ficou o Sudeste (+56.833 vagas) e em terceiro, o Sul (+23.870). O Centro-Oeste ficou em quarto lugar em setembro (+10.073 vagas) e o Norte, em quinto (+9.352). Os Estados que mais geraram empregos em setembro foram São Paulo (+36.156 postos), Pernambuco (+17.630) e Alagoas (+16.529).

Modernização Trabalhista

O Caged aponta que em setembro houve 18.395 desligamentos mediante acordo entre empregador e empregado, em um universo de 12.105 empresas, o que representa 1,5% do total de desligamentos do mês. Considerando os setores econômicos, os desligamentos por acordo foram registrados principalmente em Serviços (9.335), Comércio (4.303) e Indústria de Transformação (2.833). Um total de 28 empregados realizou mais de um desligamento mediante acordo com o empregador.

Na modalidade de trabalho intermitente, foram registradas em setembro 12.169 admissões e 6.154 desligamentos, o que gerou um saldo positivo de 6.015 empregos, em um universo de 2.495 empresas contratantes. Um total de 57 empregados celebrou mais de um contrato na condição de trabalhador intermitente no mês passado. Por setores, os principais saldos na modalidade de trabalho intermitente foram apurados em Serviços (3.029), Indústria da Transformação (1.043) e Comércio (944).

O trabalho em regime de tempo parcial teve 6.609 admissões e 4.802 desligamentos em setembro, gerando um saldo positivo de 1.807 empregos, com 3.254 empresas contratantes. Um total de 46 empregados celebrou mais de um contrato em regime de tempo parcial no mês passado. Por setores, os principais resultados nas contratações em regime de tempo parcial foram apurados em Serviços (1.001 postos), Comércio (471) e Indústria da Transformação (200).

DOCUMENTO: http://pdet.mte.gov.br/caged

ENERGIA

PETROBRAS. 17/10/2019. Petrobras apresenta destaques de produção e vendas no 3T19

A Petrobras apresentou sólido desempenho operacional no terceiro trimestre de 2019 (3T19), entregando expressivo crescimento da produção de óleo, LGN e gás natural, que atingiu 2.878 Mboed, 9,3% acima do segundo trimestre de 2019 (2T19). Tem destaque o aumento de 17,0% da produção do pré-sal, que alcançou 1.367 Mboed, representando hoje 60,4% da produção de óleo no Brasil.

O desempenho do pré-sal é decorrente do ramp-up das seis plataformas que entraram em produção em 2018 e 2019 (P-74, P-75, P-76 e P-77 no campo de Búzios e P-67 e P-69 no campo de Lula), que contribuíram com 441 Mbpd no 3T19. Adicionando a contribuição da FPSO Campos dos Goytacazes em Tartaruga Verde, no pós-sal, totalizamos 555 Mbpd, o que representa um aumento de cerca de 48% em relação ao 2T19, com a entrada em operação de nove poços produtores. Vale ainda destacar que as plataformas P-69 e P-76, nos campos de Lula e Búzios, atingiram a capacidade de produção de 150 Mbpd com ramp-up de 10,3 e 7,7 meses (tempo recorde no pré-sal), respectivamente.

No 3T19, a produção atingiu novo recorde mensal de 3,0 MMboed, além de um novo recorde diário de 3,1 MMboed, alcançados no mês de agosto. Já a produção operada atingiu o recorde mensal de 3,7 MMboed no mesmo mês.  Com estes resultados mantemos a trajetória para o cumprimento da meta de produção anual, em 2,7 MMboed, com variação de 2,5% para mais ou para menos.

A produção de óleo no pós-sal ficou estável em 706 Mbpd em relação ao 2T19, enquanto a produção de óleo em terras e águas rasas aumentou 4,3% na comparação com o 2T19, atingindo 192 Mbpd.

No segmento de refino, acompanhando a maior demanda no trimestre no mercado brasileiro, aumentamos a produção de derivados em 2,9% face ao trimestre anterior. Isso também contribuiu para a redução das importações, especialmente de gasolina e GLP, por meio da maior utilização do parque de refino (que cresceu de 76% para 80%) e das unidades de conversão. As vendas de derivados aumentaram 3,5% face ao trimestre anterior, com destaque para o incremento nas vendas de diesel, que subiram 5,2%, impulsionadas pelo plantio da safra de grãos e pela atividade industrial. As vendas de GLP subiram 3,2% na comparação com o 2T19 principalmente pelas temperaturas médias mais baixas. Houve ainda aumento da exportação, acompanhando a maior produção de óleo, e redução da importação de petróleo com maior processamento de óleo nacional nas refinarias.

No segmento de gás e energia destacam-se a geração termelétrica, que aumentou 124,6% em relação ao trimestre anterior, refletindo as condições hidrológicas e os menores custos de gás natural, e o aumento em 9 MMm3/dia da oferta de gás para atendimento da demanda termelétrica.

DOCUMENTO: https://www.investidorpetrobras.com.br/ptb/15879/9512_716567.pdf..pdf

________________

LGCJ.: