The Washington Post - 19.09.2019

THURSDAY, SEPTEMBER 19 , 2019. THE WASHINGTON POST EZ SU A23

economic relationship with the

United States. Powell on Wednes-

day said trade risks are “more

heightened now” following new

tariffs against C hinese imports.

“We do feel trade uncertainty is

having an effect,” Powell said. Offi-

cials “see it in w eak b usiness invest-

ment and w eak exports.”

Trump has recently said he

thinks he will reach a deal with

China, but it is unclear w hen.

Some economists have ques-

tioned whether the Fed should be

reducing rates at all, given how

healthy the economic fundamen-

tals look. Two out of t he 1 0 members

of the Fed’s committee that deter-

mines interest rates voted against

the cut, preferring to leave rates

unchanged. On the flip side, one

member dissented because he said

the F ed should have c ut r ates by half

a point.

“Powell has the votes for a quar-

ter-point c ut, but h e can’t c ommit to

anything else,” said Diane Swonk,

chief e conomist at G rant Thornton.

“He can’t promise additional rate

cuts, which will disappoint the

market.”

Since the Fed’s last meeting, on

July 31, Trump has tweeted or

retweeted 43 times criticizing the

central bank and calling for deeper

rate cuts. He has called Powell a

“bonehead” and “enemy” for not

lowering rates faster.

On top of political pressures, the

Fed faced an unusual situation this

week when the interest rate on

overnight loans to banks spiked

above 8 percent, well over the Fed’s

target and the highest level since

the last financial crisis. Powell

played down concerns about the

situation and said the central bank

would c ontinue to pump a bit m ore

money into the system to get the

rate back d own under 2 percent.

[email protected]

ports have weakened,” the Fed

wrote in a statement.

The U.S. economy is in a tricky

place, and Fed leaders remain di-

vided over what to do. Consumers

keep spending, but the U.S. manu-

facturing sector is struggling, and

business investment has collapsed

as many companies fear Trump’s

trade war won’t be resolved soon.

His standoff with China has been a

particular concern. The president

has repeatedly over the past year

dialed up and then dialed back

threats and penalties against Chi-

na, o ne of t he world’s l argest e cono-

mies, in an effort to force the coun-

try to make major changes to its

omy from slipping into a recession,

but Fed leaders aren’t going to do

anything to push growth higher,”

said Eric Winograd, senior econo-

mist at A llianceBernstein.

Fed leaders have characterized

these rate cuts as insurance to pro-

tect the economy a gainst t he g lobal

slowdown and worsening trade

war. Fed officials traditionally raise

interest rates when the economy is

growing as a way to combat infla-

tion, and they tend to cut rates to

provoke more spending during a

downturn.

“A lthough household spending

has been rising at a strong pace,

business fixed investment and ex-

cal c onsiderations.”

Only seven of the 17 Fed leaders

penciled in another rate cut this

year, according to economic fore-

casts released Wednesday. The rest

predict rates will stay where they

are — or rise.

The Fed painted a mostly u pbeat

picture of the economy, saying the

job market remains “strong” and

consumer spending is “rising at a

strong pace.” The Fed predicts the

economy will grow 2.2 percent this

year, weaker than the roughly 3

percent target that White House

officials have cited. The economy

grew 2.9 percent in 2018.

“The Fed wants to stop the econ-

ing members signaled they don’t

expect to lower interest rates again

before t he e nd o f the y ear.

The quarter-point reduction was

widely expected but stood in sharp

contrast to the “ big” cut Trump has

recently advocated. Trump has

called for lowering the benchmark

rate to zero o r even pushing i t nega-

tive as a way to lure investment to

the United S tates.

Powell on Wednesday largely

ruled out supporting negative in-

terest rates and suggested he w ould

lower rates further only if there was

evidence the economy was s lowing.

The Fed’s decision, which was

not unanimous, comes at a pivotal

time for the central bank, the econ-

omy and the White House. Fed offi-

cials are trying to help keep the

economy growing without fanning

inflation or squelching growth. The

economy is sending mixed signals

about whether it might slow mark-

edly next y ear or continue chugging

along. And a strong economy is key

to Trump’s reelection effort. He has

tried to frame the Fed as a primary

culprit if there’s a ny s lowdown.

For decades, White House offi-

cials had l argely a voided comment-

ing directly on the Fed’s monetary

policy decisions, seeking to pre-

serve the central bank’s independ-

ence and credibility. Trump has

shattered that norm and even

asked aides whether he could re-

place Powell, a person he p icked f or

the job in late 2017. Powell on

Wednesday wouldn’t respond to

Trump’s latest criticism, saying in-

stead that the c entral bank m ade its

decisions “without regard to politi-

While Trump has insisted that
most problems with the economy
are squarely the Fed’s fault, Powell
on Wednesday said trade uncer-
tainty was a key factor weighing on
growth. Powell didn’t single out
Trump for causing the trade uncer-
tainty, but many business execu-
tives and lawmakers h ave.
“Trade developments have been
up and down and then up, I guess,
or back up perhaps, over the course
of this intervening period. In any
case, they’ve been quite volatile,”
Powell said at a news conference
following the announcement of the
new rate. “We do see those risks as
actually m ore heightened now.”
Stocks initially fell sharply after
the Fed news as investors thought
the central bank was signaling it
would not cut again this year, but
prices rebounded a mid speculation
that the Fed might change course.
The Dow Jones industrial average
ended t he day up 3 6 points.
“History teaches us it’s better to
be proactive in adjusting policy if
you c an,” Powell said. “The idea t hat
if you see trouble approaching on
the horizon, you steer away from it
if you c an.”
The quarter-point reduction was
meant to address fears about slow-
ing growth in Europe and parts of
Asia, as well as concerns that
Trump’s trade war with countries
around the world would remain a
drag on g rowth w ell into the f uture.
The Fed said it would “ act as appro-
priate” to keep the economy grow-
ing. But a majority of the Fed’s vot-

FED FROM A1

THE MARKETS

6 Monitor your investments at washingtonpost.com/markets Data and graphics by

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S&P/ASX 200 INDEX6681.59 -0.2

CSI 300 INDEX 3910.08 0.5

HANG SENG INDEX26754.12 -0.1

NIKKEI 2252 1960.71 -0.2

15-Yr Fixed mtge

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$1000 invested over 1 Year

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2277 ,, 114477 .. 0088

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22 - -yyrrnnoottee

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11 .. 7766 %%

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2233 .. 22 %%

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DOWJONES

LIBOR 3-Month

22 .. 1166 %%

6Mo CD Natl

00 .. 9966

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5Yr CD Natl

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Note: Bank prime is from 10 major banks. Federal Funds rate is the market

rate, which can vary from the federal target rate. LIBOR is the London

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4:30 p.m. New York time.

11 DD%%CChhaannggee

00 .. 00 %%

EExxcchhaannggee--TTrraaddeedd
((TTiicckkeerr)) 11 DD%%CChhgg
$$ 775522 $$ 11224433

Coffee (COFF.L) -0.4
Copper(COPA.L) -0.5
Corn (CORN.L) -0.5
Cotton (COTN.L) -0.8
Crude Oil (CRUD.L) -2.2
Gasoline (UGAS.L) -2.0
Gold (BULL.L) 0.4
NaturalGas (NGAS.L) -1.9
Silver (SLVR.L) -0.1

Japan ¥

110088 .. 4477

SS&&PP 550000 IInndduussttrryyGGrroouuppSSnnaappsshhoott

IInndduussttrryyGGrroouupp

DDaaiillyy%%

CChhgg

• 
  
  
  
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S&P 500 LifeSciToolSvc 00 .. 88

S&P 500 Tech HW St& Peri 00 .. 88

S&P 500 GAS UTIL INDEX 00 .. 88

S&P 500 BANKS INDEX 00 .. 77

S&P 500 ELECTRIC UTIL IX 00 .. 66

S&P 500 AIR FRT & LOG IX -- 44 .. 11

S&P 500 TRADCOS&DIS IDX -- 11 .. 33

S&P 500 METALS & MNG IDX -- 00 .. 99

S&P 500 BIOTECHNOLOGY IX -- 00 .. 99

S&P 500 TOBACCO INDEX -- 00 .. 88

YYTTDD%%CChhaannggee

1199 .. 99 %%

Canada $

11 .. 3333

EEuurrooppee -- 1188 .. 99 %% ++ 1188 .. 99 %%

STXE 600 (EUR) Pr 389.41 0.0

CAC 40INDE X5620.65 0.1

DAX INDEX 12389.62 0.1

FTSE 100 INDEX 7314.05 -0.1

Money Market Natl

00 .. 7722

STANDARD&POOR'S

Bank Prime

55 .. 2255 %%

1Yr CD Natl

11 .. 3388

DDoowwJJoonneess 3300 IInndduussttrriiaallss

CCoommppaannyy CClloossee

11 DD%%

CChhgg

CChhgg%%
33 MM
3M Co 167.44-0.4 -2.6
AmerExpCo 118.74-0.3 -3.8
Apple Inc 222.7 70 .9 12.3
Boeing 386.4 10 .6 3.3
Caterpillr 131.07-0.8 0.6
Chevron 124.1 80 .2 1.0
Cisco Sys 49.34 -0.1 -12.0
Coca-Cola 54.23 0.0 7.1
Dow Inc 47.51 -1.0 -4.2
ExxonMobil 72.82 -0.5 -3.9
Gldman Schs 217.0 80 .5 11.3
Home Depot 230.8 30 .3 11.3
IBM 142.2 20 .0 4.3
Intel Corp 51.74 -0.4 9.2
J&J 130.4 10 .6 -7.0

CCoommppaannyy CClloossee

11 DD%%

CChhgg

CChhgg%%

33 MM

JPMorgan 119.76 1.0 8.2

McDonald's 210.4 30 .3 2.9

Merck & Co 83.02 0.6 -1.7

Microsoft 138.52 0.8 2.5

NIKE Inc 88.08 0.6 4.5

Pfizer Inc 36.38 -0.3 -15.5

Prcter& Gmbl 121.4 10 .2 10.8

Travelers Cos I 146.47 -0.5 -2.6

UnitedTech 137.6 60 .3 8.7

UntdHlthGr 230.61-0.8 -6.1

Verzn Comm 59.93 0.1 4.5

Visa Inc 175.29-0.7 3.6

Walgreens 54.41 -0.8 3.0

Walmart 117.1 60 .6 6.8

Walt Disney 136.8 00 .4 -1.8

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EU €

00 .. 9911

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11 .. 8899 %%

SONDJFMAMJJAS

6,100

7,200

8,400

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Britain £
FFuuttuurreess CClloossee 11 DD%%CChhgg 00 .. 8800
Copper 2.61 -0.5
Crude Oil58.11 -2.1
Gold 1515.80 0.2
NaturalGas 2.64 -1.2
Orange Juice 0.99 -1.7

FFuuttuurreess CClloossee 11 DD%%CChhgg

Silver 17.92 -1.2

Sugar 12.07 -0.2

Soybean 8.89 -0.6

Wheat 4.90 1.1

Corn 3.71 0.9

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Data and graphics by:

COMMODITIES

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CBL & Assc Prop1.17 10.4

Superior Indst Intl 3.75 7.1

GameStop Corp 4.60 6.2

AcordaTherapeutics 3.55 4.7

CACI International 226.38 4.5

Coca-Cola Cons 298.03 4.2

KLA Corp 157.98 3.5

Clearwater Paper 18.47 3.3

Kulicke & SoffaIndst 23.89 3.1

PBF Energy Inc 24.79 3.0

Callaway Golf Co 19.91 2.8

Helen of TroyLtd 154.03 2.7

EnantaPharma 70.70 2.5

Brooks Automation 39.34 2.4

NCR Corp 33.61 2.3

Park Aerospace Corp 18.90 2.3

Comerica Inc 66.92 2.2

Realogy Holdings 5.86 2.1

UnitedNatural Foods 13.40 2.1

SM Energy Co 10.59 2.1

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McDermott Intl 2.16 -63.3

FedEx Corp 150.91 -12.9

Chesapeake Energy 1.59 -10.2

Unit Corp 3.84 -9.0

ApogeeEnterprises 41.99 -8.6

Matthews Intl 33.88 -8.4

Express Inc 2.87 -7.7

RPC Inc 5.74 -7.4

Chico'sFAS Inc 3.81 -6.6

Mallinckrodt PLC 2.53 -6.6

KLX Energy Services 9.91 -6.6

Cars.com Inc 10.00 -6.3

Titan International3.05 -6.2

Tile Shop Inc 2.65 -6.0

Endo International 3.86 -5.9

GarrettMotion Inc 11.52 -5.7

Kirkland's Inc 1.40 -5.4

Tactile Sys Tech51.27 -5.3

JC Penney Co Inc 0.84 -5.1

Valaris plc 6.81 -5.0

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BRAZILIBOVESPA INDEX 104531.90 -0.1

S&P/TSX COMPOSITE INDEX 16800.29 -0.2

S&P/BMV IPC 43070.34 -0.9

BY MICHELLE YE HEE LEE

Making a political donation to a
presidential campaign is about to
get as easy as — well, saying it out
loud.
Starting next month, users of
voice-controlled home assistant
Amazon Alexa will be able to dic-
tate their donations to a 2020
presidential campaign: “A lexa, I
want to make a political contribu-
tion,” or “A lexa, donate [amount]
to [candidate n ame].”
Alexa users can make dona-
tions of at least $5 and up to $200
to campaigns, and the feature is
currently limited to presidential
campaigns. Campaigns can sign
up starting T hursday.
The latest evolution in cam-
paign technology r aises new ques-
tions about how such contribu-
tions will be screened to make sure

they are legal. And it points to

challenges federal regulators face

in keeping up with such innova-

tions without a functioning Feder-

al Election Commission, which

lost its voting quorum last month.

Alexa Political Contributions is

among the new features Amazon

announced Wednesday to help us-

ers find more information about

the 2020 presidential election, in-

cluding how candidates are poll-

ing, candidate endorsements and

the dates of primary contests.

(Amazon chief executive Jeff Be-

zos o wns The Washington Post.)

Donations will be made

through Amazon Pay, which uses

the credit card or bank account

saved with a user’s Amazon ac-

count. The Alexa user also n eeds t o

allow v oice purchasing.

Amazon will charge campaigns

a processing fee o f 2.9 percent plus

30 cents per donation, Amazon

spokeswoman Kerry Hall said.

There are a number of ques-

tions about exactly how the sys-

tem would work, and any poten-

tial legal concerns that may arise.

For example: What if a family

member m akes a donation using a

shared Amazon account tied to

another person’s credit card? Or a

house guest who is not legally

allowed to make political dona-

tions under U. S. law?

Amazon’s Q&A page clarifies

that there are restrictions on who

can make political contributions.

Hall said Alexa will verbally list

requirements to donate to politi-

cal campaigns and will ask the

customer t o confirm they are eligi-

ble t o donate.

To prevent unintended dona-

tions, users can set up a verifica-

tion code that they recite to Alexa

before the donation is processed,

Amazon says. But setting it up is

optional.

“Certainly, as people expect

voice assistant devices to do tasks

for them, I could see why this is

attractive,” s aid Richard Hasen, an

elections law expert a t the Univer-

sity of California at Irvine. “But I

do think i t raises a number o f legal

concerns that will have to be fully

fleshed out.”

It’s unclear how many cam-

paigns would participate. At least

one presidential campaign — that

of South Bend, Ind., Mayor Pete

Buttigieg — said Wednesday that

it is in talks with Amazon. (The

campaign didn’t say whether it

has concerns about the risk that

donors could mispronounce the

candidate’s l ast name.)

The company will not report

directly to the FEC or make donor

information public, Hall said. In-

stead, it will provide to campaigns

the donors’ name, email address

and p hysical a ddress, Hall said.

Federal regulations allow com-

mercial vendors to process dona-

tions for c ampaigns as long as they

meet certain requirements.

Those include processing the

donations through accounts sepa-

rate from the corporation, and

making sure there are adequate

screening procedures to make

sure that the contributions are

being m ade legally, said c ampaign

finance lawyer Dan Petalas, for-

merly the FEC’s acting general

counsel and head of enforcement.

Still, it would be a good idea for

a company like A mazon t o seek an

advisory opinion from the FEC,

Petalas said. Such opinions pro-

vide assurances to campaigns, do-

nors and f irms that a creative busi-

ness proposal meets regulations,

and help ward off baseless com-

plaints to the F EC, h e said.

Ye t the agency is unable to re-

lease official guidance or conduct

official business after it lost its

voting quorum with the resigna-

tion of vice chairman Matthew

Petersen. President Trump h as not

yet announced a plan to nominate

new commissioners.

“No doubt the rapidly evolving

technological context in which

people conduct their affairs is a

challenge for regulatory agencies

to keep pace with, but in this in-

stance I think the FEC would be

well suited to address any ques-

tions and l ikely w ould approve the

proposal,” Petalas said. “But un-

fortunately i t is n ot in a position to

do so until the W hite House acts t o

restore the agency’s quorum.”

[email protected]

Users of Amazon’s Alexa will soon be able to dictate political contributions

Stocks seesaw as future

rate cuts remain unclear

ANDREW HARRER/BLOOMBERG NEWS

Fed Chair Jerome H. Powell arrives at a news conference Wednesday. He said trade risks are “more

heightened” after new tariffs on Chinese goods, citing “weak business investment and weak exports.”

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