Member Briefing March 14, 2022

March 14, 2022

Posted By: Harold King in Daily Briefing,

Invasion of Ukraine Headlines

Fed Open Markets Committee Meets This Week – Quarter Point Hike Expected

The policy-making committee of the Federal Reserve is scheduled to meet March 15-16 to a large expectation that a 25-point rate increase will be announced. Ahead of the meeting, Moody’s maintained an assumption that the Federal Reserve raises the target range for the fed funds rate four times this year at 25 basis points a clip. Markets, however, are pricing in even more hikes, just short of seven hikes over the next 12 months.

Per Chairman Jerome Powell’s testimony to Congress last week, the FOMC appears to be closing in on a plan for balance sheet runoff. UBS says the Fed wants a process that is fast, but controlled, and does not risk market stress. “We think the median projection for 2022 will be revised from three hikes in December, to six or seven in March. By the end of 2024 we expect the median assumption for the federal funds rate will be around 3.0% to reflect a ‘whatever it takes attitude’ in taking inflation down.

Five Things to Know About the $1.5T Spending Bill Congress Passed

Congress finally passed a sweeping $1.5 trillion spending omnibus package this week, capping off months of bruising negotiations and partisan fights over how to fund the government through fiscal year 2022. The massive spending plan now heads to President Biden’s desk, where it’s expected to be signed into law next week.

There is a lot in the 2,000 plus pages of the bill that President Biden is expected to sign into law, and the spending plan should have been in place for the start of the federal government’s fiscal year back on October 1st. Here are how five key spending battles ended up playing out in the sprawling package.

The Michigan Consumer Sentiment Index Fell to 59.7 From 62.8

Most of the dip in the headline is due to a 5.0-point drop in the expectations component, to its lowest level since October 2011, when confidence was depressed by the debt ceiling debacle. Expectations are sensitive to both the state of the stock market and gas prices. The jump in gas prices pushed up near-term inflation expectations too, by 0.4% to 5.4%, the highest since November 1981, but well below the current headline CPI inflation rate, 7.9%. Expectations for inflation in five-to-10 years were unchanged at 3.0%, which will be more comforting to the Fed.

Sentiment and spending are not the same thing, and the chance of a significant divergence now is greater than in the past, because households have $2.5T in excess pandemic savings, far more than the amount needed to pay for more expensive gas. Note too that the Michigan sentiment index is much weaker than the Conference Board measure, for reasons which are not clear.

US COVID – 2 Years on: Taking Stock and Preparing for What Comes Next

Two years ago on March 11th, the World Health Organization declared covid-19 a pandemic. Americans are eager to leave the wretchedness behind them. Polls suggest concern about COVID is declining. Mask-wearing has waned (a maskless President Joe Biden hobnobbed insouciantly with members of Congress after his state-of-the-union message last week). On March 26th, Hawaii will become the final state to drop its indoor mask mandate, and the CDC now recommends masks only for the 7% of Americans living in high-risk counties.

Public-health officials are urging the government to prepare for the next wave. “This is a lull. A moment to prepare so we are never caught again,” says Megan Ranney, a physician and dean at Brown University’s School of Public Health.

NYS Vaccine and COVID Update –

Vaccine Stats as of March 13:

One Vaccine Dose

89.3% of all New Yorkers – 16,429,615 (plus 2,357 from a day earlier).
In the Hudson Valley 1,708,200 (plus 232).

Fully Vaccinated

75.8% of all New Yorkers – 14,710,204 (plus 3,664).
In the Hudson Valley – 1,498,583 (plus 262).

Boosters Given

All New Yorkers – 7,220,268
In the Hudson Valley – 858,824

The Governor updated COVID data through March 13. There were 12 COVID related deaths for a total reported of 69,689

Hospitalizations:

Patients Currently in Hospital statewide: 1,052.
Patients Currently in ICU Statewide: 174

7 Day Average Positivity Rate – Cases per 100K population

Statewide 1.41% – 8.33 positive cases per 100,00 population
Mid-Hudson: 1.41% – 7.40 positive cases per 100,00 population

Useful Websites:

Two Years On, Coronavirus Evolution Still Surprises Experts

On March 11, 2020—exactly two years ago—the World Health Organization declared COVID-19 to be a pandemic. The disease has since infected nearly 500 million people in almost 200 countries and killed more than six million people worldwide, and it’s not over yet. Along the way, this coronavirus has presented scientists with a bevy of surprises: Many experts are still amazed by how quickly the virus evolves, what it does to the human body, and how it moves in and out of other species.

Two years in, there’s still a lot we don’t know about SARS-CoV-2, says David Wohl, an infectious disease specialist at the University of North Carolina. Here’s what scientists have uncovered so far—and the mysteries that continue to tantalize and frustrate coronavirus experts.

Updated Guidance on Religious Accommodations to COVID-19 Vaccine Mandates

On March 1, 2022, the EEOC updated its guidance on religious accommodations to COVID-19 vaccine mandates. While the guidance states that job applicants and employees have a right to request a religious accommodation from an employer’s COVID-19 vaccination requirement under Title VII, the new guidance answers many questions specific to COVID-19 vaccination requirements and specifically addresses how employers should evaluate an employee’s religious objection to the vaccine.

Can the World Cope Without Russia’s Huge Commodity Stash?

So far its exports of raw materials have been spared the kind of comprehensive bans the West has imposed on other sectors. America announced an embargo on Russian oil on March 8th, but it buys little of the stuff; Britain will phase out purchases this year. However, growing signs the West could go further have shocked commodities markets.

A core-commodity index compiled by Thomson Reuters has risen by more than in any period since 1973, on a three-month basis. In the week ending March 4th it showed its biggest increase since at least 1956. Beyond trading floors, hysteria is not yet visible. The calm is unlikely to last. “Right now prices are prints on a screen. In four weeks they become reality,” says a trader. If tensions rise further, energy and metals may have to be rationed. Private firms and personal lives will have to painfully adjust. The rich world would sputter. Poor countries could go bust. In the end Russia may buckle—but not before the broken chain snaps back at the rest of the world with huge violence.

Bipartisan Calls Made for Action on New York’s Gas Tax

On Wednesday, lawmakers unveiled still more proposals on how to address the cost of gas amid supply chain problems brought on by the COVID-19 pandemic and the Russian invasion of Ukraine.

Republican state Sen. Peter Oberacker proposed a bill with Sen. Fred Akshar that would suspend the gas tax through Sept. 1. Future funds from the tax would be sent to aid infrastructure improvements. Democratic lawmakers, meanwhile, proposed an alternative solution: Cap the sales tax on gasoline at 25 cents per gallon, based on the average price paid of $3.09 in 2021. The proposal was made by Sen. John Mannion and Assemblywoman Pamela Hunter.

Study: Majority of Workers Who Quit a Job in 2021 Cite Low Pay, No Opportunities for Advancement

Some interesting survey data on the “Great Resignation” from the Pew Research Center. We know from government statistics that the U.S. quit rate is at a record highs⁠—with at least 4 million people leaving their jobs in each month since July 2021. But why are they leaving? Below are the top five reasons, according to Pew:

It is about money. 37% of those surveyed gave “pay was too low” as a “major reason” they left, and 26% more said it was a “minor reason.”
Opportunity for advancement was cited by 33% as a major reason and 30% as a minor reason.
Respect. Feeling “disrespected at work” was a major reason for 35%, and a minor reason for 21%.
Childcare issues. That was a major issue for 24%, and a minor issue for 24%.
Not enough flexibility to choose when to put in working hours. A major issue for 24%, and a minor issue for 21%.

Biden Administration Extends Travel Mask Mandate through April 18

The Biden administration will extend its travel mask mandate through mid-April as the Centers for Disease Control and Prevention crafts new guidance for masking on transportation services.

An administration official told POLITICO on Thursday that the Transportation Security Administration directive — set to expire this month — will stay in effect through April 18 so the CDC can “work with government agencies to help inform a revised policy framework for when, and under what circumstances, masks should be required in the public transportation corridor.”

Frontier to Serve Two More Cities from Stewart

Frontier Airlines has announced the launch of nonstop service between New York Stewart International Airport and Atlanta and Raleigh-Durham. The airline, known for low fares, said that tickets will be as low as $39. Frontier currently operates flights to Orlando, Tampa and Fort Lauderdale from Newburgh.

The service to Atlanta, Georgia is scheduled to take off three times per week beginning on May 26. North Carolina’s “Research Triangle” will be accessed through twice-weekly flights between Stewart and Raleigh-Durham International Airport, also beginning on May 26.

Starting Salary for Some Graduates Is $100,000

Some college seniors who walk across the stage to collect their diplomas this spring will soon strut into six-figure starting salaries at big tech, finance and consulting firms. Not everybody is happy about it.

As wage inflation hits campuses during a roaring economic recovery and tight labor market, the next cohort of frosh workers may be greeted by grouchy colleagues—some just a few years older—who are jealous and concerned. Some say new hires who don’t know what it is like to make less than $100,000 could be entitled, or out of touch with those of more modest means.

To Find More Truck Drivers, DOL Expands Registered Apprenticeships

The U.S. Department of Labor on March 9 announced its partnership with the Trucking Alliance to join the administration’s 90-Day Trucking Apprenticeship Challenge. The aim of the partnership is to expand Registered Apprenticeship programs in the trucking industry. The partnership’s focus on expanding these programs will enhance industry training and safety standards and improve job quality to recruit and retain truck drivers.

“The Trucking Alliance is committed to making improvements in training and safety standards for truck drivers a priority and keep our supply chain moving responsibly,” said Maverick USA’s CEO Steve Williams, who serves as the Trucking Alliance’s president. The department is placing a high level of importance on expanding RA in the trucking industry to build a sustainable pipeline of drivers with access to fair wages while learning skills, high job quality, and enhanced safety and training standards.

The End of the Great Resignation? Tom Brady Announces That He Is Coming Out of Retirement

Legendary quarterback, Tom Brady took to Twitter to announce his return to the Buccaneers for a third season, and his 23rd NFL season overall. “These past two months I’ve realized my place is still on the field and not in the stands. That time will come. But it’s not now. I love my teammates, and I love my supportive family. They make it all possible. I’m coming back for my 23rd season in Tampa. Unfinished business LFG.”

Perhaps he’ll inspire others to return to the workforce.