Aurelia Butler

“Bringing down the cost of healthcare, bringing down the cost of prescription drugs is an easy thing for us to do,” Biden said Thursday in Culpeper, Virginia. “It can be done legally with the stroke of a pen.”Biden is seeking to address drug prices and other pocketbook issues ahead of this year’s midterm elections as rising consumer prices threaten Democrats’ control of Congress. The president’s comments came the same day Labor Department data showed U.S. consumer prices surged in January by more than expected, sending the annual inflation rate to a fresh four-decade high of 7.5%.The president on Thursday also said he’d “work like the devil” to bring down surging gasoline prices. “Coming from a family when the cost of gas went up, you felt it in the household, you knew what it was like, it matters,” Biden said.Biden’s stalled $2 trillion Build Back Better social spending plan seeks to lower prescription medication costs for people with Medicare and private insurance by allowing the federal government to negotiate the price of some drugs, cap out-of-pocket spending for some Medicare enrollees and limit costs for insulin.“What we’re proposing is that we negotiate fair prices,” Biden said.GOP senators oppose Biden’s Build Back Better plan and moderate Democrats Joe Manchin and Kyrsten Sinema have raised objections. Biden has said the package would have to be broken up to make it through Congress but he still hopes some “chunks” of the bill will survive. Senate Budget Chairman Bernie Sanders and Senator Amy Klobuchar are pushing leaders to quickly move a standalone bill to cut drug prices — a move that would require 60 votes to pass in the evenly divided chamber.While Manchin has said he supports efforts to reduce drug prices, Democrats in both the House and Senate balked at major drug price controls last year.Accompanying the president in Virginia was Democratic Representative Abigail Spanberger, who is facing a tough re-election battle following Virginia’s redistricting of its congressional map.Spanberger is competing in a substantially redrawn 7th District, whose boundaries shifted north, eliminating portions of suburban Richmond that heavily supported her. A group of GOP challengers is trying to unseat her.©2022 Bloomberg L.P. More

The US 10-year Treasury yield on Thursday climbed to 2 per cent for the first time since August 2019, as investors ditched government debt on the latest evidence of stubbornly high inflation.The benchmark bond yield, which serves as a reference point for financial assets across the globe, has risen 0.5 percentage points so far this year. Investors are positioning themselves for a series of interest rate rises and the end of large-scale bond purchases by the Federal Reserve, but crossing 2 per cent marks a significant milestone for traders. The jump came after the Bureau of Labor Statistics reported that the consumer price index had risen 7.5 per cent in January from a year earlier, the fastest pace of US inflation in 40 years.“It is a challenging time to be a central banker, especially as it now seems that policymakers have been too relaxed on inflation over the past six months,” said Alastair George, chief investment strategist at Edison Group. “Sharply rising government bond yields represent a pre-tightening of financial conditions well ahead of any official interest rate increases.”Benjamin Jeffery, an analyst at BMO Capital Markets, said the 2 per cent threshold was also “technically significant given the market’s fondness for round numbers”.Short-dated yields, which are highly sensitive to interest rate expectations, surged on Thursday. The two-year Treasury yield rose to its highest level since January 2020, up about 0.2 percentage points on the day to a high of 1.59 per cent.“US inflation has consistently beaten expectations and today’s inflation release saw more of the same,” said Jai Malhi, global market strategist at JPMorgan Asset Management. “This provides a significant challenge for the Fed as it aims to keep price increases under control while at the same time sustaining the economic expansion.”Following the release of the January CPI report, traders increased bets on interest rate rises. The futures market now shows investors pricing in six quarter-point interest rate hikes by December and growing odds of a 0.5 percentage point increase in March. This year’s surge in US bond yields has come as the outlook for inflation over the medium and long term is relatively subdued, having fallen since November 2021. Inflation is expected to clock in under 3 per cent both five and 10 years in the future, according to break-even rates derived from trading in inflation-protected Treasuries. The trend suggests investors are pricing in a sanguine economic outlook in the years to come, despite the expectation that the Fed will sharply raise interest rates this year.Some analysts also argue that Treasury yields have been driven higher this year by increased supply. The Fed had been purchasing $120bn worth of government bonds and mortgage-backed securities a month until November 2021, when chair Jay Powell announced that the central bank would begin winding down the programme. In November, the Fed reduced its monthly asset purchases by $15bn a month before doubling the pace in December.Additional reporting by Joe Rennison in New York More

The building block for most cookies, cakes, breads and pastries has spiked 10.3% in the past year, the biggest jump since 2011, U.S. government data released Thursday show. That’s among the highest inflation rates for any category of food outside of meat, eggs and oils.The cost of basic ingredients has been climbing amid supply chain woes and labor shortfalls, and wheat is no exception. This week, the U.S. Department of Agriculture in its widely followed global supply and demand report pared back its estimate for world wheat supplies, signaling some tightness ahead. Meanwhile, “with higher wheat prices, we are seeing some pushback” from retail consumers with sticker shock, said Farm Futures analyst Jacqueline Holland.Rising prices have already started to hit U.S. bakeries, which buy much larger quantities than your average household. At Baked and Wired in Washington D.C., menu prices have already gone up “at least twice” since the pandemic started, said representative Ryan Henson. Now, it’s been forced to scale back cake production, too, thanks to skyrocketing prices of flour, along with milk and eggs.Related: U.S. Inflation Charges Higher With Larger-Than-Forecast GainThe bakery used to sell cakes every day of the week, but since last month, it only sells limited quantities on Saturdays. Before the pandemic, a 50-pound bag of flour cost $8; now it’s roughly $17.“It’s crazy,” said Henson. “We can’t offer as many things as we normally do.”Price-sensitive Valentine’s Day shoppers won’t be able to turn to chocolate for help, either. Cocoa prices in New York neared a two-year high Thursday amid dry weather that has curbed harvest yields.©2022 Bloomberg L.P. More

BRASILIA (Reuters) – A Canadian research note calling ex-president Luiz Inacio Lula da Silva a possible “savior” of Brazil’s sluggish economy has stoked debate in financial markets over increasingly bullish foreign investors eyeing a return of the left-wing leader.BCA Research analysts raised their recommendation on Brazilian equities and sovereign debt to “overweight” in a note published this week, based on “rising odds” of Lula winning the presidential election in October.”Lula’s current policy proposals and his agenda following the election will be moderate, providing a positive impetus to financial markets,” wrote the BCA analysts, led by Chief Emerging Markets Strategist Arthur Budaghyan, in a note titled “Is Lula Brazil’s Savior?”The outlook comes as foreign flows into Brazilian financial markets have surged to $9.5 billion so far this year, boosting the local currency 7% against the dollar as the benchmark Bovespa stock index has risen 8%.Much of that has come from a belief among global investors that Lula, who enjoys a double-digit lead over right-wing President Jair Bolsonaro in recent opinion polls, will take a pragmatic approach to policy, as prominent Brazilian hedge fund managers flagged during an event last week. While many domestic investors rue the demise of a reform agenda that Bolsonaro promised on taking office, foreign investors take comfort in memories of the orthodox economic policies Lula adopted early in his 2003-2010 presidency.”The leading candidate in the polls has a positive international image. He is not unknown, he is a candidate who has been tried,” said Gabriel Galipolo, former CEO of Banco Fator and managing partner of Galipolo Consultancy.He highlighted that Brazil is one of several emerging markets lifted in recent weeks by investors shifting out of the U.S. tech sector and toward other high-yielding assets. Brazilian interest rates have also climbed into double digits as the central bank battles inflation aggressively, which has also lured financial flows.Another chief economist at a Brazilian bank told Reuters Lula’s proposals to re-ignite growth with public investments and more generous social programs may even be good for the economy.Policymaking under Bolsonaro has been torn lately between an economy minister intent on fiscal discipline and allies in Congress eager to spend on pork barrel projects. In contrast, Lula has proven to be a nimble negotiator in Congress.”A Lula government would also have more ability to move between congressmen,” said the economist, requesting anonymity to avoid political blowback.However, even the most optimistic investors recognize the challenge in coming years of stabilizing public debt levels, which now stand at 80.3% of gross domestic product.”In the long run, odds are that Lula’s government will attempt to ‘inflate its way out of debt,'” the BCA analysts told clients. “Hence, our long-term strategy on Brazil remains intact: long stocks but hedge currency risk.” More

(Reuters) -St. Louis Federal Reserve President James Bullard said on Thursday that he has become “dramatically” more hawkish in light of the hottest inflation reading in nearly 40 years, and he now wants a full percentage point of interest rate hikes over the next three U.S. central bank policy meetings. Within minutes, Bullard’s view became the market’s view, with rate futures contracts now fully pricing an increase in the Fed’s target range for its policy rate to 1%-1.25% by the end of its policy meeting in June, with some bets on an even steeper rate hike path. “I’d like to see 100 basis points in the bag by July 1,” Bullard told Bloomberg News in an interview, after a U.S. government report showed inflation rose 7.5% in the 12 months through January. With only three Fed meetings between now and July 1, Bullard’s comments point to at least one half-percentage-point rate hike, a big move the Fed hasn’t made in any recent rate-hiking cycle.Contracts traded at CME Group (NASDAQ:CME) are now fully pricing in a half-percentage-point interest rate increase in March – up from about a 25% chance of such a hike on Wednesday. Before Thursday, most economists and analysts had expected the Fed to move only in regular quarter-percentage-point increments. More