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Chance of a U.S. recession up, number of Fed rate hikes down: Reuters poll

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BENGALURU (Reuters) – There is a one-in-four chance of a U.S. recession in the next 12 months, a scenario that should keep the Federal Reserve from raising interest rates next month, according to a Reuters poll of economists who now expect only one rate hike this year.

FILE PHOTO: People walk in the sun during Black Friday shopping in New York City, New York, U.S., November 23, 2018. REUTERS/Carlo Allegri

Given a global economic slowdown and a dimming outlook for U.S. growth, economists said the Fed’s tightening cycle will likely draw to a halt before July.

While financial markets have recovered from a deep sell-off late last year, the Feb 8-14 poll of over 110 economists showed a cut to the outlook for U.S. economic growth and the number of Fed rate hikes this year and next.

“There is a lot of uncertainty and there are some good reasons to forecast a slowdown in 2019 as compared to in 2018,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

“It certainly does makes sense for the Fed to take a pause on policy to see how things play out, because it is not impossible for the economy to slow down in 2019 between weakening global growth, tighter financial conditions and fading fiscal stimulus.”

U.S. economic growth was forecast to slow and average 2.4 percent this year, a downgrade from January and the lowest since April last year.

On Wednesday, U.S. President Donald Trump said trade talks with China were “going along very well” as the world’s two biggest economies try to resolve their tariff war ahead of a March 1 deadline.

Reuters polls in recent months have repeatedly highlighted the U.S.-China trade war as the prominent downside risk for the American economy.

Over half the economists who answered an extra question warned any further escalation in the trade war would bring the next U.S. recession.

That compared to about 60 percent of economists in a July 2018 poll who said the trade war did not pose a significant risk.

(GRAPHIC: Reuters Poll – Impact of U.S.-China trade war – tmsnrt.rs/2EcK9th)

The median probability of a recession in the next year rose to 25 percent from 20 percent in January. It held at 40 percent over the next two years, although the most pessimistic call was 75 percent.

Expectations for Fed’s preferred inflation gauge were also slightly lowered from last month.

All but a couple of economists polled forecast the Fed to keep rates on hold at 2.25-2.50 percent when it meets March 19-20, echoing Chairman Jerome Powell’s dovish tone.

However, 51 of 101 economists said the Bank would take the fed funds rate to 2.50-2.75 percent next quarter, something over 75 percent of economists who answered an additional question said would not be a mistake.

“The Fed is very focused on slowing growth. If anything, the bigger risk is if the Fed goes too late rather than too early,” said Ethan Harris, head of global economics at Bank of America Merrill Lynch.

Only one hike is expected from the U.S. central bank this year, compared with 2 hikes suggested by the U.S. central bank’s own “dot plot” projections and in January’s poll. After next quarter’s hike the Fed is expected to stay on the sidelines through to the end of 2021 at least.

The outlook in Reuters polls for U.S. monetary policy tightening has been gradually cut since November, when the Fed was expected to raise rates three times in 2019.

FILE PHOTO: A police officer keeps watch in front of the U.S. Federal Reserve building in Washington, DC, U.S. on October 12, 2016. REUTERS/Kevin Lamarque/File Photo/File Photo

Twelve economists now expect the Fed will not hike at all this year compared to just four respondents in the previous poll, which lines up with the views of U.S. short-term interest rate future traders.

“In light of some weaker economic data and comments from Fed Chair Powell, we did see the need to scale back our forecast on Fed tightening,” said Sal Guatieri, senior economist at BMO Capital Markets.

“Inflation pressures remain very subdued, a number of ‘so called’ cross-currents and headwinds are still important risks and until a lot of these issues are resolved, it is unlikely the Fed will raise interest rates. We see a lengthy delay right up to December and just one final rate increase this cycle.”

Analysis by Mumal Rathore and Nagamani Lingappa; Polling by Sujith Pai and Tushar Goenka; Editing by Jonathan Cable and David Gregorio

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Ottawa education workers still teaching special-ed students at schools want safety checks

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Some Ottawa educators say they are concerned about the safety of classrooms that remain open in schools for special-education students.

Ontario elementary and secondary students have been sent home to study virtually because of the dangers posed by rising rates of COVID-19. However, special-education classes are still operating at many bricks-and-mortar schools.

The special-education classes include students with physical and developmental disabilities, autism and behaviour problems. Some don’t wear masks and require close physical care.

Two unions representing teachers and educational assistants at the Ottawa-Carleton District School Board have sent letters to Ottawa Public Health expressing their concerns.

It’s urgent that public health officials inspect classrooms to assess the safety of the special-ed classes, said a letter from the Ottawa branch of the Ontario Secondary School Teachers’ Federation, which also represents the educational assistants who work with special-needs children.

“In the absence of reasons based on medical evidence to keep specialized systems classes open, we are unsure as to the safety of staff and students in these programs,” said the letter signed by president Stephanie Kirkey and other union executives.

The letter said staff agreed that students in specialized classes had difficulty with remote education and benefited most from in-person instruction.

“Our members care deeply about the students they work with and are not only concerned about their own health and safety, but also about that of their students, as they are often unable to abide by COVID safety protocols that include masking, physical distancing and hand hygiene, thus making it more likely that they could transmit the virus to one another,” the letter said.

The Ottawa-Carleton District School Board has 1,286 elementary and secondary students in special-education classes attending in person at 87 schools, said spokesperson Darcy Knoll.

While final numbers were not available, Knoll said the board believed a large number of the special-education students were back in class on Friday at schools.

In-person classes for other elementary and secondary students are scheduled to resume Jan. 25.

The school boards provide PPE for educators in special-education classes as required, including surgical masks, face shields, gloves and gowns.

Several educators interviewed said they don’t understand why it has been deemed unsafe for students in mainstream classes to attend class, but not special-ed students.

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Ottawa sets record of 210 new COVID-19 cases following lag in data reporting

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Ottawa has now broken its daily record for new COVID-19 cases twice in 2021, with 210 new cases added on Friday amid a lag in data reports from earlier in the week.

The nation’s capital has now seen 10,960 cases of the novel coronavirus.

Ottawa Public Health’s COVID-19 dashboard reports 977 active cases of the virus in Ottawa, a jump of more than 100 over Thursday’s figures.

One additional person has died in relation to COVID-19 in Ottawa, raising the city’s death toll in the pandemic to 395.

The record-setting case count comes a day after Ottawa reported a relatively low increase of 68 cases. Ontario’s COVID-19 system had meanwhile reported 164 new cases on Thursday.

OPH said Thursday that due to a large number of case reports coming in late Wednesday, the local system did not account for a large portion of cases. The health unit said it expects the discrepancy to be filled in the subsequent days.

Taken together, Thursday and Friday’s reports add 278 cases to Ottawa’s total, a daily average of 139 cases.

The new single-day record surpasses a benchmark set this past Sunday, when the city recorded 184 new cases.

Ontario also reported a new record of 4,249 cases on Friday, with roughly 450 of those cases added due to a lag in reporting in Toronto.

The number of people hospitalized with COVID-19 also continues to climb in Ottawa. OPH’s dashboard shows there are currently 24 people in hospital with COVID-19, seven of whom are in the intensive care unit.

Three new coronavirus outbreaks were added to OPH’s dashboard on Friday. One outbreak affects a local shelter where one resident has tested positive for the virus, while the other two are traced to workplaces and private settings in the community.

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Ottawa family dealing with mould issue in apartment grateful for support

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OTTAWA — An Ottawa family, who has been dealing with mould in their south Ottawa apartment, is grateful for the support they have received from the community.

“I would like to say big very mighty, big thank you to everyone,” says Nofisat Adeniyi.

Adeniyi lives with her three sons in a South Keys apartment. Her son Desmond turned to social media on Sunday to seek help for the family, saying they’ve been dealing with mould in their unit and it has taken too long to fix.

“I see my mom go through a struggle everyday; with three kids, it’s not easy,” says 16-year-old Desmond Adeniyi.

He setup a GoFundMe page to help the family raise money to move out. After gaining online attention and the story, which originally aired CTV News Ottawa on Tuesday, they have been able to raise over $30,000.

“Yes! I was surprised, a big surprise!” says Nofisat Adeniyi, “We are free from the mess that we’ve been going through.”

The family was so touched, they decided to pay it forward and donated $5,000 to another family in need, “A lady my son told me about,” says Nofisat Adeniyi.

The recipient wants to remain anonymous, but when she found out from Adeniyi, “She was crying, she has three kids; I remember when I was, I can feel what she’s feeling – because I was once in those shoes.”

CTV News Ottawa did reach out to the property management company for an update on the mould. In a statement on Wednesday, a spokesperson for COGIR Realty wrote:

“We respect the privacy of our residents and are unable to disclose any specific information regarding any of our residents. We can, however, let you know that we are working with the residents and are making every effort to resolve this matter as soon as possible,” said Cogir Real Estate

The giving did not stop at just cash donations. “When I saw the segment, the thing that struck me the most was how easily the situation can be resolved,” says mould removal expert Charlie Leduc with Mold Busters in Ottawa.

Leduc is not involved in the case, but appeared in the original story, and after seeing the mould on TV wanted to help.

“This isn’t something that we typically do, but given the circumstance and given the fact that this has gone on way too long, our company is willing to go in and do this work for free,” said Leduc.

The Adeniyi family may now have some options, and are grateful to the community for the support.

“Yes, It’s great news — you can see me smiling,” says Nofisat.

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