Hold It Steady

Looks as if our current low interest rates are here to stay. After cutting them three times in 2019, the Federal Reserve left rates unchanged at its meeting last week and said it planned to keep a hands-off approach for all of next year. But as the Fed chair, Jerome H. Powell, said, “None of us have much of a sense of what the economy will look like in 2021.” Also tough to predict? The labor market. Unemployment remains at a record low, but wage growth hasn’t kept up. One explanation is that the United States has a large shadow labor force that was never counted as officially “unemployed.” As the job market heats up, that population has trickled back into the work force, keeping wages down.

Image Credit... Giacomo Bagnara

What’s Next? (Dec. 15-21)

A Victory for Brexit

Britain’s prime minister, Boris Johnson, had a simple campaign message: “Get Brexit done.” And it worked. Mr. Johnson and his Conservative party won a sweeping majority in a rare December election on Thursday, which is exactly what he needs to finalize legislation for Britain’s departure from the European Union before the Jan. 31 deadline. The value of the pound surged as the voting results rolled in, a sign of rising confidence in Britain’s economy now that its future looks more clear. Whether you’re a fan of Mr. Johnson and his policies or not, you have to admit: Won’t it be nice for all that hemming and hawing about Brexit to end?

NAFTA’s Makeover

The House expects to vote this week on a renegotiated trade agreement between the United States, Mexico and Canada. Known as “the new NAFTA” — which is certainly catchier than its official name, the United States-Mexico-Canada Agreement — it’s a replacement for the 1993 North American Free Trade Agreement, which Mr. Trump pledged to rip up as part of his campaign platform. The latest version makes good on at least part of his promise, and will provide protections for some American farmers and autoworkers. And to get Democrats on board, lawmakers included environmental provisions and labor reforms. Look, compromise! The legislation is expected to be approved before Friday, when Congress starts its holiday break.

It’s a Start

United States negotiators agreed to an initial trade deal with China shortly before the long-running trade war was set to escalate on Dec. 15. As part of the agreement, Mr. Trump pledged to reduce the tariffs he has placed on $360 billion of Chinese goods, in return for China’s commitment to ratchet up its purchases of American agriculture products. Officials say that the pact will also require China to enforce stronger protections for American intellectual property and open its markets to American financial institutions, two major sticking points that helped set off the trade war in the first place. But this preliminary, “phase one” deal is far from comprehensive on those issues. Mr. Trump said that negotiations on a secondary agreement would begin immediately.