Aurelia Butler

Joe Manchin has reached a deal with fellow Senate Democrats on a tax, climate and social spending bill, in a reversal that could hand a significant legislative victory to president Joe Biden ahead of the US midterms. The agreement represents some of the most significant climate legislation in US history and comes as a surprise after Manchin, one of the most moderate Democrats in the Senate and a constant thorn in the administration’s side, repeatedly balked at previous iterations of the president’s flagship economic and social spending package. Manchin, who represents West Virginia, on Wednesday said the new bill would not be “Build Back Better” — the Biden administration’s name for its multitrillion-dollar policy plan — but rather the “Inflation Reduction Act of 2022”, which would address “record inflation by paying down [the country’s] national debt, lowering energy costs and lowering healthcare costs”.The bill includes $300bn in deficit reduction, aided by a new 15 per cent corporate minimum tax and closing the tax loophole on carried interest — the share of investment profits that hedge fund and private equity managers are paid as an incentive to hit higher returns.These savings will be coupled with $369bn of spending on climate and energy reforms and $64bn on the Affordable Care Act.“Build Back Better is dead, and instead we have the opportunity to make our country stronger by bringing Americans together,” Manchin said in a statement.The legislation will allow Medicare to negotiate lower prescription drug prices, reducing annual health insurance costs for about 13mn Americans by an average of $800 a year. Manchin also cited investments in new technologies to reduce domestic methane and carbon emissions.The deal could pass as soon as next week before the Senate departs on August recess. If it does, it would represent an eleventh-hour win for the Biden administration, which has been criticised by Democrats for failing to achieve some of the president’s central campaign promises.“This is the action the American people have been waiting for,” Biden said in a statement released by the White House on Wednesday evening. “This addresses the problems of today — high healthcare costs and overall inflation — as well as investments in our energy security for the future.”Senate Democrats and climate activists expressed shock at the last-minute deal, which had all but been ruled out.“Holy shit,” Senator Tina Smith, a Democrat from Minnesota, wrote on Twitter. “Stunned, but in a good way.”Manchin said his agreement included a commitment from Democratic leader in the Senate Chuck Schumer and speaker of the House of Representatives Nancy Pelosi to move forward “a suite of common sense permitting reforms”, smoothing the way for new gas pipeline projects. The commitment to fossil fuel infrastructure is likely to draw opposition from environmental and climate groups, who broadly welcomed the announcement but called on Democrats to oppose the expansion of fossil fuel production. “Political pressure has finally brought Senator Manchin back to the table on climate,” said Erich Pica, president of Friends of the Earth. “Now political pressure needs to safeguard our bedrock environmental laws.”

Wenonah Hauter, executive director at Food & Water Action, said the agreement promoted “false climate solutions . . . Streamlining permitting for natural gas pipelines and exports is not climate action, it is the opposite.” The Sierra Club, a US climate group, said it was “encouraged” by the possibility of the Senate passing bold climate action. Lori Lodes, executive director of Climate Power, an environmental group, said, the bill, if passed, would “put the United States on a path to lowering emissions in half by 2030”.“Congress needs to seize on this opening and pass the strongest clean energy and climate provisions possible as soon as possible.” More

WASHINGTON (Reuters) -The Federal Reserve said on Wednesday it would not flinch in its battle against the most intense breakout of inflation in the United States since the 1980s even if that means a “sustained period” of economic weakness and a slowing jobs market.As he explained the logic behind the stiffest interest rate increases in roughly four decades, Fed Chair Jerome Powell was peppered with questions about whether the U.S. economy was in or on the cusp of a recession – a notion he rejected because U.S. firms continue to hire in excess of 350,000 additional workers each month.”I do not think the U.S. is currently in a recession,” he told reporters after the end of the U.S. central bank’s latest policy meeting, citing an unemployment rate that is still near a half-century low and solid wage growth and job gains. “It doesn’t make sense that the U.S. would be in recession.”But the 75-basis-point rate increase announced by the Fed on Wednesday, coupled with earlier actions in March, May and June, has now jacked the central bank’s overnight interest rate from near zero to a level between 2.25% and 2.50%. That is the fastest tightening of monetary policy since former Fed Chair Paul Volcker battled double-digit inflation in the 1980s.The cure then involved back-to-back recessions.Consumer prices haven’t yet breached the 10% annual mark this time – but at 9.1% they are close enough to raise the stakes for both the Fed and the Biden administration, which is particularly sensitive on the issue ahead of congressional elections in November.While Powell said he did not think a recession would be needed to fix the problem this time, he acknowledged that the economy was slowing and would likely need to slow more for the Fed to bring the pace of price increases back to earth.”We do want to see demand running below potential for a sustained period to create slack” in the economy, Powell said in a news conference. “We’re trying to do just the right amount. We’re not trying to have a recession.”But he was adamant that the behavior of inflation would drive the Fed’s course, and that “another unusually large (rate) increase could be appropriate” when the Fed next meets if inflation does not begin to slow.Powell, and many of his Fed colleagues, have been caught out this year making policy commitments based on data – particularly on inflation – that has surprised them in negative ways and forced them to adjust on the fly. The Fed chief offered little specific guidance about what to expect next, a fact that puts a heavy focus on two months of upcoming data. The Fed’s usual six-week interlude between policy meetings is eight weeks this time, providing what Powell called “quite a lot of data” to digest, including July and August inflation readings that will either show evidence of slowing price increases – or not.”Restoring price stability is just something we have got to do,” Powell said. “There isn’t an option to fail.”When measured by the Fed’s preferred gauge, inflation is running at more than three times the central bank’s 2% target.Fed officials are “acutely aware” of the hardship that inflation imposes on American households, particularly for those with limited means, Powell said, and they will not relent in their effort until presented with “compelling evidence” that inflation is coming down.While jobs gains have remained “robust,” officials noted in the new policy statement that “recent indicators of spending and production have softened,” a nod to the fact that the aggressive rate hikes they have put in place since March are beginning to bite.DATA-DEPENDENTNew data due to be released on Friday will show to what extent growth slowed in the second quarter.Powell said some of the impact of Fed rate increases to date is still building in the economy, and depending on how inflation responds in coming months that could allow the central bank to begin to slow the pace of rate increases.The policy rate is now at the level most Fed officials feel has a neutral economic impact, in effect marking the end of pandemic-era efforts to encourage household and business spending with cheap money. The rate also matches the high point of the central bank’s previous tightening cycle from late 2015 to late 2018, a level reached this time in the span of just four months.Investors expect the Fed to raise its policy rate by at least half a percentage point at its Sept. 20-21 meeting.”While another unusually large increase could be appropriate at our next meeting, that is a decision that will depend on the data we get between now and then,” Powell said. “We will continue to make our decisions meeting by meeting, and communicate our thinking as clearly as possible.”Futures markets tied to Fed policy expectations tilted somewhat back toward a more moderate increase for the next meeting as Powell spoke on Wednesday.In the U.S. Treasury market, which plays a key role in the transmission of Fed policy decisions into the real economy, yields on the 2-year note moved lower. The yield on the 10-year note was little changed.Stocks on Wall Street added to broad gains in the session, with the S&P 500 index closing 2.6% higher, while the dollar weakened against a basket of major trading partners’ currencies.”From here, it is possible that the Fed slows its tightening pace, reassured by the likely peaking of inflation and pullback in inflation expectations as oil prices have fallen,” Seema Shah, chief global strategist at Principal Global Investors, said in a note. “However, with the labor market still a picture of strength, wage growth still uncomfortably high and core inflation set to decline at a glacially slow pace, the Fed certainly cannot stop tightening, nor can it down shift gears too much.” More

(Reuters) -Meta Platforms Inc issued a gloomy forecast after recording its first ever quarterly drop in revenue on Wednesday, with recession fears and competitive pressures weighing on its digital ads sales.Shares of the Menlo Park, California-based company were down about 4.6% in extended trading.The company said it expects third-quarter revenue to fall to $26 billion and $28.5 billion, which would make it a second year-over-year drop in a row. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv. Total revenue, which consists almost entirely of ad sales, fell 1% to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year. The figure slightly missed Wall Street’s projections of $28.9 billion, according to Refinitiv. The company, which operates the world’s largest social media platform, reported mixed results for user growth. Monthly active users on flagship social network Facebook (NASDAQ:META) came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1% year over year, while daily active users handily beat estimates at 1.97 billion.Like many global companies, Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Meta said it expected a 6% revenue growth headwind in the third quarter, based on current exchange rates.Still, the Meta results also suggest that fortunes in online ads sales may be diverging between search and social media players, with the latter impacted more severely as ad buyers reel in spending.Alphabet (NASDAQ:GOOGL) Inc, the world’s largest digital ad platform, reported a rise in quarterly revenue on Tuesday, with sales from its biggest moneymaker – Google search – topping investor expectations. Snap Inc (NYSE:SNAP) and Twitter (NYSE:TWTR) both missed sales expectations last week and warned of an ad market slowdown in coming quarters, sparking a broad sell-off across the sector.On top of economic pressures, Meta’s core business is also experiencing unique strain as it competes with short video app TikTok for users’ time and adjusts its ads business to privacy controls rolled out by Apple Inc (NASDAQ:AAPL) last year.The company is simultaneously carrying out several expensive overhauls as a result, revamping its core apps and boosting its ad targeting with AI, while also investing heavily in a longer-term bet on “metaverse” hardware and software.Meta executives told investors they were making progress in replacing ad dollars lost as a result of the Apple changes but said it was being offset by the economic slowdown.They added that Reels, a short video product Meta is increasingly inserting into users’ feeds to compete with TikTok, was now generating over $1 billion annually in revenue.However, Reels cannibalizes more profitable content that users could otherwise see and will continue to be a headwind on profits through 2022 before eventually boosting income, executives told analysts on Wednesday.”They are being greatly affected by everything,” Bokeh Capital Partners’ Kim Forrest said, referring to the economic slowdown as well as competition from TikTok and Apple.”Meta has a problem because they’re chasing TikTok and if the Kardashians are talking about how they don’t like Instagram … Meta should really pay attention to that.”On Monday, two of Instagram’s biggest users, Kim Kardashian and Kylie Jenner, both shared a meme imploring the company to abandon its shift to TikTok-style content suggestions and “make Instagram Instagram again.”CEO Mark Zuckerberg did not appear to be swayed, however.About 15% of content on Facebook and Instagram is currently recommended by AI from accounts users do not actively follow, and that percentage will double by the end of 2023, he told investors on the call.For now, at least, the metaverse part of Meta’s business remains largely theoretical. In the second quarter, Meta reported $218 million in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality headsets, down from $497 million last year.Its Reality Labs unit, which is responsible for developing metaverse-oriented technology like the VR headsets, reported sales of $452 million, down from $695 million in the first quarter.Although Meta has recently slowed investments as cost pressures increased, executives reassured investors it was still on track to release a mixed-reality headset called Project Cambria later this year, focused on professionals.Meta broke out the Reality Labs segment in its results for the first time earlier this year, when it revealed the unit had lost $10.2 billion in 2021.Its second-quarter operating profit margin fell to 29% from 43% as costs rose sharply and revenue dipped.In November, Chief Financial Officer David Wehner will become Meta’s first chief strategy officer. Susan Li, Meta’s current vice president of finance, will become CFO.^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^GRAPHIC-Meta’s revenue growth stalls as ad business takes a hit https://tmsnrt.rs/3S998S4BREAKINGVIEWS-Meta Platforms, like wine, gets better with age GRAPHIC-Meta’s revenue growth stalls as ad business takes a hit (interactive) https://tmsnrt.rs/3zfVRP4^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ > More

The committee said it will meet again on Aug. 1 at 1300 GMT.The committee meetings come after the U.S. Treasury’s Office of Foreign Assets Control issued last week a special waiver to allow the CDS settlement to continue, after having previously said that transactions involving Russian debt, necessary for the CDS auction, were banned. More