Aurelia Butler

“We hope to have those soon, and we continue to hope to have those out to you this month,” White House Press Secretary Jen Psaki said. Biden last month renominated Fed Chair Jerome Powell to lead the central bank for another four years, and picked Governor Lael Brainard to take on the bigger role of Fed vice chair when Richard Clarida’s term expires next year. That leaves three other vacancies at the Fed’s seven-member Board of Governors, including the vice chair for supervision role recently vacated by Randal Quarles, who leaves the Fed at the end of the year.Richard Cordray, who was the first director of the Consumer Financial Protection Bureau, is one name under consideration for that post, a source told Reuters last week.Many analysts expect Biden to tap progressives and individuals of diverse backgrounds. The current Fed Board is all white. More

Two of the 12 Fed bank chiefs resigned this fall after revelations they personally traded stocks and other securities as the Fed was conducting massive bond purchases and other market interventions to rescue the U.S. economy during the 2020 COVID-19 pandemic. Warren opposes Powell’s renomination as Fed chair. His term ends in February, and a date for his renomination hearing has not yet been announced. Warren sent a letter to Powell dated Monday and publicly released Tuesday. In it, Warren said the disclosures were needed to “evaluate the full extent of trading in individual stocks by Fed officials, the extent to which Fed officials were warned of the risks from their trading, and whether the plans you announced to change the Fed’s ethics practices are sufficient to prevent future financial conflicts of interest.”Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren, the two officials who resigned, said they followed the Fed’s ethics guidelines. The disclosures could shed light on whether top Fed officials profited from their personal trading. Warren wants to see a March 23, 2020 from the Fed’s ethics office advising Fed leaders to observe a trading blackout while the central bank was rolling out its crisis-fighting programs.Her letter also demands the Fed disclose for the first time all ethics guidance provided to Fed leaders since Jan. 1 2020.Powell has since rewritten the Fed’s ethics rules to restrict trading by top U.S. central banking officials, including the kind of trading Kaplan and Rosengren undertook.An inspector general’s probe into the trading, sought by Powell, is ongoing. More

(Reuters) – Kellogg (NYSE:K) Co said on Tuesday a majority of its U.S. cereal plant workers have voted against a new five-year contract, forcing it to hire permanent replacements as employees extend a strike that started more than two months ago.Temporary replacements have already been working at the company’s cereal plants in Michigan, Nebraska, Pennsylvania and Tennessee where 1,400 union members went on strike on Oct. 5 as their contracts expired and talks over payment and benefits stalled.”Interest in the (permanent replacement) roles has been strong at all four plants, as expected. We expect some of the new hires to start with the company very soon,” Kellogg spokesperson Kris Bahner said.Kellogg also said there was no further bargaining scheduled and it had no plans to meet with the union.The company said “unrealistic expectations” created by the union meant none of its six offers, including the latest one that was put to vote, which proposed wage increases and allowed all transitional employees with four or more years of service to move to legacy positions, came to fruition.”They have made a ‘clear path’ – but while it is clear – it is too long and not fair to many,” union member Jeffrey Jens said.Union members have said the proposed two-tier system, in which transitional employees get lesser pay and benefits compared to longer-tenured workers, would take power away from the union by removing the cap on the number of lower-tier employees.Several politicians including Bernie Sanders and Elizabeth Warren have backed the union, while many customers have said they are boycotting Kellogg’s products.Kellogg is among several U.S. firms, including Deere (NYSE:DE) & Co, that has faced worker strikes in recent months as the labor market tightens. More

WASHINGTON (Reuters) -The U.S. Federal Aviation Administration (FAA) on Tuesday warned that interference from planned use of 5G wireless spectrum posed an air safety risk and could result in flight diversions.The aviation industry and the FAA have raised concerns about potential interference of 5G with sensitive aircraft electronics like radio altimeters. AT&T (NYSE:T) and Verizon Communications (NYSE:VZ) in November agreed to delay the commercial launch of C-band wireless service until Jan. 5 after the FAA raised concerns.The FAA issued a pair of airworthiness directives ordering the revision of airplane and helicopter flight manuals to prohibit some operations requiring radio altimeter data when in the presence of 5G C-Band wireless broadband signals.One FAA directive on Tuesday said the “unsafe condition” posed by the planned use required immediate action before the Jan. 5 deployment “because radio altimeter anomalies that are undetected by the aircraft automation or pilot, particularly close to the ground … could lead to loss of continued safe flight and landing.”The FAA reiterated in a statement on Tuesday that it believes the “expansion of 5G and aviation will safely co-exist.” The agency added that the two directives “provide a framework … to gather more information to avoid potential effects on aviation safety equipment.”The FAA remains in discussions with the Federal Communications Commission (FCC), White House and industry officials about the precise contours of any limitations, which are expected to be outlined in the coming weeks in a series of notices.The FCC said Tuesday it “continues to make progress working with the FAA and private entities to advance the safe and swift deployment of 5G networks … We look forward to updated guidance from the FAA in the coming weeks that reflects these developments.”It is not yet clear what airports or specific airplanes may be impacted. The FAA said notices would “be issued, as necessary, to state the specific areas where the data from a radio altimeter may be unreliable due to the presence of 5G C-Band wireless broadband signals.”AT&T and Verizon on Nov. 24 said they would adopt precautionary measures for at least six months to limit interference. But aviation industry groups said on Monday they were insufficient to address air safety concerns.Verizon said Tuesday “there is no evidence that 5G operations using C-band spectrum pose any risk to aviation safety, as the real-world experience in dozens of countries already using this spectrum for 5G confirms,” and added it was confident the FAA ultimately will conclude C-Band 5G use “poses no risk to air safety.”Verizon added it was “on track to launch 5G using C-band next month and to reach 100 million Americans with this network in the first quarter of 2022.”The wireless companies said in November they would take “additional steps to minimize energy coming from 5G base stations.” The FAA said under 2020 FCC rules “base stations in rural areas of the United States are permitted to emit at higher levels in comparison to other countries.” More

He will replace Belgian economist Frank Smets, a key aide to former President Mario Draghi, who will now go on unpaid leave for one year before coming back as an adviser. Arce, who will take up his new role in the first quarter of next year, is currently the director for Economics, Statistics and Research at the Banco de España.He took up that role in 2018, when his predecessor Pablo Hernández de Cos was promoted to governor of the Spanish central bank.Arce has a doctorate from the London School of Economics. His latest research focussed on the effects of central banks’ bond-buying programmes. More

Germany’s incoming German finance minister has stressed the need for “stability” in the eurozone but said it should be combined with “growth and investment”, in a possible sign of openness towards reforming Europe’s fiscal rules.Christian Lindner told journalists on Tuesday it would be “advisable” for the eurozone “to remain committed to the idea of stability”. “That is a point the future [German] government will make when it comes to the review of the [EU’s] fiscal rules,” he added.But he denied that Berlin would now simply advocate a return to the austerity of the past. “Germany will respect stability and at the same time enable investments in competitiveness to be unleashed,” he said.Lindner becomes finance minister at a time when calls for reform of the EU’s fiscal rules are growing louder. A consultation is under way over how to amend the arrangements, enshrined in the Stability and Growth Pact, which were suspended when the pandemic began.Mario Draghi, Italy’s prime minister, last month said reform of the rules was “inevitable”, not only because of the high economic cost of the pandemic, “but also because of the future challenges of the EU, from the fight against climate change to new technologies, to the gigantic investments in semiconductors”.Meanwhile, Klaus Regling, managing director of the European Stability Mechanism, the eurozone’s bailout fund, told German news magazine Der Spiegel in October that the 60 per cent ceiling on the ratio of public debt to GDP contained in the SGP “is no longer relevant” and should be raised.Lindner was speaking to reporters shortly after the three parties making up Germany’s new government — the Social Democrats, Greens and liberals — signed the coalition agreement that sets out their plans and policies for the next four years. The signing paves the way for the Bundestag to elect Olaf Scholz as Germany’s new chancellor on Wednesday.Lindner is leader of the liberal Free Democrats (FDP), many of whose members opposed the Greek bailouts during the eurozone debt crisis. In the course of the coalition negotiations he resisted attempts to increase taxes and loosen Germany’s debt brake, its constitutional cap on new borrowing.That has made him a figure of suspicion for some in southern Europe, who worry he will push for a return to the austerity policies pursued by the EU after the global financial crisis.Lindner noted the “big increase” in eurozone countries’ debts during the pandemic. “We must avoid . . . [having] fiscal dominance in the future,” he said. That refers to a situation where public finances are so burdened that central bankers are compelled to keep government borrowing costs lower than if they simply concerned themselves with inflation. Lindner also said the new government would be watching inflation “very closely”. Germany’s inflation rate reached 6 per cent last month, its highest level since 1992, though Lindner noted it was likely triggered by a pandemic-related “one-off effects”. He said he did not plan to raise new borrowing next year beyond the €100bn already outlined by the outgoing government, and reiterated his intention to reapply the debt brake — which was suspended in the pandemic — from 2023 onwards. More

The shadow of the Omicron variant hangs over the global economy. Even though we remain largely ignorant of its transmissibility, virulence and ability to evade the protection of vaccination or prior infection, there is no better time to take stock of the economic lessons from the past two years in order to help set policy now. Most important is that when a serious virus is circulating, you cannot separate economics from epidemiology. There is clearly a trade off between restrictions on normal daily life and short-term economic activity, but the underlying cause of both health and economic troubles is the severity of the epidemic. Controlling the virus is paramount. Early and strict lockdowns were most successful in 2020 and operated well in much of Asia and the Pacific. But this year, effective vaccines and treatments have allowed life to return closer to normal in Europe and the US, so long as countries could encourage and coerce sufficient numbers of people to be inoculated. The promise of effective vaccines also lowers the cost of temporary economic restrictions at the start of a wave because an end to disruption is credibly in sight. They remove the need for the draconian restrictions inherent in a zero-Covid approach. If the link between economics and epidemiology has been a case of learning by doing, pure economic policy in rich countries has been a triumph, underpinned by a welcome absence of ideology. Last year witnessed the worst global drop in per capita gross domestic product since the second world war, but the latest OECD forecasts suggest that by the end of 2022, advanced economies will have recovered all of the lost ground compared with its November 2019 forecasts. For these countries, “Build Back Better” is not a hollow slogan, but the most likely outcome. Successful vaccination has transformed the outlook this year alongside skilful deployment of economic policy in rich countries. Fiscal support for people and companies affected by economic restrictions was rapid and generous. In emerging economies, the lack of fiscal space prevented equivalent fiscal support and explains their worse performance and the current assessment that they will suffer lasting damage from the pandemic. They were also initially lower down the pecking order to gain access to vaccines. Rapid action by central banks to quell initial turmoil in financial markets and a willingness to enable governments to borrow and spend their way through the crisis with extensive purchases of assets also played an important role. No one should get hung up on concerns that the taboo on monetising government debt has been broken, so long as the policies are temporary and they show willingness to prevent persistent inflationary pressure. The return of inflation has been the most visible demonstration of a third lesson: fine-tuning the response to a crisis is impossible. With a huge surge in global demand for goods, higher prices became inevitable and almost impossible to avoid. That price rises are more ingrained in the US, where wage inflation has risen higher, is a valuable reminder that resource constraints in economics are real. Governments cannot simply run economies at ever higher pressure without overheating. The final economic lesson of the past two years is that policy details matter. The OECD’s recent economic outlook shows that the US recovery outperformed the eurozone in terms of gross domestic product, but lagged European countries in terms of employment. This relates to the type of fiscal support offered during the pandemic and demonstrates important trade-offs. European countries tied job support to employers, keeping workers attached to their jobs, but paying the price in terms of lower productivity and delays in ensuring new jobs were created in areas where demand and spending was high. The US was better at reallocating employees to new jobs by attaching support to individuals rather than employers, but it came at the cost of finding that a much larger number fell out of the labour market altogether. It is still too early to evaluate which will ultimately prove more successful. With these lessons in mind, we can turn to the Omicron variant. The early evidence suggests it is much more transmissible than the Delta variant. It is also possibly milder, but it is not clear whether lower virulence is an innate property of the variant, the result of protection against severe disease coming from past infection or inoculation, or, more worryingly, that the age profile of positive cases has been young to date in South Africa. Countries need time to formulate policy, yet in South Africa and the UK, Omicron cases appear to be growing at extraordinary speed. The lesson from earlier in the pandemic is to act fast rather than seek to optimise, so it is time for governments in rich countries to adopt the precautionary principle as well as accelerating vaccine boosters. This means building on travel restrictions with the reintroduction of curbs on daily life while also preparing fiscal policy tools to spring back into life if further restrictions are needed in the coming days. Let us hope these measures prove to be an overreaction, especially if vaccines turn out to be effective at preventing severe disease. Little long-term damage will be done. Far better that than the alternative of waiting and risking a much worse Omicron wave. [email protected] More