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    Can A Trillion Dollar Coin Resolve the Debt Ceiling Crisis?

    The latest standoff over raising the nation’s debt ceiling is giving new life to an old theory about how to avoid a default.WASHINGTON — The debt limit standoff between Republicans and Democrats has elevated questions about creative solutions for averting a crisis, including one that at first blush might seem unthinkable: Could minting a $1 trillion platinum coin make the whole problem go away?What was once a fringe idea is now being presented to top economic policymakers as a serious remedy.Asked on Wednesday about the notion that there might be another option if Congress failed to lift the borrowing cap, Jerome H. Powell, the Federal Reserve chair, said there was not.“There’s only one way forward here, and that is for Congress to raise the debt ceiling so that the United States government can pay all of its obligations when due,” Mr. Powell said. “Any deviations from that path would be highly risky.”Treasury Secretary Janet L. Yellen was unable to avoid the debt limit crisis brewing back in the United States as she crisscrossed Africa last week and fielded queries about the coin, which she dismissed as a “gimmick.”Instead, Ms. Yellen sent two stern letters to Speaker Kevin McCarthy outlining the “extraordinary measures” she was taking to ensure the United States can keep paying its bills and urged Congress to “act promptly” to protect the nation’s full faith and credit by lifting the debt limit.President Biden told Mr. McCarthy on Wednesday that while there was room for discussion about addressing the deficit, Congress would have to pass a debt limit increase with no strings attached to avoid a financial cataclysm. Mr. Biden and Mr. McCarthy met at the White House for more than an hour in a discussion that carried high stakes, with the federal government set to exhaust its ability to pay its bills on time as early as June.But the idea of a coin still has its fair share of supporters, and they are not giving up.As political gridlock over the borrowing cap has hardened, the notion that the Treasury secretary could defuse the debt limit drama with her currency minting powers has re-emerged, including on Twitter, where the hashtag #MintTheCoin is again buzzing.Still, the feasibility of averting America’s debt crisis by minting a valuable piece of currency is far from clear. Here’s a look at origins of the coin, how it might be used and the potential consequences.A Most Extraordinary MeasureIf Congress cannot reach an agreement by early June to increase the debt limit, which was capped at $31.4 trillion in late 2021, Ms. Yellen’s ability to use government accounting tools to delay a default could soon be exhausted, and the United States would be unable to pay all of its bills on time.Treasury Secretary Janet L. Yellen in Zambia last month. She urged Congress to “act promptly” to protect the nation’s full faith and credit by lifting the debt limit.Fatima Hussein/Associated PressThis could cause a deep recession and potentially a financial crisis, shutting down large swaths of the economy and preventing beneficiaries of Social Security and Medicare from receiving their money. Although Ms. Yellen has the power to move funds around government accounts to delay a default, eventually the government’s coffers will run dry without the ability to raise more tax revenue or borrow more money.That’s where the coin comes in. Proponents of the idea believe Ms. Yellen could use her authority to instruct the U.S. Mint to produce a platinum coin valued at $1 trillion — or another large denomination — and deposit it with the Federal Reserve, the government’s banker, which manages the Treasury Department’s “general account.”Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

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    Egg Shortages Are Driving Demand for Raise-at-Home Chickens

    Which shortage came first: the chicks or the eggs?Spooked by a huge spike in egg prices, some consumers are taking steps to secure their own future supply. Demand for chicks that will grow into egg-laying chickens — which jumped at the onset of the global pandemic in 2020 — is rapid again as the 2023 selling season starts, leaving hatcheries scrambling to keep up.“Everybody wants the heavy layers,” said Ginger Stevenson, director of marketing at Murray McMurray Hatchery in Iowa. Her company has been running short on some breeds of especially prolific egg producers, partly as families try to hedge their bets against skyrocketing prices and constrained egg availability.“When we sell out, it’s not like: Well, we can make another chicken,” she said.McMurray’s experience is not unique. Hatcheries from around the country are reporting that demand is surprisingly robust this year. Many attribute the spike to high grocery prices, and particularly to rapid inflation for eggs, which in December cost 59.9 percent more than a year earlier.“We’re already sold out on a lot of breeds — most breeds — until the summer,” said Meghan Howard, who runs sales and marketing for Meyer Hatchery in northeast Ohio. “It’s those egg prices. People are really concerned about food security.”Google search interest in “raising chickens” has jumped markedly from a year ago. The shift is part of a broader phenomenon: A small but rapidly growing slice of the American population has become interested in growing and raising food at home, a trend that was nascent before the pandemic and that has been invigorated by the shortages it spurred.“As there are more and more shortages, it’s driving more people to want to raise their own food,” Ms. Stevenson observed on a January afternoon, as 242 callers to the hatchery sat on hold, presumably waiting to stock up on their own chicks and chick-adjacent accessories.The Cackle Hatchery received eggs from local farms in Missouri. Hatcheries could theoretically hatch more chicks to meet the surge in demand, but is difficult in today’s economy.Neeta Satam for The New York TimesRaising chickens for eggs takes time and upfront investment. Brown-egg-layer chicks at McMurray’s cost roughly $4 a piece, and coops can cost hundreds or thousands of dollars to construct.Mandy Croft, a 39-year-old from Macon, Ga., serves as administrator on a Facebook group for new chicken farmers and is such an enthusiastic hobbyist that family members call her the “poultry princess.” Even she warned that raising chickens may not save dabblers money, but she said her group was seeing huge traffic nonetheless.“We get hundreds of requests a day for new members, and that’s due to the rising egg cost,” she said.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    U.S. Survey Shows an Uptick in Job Openings, and Not in Layoffs

    The Labor Department found a rise in the number of posted jobs per worker in December, despite the Fed’s efforts to cool the labor market.The nation’s demand for labor only got stronger in December, the Labor Department reported on Wednesday, as job openings rose to 11 million.That brings the number of posted jobs per available unemployed worker, which had been easing in recent months, back up to 1.9 — not what the Federal Reserve has been hoping for as it seeks to quell inflation.“It does make you question whether we continue to see that slowing in net job creation,” said Kathy Bostjancic, chief economist at the financial services company Nationwide. “There’s still a strong demand for workers, and that suggests that the labor market is still running very tight, and too hot.”The 5.5 percent increase in job openings was largely driven by hotels and restaurants, which have been steadily recovering from the pandemic, and jumped sharply to 1.74 million positions posted. Jerome H. Powell, the Fed chair, has been particularly focused on wage inflation in the services sector, but like wages more broadly, increases in hourly earnings in private services have been decelerating.In another sign of confidence among workers, people voluntarily left their jobs at about the same rate as they did in November. Quits as a share of the overall employment base have fallen slightly from 3 percent at the end of 2021, but plateaued over the past few months. Overall, in 2022, about 50 million Americans quit their jobs.Layoffs were also steady in December, staying at the unusually low level that has prevailed since a spike during the pandemic. While pink slips in the tech industry have mounted swiftly — most recently with 22,000 between Microsoft and Google — the bulk of the separations may have occurred after the labor turnover survey ended.Other indicators that employers are shedding workers, such as initial claims for unemployment insurance, have also remained very low by historical standards. Those leaving tech jobs, especially with software development and engineering skills, may have found new opportunities so quickly that they didn’t file for unemployment benefits. More

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    Private payroll growth slowed to 106,000 in January as weather hit hiring, ADP says

    Private companies added just 106,000 new workers for January, down from an upwardly revised 253,000 the month before and well below the 109,000 Dow Jones estimate.
    Most of the growth came in the hospitality industry, as bars, restaurants, hotels and the like added 95,000 positions.
    ADP chief economist Nela Richardson said weather factors were at play and hiring was strong outside of the reference week the firm uses to compile the report.

    Heavy rainfall hit New Jersey’s Edgewater and caused flooding on Monday, in New Jersey, United States on January 23, 2023.
    Fatih Aktas | Anadolu Agency | Getty Images

    Job creation in the private sector plunged in January as weather-related issues sent workers to the sidelines, payroll processing firm ADP reported Wednesday.
    Companies added just 106,000 new workers for the month, down from an upwardly revised 253,000 the month before. Economists surveyed by Dow Jones had been looking for a gain of 190,000.

    Most of the growth came in the hospitality industry, as bars, restaurants, hotels and the like added 95,000 positions. Other growth industries included financial activities (30,000), manufacturing (23,000) and education and health services (12,000).
    However, the trade, transportation and utilities sector lost 41,000, construction was off 24,000, and natural resources and mining declined by 3,000.
    In all, goods-producing industries saw a net loss of 3,000 jobs, while service providers added 119,000.
    Pay growth was little changed for the month, but up 7.3% from a year ago.
    Despite the low headline number, ADP chief economist Nela Richardson said weather factors were at play and job growth may not have been as weak as the number indicates.

    “In January, we saw the impact of weather-related disruptions on employment during our reference week,” Richardson said. “Hiring was stronger during other weeks of the month, in line with the strength we saw late last year.”
    Like the Bureau of Labor Statistics, ADP uses the week of the 12th for its payroll sampling. The firm noted that extreme weather events, including snowstorms in the Midwest and floods in California, impacted the jobs picture.
    The Midwest region saw a decline of 40,000 jobs, while the Pacific rim lost 4,000, according to ADP.
    Companies with fewer than 50 employees struggled the most during the period, down 75,000 workers. Big firms employing 500 or more workers added 128,000.
    The numbers come with the Federal Reserve trying to slow the economy through a series of interest rate hikes specifically aimed at bringing down inflation.
    The report also comes two days before the more closely watched BLS count of nonfarm payroll growth for the month. Economists surveyed by Dow Jones expect to see growth of 187,000 in that report.

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    Biden and McCarthy Are Set to Discuss Debt Limit as Both Sides Trade Barbs

    The hours leading up to the meeting have highlighted the differences between the White House and the Republicans who now control the House.WASHINGTON — President Biden will meet with Speaker Kevin McCarthy at the White House on Wednesday afternoon for a discussion that carries high stakes: the need to raise the nation’s borrowing limit in order to avoid a financial crisis.The meeting will be the first between the two leaders since Republicans assumed control of the House and conveyed the speaker title on Mr. McCarthy after a protracted fight.Republicans have refused to raise the statutory debt limit unless Mr. Biden accepts deep cuts in federal spending. The president has said repeatedly that he expects Congress to raise the borrowing cap with no strings attached — and that he will not negotiate conditions for an increase.Wednesday’s meeting will take place behind closed doors, but the hours leading up to it have highlighted the differences between the White House and the Republicans who now control the House. On Tuesday, Mr. Biden and Mr. McCarthy blamed each other for the impasse in raising the debt ceiling. The president called the speaker a “decent man” who had caved to extremists in his party to take power.He made “commitments that are just absolutely off the wall for a speaker of the House to make,” Mr. Biden told reporters on Tuesday.Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

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    What to Watch at the Fed’s First Meeting of 2023

    The central bank is expected to lift interest rates and offer signals about what might come next.Federal Reserve officials are expected to raise interest rates by a quarter point on Wednesday, the latest step in their battle against rapid inflation. But what they signal about their next moves will be even more important than their actual decision this week.The Fed will release its January policy statement at 2 p.m. in Washington, after which Jerome H. Powell, the Fed chair, will hold a news conference.Although the central bank is not releasing fresh economic forecasts at this meeting, Mr. Powell’s remarks should give investors and economists a chance to assess whether officials have changed their thinking since they last met in December. In that meeting, Fed officials projected that they would lift interest rates — which are currently set in a range 4.25 percent to 4.5 percent — to just above 5 percent this year and leave them elevated throughout 2023.Since that gathering, inflation has shown further signs of slowing, technology companies have announced substantial layoffs and consumer spending has slowed markedly. But for all of those signals of a slowdown, there has also been evidence of sustained economic strength — unemployment remains at a half-century low and wage growth, while moderating, remains unusually rapid.Here’s what to watch for in the Fed’s statement and news conference.A Smaller MoveThe Fed is likely to raise rates by a quarter point to a range of 4.5 to 4.75 percent at this meeting. That rate increase would be the tiniest move the central bank has made since March; Fed officials lifted borrowing costs by half a point in December, and before that they nudged them up by three-quarters of a percentage point at four straight meetings.The slowdown is meant to give Fed officials time to see how the economy is doing after a year of aggressive rate increases. Is the economy slowing down as much as expected? Is the job market cooling off? Such factors will determine how high interest rates ultimately need to rise.Focus on ‘Ongoing’Fed officials projected in their December economic estimates that they would probably raise interest rates to a range of 5 to 5.25 percent in 2023, implying two more quarter-point rate moves after the expected move on Wednesday.If officials have only a few more adjustments left, they might call into question a key word in their statement: “ongoing.”Officials have been predicting that they will make “ongoing increases” in their policy interest rate to slow the economy. But that wording would make less sense if the Fed were to stop raising rates in either March or May, as investors expect. That is why some economists think officials could drop or tweak the phrase this week.Pulling out the thesaurus is tricky business for the Fed, though: There’s a risk that Wall Street would interpret any shift in the wording to mean that central bankers think they have basically done enough to temper the economy. If investors breathe a sigh of relief, it could make money cheaper and easier to borrow and help the economy to re-accelerate, working at odds to the Fed’s goals.Markets will be on the lookout for any hint at whether the Fed is likely to stick with its expectations and raise rates a few more times before it hits pause.John Taggart for The New York TimesThe Stopping PointMarkets will be on the lookout for any hint at whether the Fed is likely to stick with its expectations and raise rates a few more times before it hits pause. Inflation has been a little bit softer recently: The Fed’s preferred inflation gauge ran at 4.4 percent over the past year, after stripping out volatile food and fuel prices. That is still way faster than the roughly 2 percent that is normal and is the central bank’s goal, but it’s a notable slowdown from 5.4 percent early last summer.Does the Fed still think that it needs to raise rates a few more times, given that moderation, or will the cooler backdrop make it easier for them to stop lifting borrowing costs sooner? The Fed chair is sure to face questions about it.Pay ProblemsKeep an ear on Mr. Powell’s news conference for any discussion of wage gains — they could end up being a critical driver of policy this year. The Fed chair has previously made clear that he believes it would be hard to wrangle inflation fully with wages growing so quickly.He explained late last year that “demand for workers far exceeds the supply of available workers, and nominal wages have been growing at a pace well above what would be consistent with 2 percent inflation over time.”But some of his colleagues have been taking a more benign view of the job and wage situation in recent weeks.“There are tentative signs that wage growth is moderating,” Lael Brainard, the Fed’s vice chair, said during recent remarks, adding that she sees no sign that prices and wages are driving each other steadily higher.Others have welcomed a recent slowdown but suggested that they need to see a further slowdown.“I need to see more evidence of wage moderation to sustainable levels,” Christopher J. Waller, a Fed governor, said in a recent speech.New VotersA new crowd of decision makers will have a say about what happens next with Fed policy.Because this is the first meeting of 2023, the Fed will get new voting members. Four of the central bank’s 12 regional presidents rotate in and out of voting seats each year, while New York’s president and the Fed’s seven governors in Washington hold a constant vote. This year’s newest voting members are Lorie Logan from Dallas, Austan Goolsbee from Chicago, Neel Kashkari from Minneapolis and Patrick Harker from Philadelphia.Ms. Logan has already suggested that the Fed may be able to stop rate increases and restart them, which could be a theme to watch this year.Mr. Kashkari has underlined the importance of getting inflation fully under control and suggested he would favor raising rates well above 5 percent, while Mr. Harker has said he expects the Fed to raise rates “a few more times” this year. This is Mr. Goolsbee’s first meeting as a Fed official, so he has yet to make clear his views on monetary policy. More

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    Air Force Says Proposed Chinese-Owned Mill in North Dakota Is ‘Significant Threat’

    A proposal for a corn mill, which had been welcomed as an economic development success, reflects just how much things have changed with Chinese investment proposals in the U.S.After more than a year of debate about whether a Chinese company’s plan to build a corn mill in North Dakota was an economic boon or a geopolitical risk, an assistant secretary of the Air Force has weighed in with a warning that the “project presents a significant threat to national security.”The letter from Assistant Secretary Andrew P. Hunter, released publicly on Tuesday by North Dakota’s senators, noted the proximity of Grand Forks Air Force Base to the proposed mill and said the project raised “near- and long-term risks of significant impacts to our operations in the area.”The debate over Fufeng USA’s plan to build a giant milling facility on the edge of Grand Forks, less than 15 miles from the Air Force base, divided the Republican power structure in North Dakota and showed just how swiftly the economic relationship between the United States and China had changed.Though the Air Force letter did not name specific threats, residents had voiced numerous concerns. Some in town said it was unwise to deepen economic ties with China, while others speculated that the mill could be used for spying on the Air Force, which the company denied.The city’s Republican mayor, Brandon Bochenski, a former supporter of the project, said on Tuesday that because of the federal guidance, he would move to block construction by trying to deny building permits and by refusing to connect city infrastructure to the building site.More on U.S. Armed ForcesKorean War Wall of Remembrance: Many names of American service members who died in the conflict are misspelled or missing from the new memorial wall in Washington, relatives and researchers say.Parental Leave: The Pentagon announced a new policy that would double the amount of leave that is available to military service members.Defense Bill: Congress passed a $858 billion defense bill that would rescind the coronavirus vaccine mandate for troops and increase the defense budget $45 billion over President Biden’s request.A Boost for the N.R.A.: Instructors in military-sponsored J.R.O.T.C. classes have offered to promote the gun rights organization in high schools in exchange for money for their marksmanship programs.“The Air Force left ambiguity off the table,” the state’s two senators, John Hoeven and Kevin Cramer, both Republicans, said in a joint statement that called for Grand Forks officials to work with them “to find an American company to develop the agriculture project.”The corn mill was the sort of job-creating opportunity that cities have long fought over, and one that just a few years ago would have been seen by most as an unambiguous win. Both Mr. Bochenski and North Dakota’s Republican governor, Doug Burgum, celebrated in late 2021 when Grand Forks landed the project, which would have been the city’s largest economic development project in recent history.But within months after Fufeng chose Grand Forks, a college and military city with 59,000 residents, many in town began speaking out against the project. While some of the opposition focused on property rights and water use, the company’s ties to China and the perceived national security risks became the focus of pushback. Still, the city moved forward, annexing the field where the mill would be built and entering into a development agreement with the company.Mr. Bochenski, a first-term mayor and a former professional hockey player, said in an interview last year that the shifting geopolitical winds had been a challenge for the city. “Are we going to be the first one to basically say no to globalism?” he asked at the time.But on Tuesday, in light of the Air Force’s letter, Mr. Bochenski said he would seek the City Council’s help to block construction, though he noted that Fufeng USA, the American subsidiary of a Chinese company, would still own the land where it had hoped to build.Work on the project had been paused in recent months while the federal government’s Committee on Foreign Investment in the United States reviewed the company’s plans. That committee ultimately decided that it did not have jurisdiction.“The response from the federal government during this process can only be viewed as slow and contradictory,” Mr. Bochenski said. “This directive leaves open the question of other entities with Chinese connections across the nation,” he added, including a Chinese-owned aviation company in Grand Forks “and Chinese students and professors at the University of North Dakota.”Mr. Burgum, who once called the Fufeng mill a “huge opportunity” for his state, said in a statement that he supported the mayor’s decision to stop cooperating with the company given the concerns voiced by the Air Force.The turnabout in North Dakota comes as the United States rethinks its longstanding trade relationship with China, and as politicians in both parties have come to view the country more as a threat than as an attractive economic partner. Several states are considering bills this year that would limit or ban Chinese land ownership.Eric Chutorash, Fufeng USA’s chief operating officer, has repeatedly denied that the mill would be used to spy on or harm the United States. He did not immediately respond to requests for comment about the Air Force’s letter. China’s embassy in Washington declined to comment. More