Federal Reserve Board Chairman Jerome Powell testifies during a Senate Banking Committee hearing, Thursday Sept. 24, 2020 on Capitol Hill in Washington about the CARES Act and the economic effects of the coronavirus pandemic. (Drew Angerer/Pool via AP)
By Martin Crutsinger
The Federal Reserve kept its benchmark interest rate at a record low near zero Thursday and signaled its readiness to do more if needed to support an economy under threat from a worsening coronavirus pandemic.
The Fed announced no new actions after its latest policy meeting but left the door open to provide further assistance in the coming months. The central bank again pledged to use its "full range of tools to support the U.S. economy in this challenging time.” The economy in recent weeks has weakened after mounting a tentative recovery from the deep pandemic recession in early spring.
Several Fed officials have expressed concern that Congress has failed so far to provide further aid for struggling individuals and businesses. But the Fed's policy statement, issued after a two-day meeting, made no mention of lawmakers' failure to act.
A multi-trillion-dollar stimulus, enacted in the spring, had helped sustain jobless Americans and ailing businesses but has since expired. The failure of lawmakers to agree on any new rescue package has clouded the future for the unemployed, for small businesses, and for the economy as a whole. There is some hope, though, that a logjam can be broken and more economic relief can be enacted during a post-election “lame-duck” session of Congress between now and early January.
The central bank has been buying Treasury and mortgage bonds to hold down long-term borrowing rates to encourage spending. And it has kept its key short-term rate, which influences many corporate and individual loans, near zero. Some economists think the policymakers' next move will be to expand its bond buying effort, which is intended to boost the economy by lowering longer-term borrowing rates.
The Fed’s latest policy meeting coincided with an anxiety-ridden election week and an escalation of the virus across the country. Most economists warn that the economy cannot make a sustained recovery until the pandemic is brought under control and most Americans are confident enough to return to their normal habits of shopping, traveling, dining and congregating in groups.
The recent 7.5% year-over-year increase in consumer prices is the highest since 1982, and drew some strong reactions from investors, with speculations that the Federal Reserve will hike interest rates by 50 points instead of 25. But other analysts believe that the Fed will stick with its original plan of 25 points next month. Chris Vecchio, Senior Analyst, at DailyFX broke down how the Fed could potentially react to the historically high inflation data.
Ride share competitors Uber and Lyft both posted their fourth quarter earnings days apart from each other. Both companies have been trying to get back on their feet after taking some pandemic-related hits, but the Omicron variant had other ideas as the year came to a close, with each company taking a hit in ridership in December. Lance Ippolito, head trader at The Future of Wealth explains how Uber and Lyft measured up this earnings period and why Uber may still have an edge over the competition.
The Super Bowl might be over, but people are still buzzing about the players, commercials, halftime show, and more. Google tracks the top searches before and after the game every year, revealing the show-stopping moments of the biggest sporting event of the year. Sadie Thoma, Director of US Creative Partnerships at Google, joined Cheddar's Opening Bell to discuss the top trends this year.
Parallel Systems has been selected to receive $4.5 million from the Department of Energy for an advanced testing program of its autonomous, battery-electric rail vehicles. The startup, which has raised more than $53 million to date, was founded by former SpaceX engineers to reimagine the rail system by creating a more efficient, decarbonized freight network. Matt Soule, Co-founder & CEO of Parallel Systems, joined Cheddar's Opening Bell to discuss what the company hopes to achieve.
Disney reported earnings beat on both top and bottom lines. Earnings per share came in at $1.06 versus Refinitiv estimates of 63 cents. Revenue also exceeded expectations at $21.82 billion dollars versus $20.91 billion expected. Meanwhile, Disney+ added 11.8 million new subscribers this quarter to reach nearly 130 million total. Tuna Amobi, media and entertainment expert at CFRA research, joined Cheddar to gives his take on Disney's earnings blowout.
Almost a decade after facing a parent's worst nightmare, the families of the young students killed in the Sandy Hook School shooting reached a settlement with gun manufacturer Remington, makers of the Bushmaster AR-15 used in the crime. David Pucino, deputy chief counsel, Giffords Law Center to Prevent Gun Violence joined Cheddar News to discuss the families' case and how its strategy brought about the legal settlement. "They built a really great case showing the way that Bushmaster developed its advertising to drive sales using those toxic messages.
