Federal Reserve Chairman Jerome Powell testified before the House Select Subcommittee on the Coronavirus Crisis on Tuesday in a hearing that highlighted partisan rifts in how the U.S. should continue its economic recovery.
Powell pushed back against the growing narrative that recent increases in inflation were related to either monetary or fiscal policy. Instead he pointed to the "unprecedented" nature of the COVID-19 economic recovery, which has caused supply bottlenecks at the same time that demand has recovered sharply. He stressed that this inflation will eventually "wane."
He also noted that a handful of categories, including housing, used cars, and travel expenses such as airplane tickets and hotels, were driving the uptick.
"Those are things that we would look to, to stop going up and ultimately to start to decline as these situations resolve themselves," Powell said. "They don't speak to a broadly tight economy — the kind of thing that has led to high inflation over time."
These comments lined up with the chair's speech last week which followed the Fed's latest policy release, which suggested that interest rates could rise as early as 2023 — sooner than previous statements had suggested.
Republican Congress members did not seem to heed Powell's basic insight, peppering the chairman with questions about the need to address inflation, and invoking the hyperinflation of the 1970s as a possible precedent.
Powell again emphasized that this situation was nothing like the 1970s, or really any other economic situation in living memory.
Republicans, however, for the most part did not pinpoint the Fed's interest rate and asset-buying program for inflation — instead blaming the Democrats' fiscal policy.
Republican Whip Steve Scalise (R-La. 1st District) said President Joe Biden's economic agenda was "too much money chasing too few goods," and that measures such as extra unemployment insurance needed to be wound down.
Though Powell did not comment on specific programs, he did repeat multiple times that fiscal policy was not the Fed's "bailiwick" and stressed that much still needs to be done before a full recovery is complete.
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
