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.
Private equity firms are taking a big interest in investing in NBA teams, the sports league showing the highest ROI over the last two decades according to Sportico, Forbes, and PitchBook. Wylie Fernyhough, lead analys for private equity at PitchBook joined Cheddar News to discuss the way firms are looking to get a piece of the action on the court. “There’s a certain amount of rarity, with these," Fernyhough said. "They’re not exactly printing new NBA franchises."
In efforts to help support black-owned brands. Ulta Beauty says it will make a commitment to not only give these brand shelf space but also help them navigate the ins and outs of growing a business. Last week, the beauty retailer announced in order to reach those goals, the company will spend $50 million on diversity and inclusion programs, including an accelerated program to mentor entrepreneurs of color. CEO of Ulta Beauty, Dave Kimbell, joined Cheddar to discuss more.
Inflation remains hot as the January PPI has increased by 1 percent, twice what analysts had been expecting with a jump of 9.7 over the year. Beth Ann Bovino, the U.S. chief economist, for S&P Global Ratings, joined Cheddar News to discuss the rapid pace of inflation alongside higher wages, predicting the Federal Reserve will act quickly and forcefully this year. "They haven't changed their forecast, yet, that's gonna come out soon. But we expect that a March rate hike is basically pretty much baked in the cake," she said. "We think six rate hikes in total for 2022."
For black history month, Cheddar is highlighting black business leaders who are driving the need for representation forward. On February 10, the U.S. Chamber of Commerce hosted an event called 'Developing the Black-Owned Business Ecosystem.' The virtual event was organized under the lobbying group's two initiatives -- the Equality of Opportunity Initiative, and the Coalition to Back Black Businesses. The event highlighted the developments needed to develop more black-owned businesses in the U.S. Dr. Anthony Wilbon, Dean of the School of Business at Howard University, joined Cheddar News' Closing Bell to discuss his experience as a speaker at the event.
Black spending power reached a record $1.6 Trillion in a 2021 report from the University of Georgia Selig Center for Economic Growth. Ayesha Selden, certified financial planner, breaks down why real estate is the key to closing the racial wealth gap and how Black Americans are using social media to improve financial literacy. "If we look at home ownership as being a primary driver of wealth, when you look at the equity that Americans have in their homes, that equity can be used to buy additional assets like other rental properties. That equity can be used to educate our children," Selden said, noting that lower rates of home ownership meant Black Americans tend to incur more debt on average for their student loans.
A new survey from Etoro suggests that talking crypto might actually help Americans on the dating scene find love...or at least land another date. The survey found that 74% of respondents would be more interested in going on a second date with a person that pays the bill in Bitcoin. Callie Cox, Etoro's U.S. investment analyst, joined Cheddar News to discuss.
