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Markets rally as Federal Reserve raises growth forecasts and cools rate rise fears – as it happened


Fed meeting: what the experts say

And finally… here’s a round-up of expert reaction to the Fed meeting.

Anna Stupnytska, global economist at Fidelity International, says the Federal Reserve sent a dovish message today (helping to push Wall Street to those fresh highs).

The combination of incredibly easy financial conditions, which hardly tightened over the past few weeks, accelerating vaccination campaign, another substantial fiscal package recently legislated and re-opening prospects on the horizon is certainly boosting Fed’s tolerance to higher yields.

“While inflation and growth forecasts were revised up over the forecasting horizon, the median dot remained unchanged, suggesting no hikes through 2023. This sends a dovish message, revealing that the Fed is serious about pursuing its new FAIT [flexible average inflation targeting] framework.”

Michael Pearce of Capital Economics believes the FAIT framework could allow rates to stay on hold for the next few years:

The updated economic projections released after the Fed’s mid-March meeting show that officials expect strong economic growth this year to have only a transitory impact on inflation, which explains why most still aren’t thinking about thinking raising interest rates.

Even if inflation proves more stubborn, we expect their new framework will allow them to justify leaving rates unchanged over the next few years.

Paul O’Connor, Head of Multi-Asset at Janus Henderson, says Jerome Powell has deferred some tougher decisions, notably about tapering.

As widely expected, the Fed’s new growth forecasts were a major uplift to December’s stale predictions, reflecting recent improvements in US macro momentum, the new administration’s fiscal stimulus and vaccine-boosted reopening trends. Real GDP forecasts of 6.5%, 3.3% and 2.2% for 2021, 2022 and 2023 and Core PCE forecasts of at 2.2%, 2.0% and 2.1% were typically quite close to consensus expectations.

What was most interesting here was that, despite these forecasts and the Fed’s projected decline in the unemployment rate from over 6% today to 3.5% in 2023, the consensus view from Fed governors is that they expect to keep interest rates on hold throughout 2023. While bond markets can take comfort from the Fed delivering on its promise to go slowly with rate hikes, despite inflation creeping above the 2% target, the monetary tide is nevertheless turning. Whereas, back in December, only five of 18 Fed officials predicted higher rates in 2023, seven now expect a rate hike in that year and a third of the committee expects that more than one will be needed. Four participants now project hikes for 2022, compared to just one in December.

The Fed delivered a fairly dovish message to the markets today, but the big debates have been deferred not decided. While it is not hard for the Fed to remain patient, while projecting inflation bouncing around target over the forecast horizon, the pressure to tighten policy is likely to intensify if the US recovery accelerates into the summer, as everyone expects. Many of the questions that have been avoided today will linger over the months ahead and may well have become more urgent by the June FOMC. By then, the Fed might be prepared to take the first decisive step away from the current super-accommodative monetary stance by indicating when it will start to taper QE. If macro momentum continues to build, it might also be confirming market expectations of rate hikes in 2023 at that meeting. The June FOMC could be a more challenging meeting for Chairman Powell than today’s turned out to be.

Hugh Gimber, global market strategist at J.P. Morgan Asset Management, reckons we could see more volatility this year:

“Chair Powell had to walk a tightrope in the press conference, balancing a rosier outlook against the Fed’s commitment to let the economy run hot. The recent swings in Treasury yields highlight that investors are still not fully comfortable with numerous aspects of the Fed’s new target – what exactly their tolerance is for higher inflation, what inclusive full employment looks like in practice and how close to these goals the Fed needs to be before it begins to remove accommodation.

“As growth picks up sharply in the coming months, all of these uncertainties point to the potential for ongoing volatility in bond markets. This may create periodic bouts of instability in risk assets but overall we expect the vaccines, stimulus cheques and consumers looking to make up for lost time to translate into strong corporate earnings in the second half of the year, which should propel stock markets higher by year end.”

Goodnight! GW


Dow & S&P 500 close at record highs

Both the Dow and the S&P 500 have both closed at record highs, in fact, as worries about US interest rate hikes are soothed by the Fed.

Wolf Blitzer

Yet another new record high for the Dow Jones Industrial Average. For the first time ever, the Dow closed above 33,000 – specifically 33,015 – up 189 points. That’s probably good news for your 401(k).

March 17, 2021

Yahoo Finance

S&P 500, Dow jump to record highs after Fed maintains outlook for near-zero rates, quells inflation concerns by @emily_mcck

March 17, 2021


Wall Street closes higher thanks to dovish Fed

The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York.

The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York. Photograph: Carlo Allegri/Reuters

Stocks have closed higher on Wall Street, as concerns that the Fed was moving towards an earlier interest rate hike faded.

The Dow Jones industrial average has closed 189 points higher at 33,015, a gain of 0.6% today, as traders welcomed the upgraded growth forecasts.

The broader S&P 500 index shrugged off its earlier losses too, to end the day up 0.3% at 3,974 points, up 11.41 points.

The Nasdaq also bounced, as US bond yields fell back, with the tech index closing 53 points higher at 13,525, up 0.4% (having been down 1% before the Fed statement hit the wires.)

The US dollar has fallen, after the Fed raised its growth forecasts and pushed back against suggestions that it could taper its bond-buying programme soon.

This has pushed sterling up by eight-tenths of a cent, to $1.396.

The euro is up a similar amount, to $1.198.

Holger Zschaepitz

Dovish Fed weighs on the Dollar. Euro jumps to almost $1.20 as Fed sees inflation bump short-lived.

March 17, 2021

Q: Are the supply chain bottlenecks getting better, or worse?

Jerome Powell saying it’s impossible to say for sure.

But with stimulus checks being sent out, and Covid cases coming down, the really strong economic data is coming, and that’s when you’ll see where the bottlenecks are.

But firms will be reluctant to raise prices, he predicts, as he wraps up the press conference.

Powell: Expect bottlenecks and one-time bulge in prices

Q: Households are sitting on a lot of excess savings. How much will that affect inflation, and will it be transitory?

Powell says the Fed is looking at how people will spend when the economy reopens, and used very conservative, mainstream assumptions.

There is very likely to be a step-up of inflation in March and April, when last year’s low numbers drop out of the 12-month window. That ‘fairly significant pop’ will wear off quickly, though.

Past that, as the economy reopens, people will spend more – in restaurants, theatres, and on travel. As Powell puts it:

You can only go out to dinner once per night, but a lot of people can go out to dinner.

There will also be bottlenecks – firms won’t be able to service all the demand.

That will lead to a relatively modest increase in inflation, Powell predicts – a “one-time bulge in prices”, but it won’t change inflation going forward.

More reaction….

Simon French

Powell doing a fine job of keeping maximum employment sufficiently loosely defined to give FOMC wriggle room as US economy evolves. Smart policymaking – if disappointing for those looking to narrow down timing for lift off. Will be a theme again & again in 2021 press conferences

March 17, 2021

Ian Shepherdson

Honestly, people, as long as yields are rising because of stronger growth expectations and not inflation expectations, we just don’t care very much – Powell, roughly.

March 17, 2021

Jerome Powell does not sound concerned that achieving high employment could trigger a surge of inflation.

There was a time when there was a tight connection between unemployment and inflation, he says. That time is long gone, Powell insists [a nod to the demise of the Phillips Curve].

He points out that the US had a strong labour market before the pandemic, without having troubling inflation.

There is a link between wage inflation and unemployment, Powell continues. But, when wages move up because unemployment is low, firms have been absorbing it into their margins rather than raising prices.

We think we have freedom to seek to achieve high levels of employment without worrying too much about inflation, Powell insists firmly.

Guy LeBas

Now @AnnekenTappe Can you talk about the relationship about persistent unemployment and inflation?

Powell: Well, the Phillips curve is deader than this dude, so…

March 17, 2021

Here’s the key message from a chuckling Jerome Powell today – it’s not time to start talking about talking about tapering the Fed’s stimulus programme.


Now is not the time to talk about tapering, Fed Chair Jerome Powell says. “When we see that we are on track to achieve substantial further progress, then we will say so well in advance of any decision to actually taper.”

March 17, 2021

Jerome Powell is spending a lot of his press conference batting away questions about when the Fed might tighten policy.

His main point is that economic uncertainty is still high, so ‘liftoff’ will depend on outcomes which are currently highly uncertain.


The gist of Powell’s answers so far has been that the economy has a lot further to go than inflation hawks realize. Currently passed fiscal stimulus has things headed toward “liftoff” (propelled by fiscal support), but he hasn’t yet mentioned “escape velocity” (self-sustaining).

March 17, 2021

Hammerstone Markets


-expect we will begin to make faster progress on labor mkts, #inflation as year goes on, will have to see it first

-we’ve laid off very clear guidance on rate liftoff

-will wait to hike until requirements are clearly met

– resisted quantifying comfort level for inflation

March 17, 2021

Powell: I’d love to see faster European growth and smoother vaccine rollout

Q: Given the problems in Europe’s economy, could the eurozone drag the US recovery down?

Fed chair Jerome Powell agrees that the US and European recoveries are diverging, as happened after the financial crisis. As before, the US is leading the global recovery. He points out that the Fed’s mandate is domestic – maximum employment and price stability – but it does monitor developments abroad. Very strong US demand, as the economy improves, is going to support global activity as well, he predicts, as it should mean the US imports more from abroad.

And Powell adds:

I’d love to see Europe growing faster. I’d love to see the vaccine rollout going more smoothly.

But he’s not worried about the impact on the US economy. The US is on a very good track, Powell continues, with very strong fiscal support coming, vaccinations going quickly, and cases coming down.

I think we’re in a good place.

Astrid Doerner

#FED Chair #Powell sends a not-so-friendly greeting to the #EU: “I’d love to see Europe growing faster and I’d love to see the vaccine roll out going more smoothly.” He is not the only one.. #Handelsblatt

March 17, 2021

Matthew C. Klein

“I’d love to see Europe growing faster and see the vaccine rollout going more smoothly”


March 17, 2021

Robert Frick

#Powell on diverging recoveries, U.S. v Globe, we can help the world with our demand, would love to see Europe growing strongly.

March 17, 2021

Jerome Powell also cautions that it will take time for the labor market to recover from the pandemic.

Even with a rapid economic bounceback, there are 10 million people that need to get back to work, and it’s going to take some time for that to happen.

Heather Long

Fed Chair Powell on the labor market still in dire straights:

“There are in the range of 10 million people who need to get back to work and it’s going to take time for that to happen.”

“Realistically, given the numbers, it’s going to take time.”

March 17, 2021

Sylvan Lane

Powell striking a balance on the outlook. He says there’s no doubt we’re moving in the right direction, but the virus isn’t quashed yet and there are still ~10 million that need to figure out ways to get back to work. “The faster the better…but it’s going to take some time.”

March 17, 2021

Powell points out that the US is still fighting the Covid-19 pandemic, and the path of the virus remains an important factor:

FXGlobe Market News


March 17, 2021

Here are the key points from the Fed today, via Bloomberg’s Francine Lacqua:

Francine Lacqua

#Fed from @business @TheTerminal

🔸Median dot plot shows rates on hold through 2023

🔸 Seven of 18 officials see rate hike in 2023, up from five

🔸 Powell says economic recovery ‘remains uneven’

🔸 Transient price bumps won’t meet Fed’s inflation goal

March 17, 2021

On the dot plots, Powell insists that a strong bulk of the FOMC committee don’t expect interest rates to increase during the current forecast period (before the end of 2023).

And he’s pushing back against focusing too much about when the first US rate hike might come – pointing out that the state of the US economy in two or three years is highly uncertain.

Kailey Leinz

“The state of the economy in two or three years is highly uncertain, and I wouldn’t want to focus on the timing of an exact rate hike that far into the future.” -Powell

March 17, 2021

Powell also flagged that a ‘transitory’ rise in inflation over the Fed’s 2% target would not meet its standard to trigger a rate rise.

Bloomberg Economics

Powell says the Fed will keep rates low until employment goals are reached and inflation is on track to rise above 2%

“I would note that a transitory rise in inflation above 2% — as seems likely to occur this year — would not meet this standard”

March 17, 2021

Q: Is it time to start ‘talking about talking about’ tapering the Fed’s bond-buying stimulus programme?

Jerome Powell plays down the suggestion.

We want to see actual progress towards our target of “substantial further progress” in maximum employment and price stability, Fed chair Powell explains, rather than simply forecasts.

When the data shows were are on track to achieve that substantial progress, we’ll say so, he adds.

Kailey Leinz

Q: “Is it time to start talking about talking about tapering yet?”

Powell: *laughs* “not yet”

March 17, 2021

Carl R. Tannenbaum

#Powell says the #Fed wants to see actual economic progress, not forecasted economic progress. Tapering conversation won’t begin until then.

March 17, 2021

Ian Shepherdson

Talking about talking about tapering?

“Not yet”

And that’s all you need to know, for now.

March 17, 2021

Christophe Barraud🛢


*That reflects recent fiscal policy as well as vaccinations.

March 17, 2021

Federal Reserve chair Jerome Powell is holding a press conference now.

He explains that indicators of US economic activity and employment have improved recently, but cautions that no-one should be complacent.

The recovery is uneven, and far from complete.

The Fed will continue to provide support for the US economy for as long as needed, Powell says, adding that ongoing vaccinations offer hope of a return to more normal conditions later this year.

Powell says the Fed’s growth forecasts have been “revised up notably since December” [to show 6.5% growth in 2021, up from 4.2% previously expected].

He says this reflects progress on vaccinations and fiscal policy (a nod to President Joe Biden’s $1.9trn stimulus package).

James Politi

Powell: “No one should be complacent.

At the Fed, we will continue to provide the economy the support that it needs for as long as it takes”. Further: recovery remains “uneven” and ” far from complete” – path ahead still “uncertain”.

March 17, 2021


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Police say officer who shot and killed unarmed Daunte Wright intended to fire Taser


Police in a Minneapolis suburb said an officer accidentally shot and killed a 20-year-old Black man on Sunday afternoon during a traffic stop, releasing graphic body-camera footage they say shows the officer intended to use a Taser not a handgun during the death of unarmed Daunte Wright.

The incident plunged the suburb of Brooklyn Center into a night of unrest as Minneapolis remains on edge during the murder trial of former officer Derek Chauvin over the death of George Floyd. Hundreds of protesters clashed with police in riot gear who deployed teargas and flash bangs to disperse the crowds.

At a press conference inside Brooklyn Center police headquarters, surrounded by riot police and national guard troops, the police chief, Tim Gannon, described the shooting as “an accidental discharge” and confirmed no weapon had been recovered from Wright’s vehicle.

The county medical examiner has ruled the death a homicide.

The mayor of Brooklyn Center, Mike Elliott, said he had spoken to Joe Biden, who offered assistance.

“I want to say that our hearts are aching right now,” Elliott told reporters. “We are in pain right now. And we recognise that this couldn’t have happened at a worse time.

“We will get to the bottom of this. We will do all that is in our power to make sure that justice is done for Daunte Wright.”

Elliott also said he supported firing the officer involved, who was later identified as Kim Potter, a 26-year veteran of the Brooklyn Center police department.

Protesters face off with police in Brooklyn Center, Minnesota.
Protesters face off with police in Brooklyn Center, Minnesota. Photograph: Stephen Maturen/Getty Images

Protesters returned to the streets again on Monday evening, despite a 7pm curfew imposed by the governor of Minnesota. Hundreds of people gathered in the cold and rainy weather outside the Brooklyn Center police department, which was ringed by a metal fence, concrete barriers and police dressed in riot gear. Police later deployed flashbangs, teargas and smoke to disperse the crowd.

There are now a few hundred protesters outside the Brooklyn Center police dept, which is circled by fencing. Protesters have also blockaded off parts of Humboldt Ave.

— Oliver Laughland (@oliverlaughland) April 12, 2021

Police are now firing flash bangs, smoke and pepper balls into the crowd. Some are dispersing but others firing fireworks.

— Oliver Laughland (@oliverlaughland) April 13, 2021

Earlier in the day, mourners and outraged community members had made their way to the site where Wright was killed. On a grey, damp morning, Ben Witz and his sister came to the site to lay balloons.

“This is more difficult because there was another, there was another unarmed shooting,” Witz said, explaining that family members lived in the area and that the community was still traumatized from Floyd’s killing and the unrest that followed.

“It seems like it’s a common occurrence now with the police,” Witz said. “It’s crazy what’s happening. It really is.”

According to Brooklyn Center police, the incident occurred shortly before 2pm, when an officer pulled over a vehicle due to an alleged traffic violation.

The body-camera footage showed Wright being apprehended by two officers, when a third female officer approaches the scene. A struggle ensues and Wright gets back into his vehicle, at which point the female officer opens fire.

“Holy shit. I just shot him,” the officer is heard saying.

As the body-camera footage was released, a small group of activists in the police headquarters waiting area demanded the officer, who has not been identified, be fired immediately.

“Seeing the video just confirms what we already knew,” said Toshira Garraway, the founder of Families Supporting Families Against Police Violence. “It’s just killing after killing after killing.”

She added: “They will always say, ‘I was afraid, or it was an accident.’ But the fact of the matter is: this was a murder. If she is not fired, this is only going to escalate.”

Fatal police shooting sparks protests in Minneapolis – video


Fatal police shooting sparks protests in Minneapolis – video

Wright’s mother, Katie Wright, told reporters she was on the phone with her son as the encounter occurred. According to her account, reported by local TV news, her son called as he was being pulled over and asked about insurance for the vehicle, which she had recently given him.

She said she heard officers instruct her son to get out of the car and then “scuffling” shortly before the phone hung up.

“A minute later, I called and his girlfriend answered, who was the passenger in the car, and said that he’d been shot and she put it on the driver’s side, and my son was laying there lifeless,” she said.

Police said officers determined the driver had an outstanding warrant.

Mother whose son was shot dead in Minneapolis suburb: 'I just want my baby home' – video


Mother whose son was shot dead in Minneapolis suburb: ‘I just want my baby home’ – video

Heavily armored national guard troops worked to barricade the police station on Monday morning, as fewer than a dozen protesters faced the building across a road.

Two national guard Humvees, guardsmen carrying long guns and dozens of officers in riot gear were outside the station as police installed concrete blocks. A couple of members of the Original Black Panthers of Minneapolis group chatted with state troopers.

Witz, 40, a liquor store employee, said he was concerned the business would be vandalized if protests over Wright’s killing led to major unrest.

“It was like a war zone,” Witz said of the unrest that followed Floyd’s death. “And now we’re seeing it here and, I mean, why do we have to vandalize, I mean, I, as a white person I don’t get it, but I want to be educated.”

On Sunday evening, hundreds of protesters marched to the police station and were met by officers in riot gear who discharged teargas, flash-bangs and other munitions. Crowds had largely dispersed by midnight.

The Minnesota department of public safety commissioner, John Harrington, said around 20 businesses at the Shingle Creek shopping center were broken into. The mayor, Elliott, urged protesters “to be peaceful and that peaceful protesters are not dealt with force”.

Brooklyn Center is a suburb in north-west Minneapolis with a population of about 30,000. Tensions are high as the murder trial of Chauvin entered its third week.

Some protesters damaged police vehicles.
Some protesters damaged police vehicles. Photograph: Kerem Yucel/AFP/Getty Images

Amid drizzle and grey skies on Monday, protesters such as Bethany Hemrich came to pay her respects near the site where Wright had been shot dead less than 24 hours before.

“As a mother of a Black child, I couldn’t even fathom,” Hemrich, who is white, said. “My son is 10, and I brought him to [the] George Floyd memorial and had to explain racism to him.”

As her voice broke, she continued: “They didn’t have to kill him. I feel like if it was a white person, they wouldn’t have shot him.”

Quinn Redeemed, 46, spoke of the tension in the area around police-involved deaths of Black people.

Redeemed said: “This just added gasoline to the fire. We’re tired and fired up. The world needs to really see what’s going on. And now, the world is watching Minnesota.”

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Police kill student who fired at them at Tennessee high school, authorities say


A student at a Tennessee high school has been shot and killed by police after opening fire on officers responding to reports of a gunman on campus, authorities said on Monday.

David B Rausch, the director of the Tennessee bureau of investigation, said at a news conference that police found the student in a bathroom at Austin-East magnet high school in Knoxville, a city about 180 miles (290km) east of Nashville. They ordered him out, but he wouldn’t comply, and that is when he reportedly opened fire, Rausch said. Police fired back.

The student died at the school, and an officer was wounded and taken into surgery, authorities said. No one else was hurt.

“It’s a sad day for Knoxville, and it’s tough for Austin-East,” Rausch said.

Asked about the overwhelming police response to a call that came in just before afternoon dismissal, the Knoxville police chief, Eve Thomas, said, “We have a student, a school incident. It’s our worst fear, an active shooter in a school.”

The shooting comes as more classrooms are reopening to students after months of remote learning during the coronavirus pandemic, which cut down the number of mass killings in the US. The nation has seen series of mass shootings in recent weeks, including eight people killed at three Atlanta-area massage businesses on 16 March and 10 people killed at Colorado supermarket on 22 March.

Speaking outside a hospital, Knoxville’s mayor, Indya Kincannon, told WATE-TV that she had spoken with the wounded officer and he was conscious and in good spirits.

Kincannon, a former Knox county schools board president, spoke at a February press conference about the gun violence that took the lives of three Austin-East students less than three weeks apart this year. Two of the victims were 15, and the other was 16. The shootings did not take place in the school.

Law enforcement officers respond to the shooting.
Law enforcement officers respond to the shooting. Photograph: Saul Young/AP

“I know that school is a safe place,” Kincannon said at that time, according to the Knoxville News Sentinel. “It’s a place where people are learning … The issues with violence are happening in the community, and it’s affecting kids when they’re outside of the school. That’s why we are focusing our efforts to protect the innocent, protect the school, protect the children and students and staff.”

Bob Thomas, the superintendent of Knox county schools, tweeted on Monday that a shooting had occurred but the building had been secured.

“The school building has been secured and students who were not involved in the incident have been released to their families,” Thomas said.

He added in a separate tweet that authorities were gathering information and about “this tragic situation” and that additional information would be provided later.

Police urged people to avoid the area, adding that a reunification site had been set up on a baseball field behind the school for students to be reunited with family.

Last week, the Republican governor signed off on legislation that would make Tennessee the latest state to soon allow most adults 21 and older to carry handguns – openly or concealed – without first clearing a background check and training.

The state’s governor, Bill Lee, backed the legislation over objections from law enforcement groups, who argued that the state’s existing permit system provided an important safeguard for knowing who should or shouldn’t be carrying a gun.

The law, which does not apply to long guns, will take effect 1 July. The new measure also increases certain penalties relating to theft, and also makes exceptions for people with certain mental illnesses and criminal convictions.

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Alex Rodriguez and billionaire Marc Lore near deal for NBA’s Timberwolves


Former MLB star Alex Rodriguez and billionaire Marc Lore appear to be close to owning the Minnesota Timberwolves, finalizing a deal with current owner Glen Taylor, according to reports.

The pair released a statement on Saturday:

“We look forward to entering this phase of the process with Glen Taylor. Our respect for him and the legacy he built lays an amazing foundation for what is to come. We are excited by the prospect of getting to know the Timberwolves organization, the talented team and their incredible fans.”

The letter of intent paves the way for a 30-day exclusive negotiating window. If a deal is finalized, they would first become minority owners, according to the Athletic, and in 2023, would gain full control.

The Athletic reported an agreement was reached on a $1.5bn price and that the team would remain in Minneapolis – a requirement from Taylor, who has owned the team for almost 30 years.

ESPN also reported the deal was being finalized.

Rodriguez attempted last year to buy the New York Mets alongside ex-fiancee Jennifer Lopez, and Lore was among the other partners in that bid.

Lore, a billionaire New York native, stepped down as Walmart CEO in January. The former entrepreneur created (sold to Walmart for $3bn) and (sold to Amazon for $545m), among other business ventures.

A three-time AL MVP, Rodriguez retired in August 2016 with 698 home runs, a .295 average and 2,086 RBIs in 22 years. He was suspended for the 2014 season for violations of Major League Baseball’s drug agreement and labor contract.

A-Rod, now 45 years old, earned about $448m as a player. The 14-time All-Star started his career with Seattle, signed a record contract with Texas in December 2000, and then moved from shortstop to third base when he was traded from the Rangers to the New York Yankees ahead of the 2004 season.

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