WSJ What’s News - Several Federal Reserve Officials Saw Case for July Rate Cuts

Episode Date: August 21, 2024

P.M. Edition for Aug. 21. Minutes from the Federal Reserve’s July meeting show several officials saw a case to cut rates last month, with an overwhelming majority ready to reduce interest rates in September. And Ford has canceled its plans for an electric SUV and will build a hybrid gas-electric model instead. Plus, Democrats try to transform immigration from a political liability to a winning issue. Luke Vargas hosts from the floor of the Democratic convention in Chicago. Danny Lewis hosts from New York City. Sign up for the WSJ's free What's News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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kraken's undertaking to register in Canada. The Fed's July minutes show that several officials supported cutting rates as new data revealed the U.S. job market was weaker than previously reported. Plus, Ford shrinks its EV plans as demand weakens and Democrats try to transform immigration from a political liability into a winning issue. There is an interesting theme bubbling up where a lot of sort of battle-state Democrats are talking about immigration more and more, not at the DNC, but just in their own campaigns in ads and speeches, almost actually trying to go on offense on the issue.

It's Wednesday, August 21st. I'm Luke Vargas for The Wall Street Journal at the Democratic Convention in Chicago. And this is the PM edition of What's News, the top headlines and business stories that move the world today. And before we get to what's happening here in Chicago at the DNC, let's go to New York, where my colleague Danny Lewis has been keeping tabs on the day's news. Thanks, Luke. Let's start with the Federal Reserve's minutes from the last meeting in July. According to these minutes, released today, some Fed officials

saw a case for reducing interest rates at their most recent policy meeting last month. They ultimately decided to wait for more evidence of slowing inflation, but they may now be wishing they hadn't. Since that meeting, there has been even more evidence of cooling inflation and a weakening labor market. The most recent cause for concern? Data revisions by the Labor Department today showed that U.S. employers might have added 818,000 fewer jobs in the 12 months through March than previously believed. Fed's next meeting is set for September 17 and 18. But this Friday, Fed Chair Jerome Powell is set to deliver a heavily anticipated speech

kicking off the central bank's annual symposium in Jackson Hole, Wyoming. And that could sketch out various paths for rate cuts this fall. And in U.S. markets. After the Fed minutes and jobs report revision were released, stocks edged higher and traders increased their bets on the size of the Fed's rate cut in September. The S&P 500 rose 0.4 percent a day after snapping an 8-day winning streak. The Dow Jones Industrial Average gained about 55 points, or 0.1%. And the Nasdaq Composite added 0.6%. When Ford first announced it was making a three-row electric SUV,

it was supposed to roll off the assembly line next year. Then in April, the launch slipped to 2027. And today, Ford has cancelled the car entirely and will build a hybrid gas-electric SUV instead. The company will take a nearly $2 billion hit in related special charges and write-downs, and Ford says it's on pace to lose $5 billion on its EV business this year. WSJ reporter Mike Koliass covers the automotive industry. Mike, why did Ford cancel this particular car? And what does this mean for the company's ongoing EV strategy?

That strategy's been changing quite rapidly. It's pretty striking, especially in an industry where, you know, these decisions are made years and years in advance. I think it just boils down to the fact that we haven't seen EV adoption take off like the automakers all thought it would a few years ago when they made these spending plans. And so it's, they're still growing, but they're just not growing as fast as expected. How did the rapid rise of Chinese EV makers weigh on Ford's calculations?

That's the interesting sort of conundrum right now for a lot of the major automakers is they see how things are taking off in China. China has a much lower cost supply base. They've been able to put out EVs and actually make money on them, at least some of the Chinese automakers. They're offering a lot of electric cars, in places like Europe now and the Middle East that are pretty affordable.

And that's one of the problems in the US. So if you're Ford, you have to figure out, okay, it's not going as fast in the US, but I've got other markets where we compete, like Asia and Europe. And so I think what Ford is saying is, we've got to figure out how to compete with the Chinese automakers,

because they expect that eventually they'll make their way to places like Europe and the U.S. WSJ automotive reporter Mike Kaleis. That was my colleague Danny Lewis in New York with the latest news. Coming up, our Anthony Bansi hits the streets of Chicago to hear how the city is responding to a recent influx of migrants. And I'll talk to immigration reporter Michelle Hackman about a push by Democrats to make the issue a winner for them in November. That's after the break. Introducing TD Insurance for Business with customized coverage options for your business.

Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Whether you're a shop owner, a pet groomer, a contractor, or a consultant, you can get customized coverage for your business. Contact a licensed TD Insurance Advisor to learn more. Here at the DNC, Democrats have talked a lot about their big political goals of defeating Donald Trump and expanding abortion access, but much less so about immigration, an issue that polls show is a top concern for voters and which is especially salient in Chicago, one of several self-described sanctuary cities that GOP-led border states began busing undocumented migrants to in 2022. We wanted to see how that issue is playing out locally

and how Democrats plan to address it nationally. And for that first part, our producer Anthony Bansi hit the streets. As I turned into the parking lot of the Home Depot on 87th Street in Chicago, there were about 50 or so day workers lined up and looking for work. there were about 50 or so day workers lined up and looking for work.

Alongside them was Luciana Diaz. She's the head of PENAS in Chicago, a nonprofit dedicated to helping Venezuelans in the city. I met her as she was pulling a cart full of bottled water for the folks lining the road that day. Her group is one of several that have been dispatched to the area to help the men and women gathered there seeking work. We support them because they are workers from families. You know, they need to bring the food to the table. They are just standing there to look for a job dignity. Chicago's first ever deputy mayor of immigrant, migrant and refugee rights, Beatriz Ponce

de Leon, says the migrants that are coming into Chicago come from varied backgrounds. They've gotten here on their own and therefore haven't been as readily connected to resources. We also are seeing that people have degrees in their countries. There are teachers, we've met doctors, we've met you know kind of like the stereotypical all these these professions and ultimately they'd like to work in their fields, but right now they need to pay their rent. And to provide for their families, who they've traveled thousands of miles with. How many kids? Do you have children?

How many kids? How many do you have? Three. Three. How many children do you have? Five. Five children and five grandchildren. Over the past couple of years, Texas Governor Greg Abbott has sent buses of migrants to the city of Chicago.

We have seen in this whole period just under a thousand buses come to Chicago or the surrounding suburbs and have welcomed officially just over 46, almost 47,000 people who've crossed through the southern border and have come to Chicago. There are people coming on their own as well." The senior community liaison for the Office of Immigrant, Migrant and Refugee Rights, Nuneke Ubasi, told me she's there to help new arrivals with the paperwork to obtain work permits. Nuneke Ubasi, Senior Community Liaison for the Office of Immigrant, Migrant and Refugee

Rights, Chicago, USA, said she's there to help new arrivals with the paperwork to obtain work permits. Nuneke Ubasi, Senior Community Liaison for the Office of Immigrant, Migrant and Refugee Rights, Chicago, USA, said she's there to help new arrivals with the paperwork to obtain work permits. Nuneke Ubasi, Senior Community Liaison for the Office of Immigrant, Migrant and Refugee Rights, Chicago, USA, said she's there to help new arrivals with the paperwork to obtain work permits. Nuneke Ubasi, Senior Community Liaison for the Office of Immigrant, Migrant and Refugee Rights We have, you know, show them how to apply for work because even though a lot of them have English, filling out an application is a bit difficult. I asked Deputy Mayor Ponce de Leon what lessons the Democratic Party could take away from Chicago's

efforts. From the beginning, we led with our values. This is a progressive administration. Our mayor was very clear about wanting to focus on our most vulnerable communities. In the end, they add to economic development and they contribute in a positive way. If you help them along, that happens more readily. The topic of immigration has been notably slim during the DNC. And Myra Carranza, a co-owner of the Stockyard Coffee House in the Bridgeport neighborhood of Chicago, has noticed. I spoke to her ahead of the second night of the convention. We're like, man, she hasn't brought up immigration yet, but I mean, they have two days. Hopefully we get something, some type of plan.

I definitely feel like it's an important issue to bring up. So that is the situation in Chicago, but in a campaign in which messaging plays as big of a role as what parties actually do on the issues. How are Democrats trying to prevent migration from becoming a campaign liability? To help answer that, I'm joined now by Wall Street Journal immigration reporter Michelle Hackman. Michelle, there has not been a lot of immigration talk here at the Democratic Convention, at least that I've heard. Curious what you're picking up on from afar. But I know you have been following

this issue closely. What are you hearing? How are Democrats addressing this issue this week and kind of more broadly on the campaign trail? It's really interesting. You're right. We haven't heard a lot of immigration talk so far,

and it's not something in general Democrats are really keen on talking about. But there is an interesting theme bubbling up where a lot of sort of battle state Democrats running in tight races are talking about immigration more and more, not at the DNC, but just in their own campaigns, in ads and speeches, and almost actually trying to go on offense on the issue. This all goes back to the bipartisan border deal that a group of senators hammered out earlier this year, that Democrats basically got on board with, you know, even though there were elements of it that were quite, quite conservative

and that Republicans basically walked away from when, you know, former president Donald Trump came in and kind of torpedoed that bill. Yeah, that was the line of attack that President Biden took in his speech earlier this week. Here's what he had to say. Trump continues to lie about the border. Here's what he won't tell you. Trump killed the strongest bipartisan border deal in the history of the United States. And then, Michelle, there was a second point that we heard from former President Barack

Obama in his speech here talking about Harris and her VP pick, Tim Walz, and their plans. They understand that we can secure our borders without tearing kids away from their parents. Michelle, a reference there to a very controversial Trump-era immigration policy. That's right. There seems to be a recognition recently the Democrats have made where they've said, wait a second, like, people have forgotten how much they didn't like the Trump administration's immigration policies and how, you know, the word they would use is cruel, how cruel they were. And so it seems like they're returning to that messaging to say, you know, we also want illegal immigration to go down, but we're not going to be mean about it.

Do we have a sense of sort of what the long term immigration plan is from Kamala Harris and Tim Walz sort of coming out of these last few years of President Biden? On the border, I think Kamala Harris is probably going to be more of a continuation of the current Biden administration policy rather than any kind of clean break from it. And the way I would articulate the current Biden administration policy, which is not forefront in their messaging, but is basically the idea that you need to be tough against people who are crossing the border illegally.

But and this is the really big difference between him and Trump, in order for that to work, you need to give people another option. So in this case, the Biden administration is allowing people who want to seek asylum to actually make appointments in advance on a mobile app called CBP one. And the government is processing about 1400 people per day, every day of the week using that platform. So, you know, there is some evidence that that seems to be working. People are being deported immediately if they cross the border illegally. And so what's happening is people who are making it up to the border in Mexico actually are telling us when we interview them, I think what I need to do is wait for an appointment.

And I think she and Biden have both hinted that if she takes office, we could see sort of more bold in the perspective of Democrats, bold positive actions on immigration. Michelle Hackman is The Wall Street Journal's immigration reporter. Michelle, always a pleasure. Thank you so much. Thank you. And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Bienneme, Anthony Bansi and Ariana Ospreu with supervising

producer Michael Cosmides. I'm Luke Vargas for The Wall Street Journal at the Democratic Convention in Chicago and Danny Lewis is at our New York office. We will be back tomorrow morning with a brand new show. And until then, thanks for listening.