The U.S. dollar is under pressure today against the euro following the release of yesterday’s Fed Minutes from the U.S. Central Bank’s September policy meeting that showed a few participants attending the Fed’s meeting were reluctant to make additional increases in the federal funds interest rate this year until inflation gains further strength and moves closer to the Fed’s 2 percent inflation target.
Total U.S. consumer prices, as measured by the PCE price index, increased nearly 1.5 percent over the 12 months ending in July.
Core PCE price inflation, excluding food and energy prices, was also nearly 1.5 percent over the same period.
“A few participants thought that additional increases in the federal funds rate should be deferred until incoming information confirmed that the low readings on inflation this year were not likely to persist and that inflation was clearly on a path toward the Committee’s symmetric 2 percent objective over the medium term,” according to the Fed minutes.
In another section of the Fed Minutes, it was noted that many participants expressed concerns about the influence of developments that could keep inflation persistently low:
“many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent, and it was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted.”
The Fed minutes revealed that only limited data related to the economic effects of Hurricanes Harvey and Irma were available at the time of the meeting, but it appeared likely that the negative effects would restrain national economic activity only in the near term.
Repeal Of “Clean Power Plan”
On Tuesday U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a notice of proposed rulemaking to repeal the Clean Power Plan that the Obama administration endorsed to help combat global warming.
In June 2014 the EPA proposed the Clean Power Plan which was intended to reduce carbon dioxide emissions from electrical power generation by 32 percent by 2030, relative to 2005 levels, reducing emissions from coal burning coal plants, and expand the use of renewable energy and energy conservation.
On March 28, 2017 President Trump signed an executive order to review the Clean Power Plan.
On October 10, 2017 EPA Administrator Scott Pruitt, a climate change denier, signed a rule that officially repeals the Clean Power Plan before it even became adopted.
“With this action, the Trump administration is respecting states’ role and reinstating transparency into how we protect our environment,” said Administrator Pruitt.
President Trump has pledged to support the fossil fuel industry which includes the coal and oil industry.
Coal remains one of the worst toxic pollutants in the air and is ranked as the nation’s top source of carbon dioxide (CO2) emissions.
Michael Brune, Sierra Club’s Executive Director criticized EPA Director Scott Pruitt’s decision in a released statement:
“Carefully developed during the Obama administration as a way to limit carbon pollution from power plants, the Clean Power Plan is a centerpiece of our nation’s climate policy. Pruitt, though, claims that because the plan demands clean air, it is effectively picking winners and losers in the energy market. After all, if the goal is clean air, then dirty fuels can’t compete because they’re, well, dirty.”
According to Oil Change International, a new report shows that U.S. taxpayers continue to pay for more than $20 billion in fossil fuel subsidies each year.
The analysis from Oil Change International covers “tax incentives, credits, low royalty rates, and other government measures benefiting the oil, gas, and coal sectors.”
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