News Wrap: Egyptian Army Calls Off National Unity Talks
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HARI SREENIVASAN: The push to resolve Egypt’s political crisis hit a roadblock today after army leaders called off national unity talks. They said the response had been below expectations. Meanwhile, Egyptian expatriates headed to their embassies around the world to begin voting on a draft constitution. Opposition leaders called for a no-vote on the Islamist-crafted document, rather than an outright boycott.
Russian President Vladimir Putin sounded a defiant note today on his campaign to curb dissent. In his state-of-the-nation address, he threw his support to what he called traditional institutions. And he told lawmakers, clerics and other officials that he wouldn’t stand for any foreign attempts to influence Russian affairs.
PRESIDENT VLADIMIR PUTIN, Russia (through translator): Direct or indirect interference in our domestic political processes is unacceptable.
VLADIMIR PUTIN (through translator): Those politicians who receive money from abroad for their political activity and thus serve, in all likelihood, alien interests shouldn’t be politicians in the Russian Federation.
HARI SREENIVASAN: Putin won a third term last March, despite major protests. Since then, he has cracked down on dissent, with arrests of activists and strict limits on civil society groups.
The U.S. Federal Reserve is sticking with aggressive efforts to buy government bonds and boost the economy. Fed leaders announced today said they will continue until unemployment falls below 6.5 percent.
For more, we spoke earlier with Greg Ip of “The Economist.”
Greg, we have moved from an Alan Greenspan era, where everyone was trying to read the tea leaves, trying to figure out what was said between the lines. Today, we have very clear guidance of exactly what the Fed is looking for to raise interest rates.
GREG IP, “The Economist”: This is very significant. You know the Fed, at least since 1977, has had a legal responsibility to aim for both full employment and low inflation.
But Fed officials traditionally cared a lot more about low inflation because they just didn’t think that in the long run they could affect unemployment. Today’s statement by the Fed is essentially an assertion that they, in fact, do care about both those things and that they will keep stimulating the economy until they both get unemployment lower, at least down to 6.5 percent, or if inflation goes up a little bit more than they expect.
HARI SREENIVASAN: Now, Ben Bernanke also had several caveats. Explain those.
GREG IP: So Ben Bernanke, the Fed chairman, was very clear that today’s statement doesn’t represent an abandonment of the importance of low inflation. He did say, for example, that if inflation were to rise unexpectedly, over 2.5 percent in their own forecasts, that might be reason enough for them to start raising interest rates, even if unemployment has not come down to 6.5 percent.
HARI SREENIVASAN: Markets traditionally love certainty. Why didn’t they embrace it today?
GREG IP: I think markets are starting to question whether the Fed actually has the ability to deliver on this commitment to low unemployment. They have got the interest rates at zero. They have bought trillions of dollars worth of bonds, and still the economy is very, very weak.
HARI SREENIVASAN: And so, going forward, are there things that we should be looking for as signs from the Fed on what’s going to happen or should we be paying more attention to the unemployment rate?
GREG IP: Well, the Fed has taken one more step today. They’re doubling the amount of bonds they’re buying by printing money. They call that quantitative easing.
But the other factor weighing against them is that they have to see what happens in terms of the fiscal cliff negotiations. Their hope is that those will end with a deal between Congress and the president and that will make way for a steady improvement in the economy. Those are the things that they will monitor to see when is the time that they can ease back.
HARI SREENIVASAN: All right, Greg Ip from “The Economist,” thanks so much for your time.
GREG IP: Thank you, Hari.
HARI SREENIVASAN: Wall Street initially rallied on the Fed’s pronouncement, but the enthusiasm quickly flagged and stocks gave up the gains. In the end, the Dow Jones industrial average lost three points to close at 13,245. The Nasdaq fell eight points to close at 3,013.
Indianapolis will be the first major American city to replace all city-owned cars with electric and plug-in hybrid vehicles. The program announced today calls for completing the switch by 2025. The city also plans to phase in fire trucks and other heavy vehicles that run on compressed natural gas. Officials said they’re asking automakers to create plug-in hybrid police cars, which don’t yet exist.
Retiring U.S. Senator Joe Lieberman said goodbye to the Senate today with an appeal for principled compromise. He warned that gridlock is preventing progress on a host of problems. Lieberman ran as the Democratic vice presidential nominee in 2000. All told, he spent 24 years in the Senate, first as a Democrat, and since 2006 as an independent.
A pantheon of music legends takes the stage tonight in New York, raising money for those hit hardest by Hurricane Sandy. The program for the 12/12/12 concert includes Paul McCartney, Bruce Springsteen, the Rolling Stones, Kanye West, and Alicia Keys, among many others. The concert and telethon could reach two billion people on radio and TV, in movie theaters and on Facebook and even digital billboards.
Those are some of the day’s major stories.