Leaders of the U.S. central bank raised interest rates slightly Wednesday and signaled that rates are likely to go higher as the economy continues to strengthen.

At the end of two days of deliberation in Washington, the Federal Reserve set the key interest rate a quarter of a percent higher, at a range between 1.75 and 2 percent. They say the labor market continues to improve, spending is rising, and inflation is rising closer to the modest 2 percent annual rate that experts say helps the economy grow predictably.

Fed officials work to maximize employment while maintaining stable prices. With that in mind, they slashed interest rates to nearly zero during the recession in 2008 to boost economic activity. Now, they judge that it is time to continue raising rates because holding rates too low for too long could spark inflation, and such rapidly rising prices could harm the economy.

“The economy is doing very well,” Fed Chairman Jerome Powell told journalists. “Most people who want to find jobs are finding them and unemployment and inflation are low.”

He said the Fed’s efforts to manage the economy work best when the public is told what is being done, what is being considered, and why certain decisions are made. Consequently, Powell said he will begin holding press conferences more often beginning next year. 
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German authorities fined Volkswagen nearly $1.2 billion Wednesday for its role in a diesel emissions scandal that first surfaced in the United States in 2015.

Prosecutors found the German automaker failed to properly monitor its engine development department. The lack of oversight resulted in global sales of nearly 11 million diesel vehicles with illegal emissions-controlling software.

U.S. authorities previously imposed billions of dollars in penalties on the automaker, which said Wednesday it would accept the fine announced by prosecutors in the city of Braunschweig.

Volkswagen said paying the latest fine would hopefully have “positive effects on other official proceedings being conducted in Europe” against the company and its subsidiaries.
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As the trade dispute escalates between the United States and its global trading partners, American bourbon whiskey is among the U.S. exports in the crosshairs. It will soon be subject to a 25 percent tariff imposed by a growing number of countries as a retaliatory measure for U.S. tariffs on steel and aluminum. As VOA’s Kane Farabaugh reports, the retaliation is a blow to smaller craft distilleries in the U.S. trying to expand overseas.
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Distilling spirits is in Paul Hletko’s DNA.

“Prior to World War II, my grandfather’s family owned what is now a major brewery in the Czech Republic,” he told VOA.

But his grandfather’s Jewish family lost more than a brewery when the Nazis took over Europe during the war.

“The whole family got taken to the camps where they were all murdered, except my grandfather. He spent the rest of his life trying to get the brewery back and never did. And when he died, it struck me that if I didn’t do something to reconnect and reengage with the family legacy, it would be gone forever,” Hletko said.

Honoring his family legacy forced Hletko away from a law career to launch Few Spirits in 2008… an homage to his ancestors, but this time around, beer isn’t the spirit of choice.

“Whiskey is what beer wants to be when it grows up,” Hletko said from his office in an old converted automotive “chop shop” in Evanston, Illinois, that is now the world headquarters of Few Spirits. Hletko’s brand of bourbon, rye and gin is now in demand at home and abroad.

“We’re sold across 35 countries in about 45 states. We’re the No. 1 craft spirit in the United Kingdom,” he added.

But the real prize for Hletko is China.

“U.S. spirit exports to China have gone up something like 2,000 percent. That’s a hell of a number,” he said.

A number that may sharply decline as another war – this time a trade war – could once again derail the Hletko family business. 

As the trade dispute escalates between the United States and global trading partners, American bourbon whiskey is among U.S. exports in the crosshairs. It will soon be subject to a tariff imposed by a growing number of countries as a retaliatory measure for U.S. tariffs on steel and aluminum.

“The proposed tariffs are 25 percent,” Hletko tells VOA, “which would be a dramatic increase and make our products, which are already relatively expensive, unnecessarily more expensive. Basic economics dictate that the higher the price of something the less it sells, so simply adding the tariff on will reduce our sales by a pretty material amount.”

The Distilled Spirits Council said U.S. exports have surged from $575 million in 1997 to $1.64 billion in 2017. But imposing new tariffs this year could significantly impact those figures

“It’s the iconic American brands they are going after… it’s because bourbon is America. That’s a symbol in America,” says Phil Flynn, a senior market analyst with the PRICE Futures Group and a FOX Business Network contributor. But Flynn downplays the impact the tariffs will have on bourbon sales overseas, particularly in China.

“It’s not like they are banning sales of these things,” he explains. “Its just going to be a little bit more expensive. Generally speaking, if you have a good quality product, and it comes from overseas, you are probably going to pay a little more.”

But Hletko said it impacts his bottom line, and would significantly cut into his modest annual sales to China.

“We are current estimating that our $150,000 would likely go down somewhere around $5k ($5,000) to $10k ($10,000), virtually eliminating it,” he said.

And with it, other American jobs.

“Making the grain, moving the grain, doing the boxes… everybody is benefiting from U.S. exports to China and I, for one, would like to see that continue to grow,” Hletko said.

Without that growth, and now new tariffs on his product coming from the European Union and Mexico, what is now a potential loss of hundreds of thousands of dollars for Few Spirits this year could translate into millions of dollars of lost future profit if foreign consumers turn away from a product they view as too costly.

“We’re simply pawns in a political game, which is unfortunate,” he said.

A game that Hletko says crowns no real winners.
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Shares of embattled Chinese telecommunications giant ZTE plunged more than 40 percent Wednesday, its first day of trading after agreeing to pay a $1 billion fine to the United States for violating trade sanctions.

ZTE nearly went under after the Trump administration imposed a seven-year ban on the company from buying crucial software and hardware components for its smartphones and other devices from U.S. companies. The ban was punishment for ZTE putting U.S.-built components in its products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.

The sanctions were lifted after ZTE agreed to pay a $1 billion penalty, put another $400 million in escrow, and replace its entire management and board by the middle of July.

The company is also required to hire a new compliance team selected by the U.S. Commerce Department for a 10-year term.

A bipartisan group of U.S. lawmakers have introduced legislation to reimpose the penalties on ZTE, saying the firm posed a threat to U.S. national security through intelligence gathering on its devices.
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Відповідні рішення уряд ухвалив на сьогоднішньому засіданні
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There is no end to demand for what many consider to be Italy’s white gold, the marble from the Tuscan town of Carrara, a name synonymous with the very best money can buy in the world today. It is no secret, and it is not new. The quarrying in these mountains has been going on for more than 2,000 years.

The Romans were the first to be lured by the stone’s beauty and millions of tourists to this day still flock to admire some of the most magnificent ancient monuments made with this special stone, the likes of the Pantheon and Trajan’s Column in the Eternal City. And then there are famous statues like the David and the Pietà by Renaissance master Michelangelo.

So what is happening in Carrara today?

Artists, sculptors and architects have never ceased making regular pilgrimages here. M.J. Anderson, an American, first came to Carrara as a fledgling sculptor 36 years ago, drawn by the beautiful marble. Considering herself somewhat of a deconstructionist, she likes to take things apart.

“The great thing about carving marble is that once that stone is gone, it’s gone. You can’t lament about it and this keeps you moving forward in the creative process,” she said.

Sculptors like Anderson realize they are dealing with something quite extraordinary here.

“Carrara marble is consistently good. It does not fracture. It’s mined in a very cohesive manner. There’s no surprises when you are carving it. The molecules are put together very well and there’s so many different kinds of marble here. That is what is so special: there is gray, white and cream, in different densities as well and so a sculptor can find anything they want here that will suit their needs,” Anderson said.

That is what is bringing orders – and big money – from all over the world, from Arab nations and emerging markets like China, India and Thailand. Clients want their kitchens, bathrooms and staircases in their homes made from this precious material. Others come with specific ideas for a marble statue, which they commission from the very best marble sculptors in existence. To name just one example: a request came, in recent years, for a huge block to build a massive statue of Buddha.

A boom in the construction of mosques, especially in the Arab world and north Africa, has meant even more demand and big business for the marble quarrying companies. The Saudi Binladin Group, one of the world’s largest construction companies, acquired 50 percent of Marmi Carrara in recent years. Marmi Carrara owns a third of the quarries that are operational in the area today.

“Just the name Carrara basically says it’s the world’s best marble. It is the most beautiful. It has a centuries’ long history of being the best marble in the world and people come here looking for and wanting the very best,” Anderson said.

What is new is that the demand is moving away from the traditional markets.

“America has been extracting resources for a long time. Now, the money has shifted to the Middle East and they are the ones extracting the resources. That has always been the case. The Romans started the big quarries here in Carrara when they were building cities all over the Mediterranean basin and they were shipping marble out of here. It indicates where the world is shifting, where the resources are going and where the building is taking place,” said Anderson.

The great sculptors have historically been Italian, but now they come from all over world, and some have settled here. Students like 19-year old Xintong Gao come here to learn and take their knowledge home. He said his love of art, painting, and sculpture brought him here from China and he set his sights on enrolling at the Academy of Fine Arts in Carrara.

Working the marble may be a labor of love, but Gao said it is no easy work.

Not only is learning to sculpt the marble difficult, but extracting it has been a challenge for hundreds of years. Modern technology has made it easier and today the use of large quantities of diamond-tipped wires, saws and heavy earth-moving equipment is essential. The marble industry employs thousands of people but for those quarrying inside the mountains it is sometimes also dangerous work.

The demand is also taking its toll on the land.

Environmentalists have been expressing huge concerns for years that quarrying is dangerously eroding the mountains and significantly affecting the magnificent landscape of the Apuan Alps here. From afar, it looks like snow but in reality it is the bright marble that makes these mountains white all year round.

“It’s beautiful to see the quarries. They’re dramatic. They’re fabulous, the way the light hits these walls of marble,” said Anderson.

Admittedly, she notes, the environmentalists’ concerns are not without a basis. “Of course marble does not re-grow. It’s not sustainable. It was made billions of years ago. It is terrible that extraction is occurring at such a rapid pace because of the industrialization. Marble is being taken out of here so fast that entire mountain tops are disappearing. They are extracting marble from the center of these mountains as well and so it is a huge concern. Worldwide the extraction of resources is a concern and what we are looking at here is also a really terrible mining practice,” she said.
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Отримання двох траншів кредиту від Міжнародного валютного фонду за нинішньою програмою розширеного фінансування забезпечить макроекономічну та фінансову стабільність України. Про це йдеться у Звіті про фінансову стабільність, оприлюдненому Національним банком України.

«Якщо Україна отримає ще два транші до завершення програми МВФ, то коротко- та середньострокові ризики для макроекономічної та фінансової стабільності зведуться до мінімуму», – повідомляє НБУ.

Після прийняття закону «Про Вищий антикорупційний суд» з’явилися обґрунтовані надії на відновлення співпраці з МВФ, зазначають у Нацбанку.

Для приїзду наступної місії МВФ уряду потрібно вирішити питання перегляду цін на газ і збалансованості державного бюджету. Про це повідомляв голова Національного банку України Яків Смолій.

Раніше в інтерв’ю «Дзеркалу тижня» він повідомляв, що Нацбанк очікує отримати до осені п’ятий транш від Міжнародного валютного фонду.

У березні 2015 року між МВФ і Україною була затверджена чотирирічна програма розширеного фінансування на суму близько 17,5 мільярда доларів США. Її дія завершується у першому кварталі 2019 року. Наразі МВФ надав Україні за цією програмою близько 8 мільярдів 380 мільйонів доларів.

Міністерство фінансів України очікувало на надходження нового траншу кредиту МВФ на початку 2018 року. У квітні в НБУ заявили, що очікують траншу від Міжнародного валютного фонду в третьому кварталі.
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The European Central Bank will on Thursday weigh when and how to end its bond-buying stimulus program — an exit that will have far-reaching consequences across the economy, from long-suffering savers to Europe’s indebted governments.

The bank, which sets monetary policy for the 19 countries that use the euro, has been buying 30 billion euros ($35.5 billion) a month in government and corporate bonds from banks. The purchases are slated to run at least through September, and longer if necessary.

Analysts say that decisions on the exit path, which could include several intermediate steps, might come Thursday or at the July 26 meeting. Scenarios include reducing the purchases past September, and then stopping them at the end of the year.

An end to the stimulus would be part of a major shift in the global economy. The ECB would be joining the U.S. Federal Reserve in withdrawing the massive monetary stimulus deployed to combat the Great Recession and its aftermath. The Fed is expected to raise rates at its meeting Wednesday.

The ECB’s bond purchases, which started in March 2015, pump newly printed money into the economy, which in theory should help raise inflation toward the bank’s goal of just under 2 percent. Inflation was an annual 1.9 percent in May, but the bank needs to be able to say that inflation will stay in line with its target even after the stimulus is withdrawn.

Market participants pricked up their ears last week when top ECB official Peter Praet said Thursday’s meeting would be an occasion to consider when to wind down the program. Praet supervises economics at the ECB as a member of its six-member executive board and in that capacity proposes monetary policy moves for debate and decision by the 25-member governing council. That gives his words extra weight.

The impact of the ECB’s bond-buying stimulus has been felt across the economy.

It has pushed up the prices of assets like stocks, bonds and real estate but also lowered returns for savers. It has helped keep borrowing costs low for European governments as the ECB purchases have driven bond prices up and yields down. Yields and prices move in opposite directions.

For example, the Italian government, which is burdened with the second-highest debt load in the eurozone after Greece at 132 percent of gross domestic product, pays only 2.79 percent annually to borrow for 10 years. That’s less than the 2.96 percent yield on 10-year U.S. Treasurys.

The ECB meeting will be held in Riga, Latvia, as one of the ECB’s occasional road meetings away from its Frankfurt headquarters to underline its role as a pan-European institution. A bribery investigation is expected to keep the head of the host central bank, Ilmars Rimsevics, from attending the meeting and news conference with ECB President Mario Draghi.

The ECB is continuing its slow progress toward withdrawing the stimulus despite turbulence in Italy, where the new populist government has questioned the spending and debt restrictions required of euro members. Concerns over Italian politics caused big swings in the country’s financial markets for several days last month, before easing.

Analysts Joerg Kraemer and Michael Schubert at Commerzbank said that the ECB may soon have to end its stimulus program anyway as it risks running out of bonds that are eligible for purchase. The ECB has limited itself to no more than one-third of any member country’s outstanding bonds to avoid becoming the dominant creditor of member states.

With the purchases widely expected to be stopped at the end of this year, they said, attention would now turn to how long the bank would wait after the bond-purchase exit before starting to raise its interest rate benchmarks.

“The ECB probably wants to ensure that the end of bond purchases does not unleash speculation about interest rate hikes,” they wrote in a research note. “The ECB Council… might declare that rates will not be increased for ‘at least’ six months after the end of purchases.”

Currently the short-term interest rate benchmark is zero, and the rate on deposits left by commercial banks at the ECB is negative 0.4 percent. The negative rate is a penalty aimed at pushing banks to lend that money instead of hoard it.

 
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Для приїзду наступної місії Міжнародного валютного фонду уряду потрібно вирішити питання перегляду цін на газ і збалансованості державного бюджету. Про це 12 червня повідомив голова Національного банку України Яків Смолій.

«Для приїзду наступної місії потрібно переглянути ціни на газ і провести переговори з Міністерством фінансів щодо збалансованості бюджету», – сказав Смолій.

Національний банк України очікує отримати до осені п’ятий транш від Міжнародного валютного фонду, повідомив голова НБУ Яків Смолій в інтерв’ю «Дзеркалу тижня», оприлюдненому 9 червня.

Читайте також: Що чекає на гривню, ціни в магазинах та економіку без наступного траншу МВФ?

У березні 2015 року між МВФ і Україною була затверджена чотирирічна програма розширеного фінансування на суму близько 17,5 мільярда доларів США. Наразі МВФ надав Україні за цією програмою близько 8 мільярдів 380 мільйонів доларів.

Міністерство фінансів України очікувало на надходження нового траншу кредиту МВФ на початку 2018 року. У квітні в НБУ заявили, що очікують траншу від Міжнародного валютного фонду в третьому кварталі.
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У травні 2018 року споживча інфляція суттєво сповільнилася – до 11,7% у річному вимірі, повідомив Національний банк України 11 червня з посиланням на Державну службу статистики. У регуляторі нагадали, що у квітні вона становила 13,1%. 

Водночас у місячному вимірі індекс цін не змінився (порівняно з підвищенням на 0,8% у квітні). 

«Подальше зниження інфляції в річному вимірі було очікуваним, а її травневий показник виявився дещо нижчим за траєкторію прогнозу Національного банку», – заявили в регуляторі. 

У НБУ пояснили, що «це відбулося переважно завдяки стрімкому уповільненню зростання цін на продукти харчування». Крім того, не так швидко, як у квітні, зростали адміністративно регульовані ціни через уповільнення зростання цін на тютюнові вироби та помірніше, ніж минулого року, підвищення тарифів на житлово-комунальні послуги, зазначили в Національному банку України. 

У Національному банку України прогнозували, що у 2018 році інфляція складе понад 8%. 
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The separatist campaign in Indian-administered Kashmir broke out into major violence in 1989. More than 60,000 people are estimated to have died and 10,000 to have disappeared in the disputed Himalayan region. That has pushed their families into poverty. For the region’s youth, earning a living has been a challenge, especially educated young women. However, one group of young entrepreneurs is taking matters into their own hands. Yusuf Jameel has more, in this report narrated by Bezhan Hamdard.
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The United States will not lift the ban on doing business with Chinese telecommunications giant ZTE until ZTE pays a $1 billion fine for trade violations and places $400 million more in escrow.  

The U.S. Commerce Department released details of its settlement it made with ZTE, under President Trump’s orders, to let the crippled company get back in business again.

“Today, BIS (Bureau of Industry and Security) is imposing the largest penalty it has ever levied and requiring ZTE adopt unprecedented compliance measures,” U.S. Commerce Secretary Wilbur Ross said Monday.

The White House has already threatened that ZTE will be shut down again if it engages in just one more bad activity.

Last week, the Chinese company agreed to the $1 billion fine for putting U.S. built components in its telecommunications products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.

The Commerce Department cut off exports to ZTE, practically putting the company out of business.

As part of its settlement with the U.S., ZTE agreed to put another $400 million in escrow, and replace its entire management and board by the middle of July.

In exchange, the United States said it would lift sanctions against the company and allow U.S. suppliers to again do business with the Chinese firm.

Most of the world first heard of the dispute over ZTE nearly a month ago after one of President Trump’s tweets.

“President Xi of China and I are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump said.

Republican and Democratic lawmakers balked at Trump’s efforts, calling ZTE’s trade with North Korea and Iran a violation of U.S. national security.

They were also perplexed by Trump’s concern over Chinese jobs when he has long accused China of stealing U.S. manufacturing jobs.
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International Monetary Fund chief Christine Lagarde led an attack by global economic organizations on U.S. President Donald Trump’s “America First” trade policy Monday, warning that clouds over the global economy “are getting darker by the day.”

Trump backed out of a joint communique agreed by Group of Seven leaders in Canada over the weekend that mentioned the need for “free, fair and mutually beneficial trade” and the importance of fighting protectionism.

The U.S. president, who has imposed import tariffs on metals, is furious about the United States’ large trade deficit with key allies. “Fair trade is now to be called fool trade if it is not reciprocal,” he tweeted Monday.

In response, Lagarde unleashed a thinly veiled attack on Trump’s trade policy, saying challenges to the way trade is conducted were damaging business confidence, which had soured even since the weekend G-7 summit.

The Washington-based IMF is sticking to its forecast for global growth of 3.9 percent both this year and next, she said, before adding: “But the clouds on the horizon that we have signaled about six months ago are getting darker by the day, and I was going to say by the weekend.”

“The biggest and darkest cloud that we see is the deterioration in confidence that is prompted by (an) attempt to challenge the way in which trade has been conducted, in which relationships have been handled and in which multilateral organizations have been operating,” Lagarde said.

The IMF managing director spoke after a meeting in Berlin with German Chancellor Angela Merkel and the chiefs of the World Trade Organization (WTO), the World Bank, the Organization for Economic Cooperation and Development (OECD), the International Labor Organization and the African Development Bank.

Merkel said on Sunday the EU would implement countermeasures against U.S. tariffs and described Trump’s rejection of the G-7 communique as “sobering and a bit depressing.”

Investors are fearful of a tit-for-tat trade war, though markets were relatively calm on Monday after an early wobble.

‘Stop this escalation’

WTO Director-General Roberto Azevedo told the Berlin news conference: “We must … stop this escalation of tensions. A tit-for-tat process is not going to be helpful.”

He also criticized the United States’ conduct at the WTO.

“The U.S. has been focusing much more on bilateral — unilateral even sometimes — measures, which is not something that is support of the rules-based trading system.

“They have been complaining about the system, they say that they want to improve the system, but we would expect a more constructive approach on their part,” Azevedo said.

Earlier, Germany’s economy minister said Berlin saw no immediate solution to the trade row between the United States and other major economies but remained open to talks “among friends,” seeking to head off a full-blown global trade war.

As Europe’s biggest exporter to the United States, and with more than one million German jobs at stake, Germany is desperate to avoid an EU trade war with the United States.

“I believe a win-win situation is still possible,” Economy Minister Peter Altmaier, one of Merkel’s closest lieutenants, told broadcaster Deutschlandfunk. “At the moment, however, it seems that no solution is in sight, at least not in the short term.”

Automobile tariffs

Particularly concerning for Germany, a major car exporter to the United States, is Trump’s weekend tweet that Washington is looking at tariffs on automobiles.

The European Commission, which coordinates trade policy for the 28-member EU, aims to target 2.8 billion euros worth of U.S. imports, including bourbon and jeans, with additional 25 percent duties from early July.

It already has broad backing from EU member states, but needs to consult with them in the next couple of weeks.

European Commission President Jean-Claude Juncker, while questioning whether the United States was truly an ally, said the bloc did not want to stop talking with Washington.

“We do not want to cut off discussions and further talks will of course need to address the automobile sector,” he said.
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