US ECONOMICS

ISRAEL - PALESTINE

U.S. Department of State. 01/28/2020. Secretary Michael R. Pompeo With Yonit Levi of Channel 12 News. Michael R. Pompeo, Secretary of State

QUESTION:  Secretary of State Mike Pompeo, thank you so much for talking to us today, sir.

SECRETARY POMPEO:  It’s great to be with you.  Thanks for having me on.

QUESTION:  The long-awaited peace plan was unveiled today.  We saw you front and center center in the East Room in the White House.  The plan is called Peace to Prosperity.  Can I ask you, sir, what kind of peace can be made in the region if the Palestinians are not part of the deal?  They’re not even showing up to the table.

SECRETARY POMPEO:  Well, today, we laid out an offer, an offer that the Palestinians have four years to accept.  It basically takes a basic idea, right?  You’re going to have to have security for Israel, a case that the right of return is something that’s simply not going to be possible, and it lays down based upon ancient history of this important, holy land and the reality, the facts on the ground.  And it tries to deliver a set of outcomes that can deliver a pathway so that you can have a state for the Palestinians, security for the Israelis, and peace and prosperity for all of the people in that place.

QUESTION:  Are you worried by the fact that Jordan says that only – the only path is a two-state solution?  The UN secretary-general also coming out with the same statement, saying the only vision is a two-state based on the 1967 lines.  Does that concern you?

SECRETARY POMPEO:  Look, what President Trump laid down today is a vision for how to proceed.  It’s a vision that says if the Palestinians want $50 billion, a million new jobs, that they ought to enter into negotiations based on that vision, where, if there’s a counter offer, if the Palestinians have a different idea about how to proceed, they ought to present that now that they’ve been presented with this pathway forward.

It grants the Palestinians a state that’s conditional upon some really simple things, right, like stopping terrorism, acknowledging Israel as a Jewish state.  These are basic things for peace and prosperity in the region.  You’ve seen Arab states do understand that times are different today.  You saw ambassadors from Bahrain and from Oman and from the Emirates all attend this ceremony today.

This is the reality.  This is the new, modern Middle East.  And our vision relies upon the realities on the ground and the hopefulness that the Palestinian people will decide to choose a path towards prosperity for themselves as well.

QUESTION:  So (inaudible) understand correctly, the Trump administration is giving a green light to Israel to annex all of the settlements in the West Bank.  Is that correct?

SECRETARY POMPEO:  What you’ll see today is you’ll see the full plan laid out, including a conceptual map; when it’s sent to the Israelis that they will agree to negotiate on this basis, is that we’re going to do the things necessary to make sure that they are safe and secure and we don’t create increased risk for them.

At the same time, there’s no change in the status of the Temple Mount.  At the same time, it recognizes that people are living in certain places.  No one – no Israeli, no Palestinian – is required to move as a result of this plan.  These are the things that are laid down in President Trump’s vision for peace, and we do hope – we do hope that both the parties, that both the Israelis and the Palestinian people, will endeavor to take this as a basis for negotiations and begin a conversation about how to deliver on this outcome that has escaped the world for all of these decades.

QUESTION:  You’re saying that no one will have to leave their house, sir, but in the plan itself, it says quite clearly, “The Vision contemplates the possibility, subject to agreement of…parties, that the borders of Israel will be redrawn such that the Triangle Communities become part of the State of Palestine.”

This is something that Arab Israelis, the Palestinians living in Israel, will never agree to.

SECRETARY POMPEO:  Well, you say “never.”  They – the parties could make a decision.  What we’ve laid down is a vision.  We’ve laid down a basis for negotiation that the Israelis and the Palestinians might come to an accommodation that varies from what’s laid down today.  We not only expect that that will happen, we think it’s appropriate for them to have this conversation, this discussion.  That’s what a vision is.  It lays down a set of outlines.  It puts down a set of understandings.  And then the parties – the Israelis and the Palestinians – will come – have to come together to finalize that.  I am sure in the course of that there will be things that will vary a bit from what’s been presented today.

QUESTION:  You, the U.S. embassy in Israel, the State Department, put out a security alert telling the personnel, the American personnel in the region, not to go to the Westerners* Bank and not to go to East Jerusalem after this plan was unveiled.  Are you concerned of an option of an eruption of violence in our region because of the plan?

SECRETARY POMPEO:  We always tell citizens that are traveling to take precautions when we’re concerned that there could be some increased risk.  We’ve seen this.  We’ve done this in China over the past few days for the risk of what’s taking place there.  We’ll do that.  We constantly evaluate these things.  We do it literally hour by hour and day by day.

We want to make sure that people, Americans traveling in any region of the world, are safe and secure.  And so on the day that this announcement was made, we wanted to make sure that American citizens were aware that this decision by the President was being announced today and to take a caution – precautions that were appropriately commensurate with that.

QUESTION:  You’re all right with the fact that Israel will bring in a resolution to the prime minister for this Sunday to annex the settlements in the West Bank?  That is fine where the United States is regarded?

SECRETARY POMPEO:  The Israelis will make decisions consistent with Israeli law with respect to that.  Look, what’s been done over the past years, that’s how we’ll continue to operate today.  We’ll look to see how the Israelis handle this.  We’ve seen this in the past.  We’ve seen settlements that Israel has proposed be declared unlawful.  We’ll – Israelis will find their pathway forward on this.

QUESTION:  A final question, sir.  Benny Gantz, the person who wants to be prime minister, you understand that he is on board with this plan?  And will this plan live on even if he is elected prime minister in five weeks?

SECRETARY POMPEO:  So I was there yesterday when General Gantz came to visit with President Trump.  President Trump talked to him about the plan, and General Gantz was excited about it.  He was on board with the plan.  And I am confident.  This is a relationship between the United States and Israel.  I’m very confident that the vision laid out today will continue no matter how the election proceeds on March 2nd of this year.

QUESTION:  Secretary Pompeo, thank you very much for this conversation today.

SECRETARY POMPEO:  Thank you very much, ma’am.  Have a great day.

QUESTION:  Thank you.

U.S. Department of State. 01/28/2020. Secretary Michael R. Pompeo With Barak Ravid of Channel 13 News. Michael R. Pompeo, Secretary of State

QUESTION:  Secretary of State Mike Pompeo, thank you for doing this interview.

SECRETARY POMPEO:  It’s great to be with you.  Thanks for having me on today.

QUESTION:  This is a definitely a big day, a meaningful day.  And we heard what the President said, we started reading the plan, and I was wondering:  How much was Israel involved in drafting this peace plan?

SECRETARY POMPEO:  So we worked with a lot of countries, people from all across the region, not just with the Israelis.  We attempted to work with the Palestinians; we worked with Arab states.  We took on board the history of the place, the Arab Peace Initiative, all those proposals that had come before us but had not been successful.  So we listened to a lot of different ideas.  We incorporated many of them and tried to deliver a plan based on the amazing history of this holy land and the reality on the ground today that both the Israelis and the Palestinians can use as a basis for beginning their negotiations.

QUESTION:  Because it seems that you got much more input from Israel than from the Palestinians.

SECRETARY POMPEO:  We talked with lots of different countries.  We talked with the Jordanians, the Egyptians.  The list was very long.  It took us a while to get all of that done, but we ultimately got to a place where President Trump could make this announcement today that we believe provides the most detailed, comprehensive plan that has ever been presented, and the best opportunity for the Palestinians.  A real offer sits on the table for the Palestinians.  All they need to do is say yes.  We’re prepared to begin negotiations based on this vision, and many good things will happen for the Palestinian people.  We can start the process towards them having the state that they say they have wanted for all of these years.

QUESTION:  We have elections on March 2nd.

SECRETARY POMPEO:  Yes, just a month off.

QUESTION:  Yeah.  I still remember that we talked about what are going to be the results in the first round.  You saw Benny Gantz was here in town.  Are you concerned that after the Israeli elections there might be another prime minister and then it will be a problem to implement the plan because there’s a new government?

SECRETARY POMPEO:  No, I’m not concerned.  This is a – President Trump’s vision.  When General Gantz visited with President Trump yesterday, I was there.  I listened to General Gantz talk about this plan, and he said he thought it made sense, it was something he would be happy to engage in, and something he thought would make real sense for Israel in that it continued to provide the security that the Israeli needed  It didn’t change the status quo on the Temple Mount, all the things that can form a basis for the beginning of a negotiation, a vision that is based in reality and facts that has a real opportunity for security and prosperity for the Israelis as well as for the Palestinians.

QUESTION:  What was your impression of Mr. Gantz?

SECRETARY POMPEO:  General Gantz was serious.  He was focused on talking about this, but also very much wanted to share with President Trump his vision for how he would lead Israel if he were the one that became the prime minister.

QUESTION:  Prime Minister Netanyahu announced right after President Trump’s speech that he will bring to the cabinet on Sunday a resolution to annex the Jordan Valley, the northern Dead Sea, and all the settlements in the West Bank.  Is this something that the Trump administration would support?

SECRETARY POMPEO:  The Israelis will proceed under Israeli law to begin to work consistent with what we’ve laid down in this vision.  We’ve set markers for the things that we know are acceptable, and in exchange for that – you heard Prime Minister Netanyahu say this – he’s prepared, if the Palestinians agree, to negotiate based on this vision, to for four years take lands that are demarcated – and the map is available for everyone to see – lands that are demarcated there, and for four years hold those for a future Palestinian state.

All the Palestinians need to do is a few simple things, things we ask of just about every nation in the world – to recognize Israel as a Jewish state, to stop terrorism, basic fundamental things.  And then the lives of the Palestinian people can be improved dramatically.  I hope that they’ll decide to negotiate on the basis of President Trump’s vision.

QUESTION:  So just to make sure, you support the Israeli Government annexing the Jordan Valley and all the settlements in the West Bank?

SECRETARY POMPEO:  The Israelis will do this consistent with Israeli law.  The president – excuse me, Prime Minister Netanyahu has accepted this vision, and you will see how we laid down where the various boundaries are in the maps that are presented in the outline of President Trump’s vision.

QUESTION:  The Jordanian Government, King Abdullah and other senior Jordanian officials, warned that if Israel annexes the Jordan Valley, it could blow up the peace agreement, the peace agreement that the U.S. is a party to.  Are you concerned of such a scenario?

SECRETARY POMPEO:  Well, I don’t want to get into hypotheticals.  I’m confident that what we laid out today, President Trump’s vision for how this will move forward, presents a sound basis to begin negotiations.  When you talk about negotiations, that means there’ll have to be compromise, there’ll have to be – the parties will have to work on different pieces of this puzzle to get to an outcome.  We don’t pretend that we have it perfect.  We only know this:  This is historic.  This is the first time there has been a real offer with a real map, that the Israelis have agreed to, that presents an opportunity for an expansion of the Palestinian prosperity – $50 billion, a million jobs, and a capital in East Jerusalem that the United States would put its embassy in.

These are real offers for the Palestinians, and ones I hope that they will take seriously.  They are meant sincerely.  And we’d ask the Palestinians to think on this, to look at it – we’ve given them plenty of time; they don’t have to do this today or tomorrow or next week – and consider whether this is something that makes sense.  I hope the Palestinian leadership will do it.  I know that the Palestinian people will.

QUESTION:  But we heard what Palestinian President Abbas said today.  He said that it’s a “deal of shame,” he rejected it.  Do you even think it’s realistic that the Palestinians will go back to the table?

SECRETARY POMPEO:  The Palestinian people know the conditions that they live in today.  They know when they evaluate this, when they get a chance to take a breath and stare at what we’ve presented, that this is a real opportunity, one that’s better than any of the opportunities that had been presented before, and it may well be one of the final opportunities that they have to get this right.

I hope that they’ll consider.  I hope that they’ll evaluate it.  I hope they’ll take it seriously.  I hope they’ll then present a counteroffer if what’s presented isn’t acceptable.  That’s how this ought to move forward, and I hope that they’ll do that.  We’ll see.  It will obviously be up to the Palestinian people to make that decision, but it is something that is presented by President Trump in good faith.

QUESTION:  President Trump tried to reach the Palestinian President Abbas over the phone to talk to him the last few years – few days.  Abu Mazen didn’t take the call.  Do you know what exactly happened there?

SECRETARY POMPEO:  I don’t want to talk about conversations that may or may not have taken place between the Palestinians and the Americans over the last days.  When I was the CIA director, I spent a fair amount of time in the West Bank.  I came to know President Abbas.  I came to know the Palestinian leadership.  I hope that as the hours and days proceed, they’ll take a look at this and conclude that this is something that would make sense for their people to begin to evaluate and then consider as a path forward for the Palestinian people.

QUESTION:  Just last question.  There are some in the U.S. here and in Israel who claim that this plan put forward by President Trump and what Netanyahu said afterwards show that it’s mostly about domestic politics, both here in America and in Israel as part of the election campaign.  What do you make of this?

SECRETARY POMPEO:  There will always be critics and cynics.  This doesn’t surprise me.  I watched as this work’s been done over years.  This began long before the Israeli elections were contemplated and long before there was an American election coming up in this year.  It took us a while, as we discussed at the beginning of the interview.  We canvassed lots of different voices, all the professionals – the Americans who had worked on this before.  We heard from every voice.  It took us a while to get it together, and we presented it the moment we believed we had it in a place that it provided this fundamentally realistic foundation to begin the conversation, and to set out a vision upon which the Israelis have now agreed to negotiate, and we hope that the Palestinians will.

QUESTION:  You want to take a guess against about the results of the Israeli elections?

SECRETARY POMPEO:  No.  I don’t know – I don’t recall what I said last time.  I don’t want to take that risk again.  (Laughter.)

QUESTION:  No, you asked me what my guess was.

SECRETARY POMPEO:  The – I am confident the Israeli people will have a good election, and I hope it’s one that resolves in a way that gets an Israeli Government in place.  I think that’d be good for the Israeli people.

QUESTION:  Secretary of State Mike Pompeo, thank you very much for this interview.

SECRETARY POMPEO:  Thank you very much, sir.

QUESTION:  Thank you.

U.S. Department of State. 01/28/2020. Secretary Michael R. Pompeo With Ben Shapiro of The Ben Shapiro Show. Michael R. Pompeo, Secretary of State

QUESTION:  Welcome back to the Ben Shapiro Show.  We’re joined on the line by Secretary of State Mike Pompeo.  Obviously, the Secretary has very busy day.  Secretary, really appreciate your time, sir.

SECRETARY POMPEO:  Ben, it’s great to be back on the show with you.

QUESTION:  So let’s start by sort of going through some of the details of the Trump peace plan, the deal of the century.  Obviously, you would expect the resistance from the usual points of view, but what are the actual kind of barebones of the plan being presented by President Trump today?

SECRETARY POMPEO:  Ben, the President’s taken on one of the longest challenges, toughest challenges in foreign policy.  And it is the most detailed, most realistic plan ever presented.  And what’s important for everyone to know is there’s now a live offer on the table – and this hasn’t been the case before – a live offer on the table for the Palestinians to consider over a four-year period.

I can go through a bunch of the details.  For the first time, there’s a plan that ensures Israeli security, that’s endorsed by the Israeli security establishment.  Israel will be able to defend itself.  It creates a viable path for the Palestinians to get a state, conditioned on a reasonable set of milestones being achieved over a reasonable period of time.  Jerusalem remains an open city under Israeli control and sovereignty inside the security barrier.  And no change in the status on the Temple Mount; the status quo will be preserved there.

We think this is a reasonable basis for the parties to begin to engage in a vision that can lead to peace and prosperity and security.

QUESTION:  Now Secretary Pompeo, what the plan really represents, for those who are knowledgeable about the region at all, is a reflection of just basic realities on the ground.  Jerusalem cannot be divided; there’s no physical way to divide it.  When it was divided in the past, before 1967, it was barred to entry for Jews as well as many Christians.  The notion that Israel is going to dismantle major Jewish areas outside of the 1967 lines not only ignores Israel having an actual claim to that land – it’s a disputed claim by the Palestinians, but they do have a legitimate claim – it recognizes that Israel is not going to dismantle cities that have tens of thousands of people living in them.  It also recognizes that the Palestinians are not going to be abandoning the West Bank, or Judea and Samaria, or the Gaza Strip anytime soon, and it recognizes the security challenges that are faced when in what is an extremely crowded neighborhood.

Does the fact that there are so many people who are kicking back against the plan I think is recognition of the fact that people are unwilling to recognize realities on the ground, particularly with issues like the so-called right of return, this idea that suddenly Israel is going to allow millions of Palestinians to demographically settle in Israel and then vote for the dissolution of the state.

SECRETARY POMPEO:  Ben, what we’ve tried to do and what the President Trump tried to do in this process is to take history into account and the reality on the ground as it stands today into account.  And I think you just ticked through half a dozen ways in which this plan does that.  It shows incredible respect and dignity for the Palestinian people, too.  It simply asks them, whether that’s in the West Bank or in the Gaza Strip, to stop paying terrorists, stop inciting hatred, to recognize Israel as a Jewish state.  These are things that are fundamental, that are facts, that are unchanging, and delivers the possibility of a peaceful outcome.

There are – there’s no one under this plan that will be required to uproot.  No Israeli will be required to uproot; no Palestinian will be required to uproot.  These are just recognizing fundamental facts, and we think presents a basis upon which to build.

I know there’ll be people that will push back.  But what we’ve seen in the region so far to date is a lot of individuals who had an expectation for what they thought might be in the plan realizing that this vision for peace and for the region is one that is worthy of consideration.

QUESTION:  Well, this is one of the things about the peace plan that I find so interesting, is the fact that there are a bunch of Arab states that showed up, actually brought envoys to this event – obviously, Oman, the UAE – there were several different countries that actually showed up who never in the past would have shown up to anything remotely like —

SECRETARY POMPEO:  That’s right.  The Bahraini ambassador was there.  That’s correct, Ben.  Yep.

QUESTION:  Right, exactly.  And that signifies a change in mindset on the part of many of the Arab states that have been dedicated for decades to the proposition that the Jewish state was simply going to disappear, suddenly recognizing that that is never going to be a reality.

SECRETARY POMPEO:  This has been something that I’ve worked on, the President’s worked on, that Jared Kushner has worked on, for three years now, trying to make clear that – just the ordinary nature of what needed to take place in the region, that the threat was from the Islamic Republic of Iran, that there were shared interests between Israel and many of the Arab states, and that there was a path forward for those states to live in peace and harmony in the region.

QUESTION:  Now, meanwhile – quick note – the final question for you, the Palestinian Authority chief Mahmoud Abbas has already said that he’s rejecting the plan.  That, of course, is not a surprise, since the Palestinian leadership has rejected literally every peace plan ever presented to them, including incredibly generous offers in both 2000 and 2008.  So what exactly is the future of the plan if the Palestinians don’t decide to accept the plan and move forward with negotiations?

SECRETARY POMPEO:  In the end, the Palestinian people are going to have to make a decision about whether they want to continue to difficult challenges they face today with the absence of prosperity, the terrorism that exists, and the corruption that has existed in the region for a long time, or if they want to turn the page and deliver an outcome for themselves and for their children and their grandchildren that’s better, a brighter future.

That opportunity is now on the table.  They don’t have to do it today or tomorrow, but I am confident that as they stare at this, as the Palestinian people stare at what the opportunity is, a plan that might put as much as $50 billion into their places of living, a million new jobs created – when they stare at those opportunities, I am convinced that the Palestinian people will, over the coming weeks and months – and we’ve given them four years – will see that this is a better option for them.  I’m hopeful that they will.  I pray that they’ll make that choice.

QUESTION:  Secretary of State Mike Pompeo, I know that you’re on a short time schedule.  I really appreciate your hard work on this.  Thanks so much for your time.

SECRETARY POMPEO:  Ben, thank you so much, sir.  Have a great day.

INTERNATIONAL TRADE

U.S. Census Bureau. 01/29/2020. Advance U.S. International Trade in Goods

The advance international trade deficit in goods increased to $68.3 billion in December from $63.0 billion in November as imports increased more than exports.

• December 2019: 68.3° $ billion
• November 2019: 63.0° $ billion

(*) The 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.
(°) Statistical significance is not applicable or not measurable for these surveys. The Manufacturers’ Shipments, Inventories and Orders estimates are not based on a probability sample, so we can neither measure the sampling error of these estimates nor compute confidence intervals.
(r) Revised.
All estimates are seasonally adjusted except for the Rental Vacancy Rate, Home Ownership Rate, Quarterly Financial Report for Retail Trade, and Quarterly Services Survey. None of the estimates are adjusted for price changes.

DoC. January 28, 2020. Export and investment promotion Intellectual property. Remarks by Commerce Secretary Wilbur L. Ross at the Signing Ceremony for the MOU on Technical and Strategic Collaboration Between the USPTO and the Mexican Institute of Industrial Property. Wilbur Ross

It is my privilege and honor to be here in beautiful Mexico City to witness the signing of this historic MOU between the U.S. Patent and Trademark Office and Mexican Institute of Industrial Property.

Congratulations to everyone who negotiated this agreement. It took vision, dedication, and hard work to get to this point, and you should be extremely proud of this final product. It will strengthen both of our nations. Thank you, Andrei, for your leadership on this agreement, and for your unwavering commitment to protecting the most important asset of all: intellectual property.

Individuals who patent inventions need to be encouraged and protected, wherever they live, especially in today’s global economy. We can no longer allow for the wanton stealing of intellectual property.  Intellectual property theft, counterfeits, and fakes discourage further invention and the advancement of mankind.

Tomorrow, I will witness the USMCA signing at the White House. This agreement will be extremely beneficial to Mexico. It will support your growing class of scientists and engineers who have been instrumental in making Mexico a world-class manufacturing center. USMCA will enable the owners of proprietary technologies to protect their IP assets. It provides them with the freedom to produce or license their products and processes to partners in both the United States and Mexico. Along with the USMCA, this MOU goes a long way toward cementing our economic ties through increased cooperation between our nations’ patent offices.

What we are doing here today is a lasting legacy of your efforts. We should all be so proud of what this means to future American and Mexican inventors. They will be so much more successful and will be forever grateful for what you have done here today.

For those of you from the Mexican government, thank you for hosting this event, and for your dedication to our alliance. Thank you.

UMCA

U.S. Department of State. 01/29/2020. President Trump Initiates a New Chapter in Trade Policy by Signing into Law the United States-Mexico-Canada Agreement. Michael R. Pompeo, Secretary of State

Today, the President of the United States signed into law the United States-Mexico-Canada Agreement (USMCA), initiating a new chapter in U.S. trade policy.  Mexico and the United States have now passed the USMCA, and we look forward to the Canadian Parliament’s consideration of this agreement.  The passage of the USMCA is a historic achievement.  It is the gold standard of trade agreements.  The USMCA modernizes and updates our trade relations and will promote prosperity and strengthen North American competitiveness.

INTEREST RATE

FED. REUTERS. 29 DE JANEIRO DE 2020. Fed deve manter taxa de juros e discutir mudanças
Por Howard Schneider

WASHINGTON (Reuters) - O Federal Reserve vai concluir sua reunião de política monetária nesta quarta-feira provavelmente mantendo os juros, mas as autoridades devem discutir possíveis mudanças em como gerenciar a principal taxa de empréstimo do banco central dos Estados Unidos.

Desde que o Fed cortou os juros em outubro, sua terceira e última redução nos custos de empréstimos em 2019, as autoridades concordaram em manter a meta para a taxa de juros na atual faixa de 1,50% a 1,75% até que haja uma mudança significativa no cenário econômico.

Dados dos EUA desde a reunião do Fed em dezembro fizeram pouco para mudar as expectativas de contínuo crescimento econômico este ano de cerca de 2%, com desemprego baixo e estável.

Alguns riscos podem ter surgido —com o crescimento econômico da China agora sob os holofotes após o surto de coronavírus — e os rendimentos dos Treasuries caíram como resultado.

Embora os investidores tenham elevado as apostas de que o Fed vai cortar os juros de novo em algum momento deste ano, analistas ainda são praticamente unânimes de que deve demorar alguns meses para essa decisão.

Noventa e cinco dos 108 economistas consultados pela Reuters recentemente disseram esperar que o Fed mantenha os juros na reunião desta semana.

O Fed divulgará seu comunicado de política monetária às 16h (horário de Brasília). O chairman Jerome Powell dará entrevista à imprensa meia hora depois.

FED. January 29, 2020. Federal Reserve issues FOMC statement

Information received since the Federal Open Market Committee met in December indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a moderate pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to maintain the target range for the federal funds rate at 1‑1/2 to 1-3/4 percent. The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the Committee's symmetric 2 percent objective. The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles.

Implementation Note issued January 29, 2020

Decisions Regarding Monetary Policy Implementation

The Federal Reserve has made the following decisions to implement the monetary policy stance announced by the Federal Open Market Committee in its statement on January 29, 2020:

• The Board of Governors of the Federal Reserve System voted unanimously to set the interest rate paid on required and excess reserve balances at 1.60 percent, effective January 30, 2020. Setting the interest rate paid on required and excess reserve balances 10 basis points above the bottom of the target range for the federal funds rate is intended to foster trading in the federal funds market at rates well within the FOMC's target range.
• As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:

"Effective January 30, 2020, the Federal Open Market Committee directs the Desk to undertake open market operations as necessary to maintain the federal funds rate in a target range of 1-1/2 to 1-3/4 percent. In light of recent and expected increases in the Federal Reserve's non-reserve liabilities, the Committee directs the Desk to continue purchasing Treasury bills at least into the second quarter of 2020 to maintain over time ample reserve balances at or above the level that prevailed in early September 2019. The Committee also directs the Desk to continue conducting term and overnight repurchase agreement operations at least through April 2020 to ensure that the supply of reserves remains ample even during periods of sharp increases in non-reserve liabilities, and to mitigate the risk of money market pressures that could adversely affect policy implementation. In addition, the Committee directs the Desk to conduct overnight reverse repurchase operations (and reverse repurchase operations with maturities of more than one day when necessary to accommodate weekend, holiday, or similar trading conventions) at an offering rate of 1.50 percent, in amounts limited only by the value of Treasury securities held outright in the System Open Market Account that are available for such operations and by a per-counterparty limit of $30 billion per day.

The Committee directs the Desk to continue rolling over at auction all principal payments from the Federal Reserve's holdings of Treasury securities and to continue reinvesting all principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities received during each calendar month. Principal payments from agency debt and agency mortgage-backed securities up to $20 billion per month will continue to be reinvested in Treasury securities to roughly match the maturity composition of Treasury securities outstanding; principal payments in excess of $20 billion per month will continue to be reinvested in agency mortgage-backed securities. Small deviations from these amounts for operational reasons are acceptable.

The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency mortgage-backed securities transactions."

• In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve the establishment of the primary credit rate at the existing level of 2.25 percent.

This information will be updated as appropriate to reflect decisions of the Federal Open Market Committee or the Board of Governors regarding details of the Federal Reserve's operational tools and approach used to implement monetary policy.

AVIATION

BOEING. Jan. 29, 2020. Boeing Reports Fourth-Quarter Results. CHICAGO

Fourth Quarter 2019

• Financial results continue to be significantly impacted by the 737 MAX grounding
• Revenue of $17.9 billion, GAAP loss per share of ($1.79) and core (non-GAAP)* loss per share of ($2.33)

Full-Year 2019

• Revenue of $76.6 billion, GAAP loss per share of ($1.12) and core (non-GAAP)* loss per share of ($3.47)
• Operating cash flow of ($2.4) billion; cash and marketable securities of $10.0 billion
• Total backlog of $463 billion, including over 5,400 commercial airplanes

Table 1. Summary Financial Results	Fourth Quarter						Full Year
(Dollars in Millions, except per share data)	2019		2018		Change		2019		2018		Change
Revenues	$17,911		$28,341		(37)%		$76,559		$101,127		(24)%
GAAP
(Loss)/Earnings From Operations	($2,204)		$4,175		NM		($1,975)		$11,987		NM
Operating Margin	(12.3)%		14.7%		NM		(2.6)%		11.9%		NM
Net (Loss)/Earnings	($1,010)		$3,424		NM		($636)		$10,460		NM
(Loss)/Earnings Per Share	($1.79)		$5.93		NM		($1.12)		$17.85		NM
Operating Cash Flow	($2,220)		$2,947		NM		($2,446)		$15,322		NM
Non-GAAP*
Core Operating (Loss)/Earnings	($2,526)		$3,867		NM		($3,390)		$10,660		NM
Core Operating Margin	(14.1)%		13.6%		NM		(4.4)%		10.5%		NM
Core (Loss)/Earnings Per Share	($2.33)		$5.48		NM		($3.47)		$16.01		NM

*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."

The Boeing Company [NYSE: BA] reported fourth-quarter revenue of $17.9 billion, GAAP loss per share of ($1.79) and core loss per share (non-GAAP)* of ($2.33), primarily reflecting the impacts of the 737 MAX grounding (Table 1). Boeing recorded operating cash flow of ($2.2) billion and paid $1.2 billion of dividends.

"We recognize we have a lot of work to do," said Boeing President and Chief Executive Officer David Calhoun. "We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. We are committed to transparency and excellence in everything we do.  Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process."

Table 2. Cash Flow	Fourth Quarter				Full Year
(Millions)	2019		2018		2019		2018
Operating Cash Flow	($2,220)		$2,947		($2,446)		$15,322
Less Additions to Property, Plant & Equipment	($447)		($495)		($1,834)		($1,722)
Free Cash Flow*	($2,667)		$2,452		($4,280)		$13,600

*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."

Operating cash flow was ($2.2) billion in the quarter, primarily reflecting the impact of the 737 MAX grounding as well as timing of receipts and expenditures (Table 2). During the quarter, the company paid $1.2 billion of dividends.

Table 3. Cash, Marketable Securities and Debt Balances	Quarter-End
(Billions)	Q4 19			Q3 19
Cash	$9.5			$9.8
Marketable Securities1	$0.5			$1.1
Total	$10.0			$10.9
Debt Balances:
The Boeing Company, net of intercompany loans to BCC	$25.3			$22.8
Boeing Capital, including intercompany loans	$2.0			$1.9
Total Consolidated Debt	$27.3			$24.7

1 Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."

Cash and investments in marketable securities totaled $10.0 billion, compared to $10.9 billion at the beginning of the quarter (Table 3). Debt was $27.3 billion, up from $24.7 billion at the beginning of the quarter primarily due to increased commercial paper borrowings.

Total company backlog at quarter-end was $463 billion and included net orders for the quarter of $13 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes	Fourth Quarter						Full Year
(Dollars in Millions)	2019		2018		Change		2019		2018		Change
Commercial Airplanes Deliveries	79		238		(67)%		380		806		(53)%
Revenues	$7,462		$16,531		(55)%		$32,255		$57,499		(44)%
(Loss)/Earnings from Operations	($2,844)		$2,600		NM		($6,657)		$7,830		NM
Operating Margin	(38.1)%		15.7%		NM		(20.6)%		13.6%		NM

Commercial Airplanes fourth-quarter revenue was $7.5 billion and fourth-quarter operating margin decreased to (38.1) percent reflecting lower 737 deliveries and an additional pre-tax charge of $2.6 billion related to estimated potential concessions and other considerations to customers related to the 737 MAX grounding (Table 4). The estimated costs to produce 737 aircraft included in the accounting quantity increased by $2.6 billion during the quarter, primarily to reflect updated production and delivery assumptions. In addition, the suspension of 737 MAX production and a gradual resumption of production at low production rates will result in approximately $4 billion of abnormal production costs that will be expensed as incurred, primarily in 2020.

Commercial Airplanes delivered 79 airplanes during the quarter, including 45 787's, and captured orders for 30 737 MAX aircraft at the Dubai Air Show and 2 777 freighters for Lufthansa. The 787 program also booked 36 net orders in the quarter. As previously announced, the 787 production rate will be reduced from the current rate of 14 airplanes per month to 12 airplanes per month in late 2020. Based on the current environment and near-term market outlook, the production rate is expected to be further adjusted to 10 airplanes per month in early 2021, and return to 12 airplanes per month in 2023. The first flight of the 777X was completed on January 25, and first delivery is targeted for 2021.

Commercial Airplanes backlog included over 5,400 airplanes valued at $377 billion.

Defense, Space & Security

Table 5. Defense, Space & Security	Fourth Quarter						Full Year
(Dollars in Millions)	2019		2018		Change		2019		2018		Change
Revenues	$5,962		$6,874		(13)%		$26,227		$26,392		(1%)
Earnings from Operations	$31		$771		(96)%		$2,608		$1,657		57%
Operating Margin	0.5%		11.2%		(10.7) Pts		9.9%		6.3%		3.6 Pts

Defense, Space & Security fourth-quarter revenue decreased to $6.0 billion primarily driven by lower volume across the portfolio as well as the impact of a Commercial Crew charge (Table 5). Fourth-quarter operating margin decreased to 0.5 percent due to a $410 million pre-tax Commercial Crew charge primarily to provision for an additional uncrewed mission for the Commercial Crew program, performance and mix. NASA is evaluating the data received during the December 2019 mission to determine if another uncrewed mission is required.

During the quarter, Defense, Space & Security received an award for 10 Space Launch System core stages and up to 8 Exploration Upper Stages. Defense, Space & Security also received contracts for the remanufacture of 47 AH-64E Apache helicopters for three countries and to upgrade the NATO Airborne Warning & Control System fleet. Significant milestones achieved during the quarter included the delivery of the first modified MV-22 Osprey to the U.S. Marine Corps and delivery of the first P-8A Poseidon aircraft to the United Kingdom Royal Air Force. Defense, Space & Security also conducted a Commercial Crew spacecraft uncrewed Orbital Flight Test.

Backlog at Defense, Space & Security was $64 billion, of which 29 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global Services	Fourth Quarter						Full Year
(Dollars in Millions)	2019		2018		Change		2019		2018		Change
Revenues	$4,648		$4,908		(5)%		$18,468		$17,056		8%
Earnings from Operations	$684		$737		(7)%		$2,697		$2,536		6%
Operating Margin	14.7%		15.0%		(0.3) Pts		14.6%		14.9%		(0.3) Pts

Global Services fourth-quarter revenue was $4.6 billion, primarily driven by lower commercial services volume (Table 6). Fourth-quarter operating margin decreased to 14.7 percent primarily due to a charge related to the retirement of the Aviall brand and mix of products and services, partially offset by a gain on divestiture.

During the quarter, Global Services was awarded V-22 support contracts for Japan and the U.S. and AH-64 and CH-47 global support for the U.S. Army. Global Services signed a multi-year Landing Gear Exchange services agreement with LATAM Airlines Group and a 5-year digital navigation renewal agreement with Saudi Arabian Airlines. Global Services also expanded its digital offerings by launching ForeFlight Dispatch and signed a contract with Flexjet to be the inaugural customer.

Additional Financial Information

Table 7. Additional Financial Information	Fourth Quarter				Full Year
(Dollars in Millions)	2019		2018		2019		2018
Revenues
Boeing Capital	$37		$60		$244		$274
Unallocated items, eliminations and other	($198)		($32)		($635)		($94)
Earnings from Operations
Boeing Capital	($58)		$8		$28		$79
FAS/CAS service cost adjustment	$322		$308		$1,415		$1,327
Other unallocated items and eliminations	($339)		($249)		($2,066)		($1,442)
Other income, net	$104		$29		$438		$92
Interest and debt expense	($242)		($158)		($722)		($475)
Effective tax rate	56.9%		15.4%		71.8%		9.9%

At quarter-end, Boeing Capital's net portfolio balance was $2.3 billion. Revenue in other unallocated items and eliminations decreased primarily due to the timing of eliminations for intercompany aircraft deliveries. The change in earnings from other unallocated items and eliminations is primarily due to higher deferred compensation expense and increased enterprise research and development investment. Interest and debt expense increased due to higher debt balances. The fourth quarter 2019 effective tax rate reflects a $371 million tax benefit related to the settlement of state tax audits as well as the impact of pre-tax losses.

FULL DOCUMENT: https://boeing.mediaroom.com/2020-01-29-Boeing-Reports-Fourth-Quarter-Results

U.S. Department of State. 01/27/2020. U.S.-The Bahamas Air Transport Agreement of January 27, 2020

FULL DOCUMENT: https://www.state.gov/u-s-the-bahamas-air-transport-agreement-of-january-27-2020/

WEF 2020

DoC. January 24, 2020. Remarks by Secretary of Commerce Wilbur Ross at A New Space Race: Getting to the Trillion-Dollar Space Economy World Economic Forum, Davos, Switzerland. Wilbur Ross.

Good afternoon, welcome, and thank you all for being here to discuss the future of space and its immense economic potential.

You may not know that artificial limbs, Velcro, solar cells, and water filtration were created in the first age of space exploration. Now, we have an opportunity to continue and even accelerate those benefits. The global economy is increasingly tied to services provided from space.

Many of the most important economic sectors, like transportation and logistics, oil and gas, Internet, finance and others are fueled by space technologies such as positioning, navigation & timing, remote sensing, and communications. Space technologies have increased productivity, communication, and safety, and have brought new products and services to some of the most remote areas of the world.

Government activity in space is growing, but over 80 percent of the $415 billion space economy is commercial. We believe the future of space is overwhelmingly commercial in nature, and will no longer be dominated by government agencies and their priorities.

Trump Administration initiatives will encourage economic growth from space activities, and encourage like-minded nations to do the same. To this end, President Trump reestablished the National Space Council in 2017 to coordinate national space policy and prioritize economic development and technological advancement.

Within the Commerce Department, we revitalized the Office of Space Commerce, which was established more than 30 years ago to help enable commercial space activities.

Today, growth in the commercial space industry is driven primarily by venture capital and private entrepreneurs. In the past 10 years, more than $25.7 billion has been invested in 535 space companies globally. In 2019 alone, $5.8 billion was invested — the largest investment year on record.  Also last year, roughly 43 percent of space startup investment went to companies outside the United States, and over 70 countries now have meaningful space activities.

Our national and international governance activities need to facilitate the private sector, and not get in its way. While the overall satellite industry experienced an annual growth rate of 3 percent in 2018, that pales when compared to the economic benefits that those satellites have helped create in other industries.

And, by the way, that also pales to the subsector of satellite manufacturing, which experienced a 26 percent growth rate over 2018. One assessment done by Bryce Space and Technology found that the economic impact of space in 2018 had grown to $5 trillion annually. Television, the Internet and wireless communications, finance, agriculture, shipping — all of these industries have been revolutionized by satellite services. We don’t always recognize how much space affects our daily lives.

In 2019, the Department of Commerce’s National Institute of Standards and Technology looked at 10 economic sectors that use GPS on a daily basis, such as precision agriculture, financial services, surveying, and location-based services. Turns out, since the early 1980s when the technology became public, GPS has provided $1.4 trillion in economic benefit cumulatively.

While all these estimates of the space economy are encouraging, we in the Trump Administration recognize the need to improve how we account for space activities. Most traditional industrial accounting methods focus on aerospace capabilities, without separating space activities. So we recently began an initiative within Commerce’s Bureau of Economic Analysis to more precisely define and measure the space industry’s economic activities.

The space industry is being revolutionized by cost-cutting concepts like reusability, miniaturization, and design repetition. These innovations are being driven by the commercial applications they serve, since private investors are loath to finance the massive and unique projects common in the defense space.The result has been remarkable.

Current industry projections place the 2040 global space economy at between $1 and $3 trillion. And I think we will certainly get to a trillion before 2030.

But getting there will take a concerted effort among governments to foster the conditions needed for the growth and technological advancement of the commercial space sector.In particular, we must address the initial problem of space safety and sustainability.  Failure to do so will complicate and imperil our future in space, as space debris and congestion grow more complex and intense.

Already there are hundreds of thousands of objects orbiting the planet at over 17,000 miles an hour. These are mostly under 10 centimeters in diameter, but still can damage the solar panels that power satellites.he United States has led in this area for decades, mostly through the Department of Defense and NASA.

Our current efforts will leverage a wide range of commercial capabilities to improve and increase our understanding of the space environment. My Department is creating a new civil organization to improve global space situational awareness and increase interaction among space operators in the interest of space safety. Commerce is working with allied civil and commercial organizations, that have unique capabilities including new sensors and analytic tools and existing scientific datasets.

We are also working with our allies to establish best practices and standards, for both existing space capabilities and emerging ones. These will grow into much needed “rules of the road” for space activities. 

All of these efforts and others will enable future space commerce by reducing risk and increasing operational transparency. Space is both critical to our future, and our path to the future envisioned by so many at this Forum.

In the coming months, new space companies will bring broadband Internet to rural communities previously unable to fully benefit from the information age. Space will enable a new wave of possibilities in pharmaceuticals and building materials. And the industry’s continued growth and potential will inspire the next generation to seek out the unknown and achieve the seemingly impossible.

There are extraordinary opportunities in space in so many different areas, but they won’t happen on their own. Global partnerships are critical to realizing the scientific and economic future that space has to offer. New international partnerships are underway in the areas of space exploration, space safety, and even space commerce.

This June, the Departments of Commerce and State will again co-host the Space Enterprise Summit in Washington to discuss the nature of space partnerships in pursuing our mutual goals.

And so, I am thankful to Dr. Schwab and the World Economic Forum for the opportunity to highlight this potential here in Davos.

I look forward to our discussion, and to seeing future contributions of the World Economic Forum in the field of Commercial Space.

Thank you.

HUMAN RIGHTS / EL SALVADOR

U.S. Department of State. 01/29/2020. Public Designation of Thirteen Former Salvadoran Military Officials Due to Involvement in Gross Violations of Human Rights. Michael R. Pompeo, Secretary of State

Today, the Department of State is publicly announcing the designation of 13 individuals under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act 2019.  This designation is due to their involvement in gross violations of human rights in El Salvador related to the planning and execution of the extrajudicial killings of six Jesuit priests and two others on November 16, 1989 on the campus of Central American University in El Salvador.  The United States condemns all human rights abuses that took place on both sides of the brutal civil war in El Salvador, including those committed by governmental and non-governmental parties.

The United States government has several tools available in instances of violations and abuses of human rights.  Section 7031(c) provides that, in cases where the Secretary of State has credible information that current or former officials of foreign governments have been involved, directly or indirectly, in a gross violation of human rights or significant corruption, those individuals and their immediate family members are ineligible for entry into the United States.  Section 7031(c) applies only to current or former government officials.  Section 7031(c) does not apply to the conduct of individuals who are not current or former government officials, although such individuals may be subject to other visa restrictions under U.S. law.

The Department has credible information that the following persons have been involved in gross violations of human rights: Juan Rafael Bustillo, Juan Orlando Zepeda, Inocente Orlando Montano Morales, Francisco Elena Fuentes, Guillermo Alfredo Benavides Moreno, Yusshy René Mendoza Vallecillos, José Ricardo Espinoza Guerra, Gonzalo Guevara Cerritos, Carlos Camilo Hernández Barahona, Oscar Mariano Amaya Grimaldi, Antonio Ramiro Avalos Vargas, Angel Pérez Vásquez, and José Alberto Sierra Ascencio.  These 13 former Salvadoran military personnel, ranging in rank from general to private, were involved in the planning and execution of the extrajudicial killings of six Jesuit priests and two others taking refuge at the Jesuit pastoral center on November 16, 1989 on the campus of Central American University in El Salvador.

The United States supports the ongoing accountability, reconciliation, and peace efforts in El Salvador.  We value our ongoing working relationship with the Salvadoran Armed Forces, but will continue to use all available tools and authorities, as appropriate, to address human rights violations and abuses around the world no matter when they occurred or who perpetrated them.  Today’s actions underscore our support for human rights and our commitment to promoting accountability for perpetrators and encouraging reconciliation and a just and lasting peace.

DEPARTMENT OF STATE

U.S. Department of State. 01/29/2020. Call for Recommendations: 2020 Secretary of State’s Award for Corporate Excellence

On behalf of Secretary of State Michael R. Pompeo, the U.S. Department of State’s Bureau of Economic and Business Affairs is soliciting public input for recommendations for this year’s Secretary of State’s Award for Corporate Excellence (ACE).  Now in its 21st year, the ACE honors U.S. companies demonstrating leadership in their overseas operations, specifically recognizing U.S. firms that uphold the highest standards of responsible business conduct and whose operational practices and decision-making exemplify American values and international best practices.  Recommendations are due to embassies and consulates by March 6, 2020.

For 2020, the categories for the Award for Corporate Excellence are:

• Award for Corporate Excellence for Innovation will honor a company’s commitment to using emerging technologies to provide breakthrough solutions and products in line with American values.

• Description:  The innovative ideas, solutions, and products that U.S. businesses produce help secure our nation’s position as a leader in global technology and secure our nation’s future.  This category aims to encourage innovation by U.S. businesses and its application in support of global development challenges in ways that transform the communities where these companies operate.  This category highlights prominent American company leaders in emerging technology sectors such as automated vehicles, blockchain, artificial intelligence, telecommunications, digital payments, digital assets, and cloud computing.  We seek to emphasize how American companies are leading innovators in these technology sectors while respecting human rights and exemplifying ethical and sustainable business practices.

• Award for Corporate Excellence in Sustainable Energy Security will honor a company’s commitment to developing resilient and responsible sourcing, generation, transmission, and delivery of energy or energy resources in and from its international operations.

• Description:  As Secretary Pompeo said in his March 2019 CERAWeek address to the energy industry: “the more we can spread the United States’ model of free enterprise, rule of law, transparency, diversity and stability of energy supply, the more successful and secure the American people will be.”  Candidate companies excelling in this field enhance the Department’s global energy security efforts by contributing to global energy access sustainably, and thus to global economic and human development.  Candidate companies further American interests by widening the tools our diplomats have to create partnerships and open global markets.  The category’s focus will be on companies promoting sustainable, inclusive, and equitable economic growth through energy related endeavors.  This can include any of the U.S. government’s “all-the-above” (from wind, solar, nuclear, and biofuels to gas and oil) energy sources and technologies for promoting U.S. energy and energy technology endeavors abroad.

• Award for Corporate Excellence for Women’s Economic Empowerment will honor a company’s commitment to supporting women’s economic empowerment through its values, strategies, policies and procedures, and operational practices.

• Description:  Empowering women in the workplace is a significant driver of economic growth and prosperity, and improves the quality of life for women, men, families, and communities.  This category seeks to promote companies’ strides to champion women’s professional advancement and empowerment in corporate environments.  To this end, we seek to recognize companies’ operations that address:  balanced representation of women on C-suite corporate boards and in local operations, parental leave, equal opportunity and non-discrimination policies, professional training and development, women’s entrepreneurship, enterprise development, supply chain and marketing policies, pay equity, and transparency.  We encourage nominations of women-owned businesses with high standards of empowering women within their operations.

Details on Submitting a Recommendation

ACE nominations are focused on the exemplary operations of a company in a specific country, and nominations are officially put forward to the Secretary’s office by Chiefs of Mission from U.S. embassies and consulates.  As such, recommendations should be directed to a specific U.S. embassy or consulate, for the operations of a U.S. firm in that country.

Stakeholders should contact the embassy or consulate switchboard during normal business hours and ask to speak with the economic section regarding the Award for Corporate Excellence. Contact information can be obtained on the website of the respective embassy or consulate. Chiefs of Mission will ultimately decide which recommendations will be sent forward as nominations to the Secretary of State and they retain final decision-making on such matters. Stakeholders are asked only to put forward recommendations to embassies and consulates for their consideration and should refrain from lobbying for a particular recommendation once it has been submitted.

Compelling recommendations will include proof of positive impact, particularly with metrics when available; show alignment of responsible practices with core business operations; and demonstrate commitment to the communities where a company does business.

Web Site: www.state.gov/ace
Twitter: @EconAtState

________________

ORGANISMS

LATIN AMERICA

IMF. JANUARY 29, 2020. Outlook for Latin America and the Caribbean: New Challenges to Growth
By Alejandro Werner

Economic activity in Latin America and the Caribbean stagnated in 2019, continuing with the weak growth momentum of the previous five years and adding more urgency and new challenges to reignite growth. Indeed, real GDP per capita in the region has declined by 0.6 percent per year on average during 2014–2019—a sharp contrast from the commodity boom’s average increase of two percent per year during 2000–2013.

This weak momentum reflects structural and cyclical factors. On the structural side, potential growth remains constrained by low investment, slow productivity growth, a weak business climate, and the low quality of infrastructure and education. On the cyclical side, growth has been held back by low global growth and commodity prices, elevated economic policy uncertainty, economic rebalancing in some economies, and social unrest in others.

Regional challenges

Elevated policy uncertainty in several large Latin American countries continues to weigh on growth. For example, uncertainty about the course of economic policy and reforms in Brazil and Mexico likely contributed to the slowdown in real GDP and investment growth in 2019.

Continued economic rebalancing in stressed economies that experienced sudden stops in capital flows in 2018-19 (Argentina, Ecuador), while helping restore internal and external balances, have also acted as a drag on economic growth.

More recently, a few countries in the region experienced social unrest—Bolivia, Colombia, Chile, and Ecuador—which, in some cases, disrupted economic activity. Economic policy uncertainty has also risen in these countries as governments consider alternative policies and reforms to make growth more inclusive and address social demands.

Outlook and risks

As noted in the recent World Economic Outlook update , growth in the region is projected to rebound to 1.6 percent in 2020 and 2.3 percent in 2021—supported by a gradual pick up in global growth and commodity prices, continued monetary support, reduced economic policy uncertainty, and a gradual recovery in stressed economies.

However, there are also prominent downside risks. While previous external downside risks have moderated following globally synchronized monetary policy easing and the signing of the U.S.-China phase one trade deal, some new risks have appeared, including the potential global spread of the coronavirus, which could significantly disrupt global economic activity, trade, and travel. Domestic and regional downside risks have also intensified. Social unrest could spike throughout the region, while economic policy uncertainty could rise further due to both heightened social tensions and policy slippages.

Policy priorities

Economic policies will need to strike a balance between rebuilding policy space and maintaining economic stability on the one hand and supporting economic activity and strengthening the social safety net on the other hand.

Although the causes and triggers of social unrest have varied across countries, they generally reflect discontent with some aspects of the economic and political systems. A key priority going forward is to reignite growth, while making it more inclusive. Promoting competition will be important to avoid monopolistic practices that may hurt the poor disproportionally. Tackling corruption and weak governance will help make political systems more representative, although deeper political reforms may be needed.

Fiscal policy will need to support to growth, expand the social safety net, and improve the quality of public goods and services. However, in many countries, spending room in the budget remains constrained by high deficits and public debt. These countries will need to improve spending efficiency, reallocate spending from nonpriority areas to public investment and social transfers and increase revenues over the medium term to finance additional increases in these areas.

Monetary policy can remain accommodative to support growth given the stable inflation outlook, well-anchored inflation expectations, and declining neutral rates worldwide.

South America:

In Brazil, growth remained subdued at 1.2 percent in 2019, but is projected to accelerate to 2.2 percent in 2020 due to improving confidence following the approval of the pension reform and lower monetary policy interest rates in the context of low inflation. Steady implementation of the government’s broad fiscal and structural reform agenda will be essential to safeguard public debt sustainability and boost potential growth.

In Chile, the outlook is subject to uncertainty resulting from social unrest and the evolving policy responses to the social demands. Following a sharp decline in late 2019, economic activity is expected to recover gradually supported by a significant fiscal expansion and looser monetary policy, with growth reaching about 1 percent in 2020.

In Colombia, strong domestic demand led to a pickup in growth to 3.3 percent in 2019 and a widening of the current account deficit to 4½ percent of GDP. Growth is projected to accelerate to around 3½ percent in 2020 due to continued monetary support, migration from Venezuela, remittances, civil works and higher investment due to recent tax policy changes.

In Peru, growth is estimated to have slowed to 2.4 percent in 2019, hampered by lower global trade and under-execution of government spending. With these factors dissipating in the coming years, growth is projected to recover to 3.2 percent in 2020 and 3.7 percent in 2021, with inflation remaining well-anchored within the central bank’s target range.

Venezuela remains immersed in a deep economic and humanitarian crisis . Since the end of 2013, real GDP has contracted by 65 percent driven by declining oil production, hyperinflation, collapsing public services, and plummeting purchasing power. A continuation of these trends is projected for 2020, although at a slower pace. The acute humanitarian crisis has led to one of the largest migratory crises in history, with migration to neighboring countries expected to surpass 6 million—20 percent of the population—by 2020.

Mexico, Central America, and the Caribbean

In Mexico, economic activity stagnated in 2019 due to policy uncertainty and slower global and U.S. manufacturing production. Growth is expected to recover to 1 percent in 2020 as conditions normalize, including with the ratification of the trade agreement between the United States, Mexico, and Canada (USMCA) and the recent easing of monetary policy, which should continue as along as inflation expectations are well-anchored. Fiscal policy should be geared at putting the public debt-to-GDP ratio on a downward trajectory, with priority on increasing revenues, improving the efficiency of spending, and enhancing the fiscal framework.

In Central America, Panama, and the Dominican Republic growth is projected to rebound to 3.9 percent in 2020, from 3.2 percent in 2019, supported by the beginning of operations of a large copper mine inPanama, and accommodative monetary policy inCosta Rica and the Dominican Republic. In Costa Rica, continued implementation of all measures in the fiscal reform bill will be key to rebuild market confidence and fiscal space.

In Honduras, the economic plan includes important efforts to improve institutional, governance, and anti-corruption frameworks supporting business confidence, while Guatemala is expected to continue benefitting from a fiscal impulse and economic reform plans of the new administration. El Salvador is already reaping the effects of the pro-growth agenda of the new administration inaugurated in June, while unfavorable political tensions in Nicaragua are creating a significant headwind to economic recovery.

In the Caribbean, economic prospects are improving, but with substantial variation across countries. Growth in tourism-dependent economies is expected to strengthen in 2020. With commodity prices remaining broadly stable, commodity exporters are expected to see modest recovery in growth, while large oil discoveries and the start of their production in 2020 is expected to boost growth in Guyana.

The region’s exposure to climate risks continues to require strong policies. Potential growth continues to be impeded by lingering structural problems including high public debt, weaker financial systems, high unemployment, and vulnerability to commodity and climate-related shocks. Some countries have started to strengthen their fiscal positions, but further tightening is needed in others to ensure debt sustainability.

FULL DOCUMENT: https://blogs.imf.org/2020/01/29/outlook-for-latin-america-and-the-caribbean-new-challenges-to-growth/?utm_medium=email&utm_source=govdelivery

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ECONOMIA BRASILEIRA / BRAZIL ECONOMICS

ECONOMIA

FGV. IBRE. 29/01/20. Indicador de Incerteza da Economia. IIE-Br: Incerteza da Economia tem ligeira alta motivada por ambiente político interno e externo

O Indicador de Incerteza da Economia (IIE-Br) da Fundação Getulio Vargas subiu 0,5 ponto em janeiro de 2020, para 112,9 pontos, mantendo-se em nível historicamente elevado (acima dos 110 pontos). Considerando-se a evolução em médias móveis semestrais, houve aumento em 0,8 ponto, para 112,1 pontos, interrompendo a tendência de queda iniciada em outubro passado.

“A ligeira alta da incerteza em janeiro foi inteiramente motivada pelo aumento da dispersão das previsões de especialistas para variáveis econômicas brasileiras. O segundo componente do indicador, que mede a incidência de termos relacionados à incerteza na mídia, recuou um pouco no mês, mas continua em patamar elevado. Ainda preocupa o ambiente político interno e, no front externo, o clima continua tenso, desta vez principalmente em função da ameaça de conflito bélico entre Estados Unidos e Irã”, afirma Aloisio Campelo Jr, Superintendente de Estatísticas Públicas da FGV IBRE.

Em janeiro, os dois componentes do Indicador de Incerteza caminharam em sentidos opostos. O componente de Mídia, caiu 0,8 ponto, para 111,6 pontos, contribuindo em -0,7 ponto para o comportamento do índice geral no mês. O componente de Expectativa, subiu 5,4 pontos, para 112,5 pontos, contribuindo em 1,2 ponto para a alta da incerteza. Apesar de o componente de mídia ter maior peso no cálculo do IIE-Br (80%), o ano de 2020 começa com o indicador sendo majoritariamente determinado pela maior dispersão nas previsões econômicas de especialistas.

DOCUMENTO: https://portalibre.fgv.br/navegacao-superior/noticias/iie-br-incerteza-da-economia-tem-ligeira-alta-motivada-por-ambiente-politico-interno-e-externo.htm

POLÍTICA MONETÁRIA

BACEN. 29 Janeiro 2020. BC divulga Estatísticas Monetárias e de Crédito, com os dados atualizados até dezembro de 2019.

1. Crédito ampliado ao setor não financeiro

Em dezembro, o crédito ampliado ao setor não financeiro totalizou R$10,3 trilhões (141,7% do PIB), crescendo 0,7% no mês, com expansões de 2,2% em títulos de dívida e de 1,6% nos empréstimos e financiamentos, enquanto a dívida externa recuou 3,9%, acompanhando a apreciação cambial de 4,6%. No ano, o crédito ampliado cresceu 8,9%, resultado de expansões de 14,5% nos títulos de dívida, de 6,6% em empréstimos e financiamentos e de 2,3% na dívida externa.

O crédito ampliado a empresas e famílias situou-se em R$5,7 trilhões (79,2% do PIB), com aumentos de 0,6% no mês e de 8,3% em doze meses. Em dezembro, o saldo de títulos de dívida cresceu 3,3% (35,3% no ano), destacando-se as expansões em emissões de debêntures e instrumentos securitizados. Os empréstimos e financiamentos cresceram 1,6% em dezembro (6,8% no ano). O estoque de captações externas recuou 3,4% no mês, principalmente em razão da variação cambial, e cresceu 0,4% no ano. 

2. Operações de crédito do Sistema Financeiro Nacional (SFN)

O saldo das operações de crédito do sistema financeiro nacional (34% do crédito ampliado) somou R$3,5 trilhões em dezembro de 2019, com expansão de 1,6% no mês, refletindo elevações de 1,8% em pessoas jurídicas (saldo de R$1,5 trilhão) e de 1,5% em pessoas físicas (R$2 trilhões). No ano, a carteira total cresceu 6,5% (5% no ano anterior), com expansões de 11,7% no crédito às famílias e de 0,2% no crédito às empresas. A relação crédito/PIB atingiu 47,8%, com elevação anual de 0,5 p.p.

A expansão do crédito refletiu o desempenho das instituições privadas, cuja carteira cresceu 15,7% no ano. O saldo das instituições públicas recuou 2,2%. Em consequência, a participação das instituições privadas no volume total de crédito do SFN aumentou de 49% para 53% em 2019.   

O saldo das operações com recursos livres alcançou R$2 trilhões (+3,1% no mês), com expansão de 14,1% no ano (+10,7% no ano anterior). O crédito a pessoas físicas atingiu R$1,1 trilhão (+1,9% no mês, +16,6% em doze meses), destacando-se, na variação mensal, as operações de cartão à vista, veículos e crédito consignado. Nas pessoas jurídicas, o crédito livre atingiu R$905 bilhões, com aumentos de 4,6% no mês e 11,2% no ano, sobressaindo, em dezembro, o desconto de duplicatas e recebíveis, a antecipação de faturas de cartão e os empréstimos de capital de giro. Declinaram os saldos das modalidades impactadas pela apreciação cambial (notadamente repasses externos e financiamentos a exportações).

O crédito direcionado alcançou R$1,5 trilhão no final de 2019, com retrações de 0,4% no mês e de 2,4% no ano (-0,9% em 2018). Nas operações para pessoas físicas (R$902 bilhões), o crescimento no mês e no ano (+0,9% e +6,3%, na ordem) foi sustentado pelos créditos rural e imobiliário. O saldo de crédito às empresas com recursos direcionados (R$563 bilhões) seguiu em retração: -2,3% no mês e -13,6% no ano.

As concessões de crédito totais somaram R$429 bilhões em dezembro, crescendo 16,9% no mês. Na série dessazonalizada, crescimento de 2,3% (+3,3% em pessoas físicas e +0,6% em pessoas jurídicas). No ano, relativamente a 2018, elevações de 13,4% nas concessões totais, de 14,7% no segmento de famílias e de 11,8% no crédito às empresas.

O Indicador de Custo de Crédito (ICC), média do custo de toda a carteira do sistema financeiro, situou-se em 20,4% a.a. em dezembro (-0,5 p.p. mês e -0,1 p.p. no ano). No crédito livre não rotativo, redução anual de 2 p.p., para 26,8%. O spread geral do ICC situou-se em 14,5 p.p. (-0,4 p.p. no mês, +0,8 p.p. no ano).

A taxa média de juros das contratações de dezembro alcançou 23% a.a., com recuos de 0,9 p.p. no mês e de 0,2 p.p. em doze meses. O spread geral das taxas de juros das concessões situou-se em 18,4 p.p., com queda de 0,9 p.p. em dezembro e elevação de 1,4 p.p. no ano.   

No crédito livre, a taxa de juros atingiu 34% a.a., após reduções de 2,1 p.p. no mês e de 1,6 p.p. em doze meses. No crédito às famílias, taxa média de 47,3%, com queda de 2,8 p.p. no mês, destacando-se os recuos em crédito pessoal não consignado (-8,4 p.p.), cheque especial (-4,1 p.p.) e cartão rotativo regular (-6,7 p.p.). No crédito às empresas, redução de 0,8 p.p. em dezembro, para 16,5% a.a. Excluindo-se as operações rotativas, a taxa média de juros do crédito livre situou-se em 24,7%, recuando 1,3 p.p. no mês e 2,5 p.p. no ano.

3. Agregados monetários

A base monetária somou R$316,6 bilhões em dezembro, com elevações de 6,7% no mês e de 4,8% no ano. No mês, o papel-moeda emitido cresceu 10,3% (+5,9% no ano) e as reservas bancárias recuaram 14,9% (-3,2% em doze meses). Entre os fluxos mensais dos fatores condicionantes da base monetária, em dezembro, as operações com títulos federais foram expansionistas em R$127,6 bilhões (colocações líquidas de R$15,6 bilhões no mercado primário e compras líquidas de R$143,2 bilhões no mercado secundário). Foram contracionistas as operações do Tesouro Nacional (R$44 bilhões), as operações do setor externo (R$47 bilhões), as operações com derivativos (R$6,9 bilhões) e os depósitos de instituições financeiras (R$6,7 bilhões), que refletem variações nos saldos de recolhimentos compulsórios.

Os meios de pagamento restritos (M1) alcançaram R$441,3 bilhões, com aumentos de 9,9% no mês e de 7,6% no ano, ocorrendo, em dezembro, expansões de 11,7% nos depósitos à vista e de 8,3% no saldo do papel-moeda em poder do público. Considerando-se dados dessazonalizados, o M1 avançou 1,2% no mês. O M2 atingiu R$3,1 trilhões (+3% no mês e +8,5% doze meses), refletindo aumentos mensais de 2% nos saldos dos títulos emitidos por instituições financeiras (R$1,8 trilhão) e de 1,9% nos depósitos de poupança (R$845 bilhões). No mês, as captações líquidas de depósitos a prazo situaram-se em R$29,3 bilhões e as de depósitos de poupança, em R$17,2 bilhões. O M3 cresceu 1,6% no mês e 7,5% no ano, totalizando R$6,8 trilhões, registrando, em dezembro, aumento nas operações compromissadas com títulos públicos e privados e estabilidade nas cotas de fundos monetários (R$3,5 trilhões). O M4 subiu 1,3% no mês e 7,1% no ano, situando-se em R$7,2 trilhões.

4. Revisões nas estatísticas de crédito

De acordo com a Política de Revisão das Estatísticas Econômicas Oficiais Compiladas pelo Departamento de Estatísticas (DSTAT) do Banco Central do Brasil, de outubro de 2019, as estatísticas de crédito sofrem revisão ordinária anual nos meses de fevereiro. Essas revisões visam, principalmente, o aprimoramento da consistência entre os documentos com informações sobre crédito, remetidos pelas instituições financeiras (IFs) ao Banco Central; a ampliação de cobertura das estatísticas com a incorporação de novas IFs; a retificação de informações enviadas; e a recomposição de séries históricas.

Na revisão das estatísticas de crédito que serão divulgadas em fevereiro de 2020 destacam-se: i) taxa de juros do cheque especial: incorporação de períodos de utilização sem juros na apuração das taxas médias (Carta-Circular nº 3.932, de 20.2.2019); ii) Concessões de crédito consignado: revisão das séries com a retificação de informações de algumas IFs (Carta-Circular nº 4.000 de 28.1.2020); iii) Cartão de crédito à vista: incorporação de instituições de pagamentos nas séries de saldos e concessões; iv) Concessões de cartão de crédito: exclusão dos valores relativos a cartão rotativo e cartão parcelado na agregação das concessões totais, de pessoas físicas, pessoas jurídicas e livres; e v) Crédito ampliado ao setor não financeiro: revisão das séries de dívida externa, incorporando aprimoramento da cobertura e da classificação dos setores institucionais tomadores.

A divulgação antecipada do calendário das revisões estatísticas faz parte da necessária transparência do processo de disseminação das estatísticas e segue as melhores práticas internacionais.

DOCUMENTO: https://www.bcb.gov.br/content/estatisticas/docs_estatisticasmonetariascredito/Nota%20para%20a%20imprensa%20-%20Estat%C3%ADsticas%20Monet%C3%A1rias%20e%20de%20Cr%C3%A9dito.pdf

INDÚSTRIA

FGV. IBRE. 29/01/20. Sondagens e Índices de Confiança. Sondagem da Indústria. Confiança da Indústria avança em janeiro e atinge maior valor desde março de 2018

O Índice de Confiança da Indústria (ICI) da Fundação Getulio Vargas avançou 1,5 ponto em janeiro, para 100,9 pontos, o maior valor desde março de 2018 (101,4 pontos). Em médias móveis trimestrais, o indicador aumentou pela quarta vez consecutiva, atingindo 99,1 pontos em janeiro.

“O resultado da sondagem de janeiro mostra que a confiança inicia 2020 mantendo a tendência de recuperação iniciada em outubro de 2019. Apesar dos empresários ainda estarem insatisfeitos em relação ao nível de demanda atual, o ICI retorna ao nível neutro, como consequência da melhora considerável nas expectativas, sinalizando que o ânimo dos empresários tende a melhorar no primeiro semestre, mas sua sustentação depende da evolução da demanda interna”, comenta Renata de Mello Franco, economista da FGV/IBRE.

Em janeiro, a confiança subiu em 13 dos 19 segmentos industriais pesquisados. O resultado deste mês é atribuído à melhora das expectativas dos empresários, já que o indicador de situação atual se manteve estável. O Índice de Expectativas (IE) avançou 2,8 pontos, para 102,0 pontos, o maior valor desde junho de 2018 (102,3 pontos). Já o índice de Situação Atual (ISA) variou 0,1 ponto, para 99,7 pontos, o maior valor desde março de 2018 (100,1 pontos).

Neste mês, todos os indicadores que compõem o IE avançaram para a faixa dos 100 pontos. A variação de 4,6 pontos do indicador que mede as perspectivas sobre a evolução do ambiente de negócios nos próximos seis meses, para 103,5 pontos, foi o que mais contribuiu para a alta do índice. Houve crescimento da proporção de empresa prevendo melhora da situação dos negócios nos próximos seis meses, de 36,8% para 44,0%, e queda na proporção das que preveem piora, de 8,9% para 8,5% do total.

Em relação ao ISA, apenas o indicador que mede a satisfação com a situação atual dos negócios apresentou queda, passando de 100,7 pontos para 100,0 pontos. Por sua vez, o indicador de nível de estoques aumentou 0,7 ponto, para 101,5 pontos, enquanto demanda total variou 0,4 ponto, para 97,7 pontos, o mesmo valor de julho de 2018.

O Nível de Utilização da Capacidade Instalada (NUCI) subiu 0,6 ponto percentual (p.p.), para 75,7%, mesmo valor observado em agosto e outubro de 2019. Na comparação interanual, sem ajuste sazonal, o resultado é 1,1 p.p. superior.

DOCUMENTO: https://portalibre.fgv.br/navegacao-superior/noticias/confianca-da-industria-avanca-em-janeiro-e-atinge-maior-valor-desde-marco-de-2018.htm

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LGCJ.: