Voters will choose Tuesday between U.S. Rep. Jerry Nadler and U.S. Rep. Carolyn Maloney in a rare face-off between incumbents due to redistricting.
He helped lead the fight to impeach Donald Trump. She battled for people sickened by clouds of toxic soot after the Sept. 11 attacks.
At least one of New York City’s most veteran members of Congress will be voted out of office Tuesday in a Democratic primary pitting U.S. Rep. Jerry Nadler against U.S. Rep. Carolyn Maloney in a race both hoped to avoid.
At least one of New York City’s most veteran members of Congress will be voted out of office Tuesday in an unusual Democratic primary between incumbents.
Neither was willing to run in another part of the city.
Related StoryVoters In 4 States Head To The Polls For Primary Elections
Nadler and Maloney are joined in the race by 38-year-old Suraj Patel, a lawyer and lecturer at New York University who also challenged Maloney in Democratic primaries in 2018 and 2020. A fourth candidate, Ashmi Sheth, a former Federal Reserve Bank of New York employee, is on the ballot but did not meet fundraising benchmarks to qualify for debates.
Nadler, 75, was first elected to Congress in 1992. As chair of the House Judiciary Committee, he led both impeachments of Republican former President Donald Trump. He was buoyed in the last weeks of the campaign by endorsements from The New York Times and Senate Majority Leader Chuck Schumer.
Maloney, 76, was also first elected in 1992. She is the first woman to chair the House Oversight and Reform Committee. She is known for her longtime advocacy for Sept. 11 first responders seeking compensation for diseases they attribute to contamination from the destruction of the World Trade Center. She wore a firefighter’s jacket on Capitol Hill and at the 2019 Met Gala.
Few policy differences between Nadler, Maloney and Patel emerged during the primary campaign.
All support abortion rights, the Green New Deal and tighter restrictions on gun ownership. Patel argued that Nadler’s and Maloney’s generation failed to achieve Democratic goals like codifying Roe v. Wade and should cede to new blood.
Nadler and Maloney countered that their seniority in Congress brings clout that benefits New Yorkers.
Friends for many years, the two Democrats lamented having to run against each other — something that only happened after a court redrew the boundaries of the state’s congressional districts after concluding the legislature botched the process.
“I didn’t want to run against my good friend, Jerry Nadler,” Maloney said at a recent debate. “We have been friends and allies for years. Unfortunately, we were drawn into the same district.”
Still, on the campaign trail Maloney said that as a woman, she would fight harder to protect abortion rights than Nadler.
Asked at a debate how his record differed from that of Maloney, Nadler cited his votes against the Iraq War and the Patriot Act, and in favor of the Iran nuclear deal. Maloney, also elected to Congress in 1992, voted the other way on all three.
Maloney also came under fire from her opponents for her past positions on vaccines, including in 2006 when she introduced legislation directing the federal government to study the debunked theory that vaccines can cause autism. Maloney insisted that she supports vaccines and regretted ever questioning vaccine safety.
The primary winner in the overwhelmingly Democratic district will face Republican Michael Zumbluskas in the November general election.
Inflation cooled notably in July as gas prices and airfares fell, a welcome reprieve for consumers and a positive development for economic policymakers in Washington — though not yet a conclusive sign that price increases have turned a corner.
The Consumer Price Index climbed 8.5 percent in the year through July, a slower pace than economists had expected and considerably less than the 9.1 percent increase in the year through June. After food and fuel costs are stripped out to better understand underlying cost pressures, prices climbed 5.9 percent, matching the previous reading.
The marked deceleration in overall inflation — on a monthly basis, prices barely moved — is another sign of economic improvement that could boost President Biden at a time when rapid price increases have been burdening consumers and eroding voter confidence. The new data came on the heels of an unexpectedly strong jobs report last week that underscored the economy’s momentum.
job market stays strong, Americans may begin to feel better about their personal financial situations.
“It underscores the kind of economy we’ve been building,” Mr. Biden said on Wednesday. “We’re seeing a stronger labor market where jobs are booming and Americans are working, and we’re seeing some signs that inflation may be beginning to moderate.”
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
Inflation F.A.Q.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Inflation F.A.Q.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Inflation F.A.Q.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
Fed officials remain committed to wrestling America’s rapid inflation lower, and they have raised interest rates at the quickest pace since the 1980s to try to slow the economy and bring supply and demand into balance — making supersize rate moves of three-quarters of a percentage point at each of their past two meetings. Another big adjustment will be up for debate at their next meeting in September, policymakers have said.
But investors interpreted July’s unexpectedly pronounced inflation slowdown as a sign that policymakers could take a gentler route, raising rates a half-point next month. Stocks soared more than 2 percent on Wednesday, as Wall Street bet that the Fed might become less aggressive, which would decrease the chances that it would plunge the economy into a recession.
“It was as good as the markets and the Fed could have hoped for from this report,” said Aneta Markowska, chief financial economist at Jefferies. “I do think it removes the urgency for the Fed.”
Still, officials who spoke on Wednesday remained cautious about inflation. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, called the report the “first hint” of a move in the right direction, while Charles Evans, president of the Federal Reserve Bank of Chicago, said that it was “positive” but that price increases remained “unacceptably high.”
Policymakers have been hoping for more than a year that price increases will begin to cool, only to have those expectations repeatedly dashed. Supply chain issues have made goods more expensive, Russia’s invasion of Ukraine sent commodity prices soaring, a shortage of workers pushed wages and service prices higher and a dearth of housing has fueled rising rents.
toward $4 in July after peaking at $5 in June, based on data from AAA. That decline helped overall inflation to cool last month. The trend has continued into August, which should help inflation to continue to moderate.
But it is unclear what will happen next. The U.S. Energy Information Administration expects that fuel costs will continue to come down, but geopolitical instability and the speed of U.S. oil and gas production during hurricane season, which can take refineries offline, are wild cards in that outlook.
declined in July, perhaps in part because borrowing costs rose. Mortgage rates have increased this year and appear to be weighing on the housing market, which could be helping to drive down prices for appliances.
slow hiring. Wages are still rising rapidly, and, as that happens, so are prices on many services. Rents, which make up a chunk of overall inflation and are closely linked to wage growth, continue to climb rapidly — which is concerning, because they tend to change course only slowly.
Rents of primary residences climbed 0.7 percent in July from the prior month, and are up 6.3 percent over the past year. Before the pandemic, that measure typically climbed about 3.5 percent annually.
Understand Inflation and How It Affects You
Those forces could keep inflation undesirably rapid even if supply chains unsnarl and fuel prices continue to fall. The Fed aims for 2 percent inflation over time, based on a different but related inflation measure.
“The Covid reopening and revenge travel pressures have eased — and are probably going to continue easing,” said Laura Rosner-Warburton, senior U.S. economist at MacroPolicy Perspectives. But she also struck a note of caution, adding: “Under the hood, we’re still seeing pressures in rent. There’s still sticky inflation here.”
And given how high inflation has been for more than a year now, Fed policymakers will avoid reading too much into a single report. Inflation slowed last summer only to speed up again in fall.
“We might see goods inflation and commodity inflation come down, but at the same time see the services side of the economy stay up — and that’s what we’ve got to keep watching for,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said during a recent appearance. “It can’t just be a one month. Oil prices went down in July; that’ll feed through to the July inflation report, but there’s a lot of risk that oil prices will go up in the fall.”
Ms. Mester said that she “welcomes” a slowdown in some types of prices, but that it would be a mistake to “cry victory too early” and allow inflation to continue without taking necessary action.
For many Americans who are struggling to adjust their lifestyles to rapidly climbing costs at the grocery store and dry cleaners, an annual inflation rate that is still more than four times its normal speed is unlikely to feel like a big improvement, even as lower gas prices and rising pay rates do offer some relief.
Stephanie Bailey, 54, has a solid family income in Waco, Texas. Even so, she has been cutting back on meals at local Tex-Mex restaurants and new clothes because of the climbing prices, which she sees “everywhere.” At Starbucks, she opts for cold, noncoffee drinks, which in some cases are cheaper.
Her son, who is in his 20s, has moved back in with his parents. Rent had become out of reach on his salary working at a vitamin manufacturer. He is now teaching at a local high school.
“It’s just so expensive, with housing,” Ms. Bailey said. “He was having a hard time making ends meet.”
Consumer prices jumped 8.5% in July compared with a year earlier, down from a 9.1% year-over-year jump in June, according to government data.
Falling gas prices gave Americans a slight break from the pain of high inflation last month, though the surge in overall prices slowed only modestly from the four-decade high it reached in June.
Consumer prices jumped 8.5% in July compared with a year earlier, the government said Wednesday, down from a 9.1% year-over-year jump in June. On a monthly basis, prices were unchanged from June to July, the smallest such rise more than two years.
Still, prices have risen across a wide range of goods and services, leaving most Americans worse off. Average paychecks are rising faster than they have in decades — but not fast enough to keep up with accelerating costs for such items as food, rent, autos and medical services.
Last month, excluding the volatile food and energy categories, so-called core prices rose just 0.3% from June, the smallest month-to-month increase since April. And compared with a year ago, core prices rose 5.9% in July, the same year-over-year increase as in June.
Related StoryInflation Reduction Act: How It Could Impact Your Wallet
President Joe Biden has pointed to declining gas prices as a sign that his policies — including large releases of oil from the nation’s strategic reserve — are helping lessen the higher costs that have strained Americans’ finances, particularly for lower-income Americans and Black and Hispanic households.
Yet Republicans are stressing the persistence of high inflation as a top issue in the midterm congressional elections, with polls showing that elevated prices have driven President Biden’s approval ratings down sharply.
On Friday, the House is poised to give final congressional approval to a revived tax-and-climate package pushed by the president and Democratic lawmakers. Economists say the measure, which its proponents have titled the Inflation Reduction Act, will have only a minimal effect on inflation over the next several years.
While there are signs that inflation may ease in the coming months, it will likely remain far above the Federal Reserve’s 2% annual target well into next year or even into 2024. Chair Jerome Powell has said the Fed needs to see a series of declining monthly core inflation readings before it would consider pausing its rate hikes. The Fed has raised its benchmark short-term rate at its past four rate-setting meetings, including a three-quarter-point hike in both June and July — the first increases that large since 1994.
Related StoryU.S. Employers Added 528,000 Jobs in July; Unemployment Falls To 3.5%
A blockbuster jobs report for July that the government issued Friday — with 528,000 jobs added, rising wages and an unemployment rate that matched a half-century low of 3.5% — solidified expectations that the Fed will announce yet another three-quarter-point hike when it next meets in September. Robust hiring tends to fuel inflation because it gives Americans more collective spending power.
One positive sign, though, is that Americans’ expectations for future inflation have fallen, according to a survey by the Federal Reserve Bank of New York, likely reflecting the drop in gas prices that is highly visible to most consumers.
Inflation expectations can be self-fulfilling: If people believe inflation will stay high or worsen, they’re likely to take steps — such as demanding higher pay — that can send prices higher in a self-perpetuating cycle. Companies then often raise prices to offset their higher labor costs. But the New York Fed survey found that Americans foresee lower inflation one, three and five years from now than they did a month ago.
Supply chain snarls are also loosening, with fewer ships moored off Southern California ports and shipping costs declining. Prices for commodities like corn, wheat and copper have fallen steeply.
Yet in categories where price changes are stickier, such as rents, costs are still surging. One-third of Americans rent their homes, and higher rental costs are leaving many of them with less money to spend on other items.
Data from Bank of America, based on its customer accounts, shows that rent increases have fallen particularly hard on younger Americans. Average rent payments for so-called Generation Z renters (those born after 1996) jumped 16% in July from a year ago, while for baby boomers the increase was just 3%.
Stubborn inflation isn’t just a U.S. phenomenon. Prices have jumped in the United Kingdom, Europe and in less developed nations such as Argentina.
In the U.K., inflation soared 9.4% in June from a year earlier, a four-decade high. In the 19 countries that use the euro currency, it reached 8.9% in June compared with a year earlier, the highest since record-keeping for the euro began.
The price increases bedeviling consumers, businesses and policymakers worldwide have prompted a heated debate in Washington about how much of today’s rapid inflation is a result of policy choices in the United States and how much stems from global factors tied to the pandemic, like snarled supply chains.
At a moment when stubbornly rapid price gains are weighing on consumer confidence and creating a political liability for President Biden, White House officials have repeatedly blamed international forces for high inflation, including factory shutdowns in Asia and overtaxed shipping routes that are causing shortages and pushing up prices everywhere. The officials increasingly cite high inflation in places including the euro area, where prices are climbing at the fastest pace on record, as a sign that the world is experiencing a shared moment of price pain, deflecting the blame away from U.S. policy.
But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.
The world’s trade machine is producing, shipping and delivering more goods to American consumers than it ever has, as people flush with cash buy couches, cars and home office equipment, but supply chains just haven’t been able to keep up with that supercharged demand.
by 7 percent in the year through December, its fastest pace since 1982. But in recent months, it has also moved up sharply across many countries, a fact administration officials have emphasized.
“The inflation has everything to do with the supply chain,” President Biden said during a news conference on Wednesday. “While there are differences country by country, this is a global phenomenon and driven by these global issues,” Jen Psaki, the White House press secretary, said after the latest inflation data were released.
the euro area. Data released in the United Kingdom and in Canada on Wednesday showed prices accelerating at their fastest rate in 30 years in both countries. Inflation in the eurozone, which is measured differently from how the U.S. calculates it, climbed to an annual rate of 5 percent in December, according to an initial estimate by the European Union statistics office.
“The U.S. is hardly an island amidst this storm of supply disruptions and rising demand, especially for goods and commodities,” said Eswar Prasad, a professor of trade policy at Cornell University and a senior fellow at the Brookings Institution.
But some economists point out that even as inflation proves pervasive around the globe, it has been more pronounced in America than elsewhere.
“The United States has had much more inflation than almost any other advanced economy in the world,” said Jason Furman, an economist at Harvard University and former Obama administration economic adviser, who used comparable methodologies to look across areas and concluded that U.S. price increases have been consistently faster.
The difference, he said, comes because “the United States’ stimulus is in a category of its own.”
White House officials have argued that differences in “core” inflation — which excludes food and fuel — have been small between the United States and other major economies over the past six months. And the gaps all but disappear if you strip out car prices, which are up sharply and have a bigger impact in the United States, where consumers buy more automobiles. (Mr. Furman argued that people who didn’t buy cars would have spent their money on something else and that simply eliminating them from the U.S. consumption basket is not fair.)
Administration officials have also noted that the United States has seen a robust rebound in economic growth. The International Monetary Fund said in October that it expected U.S. output to climb by 6 percent in 2021 and 5.2 percent in 2022, compared with 5 percent growth last year in the euro area and 4.3 percent growth projected for this year.
“To the extent that we got more heat, we got a lot more growth for it,” said Jared Bernstein, a member of the White House Council of Economic Advisers.
$5 trillion in spending in 2020 and 2021. That outstripped the response in other major economies as a share of the nation’s output, according to data compiled by the International Monetary Fund.
Many economists supported protecting workers and businesses early in the pandemic, but some took issue with the size of the $1.9 trillion package last March under the Biden administration. They argued that sending households another round of stimulus, including $1,400 checks, further fueled demand when the economy was already healing.
Consumer spending seemed to react: Retail sales, for instance, jumped after the checks went out.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation costs and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains could also lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
Americans found themselves with a lot of money in the bank, and as they spent that money on goods, demand collided with a global supply chain that was too fragile to catch up.
Virus outbreaks shut down factories, ports faced backlogs and a dearth of truckers roiled transit routes. Americans still managed to buy more goods than ever before in 2021, and foreign factories sent a record sum of products to U.S. shops and doorsteps. But all that shopping wasn’t enough to satisfy consumer demand.
stop spending at the start of the pandemic helped to swell savings stockpiles.
And the Federal Reserve’s interest rates are at rock bottom, which has bolstered demand for big purchases made on credit, from houses and cars to business investments like machinery and computers. Families have been taking on more housing and auto debt, data from the Federal Reserve Bank of New York shows, helping to pump up those sectors.
But if stimulus-driven demand is fueling inflation, the diagnosis could come with a silver lining. It may be easier to temper consumer spending than to rapidly reorient tangled supply lines.
People may naturally begin to buy less as government help fades. Spending could shift away from goods and back toward services if the pandemic abates. And the Fed’s policies work on demand — not supply.
The Omicron variant of the coronavirus comes at a challenging moment for the Federal Reserve, as officials try to pivot from containing the pandemic’s economic fallout toward addressing worryingly persistent inflation.
The central bank has spent the past two years trying to support a still-incomplete labor market recovery, keeping interest rates at rock bottom and buying trillions of dollars’ worth of government-backed bonds since March 2020. But now that inflation has shot higher, and as price gains increasingly threaten to remain too quick for comfort, its policymakers are having to balance their efforts to support the economy with the need to keep price trends from leaping out of control.
That newfound focus on inflation may limit the central bank’s ability to cushion any blow Omicron might deal to America’s growth and the labor market. And in an unexpected twist, the new variant could even speed up the Fed’s withdrawal of economic support if it intensifies the factors that are causing inflation to run at its fastest pace in 31 years.
“In every one of the previous waves of the virus, the Fed was able to react by effectively focusing on downside risks to growth, and trying to mitigate them,” said Aneta Markowska, chief financial economist at Jefferies. “They’re no longer able to do that, because of inflation.”
said in an interview last week.
The Status of U.S. Jobs
The pandemic continues to impact the U.S. economy in a multitude of ways. One key factor to keep an eye on is the job market and how it changes as the economic recovery moves forward.
Janet L. Yellen, the Treasury secretary and a former Fed chair, made similar remarks at an event on Thursday.
“The pandemic could be with us for quite some time and, hopefully, not completely stifling economic activity but affecting our behavior in ways that contribute to inflation,” she said of the new variant.
during congressional testimony last week. “I think the risk of higher inflation has increased.”
What to Know About Inflation in the U.S.
Fed officials initially expected a 2021 price pop to fade quickly as supply chains unsnarled and factories worked through backlogs. Instead, inflation has been climbing at its fastest pace in more than three decades, and fresh data set for release on Friday are expected to show that the ascent continued as a broad swath of products — like streaming services, rental housing and food — had higher prices.
Given that, Mr. Powell and his colleagues have pivoted to inflation-fighting mode, trying to ensure that they are poised to respond decisively should price pressures persist.
Mr. Powell said last week that officials would discuss speeding up their plans to taper off their bond-buying program — prompting many economists to expect them to announce a plan after their December meeting that would allow them to stop buying bonds by mid-March. The Fed announced early in November that it would slow purchases from $120 billion a month, making the possible acceleration a notable change.
Ending bond-buying early would put officials in a position to raise their policy interest rate, which is their more traditional and more powerful tool.
nearly four million people are still missing from the labor market compared with just before the pandemic began. Some have most likely retired, but surveys and anecdotes suggest that many are lingering on the sidelines because they lack adequate child care or are afraid of contracting or passing along the coronavirus.
If the Fed begins to remove its support for the economy, slowing business expansion and hiring, the labor market could rebound more slowly and haltingly when and if those factors fade.
But the balancing act is different from what it was in previous business cycles. The factors keeping employees on the sidelines right now are mostly unrelated to labor demand, the side of the equation that the Fed can influence. Employers appear desperate to hire, and job openings have shot up. People are leaving their jobs at historically high rates, such a trend that job-quitting TikTok videos have become a cultural phenomenon.
In fact, the at-least-temporarily-tight labor market is one reason inflation might last. As they compete for workers and as employees demand more pay to keep up with ballooning consumption costs, companies are raising wages rapidly. The Employment Cost Index, which the Fed watches closely because it is less affected by many of the pandemic-tied problems that have muddied other wage gauges, rose sharply in its latest reading — catching policymakers’ attention.
If companies continue to increase pay, they may raise prices to cover their costs. That could keep inflation high, and anecdotal signs that such a trend is developing have already cropped up in the Fed’s survey of regional business contacts, called the Beige Book.
“Several contacts mentioned that labor costs were already being passed along to consumers with little resistance, while others said plans were underway to do so,” the Federal Reserve Bank of Atlanta reported in the latest edition, released last week.
Still, some believe that inflation will fade headed into 2022 as the world adjusts to changing shopping patterns or as holiday demand that has run up against constrained supply fades. That could leave the Fed with room to be patient on rate increases, even if it has positioned itself to be nimble.
Lifting rates “before those people come back is a little bit like throwing in the towel,” Ms. Markowska said. “I have a hard time believing that the Fed would throw in the towel that easily.”
None of those transactions took place between late March and May 1, a Fed official said, which would have curbed Mr. Kaplan’s ability to use information about the coming rescue programs to earn a profit.
But the trades drew attention for other reasons. Mr. Conti-Brown pointed out that Mr. Kaplan was buying and selling oil company shares just as the Fed was debating what role it should play in regulating climate-related finance. And everything the Fed did in 2020 — like slashing rates to near zero and buying trillions in government-backed debt — affected the stock market, sending equity prices higher.
“It’s really bad for the Fed, people are going to seize on it to say that the Fed is self-dealing,” said Sam Bell, a founder of Employ America, a group focused on economic policy. “Here’s a guy who influences monetary policy, and he’s making money for himself in the stock market.”
Mr. Perli noted that Mr. Kaplan’s financial activity included trading in a corporate bond exchange-traded fund, which is effectively a bundle of company debt that trades like a stock. The Fed bought shares in that type of fund last year.
Other key policymakers, including the New York Fed president, John C. Williams, reported much less financial activity in 2020, based on disclosures published or provided by their reserve banks. Mr. Williams told reporters on a call on Wednesday that he thought transparency measures around trading activity were critical.
“If you’re asking should those policies be reviewed or changed, I think that’s a broader question that I don’t have a particular answer for right now,” Mr. Williams said.
Washington-based board officials reported some financial activity, but it was more limited. Jerome H. Powell, the Fed chair, reported 41 recorded transactions made by him or on his or his family’s behalf in 2019, and 26 in 2020, but those were typically in index funds and other relatively broad investment strategies. Randal K. Quarles, the Fed’s vice chair for supervision, recorded purchases and sales of Union Pacific stock from 2019 in his 2020 disclosure. Those stocks were assets of Mr. Quarles’s wife and he had no involvement in the transactions, a Fed spokesman said.
Despite the chaotic end to its presence in Afghanistan, the United States still has control over billions of dollars belonging to the Afghan central bank, money that Washington is making sure remains out of the reach of the Taliban.
About $7 billion of the central bank’s $9 billion in foreign reserves are held by the Federal Reserve Bank of New York, the former acting governor of the Afghan central bank said Wednesday, and the Biden administration has already moved to block access to that money.
The Taliban’s access to the other money could also be restricted by the long reach of American sanctions and influence. The central bank has $1.3 billion in international accounts, some of it euros and British pounds in European banks, the former official, Ajmal Ahmady, said in an interview on Wednesday. Remaining reserves are held by the Swiss-based Bank for International Settlements, he added.
Mr. Ahmady said earlier on Wednesday that the Taliban had already been asking central bank officials about where the money was.
International Monetary Fund said on Wednesday that it would block Afghanistan’s access to about $460 million in emergency reserves. The decision followed pressure from the Biden administration to ensure that the reserves did not reach the Taliban.
Money from an agreement reached in November among more than 60 countries to send Afghanistan $12 billion over the next four years is also in doubt. Last week, Germany said it would not provide grants to Afghanistan if the Taliban took over and introduced Shariah law, and on Tuesday, the European Union said no payments were going to Afghanistan until officials “clarify the situation.”
The central bank money and international aid, essential to a poor country where three-quarters of public spending is financed by grants, are powerful leverage for Washington as world leaders consider if and when to recognize the Taliban takeover.
Mr. Ahmady, who fled Afghanistan on Sunday, said he believed the Taliban could get access to the central bank reserves only by negotiating with the U.S. government.
high-profile talks last month. But so far, China hasn’t shown an eagerness to increase its role in Afghanistan. The Taliban could try to take advantage of the country’s vast mineral resources through mining, or finance operations with money from the illegal opium trade. Afghanistan is the world’s largest grower of poppy used to produce heroin, according to data from the United Nations Office on Drugs and Crime.
But these alternatives are all “very tough,” Mr. Ahmady said. “Probably the only other way is to negotiate with the U.S. government.”
Afghanistan has about $700 million at the Bank for International Settlements, Mr. Ahmady said. The bank, which serves 63 central banks around the world, said on Wednesday that it “does not acknowledge or discuss banking relationships.”
On Wednesday, Mr. Ahmady wrote on Twitter that Afghanistan had relied on shipments of U.S. dollars every few weeks because it had a large current account deficit, a reflection of the fact that the value of its imports are about five times greater than its exports.
Those purchases of imports, often paid in dollars, could soon be squeezed.
“The amount of such cash remaining is close to zero due a stoppage of shipments as the security situation deteriorated, especially during the last few days,” Mr. Ahmady wrote.
He recalled receiving a call on Friday saying the country wouldn’t get further shipments of U.S. dollars. The next day, Afghan banks requested large amounts of dollars to keep up with customer withdrawals, but Mr. Ahmady said he had to limit their distribution to conserve the central bank’s supply. It was the first time he made such a move, he said.
Mr. Ahmady said that he had told President Ashraf Ghani about the cancellation of currency shipments, and that Mr. Ghani had then spoken with Secretary of State Antony J. Blinken. Though further shipments were approved “in principle,” Mr. Ahmady said, the next scheduled shipment, on Sunday, never arrived.
their origin story and their record as rulers.
Who are the Taliban leaders? These are the top leaders of the Taliban, men who have spent years on the run, in hiding, in jail and dodging American drones. They are emerging now from obscurity, but little is known about them or how they plan to govern.
The New York Fed provides safekeeping and payment services to foreign central banks so they can store international reserves securely, and to facilitate cross-border payments and other dollar-based transactions. International reserves often take the form of short-term Treasury bonds or gold. The New York Fed has been storing gold for foreign governments for nearly a century.
Though Mr. Ahmady has left the country, he said he believed that most members of the central bank’s staff were still in Afghanistan.
If the Taliban can’t gain access to the central bank’s reserves, it will probably have to further limit access to dollars, Mr. Ahmady said. This would help start a cycle in which the national currency will depreciate and inflation will rise rapidly and worsen poverty.
“They’re going to have to significantly reduce the amount that people can take out,” Mr. Ahmady said. “That’s going to hurt people’s living standards.”
The more than $400 million from the International Monetary Fund, which the Biden administration has sought to keep out of the Taliban’s hands, is Afghanistan’s share of a $650 billion allocation of currency reserves known as special drawing rights. It was approved this month as part of an effort to help developing countries cope with the coronavirus pandemic.
But the toppling of Afghanistan’s government and a lack of clarity about whether the Taliban will be recognized internationally put the I.M.F. in a difficult position.
“There is currently a lack of clarity within the international community regarding recognition of a government in Afghanistan, as a consequence of which the country cannot access S.D.R.s or other I.M.F. resources,” the organization said in a statement Wednesday. It added that its decisions were guided by the views of the international community.
Jake Sullivan, the White House’s national security adviser, said Tuesday that it was too soon to address whether the United States would recognize the Taliban as the legitimate power in Afghanistan.
“Ultimately, it’s going to be up to the Taliban to show the rest of the world who they are and how they intend to proceed,” Mr. Sullivan said. “The track record has not been good, but it’s premature to address that question at this point.”
The suits are returning to the office. In chinos. And sneakers. And ballet flats.
As Wall Street workers trickle back into their Manhattan offices this summer, they are noticeable for their casual attire. Men are reporting for duty in polo shirts. Women have stepped down from the high heels once considered de rigueur. Ties are nowhere to be found. Even the Lululemon logo has been spotted.
The changes are superficial, but they hint at a bigger cultural shift in an industry where well-cut suits and wingtips once symbolized swagger, memorialized in popular culture by Gordon Gekko in the movie “Wall Street” and Patrick Bateman in the film adaptation of Bret Easton Ellis’s novel “American Psycho.” Even as many corporate workplaces around the country relaxed their dress codes in recent years, Wall Street remained mostly buttoned up.
relax dress codes — including in 2019, when Goldman made suits and ties optional — banking had been one of the last bastions of formal work wear, alongside law firms. And in some quarters of Wall Street, such as hedge funds, the code has typically been more permissive.
But in banking, the strict hierarchies were embedded in unwritten fashion rules. Colleagues would ridicule those wearing outfits considered too flashy or too shabby for the wearer’s place in the corporate food chain. Superiors were style guides, but wearing something swankier than one’s boss was considered a faux pas. An expensive watch could be seen as a mark of success, an obnoxious flex, or both.
TV interview; Goldman’s boss, David Solomon, D.J.s in T-shirts on weekends; and Rich Handler, the head of Jefferies, posted a photo of himself sporting a henley tee on Twitter. At an event welcoming employees back to the office in July, Citigroup’s Jane Fraser — the only female boss of a major Wall Street bank — kept her signature look: a jewel-toned dress.
known for its leather-soled dress shoes for men and boys. “It’s going to continue to get more comfortable and casual, but people are still going to want to look nice.”
Now, 80 percent of the shoes his company designs are casual styles, Mr. Florsheim said, compared with 50 percent before the pandemic.
compete for recruits with technology companies — which are friendlier both to remote work and casual clothing — they are seeking to present a less stuffy image. Many banks are also trying to hire a more diverse cohort.
John C. Williams, president of the Federal Reserve Bank of New York and an avowed sneakerhead, said the Fed wanted people to bring their “authentic self” to work because personal style was an important part of valuing all forms of individuality and diversity.
He said he was looking forward to wearing new pairs from his sneaker collection in the office. “When people can be themselves, they do their best work,” he said.
bring staff back to offices. Most of the industry was targeting Labor Day for a full-scale return, although that may be complicated by surging coronavirus cases. Some Wall Street employees have been working out of their offices for months, but many returned only recently for the first time since the outbreak began.
It felt like the first day of school, some bankers said. They wanted to look good in front of colleagues, yet couldn’t bear the thought of wearing dress shoes or heels. Before going in, some checked with friends to see if their choices were in line with the crowd.
One item that has been popular among Wall Street men is Lululemon’s ABC pant, which the athleisure company markets as a wrinkle-resistant, stretchy polyester garment suitable for “all-day comfort.” (The company put its highly recognizable logo on a tab near the pocket to make the pants look less like workout gear.)
Untuckit, the maker of short-hemmed button-downs, saw a jump in sales as vaccination rates across the United States rose in April and May, said Chris Riccobono, the company’s founder. Customers have flocked to its two stores in Manhattan, seeking still-sharp shirts made from breathable fabric.
“What’s amazing is these guys were wearing suits in the middle of summer, walking the streets of New York, coming off the train” before the pandemic, Mr. Riccobono said. “It took corona for the guys who never wore anything but suits to realize, ‘Wait a second.’”
McDonald’s is raising wages at its company-owned restaurants. It is also helping its franchisees hang on to workers with funding for backup child care, elder care and tuition assistance. Pay is up at Chipotle, too, and Papa John’s and many of its franchisees are offering hiring and referral bonuses.
The reason? “In January, 8 percent of restaurant operators rated recruitment and retention of work force as their top challenge,” Hudson Riehle, senior vice president for research at the National Restaurant Association, said in an email. “By May, that number had risen to 72 percent.”
Restaurant workers — burger flippers and bussers, cooks and waiters — have emerged from the pandemic recession to find themselves in a position they could not have imagined a couple of years ago: They have options. They can afford to wait for a better deal.
In the first five months of the year, restaurants put out 61 percent more “workers wanted” posts for waiters and waitresses than they had in the same months of 2018 and 2019, before the coronavirus pandemic shut down bars and restaurants around the country, according to data from Burning Glass, a job market analytics firm.
replace their face-to-face workers with robots and software. Yet there are signs that the country’s low-wage labor force might be in for more lasting raises.
Even before the pandemic, wages of less-educated workers were rising at the fastest rate in over a decade, propelled by shrinking unemployment. And after the temporary expansion of unemployment insurance ends, with Covid-19 under control and children back at school, workers may be unwilling to accept the deals they accepted in the past.
Jed Kolko, chief economist at the job placement site Indeed, pointed to one bit of evidence: the increase in the reservation wage — the lowest wage that workers will accept to take a job.
According to data from the Federal Reserve Bank of New York, the average reservation wage is growing fastest for workers without a college degree, hitting $61,483 in March, 26 percent more than a year earlier. Aside from a dip at the start of the pandemic, it has been rising since November 2017.
“That suggests it is a deeper trend,” Mr. Kolko noted. “It’s not just about the recovery.”
Other trends could support higher wages at the bottom. The aging of the population, notably, is shrinking the pool of able-bodied workers and increasing demand for care workers, who toil for low pay but are vital to support a growing cohort of older Americans.
“There was a work force crisis in the home care industry before Covid,” said Kevin Smith, chief executive of Best of Care in Quincy, Mass., and president of the state industry association. “Covid really laid that bare and exacerbated the crisis.”
more families turning their backs on nursing homes, which were early hotbeds of coronavirus infections, Mr. Smith said, personal care aides and home health aides are in even shorter supply.
“The demand for services like ours has never been higher,” he said. “That’s never going back.”
And some of the changes brought about by the pandemic might create new transition opportunities that are not yet in the Brookings data. The accelerated shift to online shopping may be a dire development for retail workers, but it will probably fuel demand for warehouse workers and delivery truck drivers.
The coronavirus outbreak induced such an unusual recession that any predictions are risky. And yet, as Ms. Escobari of Brookings pointed out, the recovery may provide rare opportunities for those toiling for low wages.
“This time, people searching for jobs may have a lot of different options,” she said. “That is not typical.”
As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.
Laurence D. Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mr. Mnuchin and Mr. Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Mr. Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as “the project” that he and the Fed were “working on together.”
While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government.
60 recorded calls over the frantic Saturday and Sunday leading up to the Fed’s unveiling on Monday, March 23, of a policy package that included its first-ever program to buy corporate bonds, which were becoming nearly impossible to sell as investors sprinted to convert their holdings to cash. Mr. Mnuchin spoke to Mr. Fink five times that weekend, more than anyone other than the Fed chair, whom he spoke with nine times. Mr. Fink joined Mr. Mnuchin, Mr. Powell and Larry Kudlow, who was the White House National Economic Council director, for a brief call at 7:25 the evening before the Fed’s big announcement, based on Mr. Mnuchin’s calendars.
book on funds.
On March 24, 2020, the New York Fed announced that it had again hired BlackRock’s advisory arm, which operates separately from the company’s asset-management business but which Mr. Fink oversees, this time to carry out the Fed’s purchases of commercial mortgage-backed securities and corporate bonds.
BlackRock’s ability to directly profit from its regular contact with the government during rescue planning was limited. The firm signed a nondisclosure agreement with the New York Fed on March 22, restricting involved officials from sharing information about the coming programs.
were contracting and its business outlook hinged on what happened in certain markets.
While the Fed and Treasury consulted with many financial firms as they drew up their response — and practically all of Wall Street and much of Main Street benefited — no other company was as front and center.
Simply being in touch throughout the government’s planning was good for BlackRock, potentially burnishing its image over the longer run, Mr. Birdthistle said. BlackRock would have benefited through “tons of information, tons of secondary financial benefits,” he said.
Mr. Mnuchin could not be reached for comment. Asked whether top Fed officials discussed program details with Mr. Fink before his firm had signed the nondisclosure agreement, the Fed said Mr. Powell and Randal K. Quarles, a Fed vice chair who also appears in the emails, “have no recollection of discussing the terms of either facility with Mr. Fink.”
“Nor did they have any reason to do so because the Federal Reserve Bank of New York handled the process with great care and transparency,” the central bank added in its statement.
Brian Beades, a spokesman for BlackRock, highlighted that the firm had “stringent information barriers in place that ensure separation between BlackRock Financial Markets Advisory and the firm’s investment business.” He said it was “proud to have been in a position to assist the Federal Reserve in addressing the severe downturn in financial markets during the depths of the crisis.”
Daily Business Briefing
The disclosed emails between Fed and BlackRock officials — 11 in all across March and early April — do not make clear whether the company knew about any of the Fed and Treasury programs’ designs or whether they were simply providing market information.
Fed chair’s official schedule from that March. Those calendars generally track scheduled events, and may have missed meetings in early 2020 when staff members were frantically working on the market rescue and the Fed was shifting to work from home, a central bank spokesman said.
Mr. Powell’s calendars did show that he talked to Mr. Fink in March, April and May, and he has previously answered questions about those discussions.
“I can’t recall exactly what those conversations were, but they would have been about what he is seeing in the markets and things like that, to generally exchanging information,” Mr. Powell said at a July news conference, adding that it wasn’t “very many” conversations. “He’s typically trying to make sure that we are getting good service from the company that he founded and leads.”
BlackRock’s connections to Washington are not new. It was a critical player in the 2008 crisis response, when the New York Fed retained the firm’s advisory arm to manage the mortgage assets of the insurance giant American International Group and Bear Stearns.
Several former BlackRock employees have been named to top roles in President Biden’s administration, including Brian Deese, who heads the White House National Economic Council, and Wally Adeyemo, who was Mr. Fink’s chief of staff and is now the No. 2 official at the Treasury.
in early 2009 to $7.4 trillion in 2019. By the end of last year, they were $8.7 trillion.
As it expanded, it has stepped up its lobbying. In 2004, BlackRock Inc. registered two lobbyists and spent less than $200,000 on its efforts. By 2019 it had 20 lobbyists and spent nearly $2.5 million, though that declined slightly last year, based on OpenSecrets data. Campaign contributions tied to the firm also jumped, touching $1.7 million in 2020 (80 percent to Democrats, 20 percent to Republicans) from next to nothing as recently as 2004.
short-term debt markets that came under intense stress as people and companies rushed to move all of their holdings into cash. And problems were brewing in the corporate debt market, including in exchange-traded funds, which track bundles of corporate debt and other assets but trade like stocks. Corporate bonds were difficult to trade and near impossible to issue in mid-March 2020. Prices on some high-grade corporate debt E.T.F.s, including one of BlackRock’s, were out of whack relative to the values of the underlying assets, which is unusual.
People could still pull their money from E.T.F.s, which both the industry and several outside academics have heralded as a sign of their resiliency. But investors would have had to take a financial hit to do so, relative to the quoted value of the underlying bonds. That could have bruised the product’s reputation in the eyes of some retail savers.
fund recovery was nearly instant.
When the New York Fed retained BlackRock’s advisory arm to make the purchases, it rapidly disclosed details of those contracts to the public. The firm did the program cheaply for the government, waiving fees for exchange-traded fund buying and rebating fees from its own iShares E.T.F.s back to the New York Fed.
The Fed has explained the decision to hire the advisory side of the house in terms of practicality.
“We hired BlackRock for their expertise in these markets,” Mr. Powell has since said in defense of the rapid move. “It was done very quickly due to the urgency and need for their expertise.”
Voters In 4 States Head To The Polls For Primary Elections
Inflation Reduction Act: How It Could Impact Your Wallet
U.S. Employers Added 528,000 Jobs in July; Unemployment Falls To 3.5%
