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    Cryptocurrencies Melt Down in a ‘Perfect Storm’ of Fear and Panic

    A steep sell-off that gained momentum this week starkly illustrated the risks of the experimental and unregulated digital currencies.SAN FRANCISCO — The price of Bitcoin plunged to its lowest point since 2020. Coinbase, the large cryptocurrency exchange, tanked in value. A cryptocurrency that promoted itself as a stable means of exchange collapsed. And more than $300 billion was wiped out by a crash in cryptocurrency prices since Monday.The crypto world went into a full meltdown this week in a sell-off that graphically illustrated the risks of the experimental and unregulated digital currencies. Even as celebrities such as Kim Kardashian and tech moguls like Elon Musk have talked up crypto, the accelerating declines of virtual currencies like Bitcoin and Ether show that, in some cases, two years of financial gains can disappear overnight.The moment of panic amounted to the worst reset in cryptocurrencies since Bitcoin plummeted 80 percent in 2018. But this time, the falling prices have broader impact because more people and institutions hold the currencies. Critics said the collapse was long overdue, while some traders compared the alarm and fear to the start of the 2008 financial crisis.“This is like the perfect storm,” said Dan Dolev, an analyst who covers crypto companies and financial technology at the Mizuho Group.During the coronavirus pandemic, people have flooded into virtual currencies, with 16 percent of Americans now owning some, up from 1 percent in 2015, according to a Pew Research Center survey. Big banks like Northern Trust and Bank of America also streamed in, along with hedge funds, some using debt to further juice their crypto bets.Early investors are still probably in a comfortable position. But the rapid declines this week have been especially acute for investors who bought cryptocurrencies when prices surged last year.The fall in cryptocurrencies is part of a broader pullback from risky assets, spurred by rising interest rates, inflation and economic uncertainty caused by Russia’s invasion of Ukraine. Those factors have compounded a so-called pandemic hangover that began as life started returning to normal in the United States, hurting the stock prices of companies like Zoom and Netflix that thrived during lockdowns.But crypto’s decline is more severe than the broader plunge in the stock market. While the S&P 500 is down 18 percent so far this year, Bitcoin’s price has dropped 40 percent in the same period. In the last five days alone, Bitcoin has tumbled 20 percent, compared to a 5 percent decline in the S&P 500.Crypto Experiences a Broad Collapse1-year change in the value of cryptocurrencies

    Prices are through 6 p.m. Eastern time on May 12.Source: CoinMarketCapBy The New York TimesHow long crypto’s collapse might last is unclear. Cryptocurrency prices have typically rebounded from major losses, though in some cases it took several years to reach new heights.“It’s hard to say, ‘Is this Lehman Brothers?’” said Charles Cascarilla, a founder of the blockchain company Paxos, referring to the financial services firm that went bankrupt at the start of the 2008 financial crisis. “We’re going to need some more time to figure it out. You can’t respond at this type of speed.”The origins of cryptocurrencies trace back to 2008, when a shadowy figure calling himself Satoshi Nakamoto created Bitcoin. The virtual currency was portrayed as a decentralized alternative to the traditional financial system. Rather than relying on gatekeepers like banks to facilitate commerce, Bitcoin proponents preferred to conduct transactions among themselves, recording each one on a shared ledger called a blockchain.Prominent tech leaders including Mr. Musk, Jack Dorsey, a founder of Twitter, and Marc Andreessen, an investor, embraced the technology as it grew from a novel curiosity into a cultlike movement. The value of cryptocurrencies exploded, minting a new class of crypto billionaires. Other forms of cryptocurrency, including Ether and Dogecoin, captured the public’s attention, particularly in the pandemic, when excess cash in the financial system led people to day trade for entertainment.Cryptocurrency prices reached a peak late last year and have since slid as fears over the economy grew. But the meltdown gathered momentum this week when TerraUSD, a stablecoin, imploded. Stablecoins, which are meant to be a more reliable means of exchange, are typically pegged to a stable asset such as the U.S. dollar and are intended not to fluctuate in value. Many traders use them to buy other cryptocurrencies.TerraUSD had the backing of credible venture capital firms, including Arrington Capital and Lightspeed Venture Partners, which invested tens of millions of dollars to fund crypto projects built on the currency. That gave “a false sense of security to people who might not otherwise know about these things,” said Kathleen Breitman, one of the founders of Tezos, a crypto platform.But TerraUSD was not backed by cash, treasuries or other traditional assets. Instead, it derived its supposed stability from algorithms that linked its value to a sister cryptocurrency called Luna.This week, Luna lost almost its entire value. That immediately had a knock-on effect on TerraUSD, which fell to a low of 23 cents on Wednesday. As investors panicked, Tether, the most popular stablecoin and a linchpin of crypto trading, also wavered from its own $1 peg. Tether fell as low as $0.95 before recovering. (Tether is backed by cash and other traditional assets.)The volatility quickly drew attention in Washington, where stablecoins have been on regulators’ radar. Last fall, the Treasury Department issued a report calling on Congress to devise rules for the stablecoin ecosystem.“We really need a regulatory framework,” Treasury Secretary Janet Yellen said at a congressional hearing on Thursday. “In the last couple of days, we’ve had a real-life demonstration of the risks.”Stablecoins “present the same kinds of risks that we have known for centuries in connection with bank runs,” she added.Workers installing a cryptocurrency mining data center in Medley, Fla.Rose Marie Cromwell for The New York TimesOther parts of the crypto ecosystem soured at the same time. On Tuesday, Coinbase, one of the largest cryptocurrency exchanges, reported a $430 million quarterly loss and said it had lost more than two million active users. The company’s stock price has plunged 82 percent since its triumphant market debut in April 2021.A Guide to CryptocurrencyCard 1 of 9A glossary. More

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    Jerome Powell Confirmed for a Second Term as Fed Chair

    Jerome Powell, whom the Senate confirmed to a second term on Thursday, said allowing rapid inflation to persist would be more painful.Jerome H. Powell, the Federal Reserve chair, said in an interview on Thursday that lowering inflation is likely to be painful but that allowing price gains to persist would be the bigger problem — squaring off with the major challenge facing his central bank as he officially starts his second term at its helm.Mr. Powell, whom Senators confirmed to a second four-year term at the head of the central bank in an 80-19 vote on Thursday, holds one of most consequential jobs in the United States and the world economy at a moment of rapid inflation and deep uncertainty.Consumer prices climbed 8.3 percent in April from the previous year, according to data reported on Wednesday. And while inflation eased slightly on an annual basis, it remained near the fastest pace in 40 years, and the details of the release suggested that price pressures continue to run hot.The Fed has already begun raising interest rates to try and cool the economy, making its largest increase since 2000 when it lifted borrowing costs by half a percentage point this month. Mr. Powell and his colleagues have signaled that they will continue to push rates higher as they try to restrain spending and hiring, hoping to bring demand and supply into balance and drive inflation lower.Mr. Powell suggested Thursday in an interview with Marketplace that an even bigger 0.75 percentage point interest rate increase, though not under consideration at the moment, could be appropriate if economic data come in worse than officials expect.“The process of getting inflation down to 2 percent will also include some pain, but ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy at high levels,” Mr. Powell also said. “That’s just people losing the value of their paycheck to high inflation and, ultimately, we’d have to go through a much deeper downturn.”Mr. Powell, who was chosen as a Fed governor by former President Barack Obama and then elevated to chair by former President Donald J. Trump, was renominated by President Biden late last year.Understand Inflation and How It Impacts YouInflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.Interest Rates: As it seeks to curb inflation, the Federal Reserve began raising interest rates for the first time since 2018. Here is what the increases mean for consumers.State Intervention: As inflation stays high, lawmakers across the country are turning to tax cuts to ease the pain, but the measures could make things worse. How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Though he has been popular among lawmakers for much of his tenure, several Republicans and Democrats voted against the nomination. Senator Robert Menendez, Democrat from New Jersey, cited the central bank’s failure to promote Latino leaders. Senator Richard Shelby, Republican of Alabama, cited high inflation in opposing Mr. Powell, posting on Twitter that “we should not reward failure.”Inflation is likely to be the defining challenge of Mr. Powell’s second term. As Mr. Shelby’s comments suggest, the Fed has been criticized for responding too slowly to rapid price gains last year. Mr. Powell has emphasized that policymakers did the best they could with the data in hand.“If you had perfect hindsight, you’d go back and it probably would have been better for us to have raised rates a little sooner,” Mr. Powell said in his interview with Marketplace. “I’m not sure how much difference it would have made, but we have to make decisions in real time, based on what we know then, and we did the best we could.”With Mr. Powell’s confirmation, Mr. Biden has now appointed four of the Fed’s seven governors in Washington, putting his imprimatur on the central bank at a crucial moment.The Senate last month confirmed Lael Brainard, formerly a Fed governor, as Mr. Biden’s choice for the Fed’s vice chair, an influential position within the central bank.This week, the Senate confirmed two other new Fed governors — Lisa D. Cook and Philip N. Jefferson. Mr. Biden has also nominated Michael S. Barr as the new vice chair for supervision, and his confirmation hearing before the Senate Banking Committee is scheduled for next week.Ms. Brainard and Mr. Powell have long been aligned on policy, and the Fed’s newest governors — Ms. Cook and Mr. Jefferson — indicated during their confirmation hearings that they, too, are focused on fighting inflation. Fed officials view stable prices as a crucial building block for sustainable economic growth.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    New Data Show Few Black Economists at the Fed

    Black researchers made up about 1.5 percent of the Federal Reserve system’s 945-person staff of doctorate-level economists at the end of 2021, a number that highlights the central bank’s ongoing struggle to improve racial and ethnic diversity in its ranks.Data that the Fed on Thursday published publicly for the first time showed that 72 percent of the system’s Ph.D.-level economists are white, 17 percent are Asian, and 9.4 percent identify as Hispanic or Latino. A small share report identifying with two or more races.

    The new diversity figures follow reporting by The New York Times last year, in which data provided by the Fed showed that just 1.3 percent of economists across its system identified as Black alone around the end of 2020. The 2021 data are roughly, but not exactly comparable, because the central bank made methodological improvements in collecting the figures this year.Economics is a heavily white and Asian profession — just under 5 percentof U.S. citizens or residents who earned doctorates in the field in the 2020 school year were Black — but the Fed tends to be even less racially diverse than the profession as a whole. The release underlined that America’s central bank is making slow progress when it comes to hiring and retaining a more racially varied staff of experts.Across the Fed’s 12-bank system and Board of Governors in Washington, 14 Ph.D.-level economists identify as Black alone. The board employs 429 economists, but no Black women and just one Black man.There appears to be some progress toward greater diversity at the entry level, however. When it comes to the Fed’s 393 research assistants, who usually have bachelor’s degrees and are often aiming to pursue doctoral degrees in economics down the road, the new data showed that 19 people, or about 5 percent of the assistants, were Black.That is a slight improvement from 3.7 percent the prior year, and it roughly reflects the share of economics graduates who identify as Black.The Fed’s more entry-level staff was also more diverse by gender: 42 percent of research assistants were women, compared to about 25 percent of its doctorate-level economists.Lawmakers and think tanks have for years pushed the Fed to increase diversity within its ranks, arguing that having a set of economists and researchers at the central bank who more closely reflect the public — the people the Fed ultimately serves — would lead to a wider range of viewpoints around the policy table and more rounded economic discussions.The Fed sets the nation’s monetary policy, raising or lowering the cost of borrowing money in order to slow down or speed up the economy. Its actions help to determine how strong the labor market is in any given moment, help to control inflation, and can influence financial stability.“The risk with underrepresentation, from a substantive standpoint, is that you are underrepresenting perspectives that are important for policymaking,” said Skanda Amarnath, executive director at Employ America, which pushes the Fed to focus more intently on the job market.That could mean that a range of ideas and experiences “don’t get fully understood, or captured, to the same degree,” he said.The Fed is about to see greater racial diversity at its highest ranks: Lisa D. Cook and Philip N. Jefferson, who are both Black, were confirmed as Fed governors just this week. Susan M. Collins will become the first Black woman ever to lead a regional Fed bank when she becomes president of the Boston Fed this summer, and Raphael Bostic, the first Black man to ever lead a regional bank, is currently president of the Atlanta Fed.The Fed’s leadership team has also become more gender diverse in recent years. Assuming Mr. Biden’s nominees are all confirmed, three of the central bank’s seven governors will be women. Once new presidents take office in Boston and Dallas this summer, five of its 12 regional bank leaders will be women.Fed officials have in recent years talked publicly about aiming for a broader array of views within their own workplaces.“The Atlanta Fed is committed to modeling economic inclusion, and that starts with our own organization,” Mr. Bostic from Atlanta said in a 2020 opinion piece, published after George Floyd, a Black man, died at the hands of the police in Minneapolis. “We embrace diversity and inclusion as essential to who we are.” More

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    Why Union Efforts at Starbucks Have Spread Further Than at Amazon

    Why has the union campaign spread so much further at the coffee chain than at the e-commerce giant?Roughly six weeks after successful union votes at two Buffalo-area Starbucks stores in December, workers had filed paperwork to hold union elections in at least 20 other Starbucks locations nationwide.By contrast, since the Amazon Labor Union’s victory last month in a vote at a huge warehouse on Staten Island, workers at just one other Amazon facility have filed for a union election — with an obscure union with a checkered past — before promptly withdrawing their petition.The difference may come as a surprise to those who believed that organizing at Amazon might follow the explosive pattern witnessed at Starbucks, where workers at more than 250 stores have filed for elections and the union has prevailed at a vast majority of the locations that have voted.Christian Smalls, the president of the independent Amazon Labor Union, told NPR shortly after the victory that his group had heard from workers in 50 other Amazon facilities, adding, “Just like the Starbucks movement, we want to spread like wildfire across the nation.”The two campaigns share some features — most notably, both are largely overseen by workers rather than professional organizers. And the Amazon Labor Union has made more headway at Amazon than most experts expected, and more than any established union.But unionizing workers at Amazon was always likely to be a longer, messier slog given the scale of its facilities and the nature of the workplace. “Amazon is so much harder a nut to crack,” John Logan, a labor studies professor at San Francisco State University, said by email. The union recently lost a vote at a smaller warehouse on Staten Island.To win, a union must get the backing of more than 50 percent of the workers who cast a vote. That means 15 or 20 pro-union workers can ensure victory in a typical Starbucks store — a level of support that can be summoned in hours or days. At Amazon warehouses, a union frequently would have to win hundreds or thousands of votes.Organizers for the Amazon Labor Union spent hundreds of hours talking with co-workers inside the warehouse during breaks, after work and on days off. They held cookouts at a bus stop outside the warehouse and communicated with hundreds of colleagues through WhatsApp groups.Brian Denning, who leads an Amazon organizing campaign sponsored by the Democratic Socialists of America chapter in Portland, Ore., said his group had received six or seven inquiries a week from Amazon workers and contractors after the Staten Island victory, versus one or two a week beforehand.But Mr. Denning, a former Amazon warehouse employee who tells workers that they are the ones who must lead a union campaign, said that many didn’t realize how much effort unionizing required, and that some became discouraged once he conferred with them.Understand the Unionization Efforts at AmazonBeating Amazon: A homegrown, low-budget push to unionize at a Staten Island warehouse led to a historic labor victory. (Workers at another nearby Amazon facility rejected joining a similar effort shortly after.)Retaliation: Weeks after the landmark win, Amazon fired several managers in Staten Island. Some see it as retaliation for their involvement in the unionization efforts.A New Playbook: The success of the Amazon union’s independent drive has organized labor asking whether it should take more of a back seat.Amazon’s Approach: The company has countered unionization efforts with mandatory “training” sessions that carry clear anti-union messages.“We get people saying how do we get an A.L.U. situation here? How do we do that like they did?” Mr. Denning said, adding: “I don’t want to scare them away. But I can’t lie to workers. This is what it is. It’s not for everyone.”At Starbucks, employees work together in a relatively small space, sometimes without a manager present to supervise them directly for hours at a time. This allows them to openly discuss concerns about pay and working conditions and the merits of a union.At Amazon, the warehouses are cavernous, and workers are often more isolated and more closely supervised, especially during an organizing campaign.“What they would do is strategically separate me from everyone in my department,” said Derrick Palmer, an Amazon employee on Staten Island who is one of the union’s vice presidents. “If they see me interacting with that person, they would move them to a different station.”Asked about the allegation, Amazon said it assigned employees to work stations and tasks based on operational needs.Both companies have accused the unions of their own unfair tactics, including intimidating workers and inciting hostile confrontations.Organizing drivers is an even greater challenge, partly because they are officially employed by contractors that Amazon hires, though labor organizers say they would like to pressure the company to address drivers’ concerns.Christy Cameron, a former driver at an Amazon facility near St. Louis, said the job’s setup largely kept drivers from interacting. At the beginning of each shift, a manager for the contractor briefs drivers, who then disperse to their trucks, help load them and get on the road.“It leaves very little time to talk with co-workers outside of a hello,” Ms. Cameron said in a text message, adding that Amazon’s training discouraged discussing working conditions with fellow drivers. “It was generally how they are highly against unionizing and don’t talk about pay and benefits with each other.”Amazon, with about a million U.S. workers, and Starbucks, with just under 250,000, offer similar pay. Amazon has said that its minimum hourly wage is $15 and that the average starting wage in warehouses is above $18. Starbucks has said that as of August its minimum hourly wage will be $15 and that the average will be nearly $17.Starbucks workers celebrated the results of a vote to unionize in Buffalo last year.Joshua Bessex/Associated PressDespite the similarity in pay, organizers say the dynamics of the companies’ work forces can be quite different.At the Staten Island warehouse where Amazon workers voted against unionizing, many employees work four-hour shifts and commute 30 to 60 minutes each way, suggesting they have limited alternatives.“People who go to that length for a four-hour job — it’s a particular group of people who are really struggling to make it,” said Gene Bruskin, a longtime labor organizer who advised the Amazon Labor Union in the two Staten Island elections, in an interview last month.As a result of all this, organizing at Amazon may involve incremental gains rather than high-profile election victories. In the Minneapolis area, a group of primarily Somali-speaking Amazon workers has staged protests and received concessions from the company, such as a review process for firings related to productivity targets. Chicago-area workers involved in the group Amazonians United received pay increases not long after a walkout in December.Ted Miin, an Amazon worker who is one of the group’s members, said the concessions had followed eight or nine months of organizing, versus the minimum of two years he estimates it would have taken to win a union election and negotiate a first contract.For workers who seek a contract, the processes for negotiating one at Starbucks and Amazon may differ. In most cases, bargaining for improvements in compensation and working conditions requires additional pressure on the employer.At Starbucks, that pressure is in some sense the union’s momentum from election victories. “The spread of the campaign gives the union the ability to win in bargaining,” Mr. Logan said. (Starbucks has nonetheless said it will withhold new pay and benefit increases from workers who have unionized, saying such provisions must be bargained.)At Amazon, by contrast, the pressure needed to win a contract will probably come through other means. Some are conventional, like continuing to organize warehouse employees, who could decide to strike if Amazon refuses to recognize them or bargain. The company is challenging the union victory on Staten Island.But the union is also enlisting political allies with an eye toward pressuring Amazon. Mr. Smalls, the union president, testified this month at a Senate hearing that was exploring whether the federal government should deny contracts to companies that violate labor laws.On Thursday, Senator Bob Casey, a Pennsylvania Democrat, introduced legislation seeking to prevent employers from deducting anti-union activity, like hiring consultants to dissuade workers from unionizing, as a business expense.While many of these efforts may be more symbolic than substantive, some appear to have gotten traction. After the Port Authority of New York and New Jersey announced last summer that it was awarding Amazon a 20-year lease at Newark Liberty International Airport to develop an air cargo hub, a coalition of community, labor and environmental groups mobilized against the project.The status of the lease, which was to become final by late last year, remains unclear. The Port Authority said that lease negotiations with Amazon were continuing and that it continued to seek community input. An Amazon spokeswoman said the company was confident the deal would close.A spokeswoman for Gov. Phil Murphy of New Jersey indicated that the company might have to negotiate with labor groups before the deal could go forward. “The governor encourages anyone doing business in our state to work collaboratively with labor partners in good faith,” the spokeswoman said.Karen Weise More

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    Fed's Waller promises to tackle inflation, says mistakes of the '70s won't be repeated

    Fed Governor Christopher Waller pledged that the central bank won’t make the same mistakes on inflation as its 1970s predecessor.
    “We know what happened for the Fed not taking the job seriously on inflation in the 1970s, and we ain’t gonna let that happen,” he said.

    Christopher Waller, U.S. President Donald Trump’s nominee for governor of the Federal Reserve, speaks during a Senate Banking Committee confirmation hearing in Washington, D.C., U.S, on Thursday, Feb. 13, 2020.
    Andrew Harrer | Bloomberg | Getty Images

    Federal Reserve Governor Christopher Waller pledged Tuesday that the rate-setting group wouldn’t make the same mistakes on inflation that it did in the 1970s.
    Back then, he said during a panel chat with Minneapolis Fed President Neel Kashkari, the central bank talked tough on inflation but wilted every time tighter monetary policy caused an uptick in unemployment.

    This time, Waller said he and and his colleagues will follow through on its intentions to raise interest rates until inflation comes down down to the Fed’s targeted level. The central bank has raised rates twice this year, including a half percentage point move last week.
    “We know what happened for the Fed not taking the job seriously on inflation in the 1970s, and we ain’t gonna let that happen,” Waller said.

    The remarks came with inflation running at its hottest pace in more than 40 years. Earlier in the day, President Joe Biden called inflation the economy’s biggest challenge now and noted fighting price increases “starts with the Federal Reserve.”
    Though he noted the Fed’s political independence, Biden said, “The Fed should do its job, and it will do its job. I’m convinced of that in my mind.”
    While Waller drew the comparison to the Fed of the 1970s and early ’80s, which eventually defeated inflation with a series of massive interest rate hikes when Chairman Paul Volcker took over, he said he doesn’t think the current policymakers need to be as aggressive.

    “They had zero credibility, so Volcker just basically said, ‘I’ve got to just do this shock and awe,'” Waller said. “We don’t have that problem right now. This is not a shock-and-awe Volcker moment.”
    The Volcker moves took the Fed’s benchmark interest rate to close to 20% and sent the economy into recession. Waller said he had a conversation with the former chair before his death, and Volcker said, “If I had known what was going to happen, I never would have done it.”
    Waller said he thinks the economy can withstand the path of rate hikes this time that will be much gentler than the Volcker era.
    “The labor market is strong. The economy is doing so well,” he said. “This is the time to hit it if you think there’s going to be any kind of negative reaction, because the economy can take it.”
    Earlier in the day, Richmond Fed President Thomas Barkin also backed the goal of getting inflation under control, saying the likely path will get the fed funds rate to a range of 2% to 3% and “we can then determine whether inflation remains at a level that requires us to put the brakes on the economy or not.”

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    Senate Confirms Philip Jefferson as a Fed Governor

    Philip N. Jefferson, a college administrator and academic economist, was confirmed to the Federal Reserve’s Board of Governors on Wednesday.Senators approved him for the job in an overwhelming bipartisan 91-7 vote. He is the third of President Biden’s nominees to secure a spot on the Fed’s seven-person board: Lisa D. Cook was confirmed as a governor on Tuesday, and Lael Brainard was confirmed as vice chair last month.Mr. Jefferson, who was most recently vice president for academic affairs at Davidson College, was born in Washington, D.C., and holds a Ph.D. in economics from the University of Virginia. He has been an economist at the Fed board, and has written about poverty and monetary policy’s effect on the labor market, among other topics.The White House has also renominated Jerome H. Powell as Fed chair, though Mr. Powell is still awaiting a final confirmation vote. Senators said that vote was expected as soon as Thursday.The administration’s nominee for the final open Fed job — the vice chair for supervision — has yet to have a committee hearing and vote. Mr. Biden’s initial nominee for the position, Sarah Bloom Raskin, withdrew from consideration after it became clear that she would not pass the Senate. Michael S. Barr was put up for the job more recently.If those picks are confirmed, Mr. Biden will have nominated or renominated five of the Fed’s seven governors. The Fed is independent of politics, so those appointments are the main way that the White House can shape the future of monetary policy, which is used to keep inflation stable and employment high.Governors at the Fed’s board in Washington hold constant votes on monetary policy and oversee the nation’s largest banks. They set interest rates to guide the economy alongside 12 regional reserve bank presidents, five of whom hold a vote on monetary policy at any given time.Mr. Jefferson and Ms. Cook are likely to support the Fed’s current project: reining in rapid inflation. Consumer prices climbed 8.3 percent in the year through April, data released Wednesday showed, an uncomfortably rapid pace of increase. Fed officials are raising rates at the fastest pace in decades as they try to tamp down price pressures and bring the situation under control.“The spike in inflation we are seeing today threatens to heighten expectations of future inflation,” Mr. Jefferson said during his confirmation hearing. “The Federal Reserve must remain attentive to this risk and ensure that inflation declines to levels consistent with its goals.” More

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    U.S. Inflation Is Still Climbing Rapidly

    Inflation data showed a slowdown in annual price increases in April, but a closely watched monthly price measure continues to rise at an uncomfortably brisk rate. More

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    New F.T.C. Majority Gives Lina Khan a Chance to Push an Aggressive Agenda

    The confirmation of a third Democrat creates an opportunity for Lina Khan, the Federal Trade Commission’s chair, to advance efforts to rein in corporate power.WASHINGTON — The confirmation of a third Democrat to the Federal Trade Commission on Wednesday broke a partisan deadlock at the agency. That’s good news for Lina Khan, the agency’s chair and a Democrat.It is also a test.With the F.T.C.’s new Democratic majority — which came with the confirmation of Alvaro Bedoya, who becomes the fifth commissioner, in a slot that had been vacant since October — Ms. Khan’s allies and critics are watching to see if she pushes forward plans to address corporate power. That could include filing an antitrust lawsuit against Amazon, setting online privacy rules and tapping little-used agency powers to clip the wings of companies like Meta, Apple and Google.As Congress remains gridlocked and the midterm elections near, agencies like the F.T.C. and the Department of Justice are likely the best remaining hope for activists and policymakers who want the government to restrain corporate power. President Biden, who has promised to crack down, last year ordered the F.T.C. and other federal agencies to take steps to limit concentration.Under Ms. Khan, 33, who became the chair in June, the F.T.C. has already tried tamping down mergers by threatening to challenge deals after they close. The commission has said it will punish companies that make it hard for users to repair their products. And it settled a case with the company once known as Weight Watchers over a diet app that collected data from young children.But Ms. Khan’s new Democratic majority is essential for a broader “realization of her vision,” said William E. Kovacic, a former chair of the F.T.C. “And the clock’s ticking.”In a statement, Ms. Khan said she was “excited” to work with Mr. Bedoya and the other commissioners. She did not address how the F.T.C.’s new majority would affect her plans.The F.T.C.’s previous split between two Republicans and two Democrats led to impasses. In February, the commission couldn’t reach an agreement to move forward with a study of the practices of pharmacy benefit managers.Sarah Miller, the executive director of the American Economic Liberties Project, a progressive group that wants more antitrust enforcement, described the F.T.C.’s two Republicans, Noah Phillips and Christine Wilson, as “libertarian holdouts” who have “kind of thrown the brakes” on Ms. Khan’s ability to advance her agenda.Mr. Phillips said in an email that he supported the commission’s “long tradition of bipartisan work to advance the interests of American consumers.” But he will not support Ms. Khan’s agenda when it “exceeds our legal authority,” raises prices for consumers or harms innovation, he said.Ms. Wilson pointed to three speeches she gave over the last year criticizing Ms. Khan’s philosophy. In one speech last month, Ms. Wilson said Ms. Khan and her allies were drawing on tenets from Marxism.Alvaro Bedoya, a Democrat, was confirmed on Wednesday as the fifth member of the F.T.C.Senator Chuck Schumer of New York, the Democratic majority leader, said Wednesday’s vote confirming Mr. Bedoya was “pivotal to unshackling the F.T.C.”Now Ms. Khan may gain the ability to pursue a legal case against Amazon. She wrote a student law review article in 2017 criticizing the company’s dominance. The F.T.C. began investigating the retail giant under the Trump administration; some state attorneys general have also conducted inquiries into the company.Ms. Khan could file a lawsuit to challenge Amazon’s recent purchase of the movie studio Metro-Goldwyn-Mayer. When the $8.5 billion transaction closed in March, an F.T.C. spokeswoman noted that the agency “may challenge a deal at any time if it determines that it violates the law.”Ms. Khan may put her stamp on other deals. The agency is examining Microsoft’s $70 billion purchase of the video game publisher Activision Blizzard and sent a request to the companies this year for additional information.An executive order from Mr. Biden last year encouraging more aggressive antitrust policy pushed the F.T.C. and the Justice Department to update the guidelines they use to approve deals, which could lead to stricter scrutiny. Ms. Khan is likely to need the support of the commission’s two other Democrats, Mr. Bedoya and Rebecca Kelly Slaughter, to approve aggressive new guidelines or to challenge major mergers.Ms. Khan has also said she wants to bulk up the agency’s powers by considering regulations governing privacy and how algorithms make decisions. She has said that the F.T.C. underutilized its role as a rules-making body and that regulations would enhance its mandate to protect consumers.“Given that our economy will only continue to further digitize, marketwide rules could help provide clear notice and render enforcement more impactful and efficient,” she said last month at a privacy conference.The F.T.C. could also act on requests from progressive activist groups that want the agency to ban data-driven advertising business models and forbid noncompete agreements that stop workers from taking a job with a competitor of their current employer.But former F.T.C. officials said Ms. Khan faced challenges, even with the Democratic majority. The creation of privacy regulations could take years, said Daniel Kaufman, a former deputy head of the agency’s consumer protection bureau. Businesses are likely to challenge rules in court that don’t fit into the F.T.C.’s mandate to protect consumers from deceptive and unfair practices.“The F.T.C.’s rule-making abilities are not designed to tackle behavioral advertising so I’ve been telling my clients the agency could kick something off with a lot of press but it’s unclear where it will go,” Mr. Kaufman, a partner at the law firm BakerHostetler, said.Ms. Khan’s efforts are also sure to continue facing opposition from Mr. Phillips and Ms. Wilson. Mr. Phillips has said he has reservations about the agency’s becoming a more muscular regulator. In January, he said Congress, not the F.T.C., should be the one to make new privacy rules.Ms. Wilson recently posted screenshots of an internal survey showing that satisfaction among the F.T.C.’s career staff has fallen. “New leadership has marginalized and disrespected staff, resulting in a brain drain that will take a generation to fix,” she said.To overcome their opposition, Ms. Khan will have to keep her majority intact. That gives leverage to Mr. Bedoya, a privacy expert who has focused on the civil rights dangers of new technologies, and Ms. Slaughter, a former top member of Senator Schumer’s staff.Ms. Slaughter said in a statement that Mr. Bedoya’s privacy expertise would serve the F.T.C. well. She did not comment on the agency’s Democratic majority.Mr. Bedoya was tight-lipped about his own plans, saying only that he was “excited” to work with his new F.T.C. colleagues. More