US ECONOMICS
CHINA
U.S. Department of State. 06/30/2020. On Beijing’s Imposition of National Security Legislation on Hong Kong. Michael R. Pompeo, Secretary of State
The Chinese Communist Party’s decision to impose draconian national security legislation on Hong Kong destroys the territory’s autonomy and one of China’s greatest achievements. Hong Kong demonstrated to the world what a free Chinese people could achieve – one of the most successful economies and vibrant societies in the world. But Beijing’s paranoia and fear of its own people’s aspirations have led it to eviscerate the very foundation of the territory’s success, turning “One Country, Two Systems” into “One Country, One System.”
The CCP’s action demonstrates once again that Beijing’s commitments – in this case, the 1984 Sino-British Joint Declaration and the Basic Law – are empty words. The CCP promised 50 years of freedom to the Hong Kong people, and gave them only 23. Within the past few years, Beijing has also violated its agreements with the World Health Organization, the World Trade Organization, and the United Nations. This is a pattern the world cannot ignore.
The United States will not stand idly by while China swallows Hong Kong into its authoritarian maw. Last week, we imposed visa restrictions on CCP officials responsible for undermining Hong Kong’s autonomy. We are ending defense and dual-use technology exports to the territory. Per President Trump’s instruction, we will eliminate policy exemptions that give Hong Kong different and special treatment, with few exceptions.
The United States will continue to stand with the freedom-loving people of Hong Kong and respond to Beijing’s attacks on freedoms of speech, the press, and assembly, as well as the rule of law, all of which have, until now, allowed the territory to flourish. Today marks a sad day for Hong Kong, and for freedom-loving people across China.
U.S. Department of State. 07/01/2020. Issuance of the Xinjiang Supply Chain Business Advisory. Michael R. Pompeo, Secretary of State
Today, the U.S. Department of State, along with the U.S. Department of the Treasury, the U.S. Department of Commerce, and the U.S. Department of Homeland Security is issuing an advisory to caution businesses about the risks of supply chain links to entities that engage in human rights abuses, including forced labor in Xinjiang and elsewhere in China.
Since 2017, the Chinese Communist Party (CCP) has ramped up its campaign of systematic repression of Uyghurs and members of other Muslim minority groups that includes widespread arbitrary detention and forced labor. Targeted against ethnic and religious minorities, the People’s Republic of China’s use of forced labor is no longer confined to the Xinjiang region but is increasingly taking place across China through PRC government-facilitated arrangements with private sector manufacturers.
The advisory will make businesses aware of the potential exposure in their supply chains to entities that engage in human rights abuses in Xinjiang—or elsewhere in China—and the associated reputational, economic, and legal risks of such involvement.
U.S. Department of State. 07/01/2020. Issuance of Xinjiang Supply Chain Business Advisory
The U.S. Department of State, along with the U.S. Department of the Treasury, the U.S. Department of Commerce, and the U.S. Department of Homeland Security are issuing a business advisory to caution businesses about the risks of supply chain links to entities that engage in human rights abuses, including forced labor, in the Xinjiang Uyghur Autonomous Region (Xinjiang) and elsewhere in China.
The People’s Republic of China (PRC) government continues to carry out a campaign of repression in Xinjiang, targeting Uyghurs, ethnic Kazakhs, ethnic Kyrgyz, and members of other Muslim minority groups.
The advisory highlights the risks for businesses with supply chain links to entities complicit in forced labor and other human rights abuses in Xinjiang and throughout China. The three primary types of supply chain exposure to entities engaged in human rights abuses discussed in this advisory are:
- Assisting in developing surveillance tools for the PRC government in Xinjiang;
- Relying on labor or goods sourced in Xinjiang, or from factories elsewhere in China implicated in the forced labor of individuals from Xinjiang in their supply chains, given the prevalence of forced labor and other labor abuses in the region; and
- Aiding in the construction of internment facilities used to detain Uyghurs and members of other Muslim minority groups, and/or in the construction of manufacturing facilities that are in close proximity to camps operated by businesses accepting subsidies from the PRC government to subject minority groups to forced labor.
In order to mitigate reputational and other risks, businesses should apply appropriate industry due diligence policies and procedures.
DoC. June 29, 2020. Statement from U.S. Secretary of Commerce Wilbur Ross on Revocation of Hong Kong Special Status
With the Chinese Communist Party’s imposition of new security measures on Hong Kong, the risk that sensitive U.S. technology will be diverted to the People’s Liberation Army or Ministry of State Security has increased, all while undermining the territory’s autonomy. Those are risks the U.S. refuses to accept and have resulted in the revocation of Hong Kong’s special status.
Commerce Department regulations affording preferential treatment to Hong Kong over China, including the availability of export license exceptions, are suspended. Further actions to eliminate differential treatment are also being evaluated. We urge Beijing to immediately reverse course and fulfill the promises it has made to the people of Hong Kong and the world.
U.S. Department of State. 07/01/2020. Secretary Michael R. Pompeo At a Press Availability. Michael R. Pompeo, Secretary of State. Washington, D.C. Press Briefing Room
SECRETARY POMPEO: Morning, everyone. How are you all today? Pretty good?
QUESTION: How are you?
SECRETARY POMPEO: I am good. And seeing as we’re now on the Fourth of July, or quickly approaching, I thought I’d lead off with some thoughts on America’s founding principles for us this morning. The United States was the first nation established on the premise that government exists to protect our God-given, unalienable rights. I’ll have more to say about that in just a couple weeks.
It was a revolutionary idea; we shouldn’t forget that as we talk about these complex foreign policy issues. The idea of government for the people, by the people was and remains important, and was unique. We’re always striving for a more perfect union. We don’t get it right every day, but we try to improve and we use our unmatched power to protect rights at home and abroad. Happy early Fourth of July to you all, and to your families.
Now, turning to the substance of my remarks today, and I want to talk about one of the world’s most unfree countries.
Yesterday the Chinese Communist Party implemented its draconian national security law on Hong Kong, in violation of commitments that it made to the Hong Kong people and to the United Kingdom, in a UN-registered treaty – and in contravention of Hong Kongers’ human rights and fundamental freedoms.
Free Hong Kong was one of the world’s most stable, prosperous, and dynamic cities. Now it will be just another communist-run city, where its people will be subject to the party elite’s whims. It’s sad.
Indeed, this is already happening. Security forces are already rounding up Hong Kongers for daring to speak and think freely. The rule of law has been eviscerated. And as always, the Chinese Communist Party fears its own people more than anything else.
The United States is deeply concerned about the law’s sweeping provisions and the safety of everyone living in the territory, including Americans.
Article 38 of the new law also purports to apply to offenses committed outside of Hong Kong by non-residents of Hong Kong, and this likely includes Americans. This is outrageous and an affront to all nations.
On Friday, we implemented visa restrictions on those responsible for the Hong Kong crackdown. On Monday, we announced that we would end defense equipment and dual-use technology exports of U.S. origin going to the territory.
We will continue to implement President Trump’s directive to end Hong Kong’s special status.
Other federal agencies are involved as well. I applaud FCC Chairman Ajit Pai for designating Huawei and ZTE as national security risks.
We’re also continuing to take action to build on President Trump’s signing of the Uyghur Human Rights Policy Act.
Today, the United States Department of State, along with Treasury, Commerce, and DHS, are issuing a business advisory to companies with supply chain links to entities complicit in forced labor and other human rights abuses in Xinjiang and throughout China.
CEOs should read this notice closely and be aware of the reputational, economic, and legal risks of supporting such assaults on human dignity.
I want to call attention to recent, credible, and deeply disturbing new reports that the Chinese Communist Party is imposing forced sterilization and abortions on Uyghurs and other minorities in western China.
This shocking news is sadly consistent with the CCP’s decades-long callous disregard for the sanctity of human life. I call on all nations, women’s advocates, religious groups, and human rights organizations to stand up for the Chinese people’s basic human dignity.
The Chinese Communist Party’s brutality affects the rest of the world, too.
We welcome India’s ban on certain mobile apps that can serve as appendages of the CCP’s surveillance state. India’s Clean App approach will boost India’s sovereignty. It will also boost India’s integrity and national security, as the Indian Government itself has stated.
Today, Canada’s national day celebrations are dimmed by the CCP’s recent decision to bring trumped-up espionage charges against Michael Kovrig and Michael Spavor.
The CCP’s propagandists have implied that these two Canadian citizens are hostages, held in retaliation for Canada’s lawful arrest of Huawei’s executive. She is charged by the Department of Justice with bank fraud, wire fraud, and conspiracy to commit bank and wire fraud.
I commend the Canadian Government for standing firm and backing their independent legal system. Hostage-taking for political gains puts China in league with the Irans and Venezuelas of the world. The two Mikes need to come home now.
In the Middle East:
At the fourth Brussels conference on Syria yesterday, the United States announced almost $700 million in humanitarian assistance to support Syrians inside the country and displaced abroad, bringing our total funding to just over $11.3 billion since the conflict began more than nine years ago.
In Iraq, I want to commend the government there for bringing all armed groups under its control, including those firing rockets at Iraqi government facilities. The presence of these lawless actors remains the single biggest obstacle to additional assistance or economic investment for the country. For the world to help Iraq, Iraq must first help itself. Baghdad’s actions are a step in the right direction and we applaud them.
I want to note three brutal honor killings that have taken place in Iran: 14-year-old Romina Ashrafi, 19-year-old Fatemeh Barhi, and 22-year-old Rayhaneh Ameri. Two were beheaded and one was beaten to death with an iron bar at the hands of relatives.
For 40 years, corrupt Iranian leaders have condoned murder, dehumanized women, and ignored cries for justice. When will they stop this unspeakable wicked assault on human dignity?
Staying on Iran: As many of you saw yesterday, I spoke to the UN Security Council, urging them to retain the 13-year-old arms embargo on Iran. These restrictions, as a result of the failed JCPOA, are set to expire in October.
If Iran is allowed to buy weapons from the likes of China and Russia, more civilians in the Middle East will die at the hands of the regime and its proxies. It’s that straightforward. Tehran will become an arms dealer for the Maduros and Assads of the world. Sworn enemies of Israel like Hamas and Hizballah will be better armed. European nations will be put at risk.
Our team has put together a short video that explains why this is so important. I’d like to show it to you now.
(A video was played.)
So when you all hear about legal niceties and complexities and intra – international fighting about what the right course of action is, remind yourself about what happens to the world if this arms embargo is lifted. In the end, that’s what matters. In the end, that’s what the UN Security Council has the capacity to ensure does not take place. I remind you to go back and look at remarks from the previous administration about the fact that the United States has the unambiguous right, without the consent of any other nation, to ensure that this arms embargo stays in place. This administration is going to do everything we can to make sure that that happens to keep not only American people safe but to reduce instability in the Middle East.
A little north of Iran:
We applaud this week’s constitutional reform in the Republic of Georgia. We call on Georgia’s parliament to honor the will of the Georgian people and pledges of Georgian officials through the passage and implementation of internationally recommended election reforms. Good on them.
And yesterday, for the third time in less than a year, I met with my counterparts from Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan in the C5+1 format. We share many common goals, including peace in Afghanistan; strengthening regional trade, energy, and security ties; and building resilient economies for each of those countries.
As a sign of America’s focus on building genuine partnerships, our Development Finance Corporation CEO, Adam Boehler, is today accompanying Ambassador Khalilzad on a trip to the region to scout out investment opportunities where American businesses can be successful and help these countries be sovereign and independent as well.
Congratulations are in order for the Democratic Republic of Congo. In an unprecedented ruling, President Tshisekedi’s chief of staff was convicted for corruption. No one, however high in office, should be above the law.
And last week, the people of Malawi elected Lazarus Chakwera as their next president. This is only the second time – the second time that a court – second time that in America – in Africa, rather – that a court has overturned a presidential election tainted by irregularities, and the only time that a re-election process has resulted in the election of an opposite party candidate. Truly a historic opportunity for the people of that country.
This past week, the United States and Russia held the first round of nuclear arms control talks. Our two sides met in Vienna. They had positive, detailed discussions on a wide range of topics, including China’s secretive build-up. Beijing regrettably boycotted the talks, continuing its record of secrecy and rejection of multilateralism.
And on Monday, the Bureau of Energy Resources led an interagency working group as part of the U.S.-Greece Strategic Dialogue, where we’re working together to diversify energy sources in Southeast Europe, develop resources together, and promote regional energy security.
And finally, to our hemisphere:
All 21 OAS member states voted last week to condemn the Maduro regime’s attempts to suppress independent political parties in Venezuela. Our region has categorically rejected the attempts to create a phony, Maduro-friendly opposition.
The United States also congratulates the people of Suriname on their elections and a peaceful transition of power to a new National Assembly. We look forward to working with that new government.
In contrast, it’s now been four months since Guyana’s election – long past due for a peaceful transition of power. CARICOM and the OAS have certified the recount results. They should get on with it.
I’ve instructed my department to ensure those who undermine Guyana’s democracy are held accountable.
Also, today the USMCA comes into effect. It will open up new opportunities for U.S, Mexico, and Canadian business and consumers. Good news.
Finally, I’ll bookend my remarks by marking another anniversary. July 1st marks the 70th anniversary of the Fulbright Thailand. American educational programs and cultural programs–the world like this underscore America’s respect for freedom, democracy, decency, and respect for human rights. And with that, I’m happy to take questions from you all this morning.
MS ORTAGUS: Okay. Adam.
QUESTION: I have two for you on Iran if I may. One, on the arms embargo. I was curious if the U.S. is willing to accept a temporary extension to potentially get Russia and China to go along with it. I was hoping you could get into the specifics of what terms are acceptable. And on the larger nuclear violations that the U.S. and now the IAEA have identified, are we looking at a menu of options for repercussions for this, and specifically, might snapback be one of those options on the menu? I was hoping you could touch on that specifically, because it seems some are making the argument that snapback accounts for the arms embargo and of course all other restrictions. So I was hoping you could talk about that a bit.
SECRETARY POMPEO: So, first of all, our objective is not to extend the arms embargo for another short period of time. That’s how we got into this mess, right. The arms embargo should be lifted when the Islamic Republic of Iran begins to behave in a way that is consistent with the ability to move arms around the world, to purchase – to act in a way that’s consistent with the way normal nations act.
So it’s not a time-limited matter, it’s a conditions-based matter, and our objective is to make sure that the lifting of that arms embargo is conditions-based. And when the time is right, happy to let it happen tomorrow, but extending it for six months or a year or two years fundamentally falls into the same trap that the previous administration fell into. I know this is a bit of a strawman argument: What if you got 20 years, what if you got 50 years, what if you got 100 years? I don’t want to talk about anything specific. But our objective is very clearly to say that the lifting of that arms embargo is not appropriate until such time as the world can be assured that these folks won’t use those weapon systems or the money that flows from the sale of those weapon systems are for malign purposes.
As for the other provisions, what’s happening at the IAEA, make sure everybody’s up to speed. The IAEA filed a report that made very clear that the Iranians have failed to allow access to two sites that are suspected of potentially having engaged in nuclear activity related to their previous programs, programs that predate the JCPOA. The Iranians continue to deny access to the IAEA. This is not about the JCPOA, this is about the NPT framework, the safeguards provisions that every nuclear power signs up for and that the Iranians have agreed to. This is outside and separate from the JCPOA. It’s never been the case before that a regime has denied access to the IAEA. And so, yes, in terms of how we’re thinking about responding, we hope the world will see that this is a serious risk to the entire nonproliferation regime, and the United States is prepared to lead to come up with responses to this which would be appropriate and consistent with protecting and preserving that regime against Iranian intransigence that is entirely inappropriate.
I hope the Iranians will change their mind to allow full IAEA unfettered, repeated, consistent access. To date, they’ve chosen not to do so.
MS ORTAGUS: Nirmal.
QUESTION: Mr. Secretary, Nirmal Ghosh from Straits Times. In remarks about a week ago at the Brussels Forum, you mentioned a review of American resources abroad, force postures and so forth, reordering. Could you tell us a little bit more about that, and specifically does the Indo-Pacific and Asia in particular figure in that?
SECRETARY POMPEO: So I’ll leave specifics about force posture to Secretary Esper, but there’s important foreign policy ramifications, how we think about resource allocation, how we secure American freedom. And so this is something that’s been going on frankly since the National Security Strategy was laid down at the – roughly the beginning outset of the administration. And so we have consistently been looking for not only how we deploy our forces, Department of Defense forces, but all of the assets that we have. How do we think about our cyber capability? How do we think about where our embassies ought to be?
So we have the – the State Department’s undergone a parallel process of thinking about: How do we engage diplomatically? Where do we need to be? Where do we need to devote our resources as well? So this has been a broad, national security strategic review that’s thinking about how do we focus on the threats that challenge us today and not those that challenge us 10 or 20 or 30 years ago.
And then as your question suggested, we have certainly raised our game with respect to thinking about the threat that the Chinese Communist Party poses to the United States of America, and you will see that resources and strategy will be the result of the objective that President Trump laid out.
MS ORTAGUS: Okay, (inaudible).
QUESTION: Mr. Secretary, yesterday following your speech at the Security Council, the German representative said the U.S. has no standing in this meeting to invoke UN sanctions, and by doing so you would be violating the international law. How do you comment on that? And to what extent would the snapback be efficient if it is not supported by your allies, by your European allies?
SECRETARY POMPEO: So two things. I don’t want to get into the legal analysis that you’re suggesting. We have the full authority to go exercise that right. As a participant in UN Security Council Resolution 2231, we are highly confident that we have the right to exercise that. It is not our first objective. We hope that the UN Security Council, the Chinese, the Russians, every partner there, will see that it is in their best interest to deny Iran this benefit that comes when they have not changed their behavior one lick. And so we’re hopeful that we’ll be able to do this without having to go through a complex, difficult process at the UN. So that’s our – certainly our objective. And we think – we think we’ll prevail.
We think as we get closer, the world will see – if you are a citizen living in Brussels or you’re someone in Athens, do you really want the Iranian regime to have Chinese fighter planes? I don’t think so. I think – I think the Government of Greece will conclude the same thing. If you’re – if you’re sitting in Finland and you’re trying to sort your way through about whether it’s a good idea for the Russians to be able to have another partner who they sell weapons to, I think these – I think each nation will conclude this is a bad idea, they will regret that the JCPOA allowed this to expire, and they’ll join us in this.
It is certainly a full-fledged diplomatic effort that we’re engaged in to convince the world that this is the right outcome not just for the United States, but go talk to our partners in Saudi Arabia or the Emirates and Kuwait. They know, too, that if Iran is allowed to become an arms merchant again, instability in the Middle East will flow.
MS ORTAGUS: John, go ahead.
QUESTION: Thanks. Mr. Secretary —
SECRETARY POMPEO: Yes, sir.
MS ORTAGUS: — on this bounty issue, you had some conversations with senior Russian officials after your aides were told about evidence of the Russian bounties. Did you use those opportunities to tell Moscow not to endanger U.S. troops in that manner?
SECRETARY POMPEO: So let’s back up. Let’s back up. A lot of what you said suggests knowledge that I don’t think you actually have. I don’t want to comment on the intelligence. The CIA’s put out a statement; the DNI has put out a statement. But I can tell you the Intelligence Community handled this incredibly well. We see threats in intelligence reporting to our soldiers stationed all over the world every single day – every single day. And so I can assure you that whatever reporting it is that you’re referring to, that we responded in precisely the correct way with respect to making sure that our forces were postured appropriately, that they were aware of the level of the threat, the credibility of the threat, and that we were there.
Second, the fact that the Russians are engaged in Afghanistan in a way that’s adverse to the United States is nothing new, by the way. Some members of Congress who are out there today suggesting that they are shocked and appalled by this, they saw the same intelligence that we saw. So it would be interesting to ask them what they did when they saw whatever intelligence it is that they are referring to. They would have had access to this information as well – not just the intelligence committees, by the way – even more broadly than that.
We took this seriously; we handle it appropriately. The Russians have been selling small arms that have put Americans at risk there for 10 years. We have objected to it. To your point, when I meet with my Russian counterparts, I talk with them about this each time: “Stop this.” We think we have a not perfect but somewhat overlapping objective in Afghanistan. It’s on their doorstep. We know they were routed in Afghanistan, right. So they have an objective there, too, to reduce the risk of terrorism there. So yes, maybe not every time, but with great frequency, when I speak to my Russian counterparts we talk about Afghanistan. We talk about the fact that we don’t want them engaged in this.
But it’s – just so everybody can be level set, money flowing to Afghanistan to support the Taliban has been going on since we went to Afghanistan now almost two decades ago. It’s not just the Russians. Indeed, probably not majority are the Russians. Money has flowed from lots of places – from Iran. Even today the Iranians continue to undermine what we’re trying to accomplish in terms of peace and reconciliation in Afghanistan. And it’s incredibly important that you take in context how it is this reporting has developed and how it is the United States has responded to this. We do everything we can, and this President has been vicious in securing American freedom and protecting American soldiers.
Last point: There’s some who have suggested somehow that there wasn’t an appropriate response taken because this was Russia. If you have 20 minutes, I will read to you what this administration has done with respect to Russia, but instead I’ll just provide it to you for the record. But it starts with a $700 billion allocation of resources to the Department of Defense. It continues with the withdrawal from the INF, something the Russians remain unhappy about, what we’ve done in Syria to push back against them, including against the Wagner Group.
This administration has taken seriously the threat from Russia. I only wish we had not had so much to clean up from the previous administration’s work to allow Russia to get on the ground in Syria, make enormous gains, interfere in elections in the United States of America under the previous administration’s watch. We’ve had a lot to clean up, and President Trump has been serious about responding to this in a way that protects America, keeps Americans safe, and every day working diligently to make sure that we keep our soldiers safe wherever any threat, whether that’s from Russia or otherwise, presents itself.
QUESTION: Mr. Secretary, the U.S. has viewed Russia as a bad actor —
MS ORTAGUS: (Inaudible) go ahead.
QUESTION: — but wouldn’t the bounties be an escalation?
MS ORTAGUS: Can we let (inaudible) go next and then we’ll get to – try to get to more people, okay?
QUESTION: Wouldn’t the bounties be an escalation?
SECRETARY POMPEO: (Inaudible) go ahead.
MS ORTAGUS: (Inaudible) please go ahead. Thank you.
QUESTION: Yes. Thank you, Morgan. Thank you, Mr. Secretary. My question is: You just mentioned about the report written by Dr. Adrian Zenz regarding the forced sterilization and abortion of the Uyghur population there by China, assimilating the Uyghur people. In the report, actually, Dr. Zenz – he presented compelling evidence that the Chinese Government’s severe human rights violation of the Uyghur people meet the criteria of genocide as defined by the UN Convention on Genocide. And also, former Hong Kong governor Chris Patten called China’s policy toward the Uyghurs as also genocide. In addition to that, the European Parliament Chair Reinhard Butikofer and his first Vice-Chair Evelyne Gebhardt, in their joint statement yesterday, also said their report further corroborate the assessment that we may be witnessing the implementation of genocide. I know you also issued a statement regarding this report. So do you believe China is committing genocide towards the Uyghur people?
SECRETARY POMPEO: The United States has taken the strongest action of any nation in the world to protect the human rights of all Chinese people, including the Uyghur people. We’ll continue to do that. I hope our European allies, allies in the region will take this seriously. We hope other Muslim nations will take this seriously as well and respond in a way that has the opportunity to protect those people’s human rights.
We’ll evaluate how we think about the Chinese actions and what it is we ought to call them. We’ve worked closely with Congress to pass legislation – legislation that, if I recall correctly, passed nearly unanimously on Capitol Hill. President signed that legislation. The United States takes seriously our obligation to preserve human rights, the human rights of the people in China. We’ll continue to do that and we’re constantly evaluating those actions against the legal norms and standards for the world.
MS ORTAGUS: Abbie, go ahead.
QUESTION: Thanks, Mr. Secretary.
SECRETARY POMPEO: Oh, yes, ma’am. Hi.
QUESTION: Given all that you just laid out about the threat from Russia, is now the time to be bringing Russia back into the G7?
And if I may on Hong Kong, obviously, China has passed the national security law, and the punitive measures that have been taken so far don’t appear to have prevented them from taking these actions. So how far is the U.S. willing to go, and are you willing to take the mandatory actions laid out – or mandatory sanctions laid out in the Hong Kong Autonomy Act?
SECRETARY POMPEO: Well, if they’re mandatory, we’ll do it. We always comply with the law here at the State Department, right? It’s what we do. And so we will absolutely implement those laws both consistent with the letter and the spirit of what those statutes require. So we will certainly do that. And there is more work to do for sure, but in the end, in the end, General Secretary Xi gets to make the decision about whether he wants to move his nation closer to something that is disconnected from the world in the most fundamental ways.
They talk about – when I was in Honolulu, they talk about wanting to be good stewards, international players that comply with multilateral obligations. But when you’re violating citizens’ most fundamental freedoms, we should look to your actions, not to your words. And so that’s what we will continue to do. We’ll continue to do all the things that we can. And importantly, we will continue to build out a global coalition that understands the challenge that the Chinese Communist Party threat places on freedom-loving peoples all across the world. This isn’t a U.S-China challenge. This is a challenge that is between freedom and authoritarianism. And so long as we keep that foremost in our minds, I’m confident that the freedom-loving peoples of the world will prevail.
With respect to Russia and the G7, when they were in this, they were causing problems. They’re out of it and they still continue to present risk to us. We need to talk to the Russians. And so the President gets to decide if he wants them to come to summits or not. That’s his decision. I’ll certainly leave that to him. But I do believe it is absolutely important that we have more frequent engagement with the Russians. You saw we had two days in Vienna last week to talk about really critical strategic dialogue about nuclear weapon systems proliferating around the world. I think it is wholly important and appropriate for the United States to continue to have dialogue with the Russians to convince them to change some of the activities that are inconsistent with what it is the United States needs to do to preserve security and freedom for its own people.
MS ORTAGUS: Kylie.
QUESTION: Hi, Mr. Secretary.
SECRETARY POMPEO: Kylie, good morning.
QUESTION: I understand you don’t want to get into the specifics of this intelligence, but now that it has been —
SECRETARY POMPEO: No, no, it’s not that I don’t want to. I won’t because I’m not going to further jeopardize intelligence capabilities. I’m not going to put at risk the young men and women of Afghanistan in the same way that some news organizations have done. I just simply won’t engage in that, Kylie. It’s inappropriate, it is dangerous, and you ought not be part of that.
QUESTION: As a former CIA director and soldier, however, do you feel that the President should have been told about the Russian bounty being offered to the Taliban to kill U.S. troops even if that was not fully verified intelligence?
SECRETARY POMPEO: You have six things in your question there that are just – I’m not going to go there. You’ve got assumptions about things that just don’t reflect what it is that we’ve actually seen and done. With respect to this idea, this administration has been good – and when I was CIA director, I was directly involved in this and making sure that the President had the relevant information he needed to make important strategic decisions.
You should know that threats – I’ll give you an example of threats to our embassy. Every morning, I get a briefing – it’s one of the first or second thing I do every day – about challenges that we have, threats to our embassy. I don’t share that with the President every day. These are Americans. These are State Department diplomats whose – are at risk. What we do is we do the hard work. We put our team on the ground. We make sure we have the security posture right. If necessary, I call my counterpart at the Department of Defense and make sure that his forces are properly positioned if the threat is verifiable enough and of a sufficient threat. We do this every day. We make those judgments. That’s my responsibility to do that, to do it well. When the threat is sufficiently serious, the scale of the threat is of such importance that there’s an action that I think that the President needs to be aware of and the information that I’ve seen is sufficiently credible, then we make sure that the President is aware of that.
The President has been consistently aware of the challenges that Russia presents to us and he is aware of the risk in Afghanistan. It’s why we have spent so much time over this past year at the President’s direction to reduce risk to our forces in Afghanistan in a way no previous administration has done. We’ve set about a peace and reconciliation plan inside of – and by the way, as part of that, we’ve talked to the Russians about how we can reduce the risk of violence from the Taliban to Americans on the ground in Afghanistan. No, we’ve taken the threat and the President’s taken the threat to our forces in Afghanistan incredibly serious throughout the entire duration of this administration.
QUESTION: So it’s your opinion that the President didn’t —
SECRETARY POMPEO: Somebody else have a question?
QUESTION: — didn’t need to know about this intelligence?
MS ORTAGUS: (Inaudible) get to everybody. Yeah, go ahead.
QUESTION: Thank you, Mr. Secretary.
SECRETARY POMPEO: Yes, sir.
QUESTION: My question is on Lebanon. The Lebanese judge who issued the ruling banning local and foreign journalists from interviewing the U.S. ambassador to Beirut submitted his resignation yesterday after he was referred to judicial inspection over the ruling. Is the U.S. satisfied with that? And are you concerned of any military escalation between Israel and Hizballah in the near future?
SECRETARY POMPEO: Well, we’re always concerned about the space between Hizballah and Israel, but related to this incident with our ambassador and her ability to speak freely there, I’m – that doesn’t raise my concerns greatly. I don’t think that greatly increases the risk of conflict between the two. As for this judge no longer being the judge, one fewer Hizballah judge is always a good thing.
MS ORTAGUS: Tracy, go ahead.
QUESTION: Mr. Secretary, you just mentioned – you talked about having talked to the Russians about reducing threats to American service people in – from the Taliban, and yet these —
SECRETARY POMPEO: Not just from the Taliban, not just from the Taliban.
QUESTION: Okay, from —
SECRETARY POMPEO: Yeah.
QUESTION: — various – but if indeed they were offering – the Russians were offering bounties, still —
SECRETARY POMPEO: If indeed, yes, okay.
QUESTION: Okay. We —
SECRETARY POMPEO: I’m just – I’m just – you all are going places that I’m not going to go because we have work that is important to keep our soldiers safe and I’m not going to allow you to lay down questions with facts that are asserted and say oh, he didn’t refute what I said in my question, therefore it must be true. I’m not going to go down that path with you.
QUESTION: Okay, but this would seem a major escalation, and you’ve talked about Iran. Any time Iran would attack American troops through their proxies, there would be consequences to pay. And so I’m just wondering if that same kind of warning should not be given to the Russians.
SECRETARY POMPEO: I can assure you – I can absolutely assure you that when we see serious, credible threats from the Russians, whether these are Russians engaged in threatening activity in Ukraine, Russians engaged in threatening activity in Syria, Russian threatening activity there now in Libya, their actions in Venezuela – the list is long. When we see credible information that suggests that the Russians are putting American lives at risk, we’re responding in a way that is serious. And you said do we warn them, do we talk to them, I think was your – the answer is of course we do.
MS ORTAGUS: Okay. Rich.
QUESTION: Hey, Mr. Secretary.
SECRETARY POMPEO: Hi.
QUESTION: On Hong Kong, in your opening remarks you called it now, after the security law was imposed, just another city subjected to the CCP’s whims. Is Hong Kong lost? And how far is this administration willing to go to try to prevent that or to try to bring the situation back to where it once was?
SECRETARY POMPEO: Well, whether it’s lost or not is entirely dependent upon the decisions that General Secretary Xi makes. And when you say “lost,” you mean has it lost its freedoms, is it no longer an autonomous place. I signed a certification a couple weeks back now that suggested that it was not. I suppose these things are always reversible. The actions of the last 48 hours suggest that the Chinese Government – at least at this point, the Chinese Communist Party has no intention of reversing that trend. And as for how far we’ll go, I’ll just repeat what the President said. He wants to ensure, with a handful of exceptions, that Hong Kong is treated just like mainland China because that’s the way that General Secretary Xi has chosen to treat that place as well.
With that, thank you all. I’ve got to head on today. Thank you all. Have a great day.
USMCA
U.S. Department of State. 07/01/2020. Entry into Force of the United States-Mexico-Canada Agreement. Michael R. Pompeo, Secretary of State
Today marks a landmark achievement for the countries of North America to increase manufacturing and investment in our region. On July 1, the United States-Mexico-Canada Agreement (USMCA) came into force, fulfilling President Trump’s promise to modernize and update trade agreements. More than just the modernization of our existing agreement, it is a new engine for growth in the 21st century that will keep North America the most economically competitive region in the world. We thank all sides for their impressive efforts to reach this important moment that will open new opportunities for U.S., Mexican, and Canadian businesses. It will support the growth and integration of intellectual property and creative industries, and it will protect the environment and labor rights for generations to come. As we address the COVID-19 pandemic and the challenges it poses for our economies, the USMCA will help our region to get back on its feet faster and stronger.
CANADA
U.S. Department of State. 06/30/2020. Canada Day. Michael R. Pompeo, Secretary of State. WASHINGTON, DC
The Government and people of the United States of America send our best wishes to Canada as you celebrate Canada Day on July 1.
The strong bond between Canada and the United States continues to help both countries create a stable future. Canada and the United States share a culture of respecting democracy and human rights, and of safeguarding those values throughout the world.
As countries around the world face the health and economic consequences of the COVID-19 pandemic, we are proud to see our partnership with Canada in action. We have engaged in joint efforts to protect Canadians and Americans, and witnessed the dedication and service of frontline workers on both sides of the border.
We are partnering to develop treatments and vaccines and jump-starting economic recovery as the United States-Mexico-Canada Agreement is implemented, marking a new chapter in North American competitiveness. The United States looks forward to strengthening our defense collaboration as our two nations meet existing and emerging threats and challenges.
On Canada Day, we join with our Canadian friends and neighbors to celebrate the 153rd anniversary of the Confederation.
U.S. Department of State. 06/30/2020. Conclusion of the Tenth Round of the Columbia River Treaty Negotiations
On June 29 and 30, the United States and Canada conducted the tenth round of negotiations to modernize the Columbia River Treaty regime via videoconference. The last round of negotiations was held March 11 and 12 in Washington, D.C. During this round, Canada responded to a framework proposal previously tabled by the United States and presented a Canadian-developed proposal. The United States seeks to achieve a modernized Treaty regime that will ensure the effective management of flood risk; provide a reliable and economical power supply; and improve the ecosystem.
The Department of State leads a negotiating team consisting of representatives from the Bonneville Power Administration, the U.S. Army Corps of Engineers Northwestern Division, the Department of the Interior, and the National Oceanic and Atmospheric Administration. The U.S. delegation has also included expert-advisors from the Confederated Tribes of the Colville Reservation, the Kootenai Tribe of Idaho, and the Confederated Tribes of the Umatilla Indian Reservation.
CORONAVIRUS
DoC. US CENSUS. JUNE 30, 2020. The Risks Children Face During Pandemic
Families. Adults in Households With Children Report Higher Rate of Late Housing Payments and Food Shortages Amid COVID-19
- LINDSAY M. MONTE, Statistician
- SHARON O'DONNELL, Economist in the Census Bureau’s Social, Economic and Housing Statistics Division
Nationally, 24.7 million adults in mortgaged or rented households reported a late or deferred housing payment in May. This includes one in eight adults in mortgaged households and one in six adults in rental households.
Adults in households with children report higher proportions. At the national level, one in six adults in mortgaged households with children and one in four adults in rental households with children reported either a late or deferred payment.
Food insufficiency due to the coronavirus pandemic is especially prevalent among adults in households with children.
About 8.8 million adults nationwide reported their households had a decrease in availability of food since the start of the pandemic.
More specifically, these respondents reported having had enough to eat in March but reported in early June that they and those they lived with sometimes or often did not have enough to eat.
Food insufficiency due to the coronavirus pandemic is especially prevalent among adults in households with children. Less than 40% of the Household Pulse Survey sample live with kids, but about half of the adults who sometimes or often did not have enough to eat because of COVID-19 live with kids.
The Household Pulse survey provides a detailed and near real-time picture of how individuals and households are faring during the pandemic.
For the June 4-9 period, the Census Bureau sent invitations to 1,172,900 households and a total 73,472 responded. The results will be updated weekly through late July and include estimates for states and the nation’s 15 largest metropolitan statistical areas.
An earlier America Counts piece detailed numerous ways in which the COVID-19 pandemic is disproportionately affecting households with children. In this piece, we focus on two of the primary needs of children: housing and food.
The CARES Act, in conjunction with state and local legislation, offers some protection to households with late and deferred payments against immediate foreclosure or eviction. However, the level of delayed payment reported in the Pulse data suggests many households are in precarious financial circumstances – particularly households with children.
Children especially affected by the negative economic impacts of the pandemic are those facing both risks: living in households where the rent or mortgage payment was late and where there was not enough food.
At the national level, the Household Pulse Survey data indicate that about 11.8 million children live in households that missed a mortgage or rent payment or sought a deferment, while roughly 3.9 million children are experiencing COVID-19 induced food shortages.
However, these groups include substantial overlap — nearly 1.3 million children live in households facing both types of insecurities.
You can see these and other results from week 7 of the Household Pulse Survey in the Census Bureau’s Household Pulse tables and interactive data tool. For information about the sample and methodology, check out the survey’s technical documentation.
FULL DOCUMENT: https://www.census.gov/library/stories/2020/06/the-risks-children-face-during-pandemic.html?utm_campaign=20200701msacos1ccstors&utm_medium=email&utm_source=govdelivery
INDUSTRY
REUTERS. 1 DE JULHO DE 2020. Vendas da Fiat Chrysler e Hyundai nos EUA têm nova queda no 2° tri
BANGALORE, Índia (Reuters) - Fiat Chrysler (FCAU.N)(FCHA.MI) e Hyundai Motor (005380.KS) divulgaram nesta quarta-feira um forte declínio nas vendas trimestrais de automóveis nos Estados Unidos.
Analistas dizem que o segundo trimestre deve ter a maior contração nas vendas de automóveis deste ano, já que as restrições causadas pelas medidas de quarentena e o desemprego mantiveram os consumidores afastados das concessionárias.
A Fiat Chrysler registrou uma queda de 39% nas vendas nos EUA, para 367.086 veículos no segundo trimestre. A Hyundai disse que as vendas nos EUA caíram 24%, para 141.722 veículos, no período.
Analistas esperam que o mercado de automóveis se recupere gradualmente nos próximos trimestres, apoiado em parte por descontos nos preços adotados por montadoras que querem elevar o volume de vendas.
“As vendas no varejo estão se recuperando desde abril, com a reabertura da economia, os preços constantes da gasolina e o acesso a empréstimos com juros baixos, estimulando as pessoas a comprar”, disse Jeff Kommor, chefe de vendas da Fiat nos EUA.
As consultorias de automóveis JD Power e LMC Automotive estimam que as vendas de veículos nos EUA caíram cerca de 25%, para 1,09 milhão de unidades em junho, desacelerando de uma queda de mais de 40% em abril e de 29% em maio.
(Por Ankit Ajmera e Sanjana Shivdas)
INTEREST RATE
FED. July 01, 2020. Minutes of the Federal Open Market Committee, June 9-10, 2020
The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on June 9–10, 2020. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the meeting is also included as an addendum to these minutes.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. The descriptions of economic and financial conditions contained in these minutes and in the Summary of Economic Projections are based solely on the information that was available to the Committee at the time of the meeting.
Federal Open Market Committee. Minutes of the Federal Open Market Committee. June 9-10, 2020
A joint meeting of the Federal Open Market Committee and the Board of Governors was held by videoconference on Tuesday, June 9, 2020, at 10:00 a.m. and continued on Wednesday, June 10, 2020, at 9:00 a.m.1
PRESENT:
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
Randal K. Quarles
Thomas I. Barkin, Raphael W. Bostic, Mary C. Daly, Charles L. Evans, and Michael Strine, Alternate Members of the Federal Open Market Committee
James Bullard, Esther L. George, and Eric Rosengren, Presidents of the Federal Reserve Banks of St. Louis, Kansas City, and Boston, respectively
James A. Clouse, Secretary
Matthew M. Luecke, Deputy Secretary
Michelle A. Smith, Assistant Secretary
Mark E. Van Der Weide, General Counsel
Michael Held, Deputy General Counsel
Thomas Laubach, Economist
Stacey Tevlin, Economist
Beth Anne Wilson, Economist
Shaghil Ahmed, Marc Giannoni, Trevor A. Reeve, William Wascher, and Mark L.J. Wright, Associate Economists
Lorie K. Logan, Manager, System Open Market Account
Ann E. Misback, Secretary, Office of the Secretary, Board of Governors
Matthew J. Eichner,2 Director, Division of Reserve Bank Operations and Payment Systems, Board of Governors; Michael S. Gibson, Director, Division of Supervision and Regulation, Board of Governors; Andreas Lehnert, Director, Division of Financial Stability, Board of Governors
Rochelle M. Edge, Deputy Director, Division of Monetary Affairs, Board of Governors; Michael T. Kiley, Deputy Director, Division of Financial Stability, Board of Governors
Jon Faust, Senior Special Adviser to the Chair, Office of Board Members, Board of Governors
Joshua Gallin, Special Adviser to the Chair, Office of Board Members, Board of Governors
William F. Bassett, Antulio N. Bomfim, Wendy E. Dunn, Ellen E. Meade, Chiara Scotti, and Ivan Vidangos, Special Advisers to the Board, Office of Board Members, Board of Governors
Linda Robertson, Assistant to the Board, Office of Board Members, Board of Governors
Brian M. Doyle,3 Senior Associate Director, Division of International Finance, Board of Governors; Eric M. Engen, Senior Associate Director, Division of Research and Statistics, Board of Governors
Edward Nelson4 and Robert J. Tetlow, Senior Advisers, Division of Monetary Affairs, Board of Governors; Jeremy B. Rudd, Senior Adviser, Division of Research and Statistics, Board of Governors
Sally Davies, Associate Director, Division of International Finance, Board of Governors; David López-Salido, Associate Director, Division of Monetary Affairs, Board of Governors
Burcu Duygan-Bump, Andrew Figura, Shane M. Sherlund, and Paul A. Smith, Deputy Associate Directors, Division of Research and Statistics, Board of Governors; Jeffrey D. Walker,2 Deputy Associate Director, Division of Reserve Bank Operations and Payment Systems, Board of Governors; Paul R. Wood,4 Deputy Associate Director, Division of International Finance, Board of Governors
Brian J. Bonis, Etienne Gagnon, and Zeynep Senyuz, Assistant Directors, Division of Monetary Affairs, Board of Governors
Matthias Paustian,4 Assistant Director and Chief, Division of Research and Statistics, Board of Governors
Penelope A. Beattie,5 Section Chief, Office of the Secretary, Board of Governors; Dana L. Burnett, Section Chief, Division of Monetary Affairs, Board of Governors; Dario Caldara,6 Section Chief, Division of International Finance, Board of Governors
Mark A. Carlson, Senior Economic Project Manager, Division of Monetary Affairs, Board of Governors; Canlin Li,4 Senior Economic Project Manager, Division of International Finance, Board of Governors
David H. Small, Project Manager, Division of Monetary Affairs, Board of Governors
Hess T. Chung,4 Group Manager, Division of Research and Statistics, Board of Governors
Michele Cavallo, Bernd Schlusche,4 and Mary Tian, Principal Economists, Division of Monetary Affairs, Board of Governors; Maria Otoo, Principal Economist, Division of Research and Statistics, Board of Governors
Sriya Anbil,4 Erin E. Ferris, and Fabian Winkler, Senior Economists, Division of Monetary Affairs, Board of Governors; David S. Miller,4 Senior Economist, Division of Research and Statistics, Board of Governors; Gaston Navarro, Senior Economist, Division of International Finance, Board of Governors
Randall A. Williams, Senior Information Manager, Division of Monetary Affairs, Board of Governors
James Hebden4 and James M. Trevino,4 Senior Technology Analysts, Division of Monetary Affairs, Board of Governors
Andre Anderson, First Vice President, Federal Reserve Bank of Atlanta
David Altig, Joseph W. Gruber, Anna Paulson, Daleep Singh, and Christopher J. Waller, Executive Vice Presidents, Federal Reserve Banks of Atlanta, Kansas City, Chicago, New York, and St. Louis, respectively
Edward S. Knotek II, Paolo A. Pesenti, Julie Ann Remache,2 Samuel Schulhofer-Wohl,2 Robert G. Valletta, and Nathaniel Wuerffel,2 Senior Vice Presidents, Federal Reserve Banks of Cleveland, New York, New York, Chicago, San Francisco, and New York, respectively
Roc Armenter, Matthew D. Raskin,2 and Patricia Zobel, Vice Presidents, Federal Reserve Banks of Philadelphia, New York, and New York, respectively
Robert Lerman,2 Assistant Vice President, Federal Reserve Bank of New York
Daniel Cooper and John A. Weinberg, Senior Economists and Policy Advisors, Federal Reserve Banks of Boston and Richmond, respectively
The Chair opened the meeting with an acknowledgment of the extraordinary and deeply troubling events of the last two weeks. Injustice, prejudice, and the callous disregard for life had led to social unrest and a sense of despair. The Chair noted that it was incumbent upon the leaders of the Federal Reserve System to continue to communicate with force and clarity about the Federal Reserve's core values, and to reaffirm its unflinching commitment to those values in pursuing the Federal Reserve's mandated goals. In that spirit, the Chair noted that he intended to offer the following remarks at the end of the postmeeting press conference. All participants supported the statement affirming the Federal Reserve's core values and its commitment to do everything it can to foster racial equality as well as diversity and inclusion both within the Federal Reserve System and in society more broadly.
I want to acknowledge the tragic events that have again put a spotlight on the pain of racial injustice in this country. The Federal Reserve serves the entire nation. We operate in, and are part of, many of the communities across the country where Americans are grappling with and expressing themselves on issues of racial equality.
I speak for my colleagues throughout the Federal Reserve System when I say that there is no place at the Federal Reserve for racism, and there should be no place for it in our society. Everyone deserves the opportunity to participate fully in our society and in our economy.
These foundational principles guide us in all we do, from monetary policy to our focus on diversity and inclusion in our workplace, and to our work regulating and supervising banks to ensure fair access to credit around the country. We will take this opportunity to renew our steadfast commitment to these principles, making sure that we are playing our part.
We understand that the work of the Federal Reserve touches communities, families, and businesses across the country. Everything we do is in service to our public mission. We are committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible.Discussion of Forward Guidance, Asset Purchases, and Yield Curve Caps or Targets
Participants discussed tools for conducting monetary policy when the federal funds rate is at its effective lower bound (ELB). The discussion addressed two topics: (1) the roles of forward guidance and large-scale asset purchase programs in supporting the attainment of the Committee's maximum-employment and price-stability goals and (2) in light of the foreign and historical experience with approaches that cap or target interest rates along the yield curve, whether such approaches could be used to support forward guidance and complement asset purchase programs. The staff briefing on the first topic focused on outcome-based forward guidance for the federal funds rate—which ties changes in the target range for the federal funds rate to the achievement of specified macroeconomic outcomes, such as reaching a given level of the unemployment rate or inflation—and asset purchase programs of the kind used during and following the previous recession. The staff presented results from model simulations that suggested that forward guidance and large-scale asset purchases can help support the labor market recovery and the return of inflation to the Committee's symmetric 2 percent inflation goal. The simulations suggested that the Committee would have to maintain highly accommodative financial conditions for many years to quicken meaningfully the recovery from the current severe downturn. The briefing addressed factors that might alter the potency of forward guidance and asset purchase programs, along with a number of considerations for the design of these actions. The staff cautioned that businesses and households might not be as forward looking as assumed in the model simulations, which could reduce the effectiveness of policies that are predicated on influencing expectations about the path of policy several years into the future. Alternatively, prompt and forceful policy actions by the Committee might help focus the public's expectations around better outcomes or reduce perceived risks of worst-case scenarios, which could generate more immediate macroeconomic benefits than those featured in the staff analysis.
The second staff briefing reviewed the yield caps or targets (YCT) policies that the Federal Reserve followed during and after World War II and that the Bank of Japan and the Reserve Bank of Australia are currently employing. These three experiences illustrated different types of YCT policies: During World War II, the Federal Reserve capped yields across the curve to keep Treasury borrowing costs low and stable; since 2016, the Bank of Japan has targeted the 10-year yield to continue to provide accommodation while limiting the potential for an excessive flattening of the yield curve; and, since March 2020, the Reserve Bank of Australia has targeted the three-year yield, a target that is intended to reinforce the bank's forward guidance for its policy rate and to influence funding rates across much of the Australian economy. The staff noted that these three experiences suggested that credible YCT policies can control government bond yields, pass through to private rates, and, in the absence of exit considerations, may not require large central bank purchases of government debt. But the staff also highlighted the potential for YCT policies to require the central bank to purchase very sizable amounts of government debt under certain circumstances—a potential that was realized in the U.S. experience in the 1940s—and the possibility that, under YCT policies, monetary policy goals might come in conflict with public debt management goals, which could pose risks to the independence of the central bank.
In their discussion of forward guidance and large-scale asset purchases, participants agreed that the Committee has had extensive experience with these tools, that they were effective in the wake of the previous recession, that they have become key parts of the monetary policy toolkit, and that, as a result, they have important roles to play in supporting the attainment of the Committee's maximum-employment and price-stability goals. Various participants noted that the economy is likely to need support from highly accommodative monetary policy for some time and that it will be important in coming months for the Committee to provide greater clarity regarding the likely path of the federal funds rate and asset purchases. Participants generally indicated support for outcome-based forward guidance. A number of participants spoke favorably of forward guidance tied to inflation outcomes that could possibly entail a modest temporary overshooting of the Committee's longer-run inflation goal but where inflation fluctuations would be centered on 2 percent over time. They saw this form of forward guidance as helping reinforce the credibility of the Committee's symmetric 2 percent inflation objective and potentially preventing a premature withdrawal of monetary policy accommodation. A couple of participants signaled a preference for forward guidance tied to the unemployment rate, noting that it would be more credible to focus on labor market outcomes that have been achieved in the recent past or that—given how high the unemployment rate currently is—such guidance would clearly signal a high degree of accommodation for an extended period. A few others suggested that calendar-based guidance—which specifies a date beyond which accommodation could start to be reduced—might be at least as effective as outcome-based guidance. They noted that calendar-based guidance had been very effective when the Committee used it in 2011 and 2012 or that it would be very challenging to provide credible outcome-based guidance in light of the substantial uncertainty surrounding the current economic outlook. Regardless of the specific form of forward guidance, a couple of participants expressed the concern that policies that effectively committed the Committee to maintaining very low interest rates for a long time could ultimately pose significant risks to financial stability.
Participants agreed that asset purchase programs can promote accommodative financial conditions by putting downward pressure on term premiums and longer-term yields. Several participants remarked that declines in the neutral rate of interest and in term premiums over the past decade and prevailing low levels of longer-term yields would likely act as constraints on the effectiveness of asset purchases in the current environment and noted that these constraints were not as acute when the Committee implemented such programs in the wake of the Global Financial Crisis. These participants noted, however, that large-scale asset purchases could still be beneficial under current circumstances by offsetting potential upward pressures on longer-term yields or by helping reinforce the Committee's commitment to maintaining highly accommodative financial conditions. A few participants questioned the desirability of large-scale asset purchases following the current purchases to support market functioning, noting that they likely would lead to a further considerable expansion of the Federal Reserve's balance sheet or have potentially adverse implications for financial stability.
In their discussion of the foreign and historical experience with YCT policies and the potential role for such policies in the United States, nearly all participants indicated that they had many questions regarding the costs and benefits of such an approach. Among the three episodes discussed in the staff presentation, participants generally saw the Australian experience as most relevant for current circumstances in the United States. Nonetheless, many participants remarked that, as long as the Committee's forward guidance remained credible on its own, it was not clear that there would be a need for the Committee to reinforce its forward guidance with the adoption of a YCT policy. In addition, participants raised a number of concerns related to the implementation of YCT policies, including how to maintain control of the size and composition of the Federal Reserve's balance sheet, particularly as the time to exit from such policies nears; how to combine YCT policies—which at least in the Australian case incorporate aspects of date-based forward guidance—with the types of outcome-based forward guidance that many participants favored; how to mitigate the risks that YCT policies pose to central bank independence; and how to assess the effects of these policies on financial market functioning and the size and composition of private-sector balance sheets. A number of participants commented on additional challenges associated with YCT policies focused on the longer portion of the yield curve, including how these policies might interact with large-scale asset purchase programs and the extent of additional accommodation they would provide in the current environment of very low interest rates. Some of these participants also noted that longer-term yields are importantly influenced by factors such as longer-run inflation expectations and the longer-run neutral real interest rate and that changes in these factors or difficulties in estimating them could result in the central bank inadvertently setting yield caps or targets at inappropriate levels. A couple of participants remarked that an appropriately designed YCT policy that focused on the short-to-medium part of the yield curve could serve as a powerful commitment device for the Committee. These participants noted that, even if market participants currently expect the federal funds rate to remain at its ELB through the medium term, the introduction of an effective YCT policy could help prevent those expectations from changing prematurely—as happened during the previous recovery—or that the size of a large-scale asset purchase program, which also poses risks to central bank independence, could be reduced by an effective YCT policy. All participants agreed that it would be useful for the staff to conduct further analysis of the design and implementation of YCT policies as well as of their likely economic and financial effects.
A number of participants emphasized that, when assessing the potential roles that different monetary policy tools might play to support the attainment of the Committee's goals, it was important to think about how various policy tools could be used in coordination as part of the Committee's overall strategy to achieve its dual-mandate objectives. In addition, various participants noted that clear communications with the public are central to the efficacy of all policy tools and that, therefore, the Committee should complete its monetary policy framework review in the near term, including revising the Statement on Longer-Run Goals and Monetary Policy Strategy. Such a revised statement would communicate to the public how the Committee views its policy goals and provide additional context to the Committee's policy actions.
Developments in Financial Markets and Open Market Operations
The System Open Market Account (SOMA) manager first discussed developments in financial markets over the intermeeting period. Risk asset prices were buoyed by optimism about the potential for increased economic activity associated with reopenings as parts of the United States and other countries relaxed lockdown restrictions. That optimism was reinforced by high-frequency data suggesting a pickup in economic activity. Market participants also pointed to the suite of U.S. and global policy measures taken since mid-March as laying a foundation for the improvement in risk sentiment. Against this backdrop, staff analysis suggested that equity prices had been supported by expectations for a strong rebound in earnings next year, low risk-free rates and positive risk sentiment. Despite this improvement in risk sentiment, market participants expected weak overall growth in 2020, and elevated uncertainties in the outlook remained. The manager noted that prospects for adverse developments regarding the coronavirus (COVID-19) and the potential for financial strains to amplify recessionary dynamics, and geopolitical developments, including renewed U.S.–China tensions, presented near term risks to financial markets. Market participants were also attentive to the recent steepening in the Treasury yield curve and noted a range of uncertainties in the outlook for longer-term rates.
Regarding expectations for monetary policy, respondents to the Open Market Trading Desk's surveys suggested that most market participants did not anticipate policy changes at the June meeting. The target range for the federal funds rate was expected to remain at the ELB for at least the next couple of years, although many survey respondents attached some probability to the target range increasing in 2022. Although the rates implied by federal funds futures contracts settling next year had fallen to slightly negative levels in May, survey respondents attached very little probability to the possibility of negative policy rates.
The manager turned to a discussion of Federal Reserve operations. Credit facilities, some of which became operational over the period, generally experienced modest activity in light of broad improvements in credit market conditions. New usage across many funding operations and facilities had declined over the intermeeting period as conditions in funding markets improved. The manager noted that a significant proportion of amounts outstanding under U.S. dollar liquidity swaps and repurchase agreements (repo) reflected term transactions initiated during the period of funding market strains. In light of the improvement in funding market conditions, the manager noted that it might be appropriate to make a modest adjustment to the minimum bid rates on repo operations in the forthcoming calendar, which would effectively position these operations in a backstop role. These adjustments were not expected to have any significant effects in short-term funding markets.
Finally, the manager discussed the near-term plans for purchases of Treasury securities and agency mortgage-backed securities (MBS). Overall, functioning in the markets for these securities had improved substantially. In light of these improvements, the Desk had gradually reduced the pace of purchases over the intermeeting period, to their current levels of $4 billion per day in Treasury securities and $4.5 billion per day in agency MBS. These purchase amounts were significantly lower than the peak pace in mid-March and roughly corresponded to monthly increases in SOMA holdings of approximately $80 billion in Treasury securities and $40 billion in agency MBS. Continuing to increase holdings at this pace would likely help sustain the improvements in market functioning, and seemed to be roughly in line with market expectations for Treasury purchases, and toward the lower end of expectations for agency MBS purchases, net of reinvestments. In addition, principal payments from agency debt and agency MBS held in the SOMA portfolio could continue to be reinvested in agency MBS. Weekly operations in agency commercial mortgage-backed securities (CMBS) would also be conducted. The Desk was prepared to increase the size or adjust the composition of Treasury, agency MBS and agency CMBS purchases as needed to sustain smooth market functioning in the markets for these securities.
By unanimous vote, the Committee ratified the Desk's domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System's account during the intermeeting period.
Staff Review of the Economic Situation
The coronavirus outbreak and the measures undertaken to contain its spread were severely disrupting economic activity in the United States and abroad. The available information for the June 9–10 meeting suggested that U.S. real gross domestic product (GDP) would likely post a historically large decline in the second quarter. Labor market conditions improved in May, but these improvements were modest relative to the substantial deterioration seen over the previous two months. Consumer price inflation, as measured by the 12‑month percentage change in the price index for personal consumption expenditures (PCE), slowed notably through April, reflecting the effects of both weak aggregate demand and low energy prices.
Total nonfarm payroll employment expanded strongly in May, though by much less than the historic job losses recorded in April. The unemployment rate moved down to 13.3 percent in May after soaring to 14.7 percent in April. As was highlighted by the Bureau of Labor Statistics, these figures likely understated the extent of unemployment; accounting for the unusually large number of workers who reported themselves as employed but absent from their jobs would have raised the unemployment rate by 5 percentage points in April and 3 percentage points in May. Both the labor force participation rate and the employment-to-population ratio increased in May. Initial claims for unemployment insurance benefits had declined through the last week of May from their peak in late March, but they still were at a historically elevated level. Average hourly earnings for all employees declined in May after rising sharply in April, but these fluctuations largely reflected the substantial changes in the level and composition of employment, which disproportionately affected lower-wage workers. The employment cost index for total labor compensation in the private sector increased 2.8 percent over the 12 months ending in March—a period mostly predating the onset of the pandemic—and was the same as its year-earlier pace.
Total PCE price inflation was only 0.5 percent over the 12 months ending in April, reflecting both weak aggregate demand in recent months and a considerable drop in consumer energy prices. Prices fell in March and April in many categories that were affected the most by social-distancing measures, such as the prices for air travel and hotel accommodations. Core PCE price inflation, which excludes changes in consumer food and energy prices, was 1.0 percent over the 12 months ending in April. In contrast, the trimmed mean measure of 12-month PCE price inflation constructed by the Federal Reserve Bank of Dallas was 1.9 percent in April. The consumer price index (CPI) inched up 0.1 percent over the 12 months ending in May, while core CPI inflation was 1.2 percent over the same period. Recent readings on survey-based measures of longer-run inflation expectations were little changed on balance. The University of Michigan Surveys of Consumers measure for the next 5 to 10 years edged up in May, while the 3-year-ahead measure from the Federal Reserve Bank of New York's Survey of Consumer Expectations was unchanged. The 10-year measure for PCE price inflation from the Survey of Professional Forecasters ticked down in the second quarter. All of these measures of longer-run inflation expectations continued to be near their recent ranges.
Real PCE slumped in April, with declines widespread across most spending categories. In May, however, light motor vehicle sales and some other high-frequency indicators of consumer spending turned up, but the levels of these indicators were mostly still below their levels early in the year. Real disposable personal income increased significantly in April, as a marked decline in wage and salary income was more than offset by a substantial boost from government transfer payments due to recent fiscal policy support; as a result, the personal saving rate soared. The consumer sentiment measures from both the Michigan survey and the Conference Board survey crept up in May but remained below their levels early in the year.
Real residential investment appeared to be weakening significantly in the second quarter. Starts and building permit issuance for single-family homes, along with starts of multifamily units, dropped sharply in April. Sales of existing homes contracted markedly in April, although new home sales edged up.
Real business fixed investment continued to tumble in the second quarter. Nominal new orders and shipments of nondefense capital goods excluding aircraft decreased considerably in April. Nominal business spending for nonresidential structures outside of the drilling and mining sector also fell in April. In addition, the effects of low crude oil prices were evident in further declines in the number of crude oil and natural gas rigs in operation through early June, an indicator of business spending on structures in the drilling and mining sector.
Total industrial production plunged in April, as many factories slowed or suspended operation in response to the coronavirus pandemic. The decline in manufacturing production was widespread across all major industries and was led by a collapse in the output of motor vehicles and related parts. Output in the mining sector—which includes crude oil extraction—also decreased, reflecting the effects of low crude oil prices.
Total real government purchases appeared to be rising moderately in the second quarter. Federal defense spending continued to increase in April, and nondefense purchases were likely to be boosted in the second quarter by recent fiscal policy measures related to the coronavirus. In contrast, state and local purchases looked to be declining, as the payrolls of these governments shrank in April and May, and nominal state and local construction expenditures decreased in April.
The nominal U.S. international trade deficit widened in both March and April, as exports of goods and services plunged more than imports. The fall in goods exports was broad based, with particularly sharp declines in automotive products, industrial supplies, and capital goods. Goods imports also contracted significantly in most categories through April, and a near halt of international travel drove a steep decline in exports and imports of services.
Foreign economic activity contracted in the first quarter, even though most countries abroad introduced strict social-distancing measures to contain the spread of the coronavirus only toward the end of the quarter. In China, where restrictions were largely lifted by the end of the first quarter, data pointed to a relatively quick rebound in economic activity in the second quarter. Outside of China, indicators suggested that foreign economic activity plummeted further in the second quarter, notwithstanding some signs of improvement in May as restrictions started to ease. Inflation rates fell sharply across most foreign economies in April and May. The low level of oil prices relative to a year ago contributed to 12-month inflation rates close to or below zero in many advanced foreign economies (AFEs).
Staff Review of the Financial Situation
Over the intermeeting period, risk sentiment improved, on net, as optimism over reopening the economy, potential coronavirus treatments, the unexpectedly positive May employment situation report, and other indicators that suggest that economic activity may be rebounding more than offset concerns arising from otherwise dire economic data releases, warnings from health experts that openings may have been premature, and renewed tensions between the United States and China. Equity prices rose, and corporate bond spreads narrowed notably. The Treasury yield curve steepened, and the market-implied expected path of the federal funds rate declined somewhat. Liquidity conditions continued to improve in general, but some stress was still evident in several markets. Financing conditions were still somewhat strained for lower-rated borrowers and small businesses even as announcements and implementation of Federal Reserve facilities during the intermeeting period were supportive of credit flows. The credit quality of businesses and municipal debt weakened.
The expected path of the federal funds rate for the next few years, based on a straight read of overnight index swap quotes, declined a bit and remained close to the ELB through late 2023. Market-implied forward rates referring to 2021 and 2022 turned slightly negative for a few days beginning on May 7, though market commentary suggested that this development did not reflect investors expecting the FOMC to lower the federal funds rate target range below zero. This view was supported by Federal Reserve communications that negative interest rates did not appear to be an attractive policy tool.
The Treasury yield curve steepened over the intermeeting period, with 2-year yields little changed while 10- and 30-year yields rose. Longer-term yields were likely boosted by expectations of heavy upcoming Treasury security issuance as well as some unwinding of safe-haven demands in connection with improved investor sentiment. The Treasury's first 20-year bond offering since 1986 was met with solid demand. Changes in inflation compensation based on Treasury Inflation-Protected Securities yields were mixed; 5-year inflation compensation rose amid the recent partial rebound in crude oil prices, while the 5-to-10-year measure edged down. At the end of the intermeeting period, both measures stood roughly halfway between their mid-March lows and typical levels seen in recent years.
Broad stock price indexes moved higher. One-month implied volatility on the S&P 500 index declined somewhat but still stood at the 85th percentile of its distribution since 1990. Spreads on investment- and speculative-grade corporate bonds over comparable-maturity Treasury yields narrowed considerably but remained at levels similar to those in other periods of notable economic or bond market stress, though well below financial crisis levels.
Over the intermeeting period, financial market functioning appeared to improve in general, although progress was uneven. Liquidity measures improved in the Treasury market, but off-the-run Treasury securities of all tenors and longer-maturity on-the-run securities remained less liquid than before the onset of the pandemic. Agency MBS market functioning had largely recovered, except for some less liquid parts of the market. Corporate bond market liquidity improved considerably but remained somewhat strained, particularly for speculative-grade bonds. Liquidity in the municipal bond markets was still below pre-pandemic levels.
Conditions in unsecured short-term funding markets continued to improve over the intermeeting period, and spreads on most types of commercial paper and negotiable certificates of deposit narrowed to levels that approached pre-pandemic ranges. Amid better market conditions, take-up in the emergency liquidity facilities declined substantially. Heavy demand for Treasury bills from money market funds held down rates despite an unprecedented pace of issuance. The effective federal funds rate was 5 basis points almost every day over the intermeeting period, and the Secured Overnight Financing Rate averaged 4 basis points. Total outstanding Federal Reserve repos averaged about $170 billion. Amid improving market functioning, Federal Reserve purchases of Treasury securities and agency MBS were reduced from around $10 billion and $8 billion per day, respectively, to $4 billion and $4.5 billion per day, respectively, over the intermeeting period.
Risk sentiment in foreign financial markets improved over the intermeeting period. Further monetary policy and fiscal policy support in foreign countries, the easing of coronavirus-related restrictions, and a stronger-than-expected U.S. May employment report outweighed concerns about otherwise weak global economic data and the resurgence of U.S.–China tensions. Liquidity in global dollar funding markets continued to improve, helped in part by the Federal Reserve's liquidity programs, and prices of foreign risky assets increased. In the AFEs, option-implied volatility measures declined and long-term sovereign bond yields rose moderately, while fiscal stimulus in Japan and Europe boosted prices in their respective equity markets. Euro-area peripheral bond spreads narrowed after the European Commission proposed that the European Union be given the authority to borrow €750 billion to assist the recovery and the European Central Bank (ECB) increased the size of its Pandemic Emergency Purchase Programme. In emerging markets, the rise in oil prices since late April and overall improvements in investor sentiment boosted asset prices, even as the coronavirus outbreak worsened in some countries. Outflows from emerging market funds slowed and then turned into small inflows later in the period.
The improving risk sentiment also supported several foreign currencies, and the staff's broad dollar index fell. The euro appreciated notably over the period, lifted in part by the European fiscal and monetary policy communications. The recent rebound in oil prices contributed to a strong appreciation of the Canadian dollar, the Brazilian real, and the Mexican peso.
Financing conditions for nonfinancial firms eased somewhat over the intermeeting period, though they remained moderately strained for lower-rated borrowers. Investment-grade corporate bond issuance soared to record levels in April and remained robust in May, as issuers took advantage of more favorable market conditions following Federal Reserve announcements of two facilities to support corporate credit markets. Regarding these facilities, the Secondary Market Corporate Credit Facility began in mid-May to purchase exchange-traded funds whose investment objective is to provide broad exposure to the market for U.S. corporate bonds. Speculative-grade corporate bond issuance picked up considerably toward the end of April from very low levels, though it slowed somewhat in May. Commercial and industrial loans on banks' books surged again in April, largely driven by lending through the Paycheck Protection Program (PPP), especially at smaller banks. Credit-line drawdowns continued in April and May, though drawdowns by large firms slowed considerably from record levels in March.
The credit quality of nonfinancial corporations continued to deteriorate sharply during the intermeeting period. The volume of nonfinancial corporate bond and leveraged loan downgrades remained very high in April and May. Defaults in corporate bonds and leveraged loans increased as well; market analysts projected defaults to increase considerably over the remainder of 2020 and into 2021.
Financing conditions for small businesses tightened amid widespread continued pandemic-related closures and reduced operations of small businesses. Lenders indicated that they had tightened loan standards on small business loans or discontinued lending to such borrowers altogether (other than PPP loans). Financing conditions for state and local governments improved moderately following several Federal Reserve announcements to support the municipal debt market, but conditions remained somewhat strained for lower-rated states and municipalities. In the first week of June, the State of Illinois became the first to use the Municipal Liquidity Facility.
Commercial real estate (CRE) lending conditions recovered somewhat during the intermeeting period. Spreads on triple-A-rated and triple-B-rated non-agency CMBS declined in May but remained elevated relative to before the pandemic, and issuance showed signs of recovery in late April and early May. Federal Reserve purchases of agency CMBS reportedly helped return spreads on these securities to their pre-pandemic levels, and issuance in that market continued to be strong. However, early signs of credit repayment difficulties emerged in some CRE sectors.
The volume of mortgage rate locks for home-purchase loans picked up in mid-May following a material drop in April. Financing conditions remained tight for borrowers with relatively low credit scores and for those seeking nonconforming mortgages. In addition, options for home equity extraction continued to be restricted, as credit for both home equity lines of credit and cash-out refinances was limited. Servicers were able to handle the liquidity strains imposed by forbearance.
The sharp decline in economic activity had also curtailed the demand for consumer credit. On balance, consumer credit financing conditions did not appear to be a major drag on household spending. Issuance of consumer asset-backed securities resumed in mid-April and in early May but remained significantly below pre-pandemic levels.
Staff Economic Outlook
The projection for the U.S. economy prepared by the staff for the June FOMC meeting was downgraded, on balance, as compared with the April meeting forecast in response to information on the spread of the coronavirus and changes in the measures undertaken to contain it both at home and abroad, along with incoming economic data. U.S. real GDP was forecast to show a historically large decline in the second quarter of this year, and the unemployment rate was expected to be sharply higher than in the first quarter. The substantial fiscal policy measures and appreciable support from monetary policy, along with the Federal Reserve's liquidity and lending facilities, were expected to help mitigate the deterioration in current economic conditions and to help boost the recovery.
The staff continued to judge that the future performance of the economy would depend importantly on the evolution of the coronavirus outbreak and the measures undertaken to contain it. Under the staff's baseline assumptions that the current restrictions on social interactions and business operations would continue to ease gradually this year, real GDP was forecast to rise appreciably and the unemployment rate to decline considerably in the second half of the year, although a complete recovery was not expected by year-end. Inflation was projected to weaken this year, reflecting both the deterioration in resource utilization and sizable expected declines in consumer energy prices. Under the baseline assumptions, economic conditions were projected to continue to improve, and inflation to pick back up, over the next two years.
The staff still observed that the uncertainty related to the economic effects of the coronavirus pandemic was extremely elevated and that the historical behavior of the U.S. economy in response to past economic shocks provided limited guidance for making judgments about how the economy might evolve in the future. In light of the significant uncertainty and downside risks associated with the pandemic, including how much the economy would weaken and how long it would take to recover, the staff judged that a more pessimistic projection was no less plausible than the baseline forecast. In this scenario, a second wave of the coronavirus outbreak, with another round of strict limitations on social interactions and business operations, was assumed to begin later this year, leading to a decrease in real GDP, a jump in the unemployment rate, and renewed downward pressure on inflation next year. Compared with the baseline, the disruption to economic activity was more severe and protracted in this scenario, with real GDP and inflation lower and the unemployment rate higher by the end of the medium-term projection.
Participants' Views on Current Conditions and the Economic Outlook
In conjunction with this FOMC meeting, participants submitted their projections of the most likely outcomes for real GDP growth, the unemployment rate, and inflation for each year from 2020 through 2022 and over the longer run, based on their individual assessments of appropriate monetary policy—including the path for the federal funds rate. The longer-run projections represented each participant's assessment of the rate to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy. These projections are described in the Summary of Economic Projections, which is an addendum to these minutes.
Participants noted that the coronavirus outbreak was causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health induced sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices were holding down consumer price inflation. Financial conditions had improved, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
Participants agreed that lowering the federal funds rate to its ELB had established more accommodative financial conditions and that the Federal Reserve's ongoing purchases of sizable quantities of Treasury securities and agency MBS had helped restore smooth market functioning to support the economy and the flow of credit to U.S. households and businesses. The fiscal response to economic developments had been large and timely and was providing much needed support for economic activity. Credit flows and economic activity were also being supported by the lending facilities established under the authority of section 13(3) of the Federal Reserve Act with the approval of the Secretary of the Treasury.
Participants judged that the effects of the coronavirus outbreak and the ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term and would pose considerable risks to the economic outlook over the medium term. Participants agreed that the data for the second quarter would likely show the largest decline in economic activity in post–World War II history. Based in part on information from their Districts, participants observed that the burdens of the present crisis were not falling equally on all Americans and noted that the rise in joblessness was especially severe for lower-wage workers, women, African Americans, and Hispanics. Participants agreed that recently enacted fiscal policy programs had been delivering valuable direct financial aid to households, businesses, and communities, as well as providing relief to disadvantaged groups.
Regarding household spending, participants pointed to information from District contacts, to surveys of consumer behavior, and to high-frequency indicators—such as credit card transactions, automated teller machine visits, and cellphone data tracking—as suggesting that consumer expenditures may be stabilizing or rebounding modestly. Limited available sources of standard economic data, such as retail purchases and motor vehicle sales, also seemed in line with this impression. With supportive monetary policy and payments to households under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), including enhanced unemployment insurance payments, participants expected personal consumption expenditures to grow strongly in the second half of the year, albeit from very low levels. However, the recovery in consumer spending was not expected to be particularly rapid beyond this year, with voluntary social distancing, precautionary saving, and lower levels of employment and income restraining the pace of expansion over the medium term.
Participants noted that levels of uncertainty and risks perceived by businesses remained high and that these factors continued to contribute to restraints on capital expenditures, despite easing in financing conditions stemming in part from recent policy measures. Some business contacts pointed to halting improvements in consumer demand, a dearth in public infrastructure projects due to strained state and local government budget conditions, or the decline in energy prices as factors likely to depress business spending. Some participants also noted reports of firms stating that they have had some challenges in rehiring employees, in part related to temporary enhanced unemployment insurance benefits. Participants generally agreed that practices and developments in public health to address the pandemic would be critical for ensuring a strong and lasting reopening of businesses and reducing the likelihood of an outsized wave of closures, but monetary policy and, especially, fiscal policy would play important roles. Nevertheless, participants concluded that voluntary social distancing and structural shifts stemming from the pandemic would likely mean that some proportion of businesses would close permanently. Noting ongoing changes in the composition of production and the processes by which production takes place, participants suggested that some business adaptations were likely to endure long after the coronavirus subsides, resulting in notable dislocation and sectoral reallocation of firms and workers across industries.
Participants noted that conditions in the energy sector remained difficult amid still-low oil prices. Several participants anticipated continued low drilling activity, at least until excess inventories were reduced later this year, and expressed concern that a wave of bankruptcies in the energy sector could be forthcoming. In addition, the agricultural sector continued to be under stress due to low prices for some farm commodities, reduced ethanol production, and pandemic-related limitations on production for some food processing plants.
With regard to the labor market, participants remarked on the surprisingly positive news from the labor market report for May but emphasized that nearly 20 million jobs had been lost, on net, since February. Participants noted that because of misclassification errors in the Current Population Survey, the official unemployment rate for May likely understated the extent of unemployment; others observed that government reliance on unemployment insurance as a vehicle for income support under the CARES Act complicates the interpretation of the data. Participants also noted that unemployment insurance claims continued to run at a historically elevated level, but the proportion of laid-off workers who expected to be recalled was unusually large. Taken together, the data suggested that April could turn out to be the trough of the recession, but participants agreed that it was too early to draw any firm conclusions.
Prospects for further substantial improvement in the labor market were seen as depending on a sustained reopening of the economy, which in turn depended in large part on the efficacy of health measures taken to limit the effects of the coronavirus. On this issue, participants judged there to be a great deal of uncertainty and expressed concerns about the possibility that an early reopening would contribute to a significant increase of infections. Participants also regarded highly accommodative monetary policy and sustained support from fiscal policy as likely to be needed to facilitate a durable recovery in labor market conditions. Overall, participants expected that a full recovery in employment would take some time.
With regard to inflation, participants reiterated their view that the negative effect from the pandemic on aggregate demand was likely to more than offset any upward pressure from supply constraints so that the overall effect of the outbreak on prices was seen as disinflationary. Consistent with that interpretation, participants observed the recent negative readings on the monthly CPI and noted that they anticipated that the 12-month PCE inflation measure would likely run well below the Committee's 2 percent objective for some time. Observing that inflation had been running somewhat below the Committee's 2 percent longer-run objective before the coronavirus outbreak, some participants noted a risk that long-term inflation expectations might deteriorate. Participants noted that a highly accommodative stance of monetary policy would likely be needed for some time to achieve the 2 percent inflation objective over the longer run.
Participants commented that there remained an extraordinary amount of uncertainty and considerable risks to the economic outlook. Participants shared views on possible outcomes for the reopening of the economy, the prospects for effective voluntary social distancing, and the efficacy of public health initiatives for their implications for economic activity and employment. A number of participants judged that there was a substantial likelihood of additional waves of outbreaks, which, in some scenarios, could result in further economic disruptions and possibly a protracted period of reduced economic activity. Other possibilities included economic activity that might recover more quickly if sizable, widespread outbreaks could be avoided even as households and businesses relax or modify social-distancing behaviors. Among the other sources of risk noted by participants were that fiscal support for households, businesses, and state and local governments might prove to be insufficient and that foreign economies could come under greater pressure than anticipated as a result of the spread of the pandemic abroad. Participants stressed that measures taken in the areas of health-care policy and fiscal policy, together with actions by households and businesses, would shape the prospects for a prompt and timely return of the U.S. economy to more normal conditions. In addition, participants agreed that recent actions taken by the Federal Reserve had helped reduce risks to the economic outlook.
As part of their discussions of longer-run risks, participants noted that in some adverse scenarios, more business closures would occur, and workers would experience longer spells of unemployment that could lead to a loss of skills that could impair their employment prospects. In addition, to the extent that transmission-mitigation procedures adopted by firms reduced their productivity, or if the reallocation of industry output resulted in a lasting reduction in business investment, the longer-run level of potential output could be reduced.
Regarding developments in financial markets, participants agreed that ongoing actions by the Federal Reserve, including those undertaken in collaboration with the Treasury, had helped ease strains in some financial markets and supported the flow of credit to households, businesses, and communities. Measures of market functioning in the markets for Treasury securities and agency MBS had improved substantially since March. Strains in short-term funding markets had receded as well, and the volume of borrowing at many of the Federal Reserve's liquidity facilities had moved lower as borrowers returned to market sources of funding. Risk spreads across a range of fixed-income markets had narrowed as the intense flight to safety witnessed in financial markets in the spring ebbed further.
In their consideration of monetary policy at this meeting, participants reaffirmed that the Federal Reserve was committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum-employment and price-stability goals. In light of their assessment that the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and posed considerable risks to the economic outlook over the medium term, all participants judged that it would be appropriate to maintain the target range for the federal funds rate at 0 to 1/4 percent. Keeping the target range at the ELB would continue to provide support to the economy and promote the Committee's maximum-employment and price-stability goals. Participants also judged that it would be appropriate to maintain the target range for the federal funds rate at its present level until policymakers were confident that the economy had weathered recent events and was on track to achieve the Committee's maximum-employment and price-stability goals.
Participants also agreed that, to support the flow of credit to households and businesses, over coming months it would be appropriate for the Federal Reserve to increase its holdings of Treasury securities and agency MBS and agency CMBS at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Desk would continue to offer large-scale overnight and term repo operations. Participants noted that it would be important to continue to monitor developments closely and that the Committee would be prepared to adjust its plans as appropriate.
Participants also commented that the lending facilities established by the Federal Reserve under the authority of section 13(3) of the Federal Reserve Act were supporting financial market functioning and the flow of credit to households, businesses of all sizes, and state and local governments. Several participants commented further that it would be important for the Federal Reserve to remain ready to adjust these emergency lending facilities as appropriate based on its monitoring of financial market functioning and credit conditions.
Participants agreed that the current stance of monetary policy remained appropriate, but many noted that the Committee could, at upcoming meetings, further clarify its intentions with respect to its future monetary policy decisions as the economic outlook becomes clearer. In particular, most participants commented that the Committee should communicate a more explicit form of forward guidance for the path of the federal funds rate and provide more clarity regarding purchases of Treasury securities and agency MBS as more information about the trajectory of the economy becomes available. A number of participants judged that it was important for forward guidance and asset purchases to be structured in a way that provides the accommodation necessary to support rapid economic recovery and fosters a durable return of inflation and inflation expectations to levels consistent with the Committee's symmetric 2 percent objective. Many participants remarked that the completion of the monetary policy framework review, together with the announcement of the conclusions arising from the review and the release of a revised Committee statement on its goals and policy strategy, would help clarify further how the Committee intends to conduct monetary policy going forward.
Committee Policy Action
In their discussion of monetary policy for this meeting, members agreed that the coronavirus outbreak was causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health had induced sharp declines in economic activity and a surge in job losses. Consumer price inflation was being held down by weaker demand and significantly lower oil prices. Financial conditions had improved, in part reflecting policy measures to support the economy and the flow of credit to U.S. households, businesses, and communities. Members agreed that the Federal Reserve was committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum-employment and price-stability goals.
Members further concurred that the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and posed considerable downside risks to the economic outlook over the medium term. In light of these developments, members decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. Members noted that they expected to maintain this target range until they were confident that the economy had weathered recent events and was on track to achieve the Committee's maximum-employment and price-stability goals.
Members agreed that they would continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and would use the Committee's tools and act as appropriate to support the economy. In determining the timing and size of future adjustments to the stance of monetary policy, members noted that they would assess realized and expected economic conditions relative to the Committee's maximum-employment objective and its symmetric 2 percent inflation objective. This assessment would 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.
To support the flow of credit to households and businesses, members agreed that over coming months it would be appropriate for the Federal Reserve to increase its holdings of Treasury securities and agency MBS and agency CMBS at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Desk would continue to offer large-scale overnight and term repo operations. Members agreed that they would closely monitor developments and be prepared to adjust their plans as appropriate.
At the conclusion of the discussion, the Committee voted to authorize and direct the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the SOMA in accordance with the following domestic policy directive, for release at 2:00 p.m.:
"Effective June 11, 2020, the Federal Open Market Committee directs the Desk to:The vote also encompassed approval of the statement below for release at 2:00 p.m.:
- Undertake open market operations as necessary to maintain the federal funds rate in a target range of 0 to 1/4 percent.
- Increase the System Open Market Account holdings of Treasury securities, agency mortgage-backed securities (MBS), and agency commercial mortgage-backed securities (CMBS) at least at the current pace to sustain smooth functioning of markets for these securities, thereby fostering effective transmission of monetary policy to broader financial conditions.
- Conduct term and overnight repurchase agreement operations to support effective policy implementation and the smooth functioning of short-term U.S. dollar funding markets.
- Conduct overnight reverse repurchase agreement operations at an offering rate of 0.00 percent and with a per-counterparty limit of $30 billion per day; the per-counterparty limit can be temporarily increased at the discretion of the Chair.
- Roll over at auction all principal payments from the Federal Reserve's holdings of Treasury securities and reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency MBS in agency MBS and all principal payments from holdings of agency CMBS in agency CMBS.
- Allow modest deviations from stated amounts for purchases and reinvestments, if needed for operational reasons.
- Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions."
"The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health have induced sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices are holding down consumer price inflation. Financial conditions have improved, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.
The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy. In determining the timing and size of future adjustments to the stance of monetary policy, 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.
To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will closely monitor developments and is prepared to adjust its plans as appropriate."Voting for this action: Jerome H. Powell, John C. Williams, Michelle W. Bowman, Lael Brainard, Richard H. Clarida, Patrick Harker, Robert S. Kaplan, Neel Kashkari, Loretta J. Mester, and Randal K. Quarles.
Voting against this action: None.
Consistent with the Committee's decision to leave the target range for the federal funds rate unchanged, the Board of Governors voted unanimously to leave the interest rates on required and excess reserve balances at 0.10 percent. The Board of Governors also voted unanimously to approve establishment of the primary credit rate at the existing level of 0.25 percent, effective June 11, 2020.
It was agreed that the next meeting of the Committee would be held on Tuesday–Wednesday, July 28–29, 2020. The meeting adjourned at 10:05 a.m. on June 10, 2020.
Notation Vote
By notation vote completed on May 19, 2020, the Committee unanimously approved the minutes of the Committee meeting held on April 28–29, 2020.
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James A. Clouse
Secretary
- The Federal Open Market Committee is referenced as the "FOMC" and the "Committee" in these minutes. Return to text
- Attended through the discussion of developments in financial markets and open market operations. Return to text
- Attended through the discussion of economic developments and the outlook, and all of Wednesday's session. Return to text
- Attended through the discussion of forward guidance, asset purchases, and yield caps or targets. Return to text
- Attended through the discussion of economic developments and the outlook. Return to text
- Attended from the discussion of economic developments and the outlook through the end of Tuesday's session. Return to text
FULL DOCUMENT: https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200610.pdf
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ORGANISMS
CORONAVIRUS
IMF. 07/01/2020. DIGITAL FINANCIAL INCLUSION IN THE TIMES OF COVID
By Ulric Eriksson von Allmen, Purva Khera, Sumiko Ogawa, and Ratna Sahay
The COVID-19 pandemic could be a game changer for digital financial services. Low income households and small firms can benefit greatly from advances in mobile money, fintech services and online banking. Financial inclusion as a result of digital financial services can also boost economic growth. While the pandemic is set to increase use of these services, it has also posed challenges for the growth of the industry’s smaller players and highlighted unequal access to digital infrastructure. Several actions will need to be taken to ensure maximum inclusion going forward.
Many countries (for example, Liberia, Ghana, Kenya, Kuwait, Myanmar, Paraguay and Portugal) are supporting this shift with measures such as lowering fees and increasing limits on mobile money transactions.
Africa and Asia lead the way
In a new study, we introduce an index of digital financial inclusion that measures the progress in 52 emerging market and developing economies. We found that digitalization increased financial inclusion between 2014 and 2017, even where financial inclusion through traditional banking services was declining. This is likely to have progressed more since then.
Africa and Asia lead digital financial inclusion, but with significant variation across countries. In Africa, Ghana, Kenya, and Uganda are front runners. In comparison, Middle East and Latin America tend to use digital financial services more moderately. In some countries, such as Chile and Panama, this likely reflects a relatively higher level of bank penetration.
In most countries digital payments services are evolving into digital lending, as companies accumulate users’ data and develop new ways to use it for credit worthiness analysis. Marketplace lending, which uses digital platforms to directly connect lenders to borrowers doubled in value from 2015 to 2017. While so far concentrated in China, U.K and U.S., it appears to be growing in other parts of the world, such as in Kenya and India.
Benefits beyond financial inclusion
Financial inclusion benefits economies and societies as a whole. Previous studies have found that extending traditional financial services to low-income households and small firms goes hand-in-hand with increasing economic growth and reducing income inequality. Our analysis finds that digital financial inclusion is also associated with higher GDP growth.
During the COVID-19 lockdowns, digital financial services are enabling governments to provide quick and secure financial support to “hard-to-reach” people and businesses, as demonstrated in Namibia, Peru, Zambia and Uganda. This will help mitigate the economic fallout and potentially strengthen the recovery.
The task ahead
To tap the high potential of digital financial services in the post-COVID era, many factors need to fall into place. Equal access to digital infrastructure (access to electricity, mobile and internet coverage, and digital ID); greater financial and digital literacy; and the avoidance of data biases are necessary for a more inclusive recovery.
A global survey we conducted with more than 70 stakeholders—fintech firms, central banks, regulatory bodies, and banks—revealed that regulators need to keep up with fast-paced technological changes in fintech to ensure consumer and data protection, cybersecurity, and interoperability across users and national borders. Fintech firms also indicated a global shortage of “coders” – software developers and programmers.
At the same time, it is important to ensure that the fintech landscape remains sufficiently competitive to maximize the gains from digital financial services. The COVID-19 crisis has presented potential benefits for the sector but also poses challenges for smaller fintech companies: tightening of funding, rising non-performing loans, decline in transactions and credit demand. Some halted new lending since the onset of lockdowns. Widespread consolidation and retrenchment of start-ups would lead to greater concentration in the sector and could set back inclusion. In the public’s interest, this points to accelerating the creation of governance frameworks for big Fintech companies.
The pandemic shows that the trend towards greater digitalization of financial services is here to stay. To build inclusive societies and address rising inequalities during and after the ongoing crisis, global and national leaders must close the digital divide across and within countries to reap the benefits of digital financial services. This means finding the right balance between enabling financial innovation and addressing several risks: insufficient consumer protection, lack of financial and digital literacy, unequal access to digital infrastructure, and data biases that need action at the national level; as well as addressing money laundering and cyber risks through international agreements and information sharing, including on antitrust laws to ensure adequate competition.
FULL DOCUMENT: https://blogs.imf.org/2020/07/01/digital-financial-inclusion-in-the-times-of-covid-19/?utm_medium=email&utm_source=govdelivery
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ECONOMIA BRASILEIRA / BRAZIL ECONOMICS
MERCOSUL
MRE. DCOM. NOTA-30 de Junho de 2020. LVI Cúpula de Chefes de Estado do MERCOSUL e Estados Associados e LVI Reunião Ordinária do Conselho do Mercado Comum - 1º e 2 de julho de 2020
Será realizada, no próximo dia 2 de julho, a 56edição da Cúpula de Chefes de Estado do MERCOSUL e Estados Associados, precedida, no dia anterior, de reunião ordinária do Conselho do Mercado Comum, órgão decisório de nível ministerial. Em razão da pandemia do novo coronavírus, ambas as reuniões serão realizadas, pela primeira vez, por videoconferência.
Os dois encontros marcam o encerramento da presidência de turno do Paraguai (PPTP) do MERCOSUL e o início da presidência do Uruguai. Oferecerão oportunidade para examinar a situação e as perspectivas do processo de integração regional, além das atividades de relacionamento externo do bloco.
Durante a PPTP, apesar das restrições impostas pela situação sanitária, prosseguiram os trabalhos do MERCOSUL para fortalecer sua vertente econômico-comercial e de negociações comerciais com outros parceiros, bem como sua capacidade de produzir ganhos concretos para os cidadãos.
Em 2019, o Brasil exportou cerca de US$ 15 bilhões para os países do MERCOSUL e importou US$ 13 bilhões, com superávit de US$ 2 bilhões.
CNI. 01/07/2020. Indústria do Mercosul pede prioridade ao bloco e mais diálogo com setor privado. Em carta, CNI, União Industrial Argentina, a União Industrial Paraguaia e a Câmara de Indústrias do Uruguai pedem transparência e vontade política para que esse processo avance. Reunião de cúpula será quinta-feira (2). "O processo de integração do Mercosul vem enfrentando problemas, que parecem crônicos, há muitos anos", afirmam os países em carta
Representantes do Conselho Industrial do Mercosul aprovaram uma declaração conjunta para defender a importância do bloco para suas economias. No documento, a Confederação Nacional da Indústria (CNI), a União Industrial Argentina (UIA), a União Industrial Paraguaia (UIP) e a Câmara de Indústrias do Uruguai (CIU) afirmaram que, no atual contexto econômico, esse processo de integração se encontra em um momento crucial para sua existência.
“O processo de integração do Mercosul vem enfrentando problemas, que parecem crônicos, há muitos anos. Esses problemas só serão superados por uma vontade política firme e sólida dos governos e dos setores privados dos Estados do Mercosul. Cada uma das questões pendentes na agenda interna e externa do Mercosul deve refletir os interesses comuns para avançarem”, afirma a carta.
O documento foi aprovado nas vésperas da reunião da Cúpula dos Presidentes do Mercosul, marcada para esta quinta-feira (2), de modo virtual.
CNI defende internalização de acordos e redução da burocracia no comércio exterior
Entre outras agendas, a CNI defende a internalização dos acordos entre o Mercosul e a União Europeia e Associação Europeia de Livre Comércio (EFTA), bloco que reúne Suíça, Liechtenstein, Noruega e Islândia, assinados em 2019. Também defende a conclusão do acordo de livre comércio com o Canadá e o lançamento de negociações com países da América Central.
Na agenda interna do Mercosul, a CNI também defende a internalização do acordo em Compras Públicas, assinado em 2017, e do acordo em Facilitação de Comércio, assinado em 2019, bem como um compromisso dos governos dos quatro países em não aplicar medidas restritivas ao comércio intrabloco, sobretudo nesse período recessivo e de combate à pandemia do coronavírus.
CRÉDITO
BACEN. 01 Julho 2020. BC divulga dados agregados de cooperativas de crédito
O Banco Central divulgou o Panorama do Sistema Nacional de Crédito Cooperativo (SNCC), que apresenta uma análise agregada do segmento com o objetivo de dar publicidade a informações de interesse público e contribuir para maior transparência dos dados do Sistema Financeiro Nacional (SFN).
O segmento cooperativo manteve sua trajetória de crescimento em 2019. As unidades de atendimento aumentaram 10% e a base de cooperados, 9,6%, alcançando 10,9 milhões de associados. Os ativos totais cresceram 16,2%, percentual 2,7 vezes superior ao conjunto dos demais segmentos de instituições financeiras, com maior direcionamento ao crédito, cujo estoque aumentou 25%, reflexo do dinamismo das carteiras de pequenas e médias empresas e de pessoas físicas, em especial dos produtores rurais. O aumento da participação e da representatividade do SNCC no mercado de crédito se deu mantendo os ativos problemáticos em nível inferior ao dos demais segmentos.
INDÚSTRIA
IHS MARKIT. REUTERS. 1 DE JULHO DE 2020. Indústria do Brasil volta a crescer em junho com aumento de demanda e produção, mostra PMI
Por Camila Moreira
SÃO PAULO (Reuters) - A indústria brasileira voltou a crescer em junho pela primeira vez desde fevereiro, com aumento na produção, nas novas encomendas e na confiança, em sinais de retomada após impactos do coronavírus no país, de acordo com a pesquisa Índice de Gerentes de Compras (PMI, na sigla em inglês).
O levantamento publicado pelo IHS Markit nesta quarta-feira mostrou que o PMI de indústria saltou a 51,6 em junho, de 38,3 em maio, com as empresas se recuperando de efeitos das medidas de isolamento.
Entretanto, os ganhos foram moderados por evidências de excesso de capacidade no setor, com empresas ainda buscando reduzir gastos, o que as levou a cortar as compras e diminuir o número de funcionários.
O IHS Markit informou que os entrevistados citaram a reabertura das empresas e o aumento da demanda como motivos para o retorno à expansão tanto da produção quanto das novas encomendas.
Contudo, os ganhos foram puxados pelo mercado doméstico, uma vez que as vendas de exportação continuaram a cair e os volumes totais de novos negócios permaneceram extremamente baixos em relação aos níveis pré-pandemia, segundo os consultados.
De fato, as empresas continuaram a operar em níveis bem abaixo da capacidade em junho e também seguiram cortando empregos e reduzindo a atividade de compras. A ideia era diminuir os custos nas plantas, buscando elevar a produtividade ou utilizar estoques quando possível.
“Temos que colocar esses números no contexto do colapso da produção em abril e maio. O crescimento modesto compensa apenas uma pequena parte das perdas recentes, e as empresas —diante de grande excesso de capacidade— continuam a cortar vagas e compras a um ritmo rápido”, destacou o diretor de economia do IHS Markit, Paul Smith.
As pressões de custos se intensificaram em junho diante de uma taxa de câmbio desfavorável, o que aumentou os preços de insumos denominados em dólar no ritmo mais acelerado em 21 meses. Em resposta, os preços cobrados foram elevados à mais alta taxa já registrada pela pesquisa desde setembro de 2018.
Ainda que o cenário permaneça desafiador, os entrevistados se mostraram animados com o retorno ao crescimento tanto na produção quanto nas encomendas, e a confiança sobre o futuro atingiu o nível mais alto desde fevereiro, com projeções positivas para demanda e vendas nos próximos 12 meses.
Edição de José de Castro
ISM. REUTERS. 1 DE JULHO DE 2020. Atividade manufatureira dos EUA atinge máxima de 14 meses, mostra ISM
WASHINGTON (Reuters) - A atividade manufatureira dos Estados Unidos se recuperou em junho, atingindo o nível mais alto em mais de um ano conforme os negócios reabrem, mas a alta das infecções por Covid-19 ameaça a recuperação.
O Instituto de Gestão de Fornecimento (ISM, na sigla em inglês) informou nesta quarta-feira que seu índice nacional de atividade fabril saltou para 52,6 no mês passado, de 43,1 em maio. Foi a leitura mais forte desde abril de 2019 e encerrou três meses seguidos de contração.
Leitura acima de 50 indica crescimento no setor de manufatura, que responde por 11% da economia dos EUA. Economistas consultados em pesquisa da Reuters esperavam alta do índice a 49,5 em junho.
Reportagem de Lucia Mutikani
COMÉRCIO EXTERIOR BRASILEIRO
MEconomia. REUTERS. 1 DE JULHO DE 2020. Brasil tem superávit comercial recorde para junho, de US$7,5 bi
BRASÍLIA (Reuters) - O Brasil teve superávit comercial de 7,5 bilhões de dólares em junho, recorde histórico para o mês da série iniciada em 1989, divulgou o Ministério da Economia nesta quarta-feira.
O dado veio acima da projeção de um superávit de 6,95 bilhões de dólares, segundo pesquisa Reuters com analistas. Enquanto as exportações somaram 17,9 bilhões de dólares no mês, as importações alcançaram 10,4 bilhões de dólares.
No primeiro semestre, o saldo da balança comercial foi positivo em 23 bilhões de dólares, contra 25,7 bilhões de dólares em igual período de 2019.
Por Marcela Ayres
INFLAÇÃO
IBGE. 01/07/2020. Índice de Preços ao Produtor (IPP) varia 1,22% em maio
Em maio de 2020, os preços da indústria subiram 1,22% em relação a abril/2020. O acumulado no ano atingiu 3,37%. Na comparação com maio de 2019, a variação de preços foi de 4,60%. Em maio, 16 das 24 atividades apresentaram variações positivas de preços, contra 20 do mês anterior.
| Período | Taxa |
|---|---|
| Maio de 2020 | 1,22% |
| Abril de 2020 | 0,11% |
| Maio de 2019 | 1,39% |
| Acumulado no ano | 3,37% |
| Acumulado em 12 meses | 4,60% |
O Índice de Preços ao Produtor (IPP) das Indústrias Extrativas e de Transformação mede a evolução dos preços de produtos “na porta de fábrica”, sem impostos e fretes, e abrange informações por grandes categorias econômicas, ou seja, bens de capital, bens intermediários e bens de consumo (duráveis e semiduráveis e não duráveis).
| Índices de Preços ao Produtor, segundo Indústrias Extrativas e de Transformação (Indústria Geral) e Seções - Últimos três meses | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Indústria Geral e Seções | Variações (%) | ||||||||
| M/M-1 | Acumulado Ano | M/M-12 | |||||||
| MAR/20 | ABR/20 | MAI/20 | MAR/20 | ABR/20 | MAI/20 | MAR/20 | ABR/20 | MAI/20 | |
| Indústria Geral | 0,84 | 0,11 | 1,22 | 2,01 | 2,13 | 3,37 | 5,95 | 4,79 | 4,60 |
| B - Indústrias Extrativas | -17,12 | 4,04 | 9,13 | -7,72 | -4,00 | 4,77 | -6,30 | -5,38 | -3,04 |
| C - Indústrias de Transformação | 1,78 | -0,05 | 0,87 | 2,47 | 2,41 | 3,30 | 6,54 | 5,29 | 5,00 |
| Fonte: IBGE, Diretoria de Pesquisas, Coordenação de Indústria | |||||||||
Em maio de 2020, os preços da indústria variaram, em média, 1,22% em relação a abril/2020. As quatro maiores variações foram nas seguintes atividades industriais: indústrias extrativas (9,13%), refino de petróleo e produtos de álcool (-5,78%), outros equipamentos de transporte (4,57%) e têxtil (4,36%). As maiores influências foram: alimentos (0,60 p.p.), refino de petróleo e produtos de álcool (-0,41 p.p.), indústrias extrativas (0,39 p.p.) e veículos automotores (0,15 p.p.).
O acumulado no ano atingiu 3,37%, ante 2,13% em abril/2020. As atividades de maior variação foram: refino de petróleo e produtos de álcool (-36,27%), outros equipamentos de transporte (23,01%), madeira (18,86%) e metalurgia (18,25%). No acumulado do ano, os setores de maior influência foram: refino de petróleo e produtos de álcool (-3,86 p.p.), alimentos (2,12 p.p.), metalurgia (1,06 p.p.) e outros produtos químicos (0,71 p.p.)
No acumulado em 12 meses, a variação de preços foi de 4,60%, contra 4,79% em abril/2020. As quatro maiores variações foram em refino de petróleo e produtos de álcool (-36,02%), outros equipamentos de transporte (27,14%), madeira (17,85%) e alimentos (17,59%). Os setores de maior influência foram: alimentos (3,88 p.p.), refino de petróleo e produtos de álcool (-3,87 p.p.), metalurgia (0,90 p.p.) e veículos automotores (0,60 p.p.).
A variação de preços de 1,22% em relação a abril repercutiu da seguinte maneira entre as grandes categorias econômicas: 3,08% em bens de capital; 1,00% em bens intermediários; e 1,14% em bens de consumo, sendo que 1,58% foi a variação observada em bens de consumo duráveis e 1,04% em bens de consumo semiduráveis e não duráveis.
Do resultado da indústria geral, 1,22%, a influência das Grandes Categorias Econômicas foi: 0,24 p.p. de bens de capital, 0,55 p.p. de bens intermediários e 0,43 p.p. de bens de consumo. No caso de bens de consumo, 0,32 p.p. se deveu às variações em bens de consumo semiduráveis e não duráveis e 0,11 p.p. nos bens de consumo duráveis.
| Índices de Preços ao Produtor, segundo Indústrias Extrativas e de Transformação (Indústria Geral) e Grandes Categorias Econômicas - Últimos três meses | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Indústria Geral e Seções | Variações (%) | ||||||||
| M/M-1 | Acumulado Ano | M/M-12 | |||||||
| MAR/20 | ABR/20 | MAI/20 | MAR/20 | ABR/20 | MAI/20 | MAR/20 | ABR/20 | MAI/20 | |
| Indústria Geral | 0,84 | 0,11 | 1,22 | 2,01 | 2,13 | 3,37 | 5,95 | 4,79 | 4,60 |
| Bens de Capital (BK) | 2,70 | 2,65 | 3,08 | 5,10 | 7,88 | 11,20 | 9,45 | 11,46 | 14,02 |
| Bens Intermediários (BI) | 0,56 | 1,20 | 1,00 | 2,95 | 4,19 | 5,23 | 4,87 | 5,14 | 4,31 |
| Bens de consumo(BC) | 0,87 | -1,93 | 1,14 | 0,14 | -1,80 | -0,68 | 6,80 | 2,99 | 3,20 |
| Bens de consumo duráveis (BCD) | 0,37 | 1,12 | 1,58 | 1,24 | 2,38 | 4,00 | 4,11 | 4,21 | 5,71 |
| Bens de consumo semiduráveis e não duráveis (BCND) | 0,98 | -2,56 | 1,04 | -0,09 | -2,65 | -1,64 | 7,37 | 2,73 | 2,67 |
| Fonte: IBGE, Diretoria de Pesquisas, Coordenação de Indústria | |||||||||
No acumulado no ano, as variações de preços da indústria acumularam, até maio, variação de 3,37%, sendo 11,20% a variação de bens de capital (com influência de 0,84 p.p.), 5,23% de bens intermediários (2,80 p.p.) e -0,68% de bens de consumo (-0,27 p.p.). No último caso, este resultado foi influenciado em 0,26 p.p. pelos produtos de bens de consumo duráveis e -0,53 p.p., pelos bens de consumo semiduráveis e não duráveis.
Na comparação maio 2020/maio 2019, a variação de preços da indústria alcançou 4,60%, com as seguintes variações: bens de capital, 14,02% (1,03 p.p.); bens intermediários, 4,31% (2,35 p.p.); e bens de consumo, 3,20% (1,22 p.p.), sendo que a influência de bens de consumo duráveis foi de 0,38 p.p. e a de bens de consumo semiduráveis e não duráveis de 0,84 p.p..
A seguir os principais destaques:
Indústrias extrativas: em maio, os preços do setor avançaram 9,13% em relação a abril, maior variação e terceira maior influência no índice geral (0,39 p.p. em 1,22%). Trata-se da maior variação positiva na atividade desde março de 2019 (12,13%). O acumulado no ano ficou em 4,77%, resultado positivo após dois meses de queda neste indicador. No acumulado nos últimos 12 meses, o setor continua apresentando variação negativa (de -3,04%), assim como em março (-6,30%) e em abril (-5,38%).
Alimentos: em maio, os preços de alimentos cresceram, em média, 2,47% em relação a abril. Na série que vai de agosto de 2019 a maio de 2020, apenas o resultado de janeiro de 2020 (-1,91%) foi negativo. Neste período, a variação de preços acumulou 20,42%, sendo que, em 2020, o acumulado foi de 8,99%. Na comparação com igual mês de 2019, o resultado de maio foi de 17,59%.
Além de ser a maior contribuição no resultado geral, 25,99%, alimentos tem a quarta maior variação na comparação maio 2020 contra maio 2019, a principal influência nos indicadores em relação ao mês anterior (0,60 p.p., em 1,22%) e acumulado em 12 meses (3,88 p.p., em 4,60%) e a segunda no acumulado no ano (2,12 p.p., em 3,37%).
Os produtos com maior destaque em termos de influência (“carnes de bovinos frescas ou refrigeradas”, “açúcar VHP (very high polarization)”, “resíduos da extração de soja” e “carnes e miudezas de aves congeladas”) responderam por 1,74 p.p. da variação de 2,47%. Estes produtos são importantes na pauta de exportação brasileira, portanto, o aumento de preços esteve ligado à depreciação do real que, em maio, foi de 6,0%, com o que alcançou 37,3% ao longo de 2020. No caso de “carnes e miudezas de aves congeladas”, apesar de a exportação ter sido particularmente estimulada pela demanda chinesa, os preços no mercado interno tiveram o impacto negativo, que prevaleceu.
Refino de petróleo e produtos de álcool: na comparação maio contra abril, a variação média de preços do setor foi, pelo quarto mês consecutivo, negativa (-5,78%). No ano, a variação é de -36,27% e em 12 meses, de -36,02%. Em maio, o número-índice foi de 76,71, número que se aproxima da média de 2016, 77,32.
Entre os produtos destacados em termos de variação e de influência, a lista é praticamente a mesma. “Naftas” aparece entre as variações, mas não em influência, e “álcool etílico (anidro ou hidratado)” em influência, mas não em variação. A influência conjunta dos quatro produtos destacados (listados no quadro a seguir) foi de -5,70 p.p., em -5,78%. Vale dizer que a única variação positiva nos produtos listados foi observada em “gasolina, exceto para aviação”.
Outros produtos químicos: a indústria química apresentou variação média de preços, em relação a abril, de 0,23%, menor variação positiva dos últimos quatro meses, lembrando que março havia tido a maior variação positiva de preços desde o início da pesquisa em dezembro de 2009. O setor acumulou uma variação positiva de 9,14% em 2020, bem diverso do que ocorreu em maio de 2019, quando havia ficado negativo em –3,17%. No acumulado em 12 meses, a atividade alcançou 5,33%. O setor químico foi a quarta maior influência no acumulado do ano e representou a terceira maior contribuição (8,56%) nos resultados do indicador geral.
Em relação aos quatro produtos que mais influenciaram o resultado no mês (0,50 p.p. em 0,23%), os já mencionados “benzeno” e “propeno (propileno) não saturado” tiveram variações negativas. Os demais tiveram variações positivas e pertencem aos dois grupos econômicos anteriormente citados, são eles: “adubos ou fertilizantes minerais ou químicos fosfatados” e “herbicidas para uso na agricultura”.
Metalurgia: Em relação a abril, houve variação de 1,04%, completando dessa forma cinco variações positivas de preços seguidas. Com isso, o acumulado no ano ficou em 18,25%, maior acumulado até maio em toda série da pesquisa. No acumulado em 12 meses a variação ficou em 14,90%.
O resultado do mês foi obtido graças, principalmente, a quatro produtos, sendo dois do grupo de materiais ferrosos e dois de não ferrosos. São eles: “lingotes, blocos, tarugos ou placas de aços ao carbono” com valor negativo, “ouro para usos não monetários”, “óxido de alumínio (alumina calcinada)” e “ferronióbio”, todos esses com variações positivas de preços sobre o indicador M/M-1. Os quatro representam 0,61 p.p. da variação no mês, cabendo 0,43 p.p. aos demais 20 produtos. Esses mesmos produtos haviam sido os destaques em março e abril.
Veículos automotores: em maio, a variação foi de 1,80% em relação a abril. Este resultado, além de representar o nono mês consecutivo de aumento médio de preços, é a maior variação observada no setor desde janeiro de 2016 (quando houve um aumento de 2,13%). Com isso, a variação acumulada no ano alcançou 5,18%, sendo a maior variação em um mês de maio para este indicador em toda a série histórica. E a variação acumulada nos últimos 12 meses apresentou um aumento de 7,47%. Além de apresentar a segunda maior contribuição no cálculo do indicador geral (8,60%), a atividade se destacou, dentre todos os setores pesquisados, por ter sido a quarta maior influência nos indicadores mensal (0,15 p.p. em 1,22%) e acumulado em 12 meses (0,60 p.p. em 4,60%).
A atividade de veículos automotores, além de apresentar a segunda maior contribuição no cálculo do indicador geral (8,60%), se destacou, dentre todos os setores pesquisados, por ter sido a quarta maior influência nos indicadores M/M-1 (0,15 p.p. em 1,22%) e M/M-12 (0,60 p.p. em 4,60%).
Em uma análise por produtos no setor, é possível observar que, entre os quatro produtos de maior influência na comparação mensal, todos eles impactaram positivamente o índice: “automóveis para passageiros, a gasolina ou bicombustível, de qualquer cilindrada”, “bombas injetoras para veículos automotores”, “freios, servo-freios ou suas peças e acessórios, para veículos automotores” e “veículos para o transporte de mercadorias a gasolina e/ou álcool, de capacidade não superior a 5 t”. A influência desses quatro produtos que mais impactaram a variação do mês em relação ao mês imediatamente anterior foi de 1,43 p.p., ou seja, os demais 19 produtos da atividade contribuíram com 0,37 p.p.
Preços ao produtor. Inflação da indústria acelera em maio pressionada por alta de alimentos. Alta das carnes influenciou aumento de 1,22% nos preços da indústria
Os preços da indústria subiram 1,22% em maio frente ao mês anterior, maior resultado desde maio de 2019, quando registrou 1,39%. Os dados são do Índice de Preços ao Produtor (IPP), divulgado hoje (1) pelo IBGE. É o décimo aumento consecutivo do indicador, que mede a variação dos preços de produtos na “porta da fábrica”, sem impostos e frete, de 24 atividades das indústrias extrativas e da transformação. Com o resultado de maio, o acumulado no ano atinge 3,37%. Já nos últimos 12 meses a inflação da indústria foi de 4,60%.
O gerente da pesquisa, Alexandre Brandão, explica que a desaceleração na queda do preço do petróleo e o aumento no preço dos alimentos foram os fatores que mais influenciaram o índice de maio. “Em abril, tivemos uma queda muito grande em refino de petróleo (-20,61%) e em maio continuou havendo uma queda, mas foi muito menor (-5,78%), enquanto os outros setores não apresentaram muita diferença entre esses dois meses. Alimentos, que é o setor mais importante, já vinha de um aumento de preços e agora aumentou mais. Então esses dois movimentos levaram o índice a 1,22%”, analisa. Em abril, o índice geral foi 0,11%.
Preços ao produtor - Variação mês/mês anterior (%)
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Fonte: IBGE - Índice de Preços ao Produtor
Os preços no setor de alimentos, que tem maior peso no cálculo do IPP (25,99%), cresceram 2,47% em maio frente ao mês anterior. Em maio, o setor foi responsável por 0,60 pontos percentuais no índice geral dos preços da indústria. Para o pesquisador, a alta no setor de alimentos segue sendo influenciada pela desvalorização do real frente ao dólar. “Em maio, tivemos uma depreciação de 6% do real, que é menor do que tivemos nos meses anteriores. Mas esse acúmulo tem um efeito sobre os preços dos produtos que mais influenciaram o setor, já que eles são voltados principalmente para exportação”, comenta Brandão.
Os produtos que mais influenciaram o aumento de preços no setor de alimentos foram carnes de bovinos frescas ou refrigeradas, açúcar VHP, e resíduos da extração de soja, que variaram positivamente nesse mês. Já a diminuição no preço de carnes e miudezas de aves congeladas, quarto produto que mais teve influência sobre o setor, deve-se, segundo o pesquisador, principalmente a fatores internos como o aumento do desemprego e a consequente tendência de diminuição na demanda por esse tipo de carne.
Além de alimentos e refino de petróleo e produtos de álcool, os setores que mais influenciaram o índice geral foram indústrias extrativas e veículos automotores. Em maio, 16 das 24 atividades apresentaram variações positivas de preços. As maiores variações foram observadas entre os produtos das seguintes atividades: indústrias extrativas (9,13%), refino de petróleo e produtos de álcool (-5,78%), outros equipamentos de transporte (4,57%) e têxtil (4,36%).
DOCUMENTO: https://agenciadenoticias.ibge.gov.br/agencia-sala-de-imprensa/2013-agencia-de-noticias/releases/28130-indice-de-precos-ao-produtor-ipp-varia-1-22-em-maio
FGV. IBRE. 01/07/2020. Inflação pelo IPC-S sobe na última semana de junho com destaque para o comportamento do item gasolina
O IPC-S de 30 de junho de 2020 subiu 0,36%, ficando 0,27 ponto percentual (p.p) acima da taxa registrada na última divulgação. Com este resultado, o indicador acumula alta de 0,55% no ano e 2,22% nos últimos 12 meses.
Nesta apuração, sete das oito classes de despesa componentes do índice registraram acréscimo em suas taxas de variação. A maior contribuição partiu do grupo Transportes (0,32% para 1,05%). Nesta classe de despesa, cabe mencionar o comportamento do item gasolina, cuja taxa passou de 0,69% para 3,28%.
Também registraram acréscimo em suas taxas de variação os grupos: Educação, Leitura e Recreação (-1,16% para -0,40%), Habitação (-0,12% para 0,00%), Comunicação (0,47% para 0,88%), Alimentação (0,52% para 0,57%), Vestuário (-0,01% para 0,08%) e Saúde e Cuidados Pessoais (0,16% para 0,18%). Nestas classes de despesa, vale destacar o comportamento dos itens: passagem aérea (-8,00% para 1,37%), móveis para residência (-0,56% para 0,02%), combo de telefonia, internet e TV por assinatura (1,16% para 2,00%), laticínios (0,64% para 1,55%), calçados (-0,83% para -0,41%) e medicamentos em geral (0,44% para 0,88%).
Em contrapartida, o grupo Despesas Diversas (0,23% para 0,19%) apresentou recuo em sua taxa de variação. Nesta classe de despesa, vale citar o item despachante (0,88% para 0,00%).
DOCUMENTO: https://portalibre.fgv.br/noticias/inflacao-pelo-ipc-s-sobe-na-ultima-semana-de-junho-com-destaque-para-o-comportamento-do
CONFIANÇA EMPRESARIAL
FGV. IBRE. 01/07/2020. Confiança Empresarial recupera 61% das perdas do bimestre março-abril
O Índice de Confiança Empresarial (ICE) da Fundação Getulio Vargas (FGV IBRE) subiu 14,9 pontos em junho, para 80,4 pontos, após avançar 9,8 pontos no mês anterior. O índice se mantém em patamar historicamente baixo mas com a alta do bimestre maio-junho recupera 61% das perdas do bimestre março-abril.
“A evolução tímida dos indicadores de situação atual no mês sugere que a situação econômica continuou muito fraca em junho, com destaque negativo para o setor de serviços, cujo Índice de Situação Atual encontra-se ainda bem mais próximo do seu mínimo histórico que do nível pré-pandemia. Apesar dos níveis elevados de incerteza, começa a ganhar força no meio empresarial a percepção de que o pior momento pode já ter passado. Com isso, as expectativas tornarem-se menos pessimistas, formando um cenário compatível com o de uma lenta retomada do nível de atividade econômica” comenta Aloisio Campelo Jr., Superintendente de Estatísticas da FGV IBRE.
O Índice de Confiança Empresarial (ICE) consolida os índices de confiança dos quatro setores cobertos pelas Sondagens Empresariais produzidas pela FGV IBRE: Indústria, Serviços, Comércio e Construção.
Após chegar a mínimos históricos em abril, a confiança dos empresários avançou, novamente influenciada pela melhora das expectativas. O Índice de Expectativas (IE-E) subiu 19,4 pontos, para 82,4 pontos, recuperando 60% das perdas do bimestre março-abril. Já o índice que retrata a situação corrente dos negócios (ISA-E) subiu 8,7 pontos, para 72,6 pontos, recuperando 36% das perdas no mesmo período.
O Indicador de Demanda Prevista (para três meses à frente) subiu 27,4 pontos, para 81,2 pontos e o Indicador de Emprego Previsto (idem) subiu 16,8 pontos, para 74,5 pontos. O Indicador de Expectativas com a Situação dos Negócios - único componente do IE-E que mira o horizonte de seis meses – avançou 13,7 pontos, para 80,0 pontos.
A confiança subiu nos quatro setores integrantes do ICE com alta tanto dos índices de expectativas (mais expressiva) quanto dos índices de percepção em relação à situação atual, à exceção do setor da Construção em que o ISA-Construção ficou praticamente estável. Na métrica de médias móveis trimestrais, a confiança continuou recuando em todos os setores.
Difusão da Confiança
A confiança setorial, que havia recuado em todos os segmentos integrantes do ICE em abril, avançou em 78% deles em maio e em todos os 49 segmentos em junho.
DOCUMENTO: https://portalibre.fgv.br/noticias/confianca-empresarial-recupera-61-das-perdas-do-bimestre-marco-abril
INOVAÇÃO
CNI. 01/07/2020. 83% das empresas afirmam que precisarão de mais inovação para sobreviver no pós-pandemia, aponta CNI. Pesquisa da Confederação Nacional da Indústria (CNI) mapeou a percepção de executivos de médias e grandes indústrias sobre inovação e sua importância no atual cenário do país. Cultura da inovação já vem sendo praticada na maioria das empresas consultadas
Pesquisa inédita da Confederação Nacional da Indústria (CNI) mostra que as soluções inovadoras serão decisivas para o país enfrentar os efeitos da Covid-19 sobre a saúde da população e minimizarem os prejuízos sociais e econômicos. O levantamento destaca que, em uma segunda etapa, a inovação será decisiva para acelerar a retomada da atividade e do crescimento da economia no Brasil.
Entre as mais de 400 empresas ouvidas, 83% afirmam que precisarão de mais inovação para crescer ou mesmo sobreviver no mundo pós-pandemia. Os executivos das indústrias destacaram que a linha de produção é a área prioritária para receber inovações (58%), seguida pela área de vendas (19%).
Essa percepção se dá ao mesmo tempo em que o setor produtivo sofre impactos negativos decorrentes das restrições impostas pela disseminação do novo coronavírus. No estudo encomendado pela CNI ao Instituto FSB Pesquisa, 65% das médias e grandes empresas informam que tiveram sua produção reduzida ou paralisada devido à pandemia. Além disso, 69% garantem ter perdido faturamento.
“O atual contexto de pandemia deixou ainda mais evidente para as empresas a necessidade de se investir em tecnologias inovadoras e, principalmente, em aperfeiçoamento das metodologias de gestão”, afirma a diretora de Inovação da CNI, Gianna Sagazio. Ela acrescenta que “a crise tende a acelerar o desenvolvimento de inovações já em curso”.
Impactos na produção
Os números da pesquisa relativos aos impactos na produção revelam que, diante do cenário, mudar se tornou imperativo. Entre as empresas consultadas, 68% alteraram de alguma forma seu processo produtivo (74% nas grandes e 66% nas médias), mas só 56% dessas consideram ter inovado, de fato, após essa mudança. Entre todas as empresas pesquisadas, 39% dizem que a mudança empreendida foi uma inovação.
Entre as mudanças efetuadas, a mais citada diz respeito à relação com os trabalhadores (90%), depois vêm mudanças na linha de produção (84%), nos processos de venda (82%), na gestão (75%), na logística (62%), na cadeia de fornecedores (61%) e no controle de estoques (55%).
Outro dado interessante mostra que a cultura da inovação já vem sendo praticada na maioria das empresas consultadas, entre as quais, 92% informaram que inovam. Dessas, 55% garantem que a inovação aumentou muito a produtividade – regionalmente, são as empresas do Centro-Oeste, relacionadas ao agronegócio, as que mais relatam muito ganho de produtividade (69%) em decorrência de inovações.
Por outro lado, das empresas que inovam, só 37% dizem ter orçamento específico para inovação e 33% têm profissionais dedicados exclusivamente aos processos inovativos. Além disso, a falta de recursos e de pessoal qualificado para inovar foram citados pelos executivos que dizem dar importância média ou baixa à inovação.
Plataforma de inovações
Para vencer essas limitações e impulsionar a cultura da inovação entre as indústrias brasileiras, a CNI anuncia nesta quarta-feira (1º/07) parceria estratégica com a SOSA, plataforma israelense com atuação global em inovação aberta, que tem centros de Inovação em Tel Aviv; Nova York, nos Estados Unidos; e Londres, no Reino Unido.
O acordo possibilitará que indústrias e startups no Brasil tenham acesso aos ecossistemas de tecnologia da SOSA em Nova York e Tel Aviv, inaugurando um processo de engajamento e colaboração com as tecnologias 4.0 mais disruptivas em desenvolvimento fora do país.
A pesquisa realizada pelo Instituto FSB Pesquisa para a CNI revelou que só duas em cada dez empresas possuem programa ou estratégia de inovação aberta (30% entre as grandes empresas e 18% entre as médias). Dois terços das empresas consultadas disseram ter interesse em uma plataforma global de inovação e, dessas, 59% afirmaram que uma plataforma como essa ajudaria muito sua empresa a inovar.
Informações sobre a metodologia
o Instituto FSB Pesquisa entrevistou, por telefone, entre os dias 18 e 26 de junho, executivos de 402 empresas industriais de médio e grande portes, compondo amostra proporcional em relação ao quantitativo total de empresas desses portes em todos os estados brasileiros. Dentro de cada Estado, a amostra foi controlada por porte das empresas (média e grande) e setor de atividade.
Após a pesquisa, foi aplicado um fator de ponderação para corrigir eventuais distorções em relação ao plano amostral. Devido ao arredondamento, a soma dos percentuais pode variar de 99% a 101%.
Parceria CNI-SOSA impulsionará a inovação na indústria no Brasil. Programa inédito ampliará competitividade do país, alçando o setor como líder global em inovação. "Promover a inovação é crucial para fortalecermos a nossa economia", avalia CNI
A Confederação Nacional da Indústria (CNI) e o SOSA, empresa multinacional de inovação aberta, acabam de anunciar uma parceria estratégica. O acordo possibilitará que indústrias e startups no Brasil tenham acesso a ecossistemas de tecnologia em Nova Iorque e Tel Aviv, inaugurando um processo de engajamento e colaboração com as tecnologias 4.0 mais disruptivas em desenvolvimento fora do país.
“A parceria com o SOSA é um passo fundamental para todos nós”, disse o presidente da CNI, Robson Braga de Andrade. “Promover a inovação é crucial para fortalecermos a nossa economia. Utilizarmos a experiência de inovação em nível mundial do SOSA terá um efeito transformador para a indústria brasileira”, acrescentou.
Para Uzi Scheffer, CEO do SOSA, a parceria é empolgante, já que envolve a CNI, uma organização tão importante e que lidera a indústria no Brasil, para criarmos oportunidades dentro da nossa rede global de inovação. “Promover inovação aberta desencadeará inúmeros benefícios. Sentimos orgulho em estarmos envolvidos nesse processo”, destacou Scheffer.
A união da CNI com o SOSA permitirá que as indústrias brasileiras tenham acesso às tecnologias de ponta, além de conectar as startups brasileiras aos principais mercados internacionais da inovação aberta.
A iniciativa cria oportunidades para que indústrias e startups participantes mergulhem na rede de tecnologias avançadas (as chamadas deep techs) do SOSA, e utilizem ferramentas e parcerias estratégicas para expansão em nível global. Na avaliação da CNI, ampliar a presença do Brasil na esfera da inovação é especialmente importante agora, num momento em que o país enfrenta a pandemia da Covid-19.
Indústrias e startups terão acesso ao que há de mais avançado em inovação
A partir da parceria, as empresas poderão participar de atividades de inovação aberta, de reconhecimento técnico para incentivar casos de aplicação imediata. Terão acesso a dias de demonstração exclusivos, workshops sobre liderança em inovação, relatórios especiais e curadoria para seleção de eventos da inovação na indústria. Corporações, investidores e delegações governamentais serão apresentados continuamente às últimas tendências da tecnologia global para aprimorar a vantagem competitiva da indústria brasileira.
A união permitirá que as indústrias brasileiras tenham acesso às tecnologias de ponta
Já as startups terão acesso aos ecossistemas de inovação aberta em Tel Aviv e Nova Iorque, onde se aproximarão de corporações multinacionais, venture capitals, investidores e outras empresas de tecnologia. As startups também participarão de eventos técnicos com curadoria, com oportunidades de negócios globais, a partir de encontros, mesas-redondas, painéis, além de oficinas profissionais projetadas para fornecer as ferramentas e as melhores práticas necessárias para a construção de uma empresa global.
A natureza dinâmica e variada da indústria brasileira será sempre levada em conta na parceria CNI-SOSA. Todos os produtos, serviços e materiais serão adaptados às questões socioeconômicas, ao idioma e ao ecossistema de tecnologia do Brasil. A CNI manterá profissionais nos escritórios do SOSA em Tel Aviv e em Nova Iorque para o atendimento personalizado às indústrias no Brasil.
O anúncio da parceria CNI-SOSA acontece no dia 1º de julho, numa cerimônia virtual com a participação de Emmanuel Lagarrigue, diretor de inovação e membro do Comitê Executivo da Schneider Electric, grupo multinacional francês presente no Brasil, e de Norbert Gaus, chefe de pesquisa em digitalização e automação da Siemens Corporate Technology.
O evento de lançamento da iniciativa contará principalmente com a presença de empresários e executivos de empresas participantes da Mobilização Empresarial pela Inovação (MEI), grupo criado e coordenado pela CNI que reúne mais de 350 empresas, entre as mais inovadoras do Brasil.
“A parceria com o SOSA é um passo fundamental para todos nós”, disse presidente de CNI
A participação no lançamento virtual da parceria é livre e gratuita. A cerimônia começa a partir das 9h30 desta quarta-feira (1º).
DOCUMENTO: https://s3.amazonaws.com/bucket-gw-cni-static-cms-si/portaldaindustria/noticias/media/filer_public/9d/bd/9dbd616e-4311-409f-9e9c-5e25dfe9a8a6/inovacao_na_industria_-_pesquisa_com_lideres_empresariais.pdf
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LGCJ.:
