Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.USDA Confirms January 11 Reports Delayed
USDA has confirmed expectations that the partial government shutdown continues to impact operations at the agency, including reports on the state of US agriculture.
"Due to a lapse in federal funding, work on National Agricultural Statistics Service (NASS) and Office of the Chief Economist – World Agricultural Outlook Board (OCE-WAOB) reports have been suspended since December 22, 2018 and remain suspended," USDA said in a statement released today. "Given the lead time required for the analysis and compilation of Crop Production, Crop Production-Annual, World Agricultural Supply and Demand Estimates (WASDE), Grain Stocks, Rice Stocks, Winter Wheat and Canola Seedings, and Cotton Ginnings reports, those reports will not be released on January 11, 2019 as originally scheduled even if funding is restored before that date."
As for the eventual release, USDA said, "The date of all NASS and OCE-WAOB releases will be determined and made public once funding has been restored."
Sources have signaled previously that it would take USDA analysts about one week to complete their analysis of the data to facilitate the release of the reports. USDA Chief Economist Rob Johansson told AgriTalk this week that USDA could potentially shorten the analysis time, including working over a weekend if it would speed release of the data.
Sen. Roberts Latest Republican to Opt Out of Running in 2020
Fresh off clearing a bipartisan farm bill, Senate Ag Committee Chairman Pat Roberts, R-Kan., said he was going to take time over the holidays to decide on his future plans.
Roberts made good on announcing his intentions on Friday, stating he will not seek reelection to the Senate in 2020. Roberts made the announcement from Kansas and pledged to continue working for the state over the next two years.
Democrats going to focus on the state as they managed to take the governor's race and flip a Republican district in the 2018 elections.
Still, most expect the seat will still likely remain in Republican hands since the state has not elected a Democrat to the Senate since the 1930s.
Washington Insider: Fed Pleads Patience on Monetary Policy
Well, there is plenty of economic uncertainty these days along with growing concern regarding Fed policy. The New York Times reported recently that Jerome Powell, the Federal Reserve chairman, thinks that “low inflation will allow the Fed to be patient in deciding whether to continue raising interest rates.” The message was welcomed by jittery investors, the Times said.
It reported that the Fed is “confronting an increasingly uncertain economic outlook with falling stock prices, weakening global growth and concerns about President Trump’s economic policies” that have set investors on edge and prompted warnings that the economic expansion is nearing its end. At the same time, measures of domestic economic activity remain strong, including Friday’s report that the economy added 312,000 jobs in December.
Powell’s message on Friday was that the Fed can afford to watch and wait. He said the best available evidence suggested that the economy was still in good shape. But he also sought to reassure investors unsettled by his confident tone at his last news conference in mid-December. He said that the Fed was watching for evidence of weakness and that the health of the economy would ultimately determine the course of policy.
“With the muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves,” Powell said. The Fed predicted in December that it would raise rates twice in 2019, but Powell said the central bank was ready to change course “significantly if necessary.”
The stock market, driven down on Thursday by concerns about growth, surged on Friday on the strength of the jobs data and then kept climbing as Powell spoke. Investors who are worried about the growing economic impact of a trade war with China also hoped for progress toward a resolution at the upcoming meeting between administration and Chinese officials.
Powell also defended the Fed’s autonomy in the face of sharp attacks by President Trump, who has complained to aides that the Fed’s rate increases would undermine economic growth and “turn me into Hoover,” a reference to the president during the Great Depression’s early years.
Some of the administration’s economic advisers, alarmed by his inquiries as to whether he has the power to fire Powell, want to arrange a meeting between the two men. Powell told the New York Times that he was open to meeting with Trump, as Fed chairs have done with past presidents, but that “no meeting had been scheduled.”
He also said the Fed would make policy without regard to the President’s views. “I want the public to be assured that we have a strong culture, it’s not a fragile one, it’s not being disrupted,” he said.
Asked if he would resign if Trump asked him to do so, Powell replied directly: “No.”
Strong economic growth fueled the Fed’s decision to raise its benchmark rate four times in 2018, into a range from 2.25% to 2.5%. The rate, which had hovered near zero in the wake of the financial crisis a decade earlier now sits at the lower end of the range that Fed officials consider a reasonable estimate of “neutrality,” meaning that the central bank is neither encouraging nor discouraging economic growth.
Fed officials say the continued strength of the economy validates their management of monetary policy. “I think we’re actually in a good spot,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said on Friday, noting that job growth is strong and inflation is under control.
But critics, including the President, have said the economy still needs the Fed’s help. Inflation remains below the 2% annual pace the Fed regards as optimal, suggesting that the economy has room to grow, and workers are only beginning to reap the benefits of an expansion now in its 10th year.
The Fed’s decision to raise the benchmark rate at its most recent meeting, in mid-December, drove down stock prices and bond yields in a show of concern about the prospects for continued economic growth.
Powell said last week that he thinks that the markets’ concerns are overstated; that 2018 was “a good year for the United States economy” and that the latest economic data suggested “ongoing momentum heading into 2019.”
But the Fed chairman offered a different kind of relief to financial markets by emphasizing that the slow pace of inflation allows the Fed to postpone judgments about the resilience of the economic expansion.
Job growth has remained strong, and wage growth has increased in recent months, but Powell said the Fed was on guard against rising prices, not rising wages. He said the strength of the labor market “does not raise concerns about too high inflation.”
“If we ever came to the conclusion that any aspect of our plans was somehow interfering with our attainment of our statutory goals, we wouldn’t hesitate to change it,” he said.
So, we will see. The administration seems unlikely to be satisfied by the Fed’s patience, given its preference for strong growth so this is not likely to be the last report of frictions with the Fed and its policies, tensions producers should watch closely if they persist, Washington Insider believes.
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