Member Briefing March 17, 2022
Invasion of Ukraine Headlines
- Biden Says U.S. to Give Ukraine Drones, Anti-Aircraft Systems – Reuters
- Russia and Ukraine Looking for Compromise in Peace Talks – Reuters
- Biden Brands Putin a ‘War Criminal’ – BBC
- Ukraine’s Zelensky Meets the Moment as he Speaks to Congress – Boston Globe
- Ukraine Crisis Drives Migration, Poverty, Global Hunger – Agence France-Presse
- Five Takeaways from Zelensky’s Virtual Address to Congress – The Hill
- ‘Stop This War Immediately’: NATO Chief Tells Putin, – Read more at CNBC
- Russia Is Spiraling Toward a $150 Billion Default Nightmare – Bloomberg
- Portugal to Adjust Law that Let Abramovich Get Citizenship, Minister Says – Reuters
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Fed Meeting: Quarter Point Increase and as Many as Six More in 2022
The Federal Open Market Committee, the panel of Fed officials responsible for setting monetary policy, increased the federal funds rate by 0.25 percentage points to a range of 0.25 to 0.5 percent. The FOMC also projected roughly six more rate hikes this year, along with slower growth and higher inflation. New projections show most officials expect the fed-funds rate to rise to at least 1.875% by the end of this year, to around 2.75% by the end of 2023 and to hold rates there in 2024.
In a statement following its two-day meeting, the Fed hinted at rising concern about inflationary pressures. It said inflation has been high due to “broader price pressures” and added that the war in Ukraine and “related events are likely to create additional upward pressure on inflation.” The statement also signaled that the Fed could soon announce and implement a plan to shrink its $9 trillion asset portfolio. The central bank ended a long-running asset-purchase stimulus program last week.
DiNapoli: Cuomo Administration Misled the Public Regarding COVID-19 Nursing Home Deaths
The State Health Department was unprepared to respond to infectious disease outbreaks in nursing homes even before the COVID-19 pandemic hit New York, an audit by State Comptroller Thomas DiNapoli’s office found. The auditors also found the department did not provide the public with accurate COVID-19 death counts and became entangled in the undercounting of those deaths as the executive took control of the information provided to the public. The health department understated the number of nursing home deaths due to COVID-19 by at least 4,100, and at times during the pandemic by more than 50 percent, the DiNapoli report said.
“The pandemic was devastating and deadly for New Yorkers living in nursing homes.” DiNapoli said. “Our audit findings are extremely troubling. The public was misled at the highest level of state government through distortion and suppression of facts when New Yorkers deserved the truth.”
Read more at the Comptroller’s website
Retail Sales Come Up Short in February as Inflation Slows Consumer Spending
Advance retail sales grew 0.3% for the month, slightly below the 0.4% Dow Jones estimate. Stripping out autos, sales were up 0.2%, well below expectations for a 0.9% increase and indicative that after a rapid pace to start the year, consumers were slowing down. One bright spot in the data released Wednesday is that January spending was revised up to an increase of 4.9%, a blistering pace that was even stronger than the initial estimate of 3.8%.
The spending numbers were well below the rise in prices, which increased 0.8% in February. Retail spending numbers are not adjusted for inflation. The biggest dent in February’s numbers came in online shopping, with non-store sales down 3.7%. The two-month numbers “suggest that real consumption growth remains reasonably solid” though some headwinds are beginning to show, particularly from expected interest rate increases coming from the Federal Reserve, said Andrew Hunter, senior U.S. economist at Capital Economics.
US COVID – Lawmakers Push Pandemic Probe Modeled on 9/11 Commission
A Senate panel voted overwhelmingly on Tuesday to establish an independent task force to probe the U.S. response to the pandemic — the closest lawmakers have come to supporting such an investigation, two years into the crisis. The vote on that bipartisan legislation, part of the Prevent Pandemics Act advanced by the Senate’s health committee, is the first step in a fraught political journey, and comes as Democrats and Republicans have pursued their own probes, seeking to shape public perceptions ahead of midterm elections that could alter the balance of power in Washington.
The bill introduced by Sen. Patty Murray (D-Wash.) and Sen. Richard Burr (R -N.C.), calls for lawmakers representing both parties to choose a 12-member task force that would inquire into the nation’s readiness and response to the coronavirus on the federal, state and local levels, and issue a final report and recommendations within 18 months. Their broader pandemic legislation cleared their panel in a 20-2 vote on Tuesday but still needs to receive a floor vote in both chambers of Congress before potentially becoming law.
Compromise Reached on COVID-19 Vaccine Intellectual Property Rights Waiver
The EU, South Africa, India and the U.S. have reached a compromise in long-running negotiations on a waiver on intellectual property rights for coronavirus products. Supporters of a waiver argue that it would have led to a significant increase in the production of coronavirus products during the pandemic and could have saved many lives. It would, in effect, have freed up producers to replicate coronavirus vaccines, tests and diagnostics without fear of infringing on pharmaceutical companies’ patents.
Until the end of last year, coronavirus vaccines were in short supply, with many poorer countries, particularly in Africa, having almost no access to vaccines. Under the compromise, which currently only covers vaccines, developing countries that have exported less than 10 percent of the world’s coronavirus vaccine doses in 2021 would be able to authorize the use of a patented coronavirus vaccine without the owner of the patent’s consent.
Raskin Removes Herself from Consideration for Fed Post
Sarah Bloom Raskin, President Biden’s nominee to become the government’s most powerful banking regulator, withdrew from consideration on Tuesday, the White House said, amid opposition to her nomination from Republicans and a key Democrat, Andrew Ackerman and Ken Thomas report.
The withdrawal is a major blow for the Biden administration, which has struggled to advance its financial nominees through the evenly divided Senate. It came a day after Sen. Joe Manchin of West Virginia, a key Democratic vote in the evenly divided chamber, said Monday that he couldn’t support Ms. Raskin’s nomination, citing her views on addressing climate change.
EIA: U.S. Shale Production Set For Big Jump In April
U.S. shale oil production in the seven most prolific shale basins are set for their biggest rise since March of 2020, according to new EIA data. The Energy Information’s Drilling Productivity Report is estimating that the total production in the seven major U.S. shale basins will rise by 117,000 bpd next month, to 8.708 million bpd, according to the EIA’s latest version of the Drilling Productivity Report. The news comes as U.S. crude oil production finds itself in the spotlight as to the reasons they are not producing more.
For April, the EIA now sees U.S. crude in the Permian rising from 5.138 million bpd to 5.208 million bpd—a 70,000 bpd rise. The Eagle Ford is expected to see the second largest increase with a 23,000 bpd rise to 1.146 million bpd. The Bakken is expected to increase by 16,000 bpd.
Volvo Cars Teams up With Starbucks for Pilot EV Charging Network
Volvo Cars U.S. (VOLVb.ST) said on Tuesday it was partnering with coffee giant Starbucks Corp (SBUX.O) to create a public electric vehicle (EV) charging network that is set to begin this summer. The Swedish automaker maker said that its pilot installations would include as many as 60 Volvo-branded ChargePoint DC fast chargers at up to 15 Starbucks store locations.
Volvo, which plans to have a charger installed at every 100 miles, said it expects the installations to be completed by the end of 2022. The charging stations could be used by all EV drivers for a fee. However, Volvo car owners could use these at no charge or at preferential rates.
China Stocks Jump Most Since 2008 as State Council Vows Support
Stocks across Hong Kong and China staged a stunning rebound after China’s state council vowed to keep its stock market stable amid a historic rout that erased $1.5 trillion in value over the past two sessions. The rally followed a report by the official Xinhua news agency that China will keep the stock market stable and support overseas share listing, citing a meeting chaired by Vice Premier Liu He. The comprehensive statement also sought to resolve other woes that have plagued the market, particularly concerns over Beijing’s tech crackdown, saying efforts to “rectify” internet platform companies should end soon.
China’s central bank and its banking and insurance regulator soon followed suit to pledge their role in ensuring a stable capital market, a coordinated move that underscores the determination of the authorities.
Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales
Saudi Arabia is in active talks with Beijing to price some of its oil sales to China in yuan a move that would dent the U.S. dollar’s dominance of the global petroleum market and mark another shift by the world’s top crude exporter toward Asia. China buys more than 25% of the oil that Saudi Arabia exports. If priced in yuan, those sales would boost the standing of China’s currency. The Saudis are also considering including yuan-denominated futures contracts, known as the petroyuan, in the pricing model of Saudi Arabian Oil Co. , known as Aramco.
The talks with China over yuan-priced oil contracts have been off and on for six years but have accelerated this year as the Saudis have grown increasingly unhappy with decades-old U.S. security commitments to defend the kingdom, the people said. The Saudis are angry over the U.S.’s lack of support for their intervention in the Yemen civil war, and over the Biden administration’s attempt to strike a deal with Iran over its nuclear program. Saudi officials have said they were shocked by the precipitous U.S. withdrawal from Afghanistan last year.
SBA Announced COVID EIDL Program Borrowers to Receive an Additional Deferment
Isabella Casillas Guzman, head of the U.S. Small Business Administration (SBA) yesterday directed the Agency to provide additional deferment of principal and interest payments for existing COVID Economic Injury Disaster Loan (EIDL) program. Borrowers now have a total of 30 months deferment from inception on all approved COVID EIDL loans. The extended deferment period will provide additional flexibility to small business owners impacted by the pandemic, especially those in hard-hit sectors managing disruption with recent variants, as well as recent supply chain and inflation challenges amid a growing economic recovery.
Since its inception, the COVID EIDL program, a federal disaster relief loan, has allocated more than $351 billion in relief aid to 3.9 million borrowers.
Read more at SBA.gov
Why Workers and Employers are Ghosting Each Other
Ghosting is a practice that’s common in the recruitment process; one recent study of 1,500 global workers found that 75% of jobseekers have been ghosted by a company after a job interview. Employers openly acknowledge that they do it; only 27% of US employers surveyed by job listings site Indeed said they hadn’t ghosted a candidate in the past year. But it’s not just companies. Right now, employees are ghosting back – and potentially in higher numbers than ever before. In the same 2021 Indeed survey, 28% of workers said that they’d ghosted an employer – compared to 19% two years before.
The phenomenon seems to be happening at all stages of the recruitment process. While some employers reported that candidates cut off communications following an initial phone screening, a quarter said new hires had “no-showed” on their first day at work. Ghosting is considered bad practice for both companies and workers; no one likes being on the receiving end of it. Yet its rise seems inexorable: digital hiring processes deluge companies with candidates, making replying to everyone hard, even as labor shortages give job-hunters more options as employers scramble for talent. Is the inevitable consequence of this an increasingly discourteous recruitment process – or can steps be taken by both sides to avert a downward spiral?