Week In Review
May’s deal was defeated for a third time in Parliament even after May promised to step down if it passed. Earlier in the week Parliament voted on eight different “Plan B” options in order to try to find an alternative way forward that can command a majority, but all eight options were defeated. Parliament will hold votes on a smaller number of options on Monday. Tusk called an emergency summit of the European Council for April 10th, two days before Britain must either ask for a longer extension and agree to participate in European Parliament elections or commit to leaving with no deal on May 22nd.
If Parliament is unable to find a Plan B that can get a majority next week then a no-deal exit becomes much more likely. To avoid a no-deal exit Parliament will have to either present a different option that can get a majority and is acceptable to the EU or vote no confidence in May’s government and force a general election while also asking for a longer extension.
U.S. 4Q18 GDP was revised lower this week, from 2.6% to 2.2%. The Fed’s Beige Book, a report on economic activity in each of the twelve Fed districts, was weak, with 10 districts reporting slight-to-moderate growth and two districts reporting no growth. Personal income rose 0.2% in February, while January personal spending increased just 0.1%.
None of the economic news this week was very encouraging. GDP was revised lower than expected, as consumer spending was weaker than previously anticipated, especially in December. Spending continues to underwhelm, as January’s 0.1% increase was considerably worse than expectations. Add in a not-so-great Beige Book report and the case for a cut as the next Fed rate move is strengthening.
Florida Democratic Representative Darren Soto introduced legislation this week to make Puerto Rico the 51st state. At a press conference, Soto stated “Puerto Rico’s colonial status is not working.” He continued, stating “Puerto Ricans need their own U.S. senators and representatives to fight for their needs.” Statehood would allow Puerto Rico voting rights and economic rights that it currently does not have as a territory. Puerto Rico’s Governor Ricardo Rossello and Jenniffer Gonzalez, the Resident Commissioner of Puerto Rico, both support the legislation, while San Juan’s Mayor Carmen Yulin Cruz does not support statehood.
It is unlikely that Representative Soto’s bill will become law, as there would be considerable opposition in Congress. However, this week’s legislation draws additional attention to the amount of financial assistance that the U.S. Government provides to Puerto Rico along with the disaster funding that the island received following the 2017 hurricanes.
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