Aurelia Butler

WASHINGTON (Reuters) -The U.S. Senate voted 79-19 on Tuesday for a bill which would provide the Postal Service (USPS) with about $50 billion in financial relief over a decade and require its future retirees to enroll in a government health insurance plan.The action, after the U.S. House of Representatives overwhelmingly approved the measure in early February, sends the bill to President Joe Biden for his signature. USPS has reported net losses of more than $90 billion since 2007, and on Tuesday reported a net loss of $1.5 billion for the quarter ending Dec. 31.USPS has been struggling with diminishing mail volumes even as it must deliver to a growing number of U.S. addresses. “It has to be done because the Postal Service’s business model just doesn’t work,” said Senator Rob Portman, a Republican and one the bill’s primary sponsors. “Having to deliver more and more packages and fewer and fewer more profitable first class mail pieces to more and more addresses.”AFL-CIO President Liz Shuler, whose union represents postal workers, said the bill was the culmination of “15 years of efforts to fund and strengthen USPS.”Democratic Senate Leader Chuck Schumer said the legislation provides “the Postal Service a much-needed reset and puts the agency “on a path to solvency.”Postmaster General Louis DeJoy in March 2021 proposed some of the financial reforms https://about.usps.com/what/strategic-plans/delivering-for-america/assets/USPS_Delivering-For-America.pdf#:~:text=The%20Plan%E2%80%99s%20strategic%20initiatives%20are%20designed%20to%20reverse,next%20ten%20years%20by%20achieving%20break-even%20operating%20performance in the legislation, which he said could eliminate $160 billion in predicted losses over the next decade. USPS also adopted new delivery standards in October that slow some first-class mail deliveries. DeJoy has called the legislation “vital to the United States Postal Service and the American People.”One reason for the large losses is 2006 legislation mandating USPS pre-fund more than $120 billion in retiree healthcare and pension liabilities.The bill eliminates requirements USPS pre-fund retiree health benefits for current and retired employees for 75 years, a requirement no business or other federal entity faces. USPS projects it would sharply reduce its pre-funding liability and save it roughly $27 billion over 10 years.It requires future retirees to enroll in Medicare. About 25% of postal retirees do not enroll in Medicare even though they are eligible, which results in USPS paying higher premiums than other employers. USPS estimates the change could save it about $22.6 billion over 10 years.Postal unions support the bill as does the Greeting Card Association, Hallmark and Amazon.com (NASDAQ:AMZN).The bill requires USPS to maintain six-day a week mail deliveries and develop an online weekly performance data dashboard by ZIP code, and expands special rates for local newspaper distribution.USPS has said the legislative changes will largely eliminate an estimated $57 billion in liabilities over the next 10 years, without reducing the benefits received by employees or retirees. More

By Saqib Iqbal Ahmed and Ira Iosebashvili(Reuters) – Plummeting stocks, soaring commodity prices and tightening global financial conditions following Russia’s invasion of Ukraine are clouding the outlook for markets already unsettled by the prospect of a hawkish Federal Reserve.Dramatic moves are everywhere you look, from a bear market in the Nasdaq Composite Index and wild rallies in oil and other raw materials to surges in popular haven assets such as gold and the U.S. dollar.Hanging over it all is the Fed, which is widely expected to raise rates at its monetary policy meeting next week for the first time in more than three years. Some investors now worry that the U.S. central bank will have to keep raising rates to contain rising inflation despite an expected hit to growth from geopolitical instability, risking a recession. “Traders are not used to this kind of volatility in markets,” said Michael O’Rourke of Jones Trading. “Everyone is trying to figure out what is the next threat and where the next distortion is.” RAW MATERIALS RALLYSanctions against commodity-export giant Russia by the United States and its allies have stoked a rally in the price of oil, metals, wheat and other commodities, a move investors fear will exacerbate already high inflation while weighing on global growth – a condition known as stagflation.Brent crude is up more than 25% since the beginning of March while nickel prices more than doubled on Tuesday, forcing the London Metal Exchange to halt trading in the metal. “For the U.S. economy, we now see stagflation, with persistently higher inflation and less economic growth than expected before the (Ukraine) war. A recession can no longer be ruled out,” strategist Ed Yardeni of Yardeni Research wrote in a recent note to clients.BEARS EMERGINGThe Nasdaq slipped 3.6% on Monday, taking it more than 20% below its recent peak, confirming that the index is in a bear market, according to a common definition. Germany’s DAX is in bear territory as well, while the benchmark S&P 500, down nearly 12% this year, recently confirmed a correction.CREAKY PLUMBINGFinancial indicators are showing increasing signs of stress throughout markets. One of these is the so-called FRA-OIS spread, which measures the gap between the U.S. three-month forward rate agreement and the overnight index swap rate. It was recently at its highest level since May 2020.A higher spread reflects rising interbank lending risk or banks hoarding U.S. dollars, meaning that it is widely viewed as a proxy for banking sector risk.The rush for dollars has been a major contributor to the greenback’s advance against the euro over the last two weeks, according to Huw Roberts, head of analytics at Quant Insight in New York.More broadly, global financial conditions – the umbrella phrase for how metrics such as exchange rates, equity swings and borrowing costs affect the availability of funding in the economy – are at their tightest in around two years. GYRATIONSVolatility in stocks, currencies and rates is at multi-year highs, as investors calibrate their portfolios for higher commodity prices and a potentially prolonged conflict in eastern Europe.The Cboe, known as Wall Street’s fear gauge, was recently at 33 and has shot up by about 16 points this year.Sharp (OTC:SHCAY) rises and falls in Treasury yields – fueled by bets on how aggressive the Fed will be in raising rates in 2022 as well as a flight to safety in U.S. government bonds, have taken the ICE (NYSE:ICE) BoFAML MOVE Index to its highest level since March 2020.Meanwhile, gyrations in currencies and a rally in the U.S. dollar has lifted the Deutsche Bank (DE:DBKGn) Currency Volatility Index to a near-two-year high.FLIGHT TO SAFETYNot surprisingly, investors have been sheltering in gold, the dollar, the Swiss franc and other so-called safe havens, driving up their prices to multi-month highs. Prices for the yellow metal are up more than 10% this year. More