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A Day After Criticism, Trump Offers Support to Puerto Rico

President Donald Trump is assuring residents of hurricane-ravaged Puerto Rico that he “will always be with them.”

His tweet Friday morning comes a day after he lashed out at the island, insisting that the federal government can’t keep sending help “forever.” He’d also suggested the U.S. territory is to blame for its financial struggles.

 

He took a softer tone on Friday, saying that “the wonderful people of Puerto Rico” have an “unmatched spirit.” He tweeted, “I will always be with them!”

 

But he also said again that residents “know how bad things were before” the hurricanes.

 

Much of the island remains without power weeks after the storm.

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Global Economy: Growth Gathering Momentum, but Where’s the Inflation?

The euro zone economy may be building up an impressive head of steam that shows no signs of cooling, but what policymakers at the European Central Bank really want – higher inflation – is still largely absent.

Industrial output in the bloc rose faster than anyone polled by Reuters expected in August, according to data on Thursday which followed a slew of forecast-beating releases and after the International Monetary Fund upgraded its outlook for global growth.

“Although the industrial sector only accounts for a quarter of GDP it has been the euro zone’s most cyclical sector historically, and so is an important indicator of the economy’s wider health,” said Christian Jaccarini at CEBR.

“With the economy gathering momentum, the European Central Bank should feel confident about starting to taper its asset purchase program at the beginning of next year.”

The economy is performing stronger than at any time since the global financial crisis so speculation the ECB will soon begin scaling back its massive stimulus program has been rife.

Policymakers at the Bank will announce on Oct. 26 a six-month extension to its asset purchase program but will cut how much it buys each month to 40 billion euros from January, a September Reuters poll predicted.  

Five people with direct knowledge of discussions told Reuters the ECB is homing in on extending its stimulus for nine months at the next meeting while scaling it back.

Yet the ECB’s key focus is inflation and numbers due on Tuesday will probably confirm prices only rose 1.5 percent in September on a year ago, still a lot weaker than the just below 2 percent rate-setters would like.

According to Reuters polls taken throughout 2017, which have been correct about how low it would remain this year, inflation won’t hit that ECB target for years.

“There is likely to be only a limited pick-up in inflationary pressures, meaning that interest rate hikes can be kept on hold until 2019 – later than markets seem to expect,” economists at Capital Economics wrote.

British dilemma

Across the Atlantic, U.S. Federal Reserve policymakers have already begun tightening but had a prolonged debate about the prospects of a pickup in inflation and slowing the path of future interest rate rises if it did not, according to minutes of the central bank’s last policy meeting.

“Many participants expressed concern that the low inflation readings this year might reflect… 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 said in the minutes.

Britain, however, has the opposite problem.

Since the vote in June 2016 to leave the European Union, the pound has lost around 13 percent of its value against the dollar, driving up the costs of imports and caused inflation to run well above the 2 percent the Bank of England would like it at.

In the referendum’s aftermath the Bank cut 25 basis points from borrowing costs, taking them to a record low 0.25 percent, hoping to stave off a predicted economic meltdown after the leave vote.

That meltdown never happened and Britain’s economy was one of the best performers last year although growth has since slowed sharply.

Still, at its November meeting the BoE will raise interest rates for the first time in a decade, according to economists in a recent Reuters poll taken after a barrage of hawkish rhetoric from BoE policymakers. However, most of them also said raising rates now would be a policy mistake.  

“On the strength of the MPC’s rhetoric and current market expectations, we continue to look for a November hike. But this assumes no significant downside surprises in the inflation and wage data next week,” said Allan Monks at JPMorgan.

“If the MPC is minded to back out of tightening in November – in response to the data or the Brexit process – we would expect at least some hint of this in any commentary between now and the next meeting on Nov. 2.”

Britain’s economy shows little sign of breaking out of its lethargy and it is “extraordinary” the BoE is considering raising interest rates, the British Chambers of Commerce said on Friday.

“We’d caution against an earlier than required tightening in monetary policy, which could hit both business and consumer confidence and weaken overall UK growth,” said Suren Thiru, BCC head of economics.

Divorce talks have this week ended in deadlock over a British refusal to clarify how much it will pay on leaving, EU negotiator Michel Barnier said on Thursday.

But EU leaders could hand beleaguered British Prime Minister Theresa May an olive branch in Brexit negotiations next week by launching their own internal preparations for a transition to a new relationship with Britain, giving her some hope.

 

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Trump Weathering Turbulent Times at Home and Abroad

President Donald Trump, who is no stranger to political chaos, found himself in turbulent times this week.

Trump faces critical foreign policy challenges on Iran and North Korea and he remains frustrated with the prospect of a stalled domestic agenda at home. Adding to the turbulence in recent days was the president’s Twitter feud with Republican Senator Bob Corker of Tennessee and a resurgence of Trump’s long-running spat with the mainstream news media.

On Thursday, White House Chief of Staff John Kelly made a rare appearance before reporters at the daily White House briefing to knock down reports that he is frustrated in his job.

“I don’t think I’m being fired today, and I’m not so frustrated in this job that I’m thinking of leaving,” Kelly said.

As for Trump, even as he highlighted tax reform at a rally in Pennsylvania Wednesday, he complained again that he has gotten little credit for his achievements so far.

“The confidence in our country is back like it hasn’t been in many, many years,” Trump said to cheers at the event in Middletown, Pennsylvania.

He seemed a bit wistful at one point about his life before politics: “I had a very good life. But you know what? I am having a better life now and I’m helping a lot of people.”

Feuds and spats

But the president has been irritated this week over criticism from Senator Corker, warning that Trump’s temperament and rhetoric could risk “World War III.”

He also lashed out at the media in the Oval Office over reports from NBC News that he wanted to expand the U.S. nuclear arsenal by a factor of ten, something both he and his defense secretary denied.

“And it is frankly disgusting the way the press is able to write whatever they want to write, and people should look into it,” he said.

Trump’s rally in Pennsylvania was an attempt to refocus attention on tax reform. He is eager for a legislative victory he can point to in advance of next year’s congressional midterm elections.

But Republican divisions over the issue and the opposition of Democrats pose a threat to the tax plan being enacted.

“They say it is tax cuts for the middle class. It’s not. It is aimed at the rich,” Senate Democratic leader Chuck Schumer said.

Success on tax reform is also important to Republicans, especially those running for re-election next year.

“The best way for us to help people and advance our principles is that we stay unified and advance this agenda that we are working on like tax reform,” House Speaker Paul Ryan told reporters at the Capitol.

Watch: President Trump Facing Turbulent Times at Home and Abroad

Looking to the base

Amid what some see as chaos on many fronts, Trump continues to turn to his political base for solace and support.

“I think he still gets the populist moments,” Republican strategist John Feehery said. “He still gets the fact that Washington is extraordinarily unpopular. He understands that the media is extraordinarily unpopular with the Republican voters.”

But Feehery added that the president’s habit of picking fights with both opponents and allies continues to provide major distractions from getting his agenda passed in Congress.

“His biggest problem right now is that the national media does not like him. The Republican Party, by and large, the establishment, does not like him,” he said. “Democrats obviously hate him, and so it has been very difficult for him to gain any traction, and there is also the problem of his own volatile nature.”

Despite the recent turmoil, Trump is counting on his core supporters to stick with him and he made that clear to the crowd in Pennsylvania this week. “You finally have a government that is going to defend you and stand up for you and your country,” he told the crowd.

Mixed polls

Analysts say for the most part Trump’s base is hanging with him.

“With 38 percent of the electorate, 80-plus percent of the Republican Party strongly behind him, it is unlikely that we are going to see a lot of Republicans break from him and really challenge him in meaningful ways,” George Washington University political scientist Matthew Dallek said.

But all that focus on shoring up the president’s base does come with a political cost, Gallup pollster Frank Newport said.

“For him to get a higher approval rating, he has got to somehow move those Democrats and some independents, where he is getting about a 30 percent approval now, and that is very hard,” Newport said.

In the latest Quinnipiac University poll, Republicans approved of the president’s job performance by a margin of 81 to 12 percent.

His overall approval rating was at 38 percent, up slightly from last month. That is about even with the job approval average of several polls calculated daily by Real Clear Politics, which has Trump at 38.8 percent approval, 55.4 disapproval.

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China’s Imports From North Korea Fall Nearly 38 Percent in September

China’s imports from North Korea fell 37.9 percent in September from a year earlier, marking the seventh consecutive month of decline, the customs office said Friday.

China-U.S. ties have been strained by President Donald Trump’s criticism of China’s trade practices and by demands that Beijing do more to pressure North Korea over Pyongyan’s nuclear and missile programmes.

China’s exports to North Korea in September dropped 6.7 percent from a year ago, a spokesman for the General Administration of Customs told a briefing, adding no seafood imports from North Korea were recorded last month.

China’s imports from North Korea fell 16.7 percent on-year to $1.48 billion in Jannuary-September, while exports to North Korea rose 20.9 percent to $2.55 billion in the same period.

That created a trade surplus with North Korea at $1.07 billion in the first nine months of this year.

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California Wildfires Threaten Wine Country’s Lifeblood: Tourism

The wildfires burning through Northern California are sending visitors packing, threatening the $2 billion-plus spent annually by tourists on wine tours, fine food, limousine rides and much more, business leaders said.

At the Inn on First bed and breakfast in the famous wine town of Napa, co-owner Jamie Cherry was encouraging callers to postpone rather than cancel visits, as wildfires burned largely unchecked across the region.

“People are canceling as far as November already,” Cherry said. “It’s going to be devastating in terms of financial loss for everybody.”

The fast-moving fires have killed at least 26 people and left hundreds missing in an area less than an hour’s drive from San Francisco.

With hundreds of wineries, expensive restaurants and bucolic rolling scenery, the wine country of Sonoma and Napa counties is a major draw for visitors. Limousines and buses clog parking lots at weekends as visitors sip Chardonnay and Cabernet Sauvignons in towns known for their mix of rural and cosmopolitan vibes.

Now, with at least 13 burned wineries, shuttered tasting rooms and thick smoke in the air from nearly two dozen fires that have charred more than 190,000 acres across the state, it is unclear how quickly the region can lure back tourists.

‘We’d go back’

Napa Valley welcomed 3.5 million visitors last year, with overnight guests spending on average $402 per day, according to Visit Napa Valley, the region’s tourism marketing group.

“There is a good amount of infrastructure that has burned down, homes have burned down, wineries have burned. There are restaurants that are not going to open quickly,” said Clay Gregory of Visit Napa Valley.

On Thursday, tasting rooms remained closed and the famous Napa Valley Wine Train, which ferries tourists through the vineyards, said it planned to reopen Sunday.

Dozens of limousines and tour buses, their polish dulled by a film of ash, sat in a parking lot and warehouse on the outskirts of Napa. The company’s owner, Michael Graham, said the business had just hit peak demand of 100 reservations a day, but since the fires that had slumped to two.

Graham remains hopeful, however, citing tourism’s quick recovery after the 6.0 earthquake that hit Napa in 2014: “People were out wine-tasting the same day.”

Graham said the region was still largely intact, with vast swathes of countryside untouched by fire.

“It’s just smoky. As soon as they get this contained it will be back to business as usual,” he said.

Others agreed the effect of the fires on tourism would be short-lived.

Roseanne Rosen has fond memories of the trip with her husband to wine country that she just finished ahead of the fires. The couple from Kansas City has been coming for the last decade and has no plans to abandon that tradition.

“It’s one of our favorite destinations and I don’t see that changing,” Rosen said by telephone. “Once people are open and ready for business, we’d go back in an instant.”

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Peru’s Cabinet Seeks New Legislative Powers on Economy From Congress

The government of Peru’s President Pedro Pablo Kuczynski said Thursday that it will request special powers to legislate economic policies from the opposition-ruled Congress, after growth slowed sharply during his first year in office.

During a presentation in Congress, Prime Minister Mercedes Araoz said her cabinet wants to legislate policies aimed at consolidating an incipient economic recovery and making Peru a member of the Organization for Economic Co-operation and Development (OECD), a wealthy-country think tank.

In Peru, Congress traditionally grants legislative powers to the executive branch at the start of a president’s term, and it is rare for a prime minister to seek them so far into an administration – underscoring ongoing worries about the economy.

Growth in Peru, one of the region’s most robust economies, faltered early this year after a corruption scandal halted public work projects and severe flooding destroyed billions of dollars in infrastructure.

The government and central bank now expect the economy to grow by about 2.8 percent this year thanks to better prices for Peru’s key copper exports, down from 3.9 percent last year.

Araoz said the economy should expand by at least 4 percent in coming years.

It was unclear whether the opposition would grant the government its request for new legislative powers following a political crisis in September that ended with Congress ousting Kuczynski’s former cabinet.

Kuczynski appointed a more socially conservative cabinet led by Araoz that won initial praise from the right-wing populist party Popular Force, which has an absolute majority in Congress.

But Congress must approve the new cabinet with a vote of confidence scheduled for Thursday.

Araoz said that she would present the request for legislative powers in coming days.

Congress gave Kuczynski legislative authority on economic policies in September 2016, which his government used to pass laws aimed at reducing and expediting bureaucratic permits.

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Report: Rise in Natural Disasters Fueling Global Homelessness

New research finds nearly 14 million people a year are losing their homes because of sudden onset disasters such as floods and cyclones.

The Internal Displacement Monitoring Center, which analyzed the impact of sudden onset disasters in 204 countries and territories, warns that homelessness will continue to rise unless significant progress is made in managing disaster risk.

According to the research — officially released on Friday, marking International Day for Disaster Reduction — eight of the 10 disaster-prone countries with the highest levels of displacement are in East, South or Southeast Asia. India and China top this list. The two countries outside this region are Russia, ranked ninth, and the United States, ranked 10th.

The head of data and analysis at the center, Justin Ginnetti, said the 13.9 million people displaced by sudden onset disasters excluded those told to evacuate an area before a disaster struck. He called this a conservative figure, since homelessness due to drought was not included in the data.

Floods chiefly repsonsible

“Most of this displacement is being driven by floods, which is on the increase in a globally warming world and where population growth is increasing in flood-prone areas,” Ginnetti said. “Population exposure is indeed a key component of displacement risk. More people are likely to be displaced by disasters in countries with large populations.”

The data show displacement associated with disasters will mainly affect developing countries. However, the chief spokesman for the U.N. International Strategy for Disaster Reduction, Dennis McClean, said economic losses would be greatest in the richer countries. He said this year would probably be the worst year on record in terms of economic losses.

“If we look just at the Atlantic hurricane season, which is still ongoing, we see that economic losses in the United States alone are probably in the region of about $300 billion,” McClean said. “That is what the initial estimates are telling us. And, of course, the losses are perhaps even more significant in small island states in the Caribbean, which have also been devastated by these events.”

Specialists in disaster risk reduction are urging nations to improve land zoning and the quality of buildings, especially in seismic zones and on land exposed to storms and floods. They note that good early warning systems may not save homes but will save lives.

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US FCC Head Silent on Trump Comment About Pulling Broadcast Licenses

A suggestion by President Donald Trump that a U.S. regulator pull broadcast licenses from TV networks over what Trump calls “fake news” has been met by silence from the watchdog’s head Ajit Pai, who has a history of defending free speech rights.

Pai, who was reconfirmed last week for a new five-year term at the Federal Communications Commission and named chairman by Trump in January, has been urged by members of Congress to denounce Trump for a proposal that has little, if any, chance of success.

That is because the commission does not actually license broadcast networks or cable stations and the hurdles to denying licenses to individual stations are extremely high.

Trump’s remarks on Wednesday that threatened to muzzle the media and fellow-Republican Pai’s strong support for press freedoms could conflict as Pai mounts ambitious plans to overhaul federal communications regulations.

Trump said in a Twitter post: “Network news has become so partisan, distorted and fake that licenses must be challenged and, if appropriate, revoked. Not fair to public!”

His ire was raised by an NBC News report that said he had called for a massive increase in the U.S. nuclear arsenal, a report Trump denied. Trump and his supporters have repeatedly used the term “fake news” to cast doubt on media reports critical of his administration, often without providing any evidence to support their case that the reports were untrue.

Pai’s office has declined to comment, despite Reuters’ repeated requests Wednesday and Thursday.

The FCC, an independent agency, does not issue licenses to individual networks but to local stations, including those directly owned by broadcasters such as Comcast Corp that owns NBC. Comcast and NBC declined to comment on Trump’s remarks.

Pai has defended the First Amendment and press freedoms. In October 2016, he said anyone at the FCC “has the duty to speak out whenever Americans’ First Amendment rights are at stake.”

In a 2014 Wall Street Journal piece, Pai said “the government has no place pressuring media organizations into covering certain stories.”

Pai has an ambitious agenda, which he is expected to unveil details of in the coming months. It includes proposing to eliminate some significant media ownership restrictions and a plan to roll back former Democratic President Barack Obama’s so-called net neutrality rules.

Senator Tom Udall, a New Mexico Democrat, said on Twitter Trump’s comments were “unacceptable attacks on the #FirstAmendment by @POTUS. @AjitPaiFCC committed to Congress to speak up at times like this. We are waiting.”

U.S. House of Representatives Speaker Paul Ryan defended press freedoms Thursday but did not directly criticize Trump.

“I’m for the First Amendment. I don’t always agree and like what you guys write, but you have a right to do it,” Ryan said.

Republican Senator Ben Sasse asked if Trump was “recanting” the oath of office to defend the First Amendment.

In March, Pai told the U.S. Congress he did not agree with Trump when he said that “the media is the enemy of the American people.” Pai said he would act independently of the White House on media-related matters.

Last month, Pai lamented that people on Twitter demand “the FCC yank licenses from cable news channels like Fox News, MSNBC, or CNN because they disagree with the opinions expressed on those networks. Setting aside the fact that the FCC doesn’t license cable channels, these demands are fundamentally at odds with our legal and cultural traditions.”

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