Monthly Archives: May 2017

Fed minutes sound note of caution about June rate hike, detail plans to trim balance sheet

By Ana Swanson

Federal Reserve Chair Janet L. Yellen addressed a conference at Brown University in Providence, R.I., earlier this month. (AP Photo/Michael Dwyer)

The central bank is watching for evidence that a recent slowdown in the economy is temporary and that inflation is heating up toward its goal before committing to another interest rate hike, minutes from the Federal Reserve’s May 2-3 meeting showed.

The minutes, which were released Wednesday afternoon, showed a central bank that is divided on whether to raise rates as early as June, something that markets have generally been anticipating. Now investors will likely look to economic releases scheduled during the next three weeks, including the jobs report due next week, for clues as to whether the Fed will raise its primary interest rate when it next meets on June 13-14.

The minutes also contained details of how the Fed might begin to reduce the massive $4.5 trillion balance sheet it accumulated by purchasing Treasury and mortgage-backed securities during the recession in an effort to prop up the economy. Central bankers expressed preference for a plan that would let the assets gradually mature, but every three months decrease the amount the Fed reinvests in these purchases, leading to a predictable and orderly reduction of the amount.

[The 6 million people the White House believes can balance its budget]

The participants of the Fed’s Open Market Committee, which makes interest rate decisions, reiterated that it was important to gradually raise interest rates to a more normal level after holding them ultralow for years to help stimulate a struggling U.S. economy. Yet a few participants cautioned that the Fed could raise interest rates more gradually than previous forecasts had suggested, noting that the economy has showed surprising weakness in recent months.

Stocks jumped after the …read more


Trump’s budget would penalize poor people for having too many kids

By Caitlin Dewey

Residents wait in line, some overnight, for free groceries at the Five Loaves and Two Fishes Food Bank outside of the struggling coal mining town of Welch, W.Va., on May 20. (Spencer Platt/Getty Images)

The Trump administration is seeking to dramatically cut food aid to large American families as part of its wide-ranging budget proposal to shrink the social safety net, Agriculture Department officials said Tuesday.

The measure is a small part of the administration’s radical plan to cut the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps, by $193 billion over 10 years. The plan would slash the number of people who rely on the SNAP program, which covers 44 million people.

On Monday, White House budget director Mick Mulvaney signaled that the administration would achieve that goal in part by limiting eligibility to unemployed adult participants. But in the administration’s full budget proposal, and in a call with reporters Tuesday afternoon, Deputy Agriculture Secretary Michael Young said the administration is seeking to slash SNAP benefits to another population as well: low-income households of more than six people, the majority of which include young children.

[Trump to poor Americans: Get to work or lose your benefits]

The administration’s plan would cap the maximum monthly benefits for all families at the current threshold for a family of six, Young said. That effectively means that additional family members would be indiscriminately booted from the program.

Although the affected population is not large — slightly fewer than 200,000 SNAP households have more than six people — USDA data suggests that it is highly vulnerable. To qualify for SNAP, a family of eight must have a gross annual income of $53,000 or less. The majority of these large households include children under 12 years old and …read more


For the first time, poor people receiving housing subsidies may be required to work

By Tracy Jan

HUD Secretary Ben Carson takes a shot on the pool table as he visits the Collins Park apartment complex in Miami in April. (Joe Raedle/Getty Images)

President Trump’s budget proposal, announced Tuesday, calls for the most dramatic cuts to the Department of Housing and Urban Development since President Ronald Reagan slashed the agency’s funding in the early 1980s and leaves a wide opening for introducing work requirements for people who receive federal housing subsidies.

The impact of the $4.094 trillion budget plan for the fiscal year that begins in October would be felt by poor and working-class Americans across the nation, including seniors, people with disabilities, working families living in rural and urban communities, and the homeless.

In gutting federal funding for affordable housing and neighborhood improvements, the budget essentially kicks responsibility for addressing community revitalization and economic development to state and local governments, as well as charities and the private sector.

[Trump proposes dramatic changes to federal government, slashing safety net programs that affect up to a fifth of Americans]

“We will work very closely with Congress to support the critical work of our agency as we vigorously pursue new approaches to help work-eligible households achieve self-sufficiency,” Housing Secretary Ben Carson said in a statement Tuesday.

The largest of Trump’s $6.2 billion in proposed cuts to HUD is the elimination of the four-decade-old Community Development Block Grant program, which provides cities with money for affordable housing and other community needs, such as fighting blight, improving infrastructure and delivering food to homebound seniors. The $3 billion in block grants, which benefit 1,250 state and local recipients, make up half of the cuts to HUD.

The Trump administration, in making its case to terminate the block grant program, argues that it “has not demonstrated results.” Its purpose is …read more