though typically too little to fully offset the amount of inflation that has occurred this year. There are notable exceptions to that, including in leisure and hospitality jobs, where pay has accelerated faster than prices.

The fact that rents and other housing costs are now climbing only compounds the concern that price gains are becoming stickier.

“You have the sticky, important and cyclical piece of inflation surprising to the upside,” said Laura Rosner-Warburton, an economist at MacroPolicy Perspectives. “It is certainly a very significant development.”

Matt Permar, a 24-year-old mail carrier from Toledo, Ohio, rents a two-bedroom apartment in a suburban area with a friend from college. The pair had paid $540 a month each for two years, which Mr. Permar called “pretty standard.” But that has changed.

“With the housing market being the way it is, they raised it about $100,” he said of his monthly rent. As a result, Mr. Permar said, he will have less cash to save or invest.

The Fed aims for 2 percent inflation on average over time, which it defines using a different but related index, the Personal Consumption Expenditures measure. That gauge is released at more of a delay, and has also jumped this year.

Central bankers have said they are willing to look past surging prices because the gains are expected to prove transitory, and they expect long-run trends that had kept inflation low for years to come to dominate. But they have grown wary as rapid price gains last.

The Fed’s September meeting minutes showed that “most participants saw inflation risks as weighted to the upside because of concerns that supply disruptions and labor shortages might last longer and might have larger or more persistent effects on prices and wages than they currently assumed.”

Fed officials’ moves toward slowing their bond purchases could leave them more nimble if they find that they need to raise rates to control inflation next year. Officials have signaled that they want to stop buying bonds before raising rates, so that their two tools are not working at odds with each other.

Wall Street is watching every inflation data point closely, because higher rates from the Fed could squeeze growth and stock prices. And climbing costs can cut into corporate profits, denting earning prospects.

White House officials and many Wall Street data watchers tend to emphasize a “core” index of inflation, which strips out volatile food and fuel prices. Core inflation climbed 4 percent in the year through last month, but the monthly gain was less pronounced, at 0.2 percent.

Some economists welcomed that moderation as good news, along with the cooling in key prices, like airfares, that had popped earlier in the economic reopening. Others emphasized that once supply chain kinks were worked out, prices could drop on products like couches, bikes and refrigerators, providing a counterweight to rising housing expenses.

Omair Sharif, founder of Inflation Insights, said he expected consumer price inflation to moderate, coming in at 2.75 percent to 3 percent on a headline basis by next July, and for core inflation to cool down even more.

“I don’t think there’s any reason to panic,” he said.

Ana Swanson and Ben Casselman contributed reporting.

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Fed Chair Jerome Powell Faces Reappointment Amid Tumult

As Jerome H. Powell’s term as the chair of the Federal Reserve nears its expiration, President Biden’s decision over whether to keep him in the job has grown more complicated amid Senator Elizabeth Warren’s vocal opposition to his leadership and an ethics scandal that has engulfed his central bank.

Mr. Powell, whose four-year term as chair expires early next year, continues to have a good chance of being reappointed because he has earned respect within the White House for his aggressive use of the Fed’s tools in the wake of the pandemic recession, people familiar with the administration’s internal discussions said.

But the decision and the timing of an announcement remain subject to an unusually high level of uncertainty, even for a top economic appointment. The White House will most likely announce Mr. Biden’s choice in the coming weeks, but that, too, is tenuous.

The administration is preoccupied with other major priorities, including passing spending legislation and lifting the nation’s debt limit. But the uncertainty also reflects growing complications around Mr. Powell’s renomination. Ms. Warren, Democrat of Massachusetts, has blasted his track record on big bank regulation and last week called him a “dangerous man” to lead the central bank.

Securities and Exchange Commission to investigate whether the transactions amounted to insider trading. “The responsibility to safeguard the integrity of the Federal Reserve rests squarely with him.”

Asked on Tuesday whether he had confidence in Mr. Powell, the president said he did but that he was still catching up on events.

The White House’s decision over Mr. Powell’s future is pending at a critical moment for the U.S. economy. Millions of jobs are still missing compared with before the pandemic, and inflation has jumped higher as strong demand clashes with supply chain disruptions, presenting dueling challenges for the Fed chair to navigate. The Fed’s next leader will also shape its involvement in climate finance policy, a possible central bank digital currency and the response to the central bank’s ethics dilemma.

“This is starting to feel like an incredibly consequential time for the Fed,” said Dennis Kelleher, the chief executive of Better Markets, a group that has been critical of the Fed’s deregulatory moves in recent years and has criticized it for insufficient ethical oversight.

26 transactions, albeit all in broad-based funds. He also noted that Lael Brainard, a Fed governor and a longtime favorite to replace Mr. Powell if he is not reappointed, did not report any transactions year.

“If you’re trying to go above and beyond, and be beyond reproach, not trading is the better option,” Mr. Hauser said.

bought and sold individual stocks, his 2017 disclosures showed. Ms. Brainard herself has in the past made broad-based transactions. It was the Fed’s more expansive role in 2020 that spurred the backlash.

Agencies often need a “wake-up call” to notice evolving problems with their oversight rules, said Norman Eisen, a senior fellow at the Brookings Institution and an ethics adviser in President Barack Obama’s White House.

“My own view is that Chair Powell is pivoting briskly to address the weaknesses in the Fed’s ethics system,” he said.

enabled big banks to become more intertwined with venture capital.

Critics say reappointing Mr. Powell amounts to retaining that more hands-off regulatory approach. And some progressive groups suggest that if Mr. Powell stays in place, Mr. Quarles will feel emboldened to stick around: He has hinted that he might stay on as a Fed governor once his leadership term ends.

That would mean four of seven Fed Board officials — a majority — would remain Republican-appointed. Two other governors — Michelle W. Bowman and Christopher J. Waller — were nominated by President Donald J. Trump.

During Mr. Powell’s Senate testimony last week, Ms. Warren said renominating him as chair meant “gambling that, for the next five years, a Republican majority at the Federal Reserve, with a Republican chair who has regularly voted to deregulate Wall Street, won’t drive this economy over a financial cliff again.”

Even without Ms. Warren’s approval, Mr. Powell would most likely draw enough support to clear the Senate Banking Committee, the first step before the full Senate could vote on his nomination, because of his continued backing from the committee’s Republicans. But having a powerful Democratic opponent whose support the administration needs on other legislative priorities is not helpful.

The Fed chair does have some powerful allies in the administration, including Ms. Yellen, the Treasury secretary. But the decision rests with Mr. Biden.

“I know he will talk to many people and consider a wide range of evidence and opinions,” Ms. Yellen said on CNBC on Tuesday.

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Could This Covid Wave Reverse the Recovery? Here’s What to Watch.

The spread of the Delta variant has delayed office reopenings, disrupted the start of school and generally dashed hopes for a return to normal after Labor Day. But it has not pushed the U.S. economic recovery into reverse.

Now that recovery faces a new test: the removal of much of the aid that has helped keep households and businesses afloat for the past year and a half.

The Paycheck Protection Program, which distributed hundreds of billions of dollars in grants and loans to thousands of small businesses, concluded last spring. A federal eviction moratorium ended last month after the Supreme Court blocked the Biden administration’s last-minute effort to extend it. Most recently, an estimated 7.5 million people lost unemployment benefits when programs that expanded the system during the pandemic were allowed to lapse.

Next up: the Federal Reserve, which on Wednesday indicated it could start pulling back its stimulus efforts as early as November.

OpenTable, for example, have fallen less than 10 percent from their early-July peak. That is a far smaller decline than during the last Covid surge, last winter.

“It has moved down, but it’s not the same sort of decline,” Mr. Bryson said of the OpenTable data. “We’re living with it.”

$120 billion in monthly bond purchases — which have kept borrowing cheap and money flowing through the economy — but it will almost certainly keep interest rates near zero into next year. Millions of parents will continue to receive monthly checks through the end of the year because of the expanded child tax credit passed in March as part of President Biden’s $1.9 trillion aid package.

That bill, known as the American Rescue Plan, also provided $350 billion to state and local governments, $21.6 billion in rental aid and $10 billion in mortgage assistance, among other programs. But much has not been spent, said Wendy Edelberg, director of the Hamilton Project, an economic-policy arm of the Brookings Institution.

“Those delays are frustrating,” she said. “At the same time, what that also means is that support is going to continue having an effect over the next several quarters.”

Economists, including officials in the Biden administration, say that as the economy heals, there will be a gradual “handoff” from government aid to the private sector. That transition could be eased by a record-setting pile of household savings, which could help prop up consumer spending as government aid wanes.

A lot of that money is held by richer, white-collar workers who held on to their jobs and saw their stock portfolios swell even as the pandemic constrained their spending. But many lower-income households have built up at least a small savings cushion during the pandemic because of stimulus checks, enhanced unemployment benefits and other aid, according to researchers at the JPMorgan Chase Institute.

“The good news is that people are going into the fall with some reserves, more reserves than normal,” said Fiona Greig, co-director of the institute. “That can give them some runway in which to look for a job.”

recent survey by Alignable, a social network for small business owners. Not all have had sales turn lower, said Eric Groves, the company’s chief executive. But the uncertainty is hitting at a crucial moment, heading into the holiday season.

“This is a time of year when business owners in the consumer sector in particular are trying to pull out their crystal ball,” he said. “Now is when they have to be purchasing inventory and doing all that planning.”

open a new location as part of a development project on the West Side of Manhattan.

Go big. If some aid ended up going to people or businesses that didn’t really need help, that was a reasonable trade-off for the benefit of getting money to the millions who did.

Today, the calculus is different. The impact of the pandemic is more tightly focused on a few industries and groups. At the same time, many businesses are having trouble getting workers and materials to meet existing demand. Traditional forms of stimulus that seek to stoke demand won’t help them. If automakers can’t get needed parts, for example, giving money to households won’t lead to more car sales — but it might lead to higher prices.

That puts policymakers in a tight spot. If they don’t get help to those who are struggling, it could cause individual hardship and weaken the recovery. But indiscriminate spending could worsen supply problems and lead to inflation. That calls for a more targeted approach, focusing on the specific groups and industries that need it most, said Nela Richardson, chief economist for ADP, the payroll processing firm.

“There are a lot of arrows in the quiver still, but you need them to go into the bull’s-eye now rather than just going all over,” Ms. Richardson said.

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Federal Reserve Signals a Shift Away From Pandemic Support

Federal Reserve officials indicated on Wednesday that they expect to soon slow the asset purchases they have been using to support the economy and predicted they might raise interest rates next year, sending a clear signal that policymakers are preparing to curtail full-blast monetary help as the business environment snaps back from the pandemic shock.

Jerome H. Powell, the Fed’s chair, said during a news conference that the central bank’s bond purchases, which have propped up the economy since the depths of the pandemic downturn, “still have a use, but it’s time for us to begin to taper them.”

That unusual candor came for a reason: Fed officials have been trying to fully prepare markets for their first move away from enormous economic support. Policymakers could announce a slowdown to their monthly government-backed securities purchases as soon as November, the Fed’s next meeting, and the program may come to a complete end by the middle of next year, Mr. Powell later said. He added that there was “very broad support” on the policy-setting Federal Open Market Committee for such a plan.

Nearly 20 months after the coronavirus pandemic first shook America, the Fed is trying to guide an economy in which business has rebounded as consumers spend strongly, helped along by repeated government stimulus checks and other benefits.

markets on edge. In the United States, partisan wrangling could imperil future government spending plans or even cause a destabilizing delay to a needed debt ceiling increase.

Mr. Powell and his colleagues are navigating those crosscurrents at a time when inflation is high and the labor market, while healing, remains far from full strength. They are weighing when and how to reduce their monetary policy support, hoping to prevent economic or financial market overheating while keeping the recovery on track.

“They want to start the exit,” said Priya Misra, global head of rates strategy at T.D. Securities. “They’re putting the markets on notice.”

Investors took the latest update in stride. The S&P 500 ended up 1 percent for the day, slightly higher than it was before the Fed’s policy statement was released, and yields on government bonds ticked lower, suggesting that investors didn’t see a reason to radically change their expectations for interest rates.

The Fed has been holding its policy rate at rock bottom since March 2020 and is buying $120 billion in government-backed bonds each month, policies that work together to keep many types of borrowing cheap. The combination has fueled lending and spending and helped to foster stronger economic growth, while also contributing to record highs in the stock market.

fresh set of economic projections on Wednesday, laying out their predictions for growth, inflation and the funds rate through the end of 2024. Those included the “dot plot” — a set of anonymous individual estimates showing where each of the Fed’s 18 policymakers expect their interest rate to fall at the end of each year.

last released in June. This was the first time the Fed has released 2024 projections, and officials expected rates to stand at 1.8 percent at the end of that year.

sharply higher in recent months, elevated by supply-chain disruptions and other quirks tied to the pandemic. The Fed’s preferred metric, the personal consumption expenditures index, climbed 4.2 percent in July from a year earlier.

Fed officials expected inflation to average 4.2 percent in the final quarter of 2021 before falling to 2.2 percent in 2022, the new forecasts showed.

Central bankers are trying to predict how inflation will evolve in the coming months and years. Some officials worry that it will remain elevated, fueled by strong consumption and newfound corporate pricing power as consumers come to expect and accept higher costs.

Others fret that the same factors pushing prices higher today will lead to uncomfortably low inflation down the road — for instance, used car prices have contributed heavily to the 2021 increase and could fall as demand wanes. Tepid price increases prevailed before the pandemic started, and the same global trends that had been weighing inflation down could once again dominate.

“Inflation expectations are terribly important, we spend a lot of time watching them, and if we did see them moving up in a troubling way” then “we would certainly react to that,” Mr. Powell said. “We don’t really see that now.”

The Fed’s second goal — full employment — also remains elusive. Millions of jobs remain missing compared with before the pandemic, even after months of historically rapid employment gains. Officials want to avoid lifting interest rates to cool off the economy before the labor market has fully healed. It’s difficult to know when that might be, because the economy has never recovered from pandemic-induced lockdowns before.

“The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic,” Mr. Powell said on Wednesday.

Given those uncertainties, the Fed is likely to move cautiously on raising interest rates. And while Mr. Powell teed up a possible November announcement that the Fed would start slowing its bond-buying, even that is subject to change if the economy does not shape up as expected — or if major risks on the horizon materialize.

“The start of tapering would be delayed if the debt ceiling standoff is unresolved and markets are in turmoil,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note following the meeting.

Yet Mr. Powell made clear that the Fed was not equipped to ride to the rescue if lawmakers could not resolve their differences.

“It’s just very important that the debt ceiling be raised in a timely fashion,” Mr. Powell said, adding that “no one should assume the Fed or anyone else can protect markets and the economy in the event of a failure” to “make sure that we do pay those, when they’re due.”

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Global Markets Swoon as Worries Mount Over Superpowers’ Plans

Investors on three continents dumped stocks on Monday, fretting that the governments of the world’s two largest economies — China and the United States — would act in ways that could undercut the nascent global economic recovery.

The Chinese government’s reluctance to step in and save a highly indebted property developer just days before a big interest payment is due signaled to investors that Beijing might break with its longstanding policy of bailing out its homegrown stars.

And in the United States, the globe’s No. 1 economy, investors worried that the Federal Reserve would soon begin cutting back its huge purchases of government bonds, which had helped drive stocks to a series of record highs since the coronavirus pandemic hit.

The sell-off started in Asia and spread to Europe — where exporters to China were slammed — before landing in the United States, where stocks appeared to be heading for their worst performance of the year before a rally at the end of the trading day. The S&P 500 closed down 1.7 percent, its worst daily performance since mid-May, after being down as much as 2.9 percent in the afternoon.

to ignore a variety of issues complicating the recovery — including the emergence of the Delta variant and the supply chain snarls that have bedeviled consumers and manufacturers alike.

But beginning this month, as Evergrande began to teeter and the likelihood of the Fed’s scaling back — or tapering — its bond-buying programs grew, the market’s protective bubble began to deflate. Some U.S. investors are also concerned that tax increases are in the offing — including on share buybacks and corporate profits — to help pay for a spending push by the federal government, the signature piece of which is President Biden’s proposed $3.5 trillion budget bill. Separately, Congress also must act to raise the government’s borrowing limit, a politically charged process that has at times thrown markets for a loop.

On Monday, those currents combined, reflecting the interconnectedness of the global markets as investors everywhere sold their holdings.

the rancorous debate about increasing the debt limit was accompanied by a sharp market slump, as representatives in Washington appeared to flirt with the idea of not raising the constraint on borrowing, which would effectively amount to a default on Treasury bonds.

“It’s going to be drama for the sake of politics,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. “People don’t like that.”

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August Jobs Report is Concerning News for Fed

Disappointing August jobs numbers intensified the economic uncertainty caused by the Delta variant, putting pressure on the Federal Reserve as it considers when to reduce its policy support and on the White House as it tries to get more Americans vaccinated.

Fed officials and President Biden had been looking for continued improvement in the job market, but the Labor Department reported on Friday that employers added just 235,000 jobs in August — far fewer than projected and a sign that the ongoing coronavirus surge may be slowing hiring.

“There’s no question that the Delta variant is why today’s job report isn’t stronger,” Mr. Biden said in remarks at the White House. “I know people were looking, and I was hoping, for a higher number.”

A one-month slowdown is probably not enough to upend the Fed’s policy plans, but it does inject a dose of caution. It also will ramp up scrutiny of upcoming data as the central bank debates when to take its first steps toward a more normal policy setting by slowing purchases of government-backed bonds.

speech last week that as of the central bank’s July meeting, he and most of his colleagues thought they could start reducing the pace of asset purchases this year if the economy performed as they expected.

sharp pullback in hotel and restaurant hiring, which tends to be particularly sensitive to virus outbreaks. The participation rate, a closely watched metric that gauges what share of the population is working or looking, stagnated.

But there were other signs that underlying demand for workers remained strong. Wages continued to rise briskly, suggesting that employers were still paying up to lure people into work. Over the last three months, job gains have averaged 750,000, which is a strong showing. And the unemployment rate continued to decline in spite of the weakness in August, slipping to 5.2 percent.

4.2 percent in the year through July — well above the 2 percent average that officials aim to achieve over time.

Officials widely expect those price gains to slow as the economy returns to normal and supply chain snarls clear up. But they are monitoring consumer inflation expectations and wages keenly: Prices could keep going up quickly if shoppers begin to accept higher prices and workers come to demand more pay.

That’s why robust wage gains in the August report stuck out to some economists. Average hourly earnings climbed by 0.6 percent from July to August, more than the 0.3 percent economists in a Bloomberg survey had forecast. Over the past year, they were up 4.3 percent, exceeding the expected 3.9 percent.

The fresh data put the Fed “in an uncomfortable position — with the slowdown in the real economy and employment growth accompanied by signs of even more upward pressure on wages and prices,” wrote Paul Ashworth, the chief North America economist at Capital Economics.

referred to that consideration in a footnote to last week’s speech.

“Today we see little evidence of wage increases that might threaten excessive inflation,” he said.

Plus, it is unclear whether pay gains will remain robust as workers return. While it is hard to gauge how much enhanced unemployment benefits discouraged workers from taking jobs, and early evidence suggests that the effect was limited, a few companies have signaled that labor supply has been improving as they sunset.

Other trends — the end of summer and the resumption of in-person school and day care — could allow parents who have been on the sidelines to return to the job search, though that might be foiled if Delta keeps students at home.

“There’s still so much disruption, it’s hard for businesses and workers to make plans and move forward when you don’t know what’s coming around the next bend,” said Julia Coronado, the founder of MacroPolicy Perspectives, adding that this is a moment of “delicate transition.”

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Powell Signals Fed Could Start Removing Economic Support

Eighteen months into the pandemic, Jerome H. Powell, the Federal Reserve chair, has offered the strongest sign yet that the Fed is prepared to soon withdraw one leg of the support it has been providing to the economy as conditions strengthen.

At the same time, Mr. Powell made clear on Friday that interest rate increases remained far away, and that the central bank was monitoring risks posed by the Delta variant of the coronavirus.

The Fed has been trying to bolster economic activity by buying $120 billion in government-backed bonds each month and by leaving its policy interest rate at rock bottom. Officials have been debating when to begin slowing their bond buying, the first step in moving toward a more normal policy setting. They have said they would like to make “substantial further progress” toward stable inflation and full employment before doing so.

Mr. Powell, speaking at a closely watched conference that the Kansas City Fed holds each year, used his remarks to explain that he thinks the Fed has met that test when it comes to inflation and is making “clear progress toward maximum employment.”

six million fewer jobs than before the pandemic. And the Delta variant could cause consumers and businesses to pull back as it foils return-to-office plans and threatens to shut down schools and child care centers. That could lead to a slower jobs rebound.

Mr. Powell made clear that the Fed wants to avoid overreacting to a recent burst in inflation that it believes will most likely prove temporary, because doing so could leave workers on the sidelines and weaken growth prematurely. While the Fed could start to remove one piece of its support, he emphasized that slowing bond purchases did not indicate that the Fed was prepared to raise rates.

“We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2 percent inflation on a sustainable basis,” he said in his address to the conference, which was held online instead of its usual venue — Jackson Hole in Wyoming — because of the latest coronavirus wave.

The distinction he drew — between bond buying, which keeps financial markets chugging along, and rates, which are the Fed’s more traditional and arguably more powerful tool to keep money cheap and demand strong — sent an important signal that the Fed is going to be careful to let the economy heal more fully before really putting away its monetary tools, economists said.

told CNBC on Friday that he supported winding down the purchases “as quickly as possible.”

“Let’s start the taper, and let’s do it quickly,” he said. “Let’s not have this linger.”

James Bullard, the president of the Federal Reserve Bank of St. Louis, said on Friday that the central bank should finish tapering by the end of the first quarter next year. If inflation starts to moderate then, the country will be in “great shape,” Mr. Bullard told Fox Business.

“If it doesn’t moderate, then I think the Fed is going to have to be more aggressive in 2022,” he said.

ushered in a new policy framework at last year’s Jackson Hole gathering that dictates a more patient approach, one that might guard against a similar overreaction.

But as Mr. Bullard’s comments reflected, officials may have their patience tested as inflation climbs.

The Fed’s preferred price gauge, the personal consumption expenditures index, rose 4.2 percent last month from a year earlier, according to Commerce Department data released on Friday. The increase was higher than the 4.1 percent jump that economists in a Bloomberg survey had projected, and the fastest pace since 1991. That is far above the central bank’s 2 percent target, which it tries to hit on average over time.

“The rapid reopening of the economy has brought a sharp run-up in inflation,” Mr. Powell said.

They warn that if the Fed overreacts to today’s inflationary burst, it could wind up with permanently weak inflation, much as Japan and Europe have.

White House economists sided with Mr. Powell’s interpretation in a new round of forecasts issued on Friday. In its midsession review of the administration’s budget forecasts, the Office of Management and Budget said it expected the Consumer Price Index inflation rate to hit 4.8 percent for the year. That is more than double the administration’s initial forecast of 2.1 percent.

initially expected. But they still insist that it will be short-lived and foresee inflation dropping to 2.5 percent in 2022. The White House also revised its forecast of growth for the year, to 7.1 percent from 5.2 percent.

Slow price gains sound like good news to anyone who buys oat milk and eggs, but they can set off a vicious downward cycle. Interest rates include inflation, so when it slows, Fed officials have less room to make money cheap to foster growth during times of trouble. That makes it harder for the economy to recover quickly from downturns, and long periods of weak demand drag prices even lower — creating a cycle of stagnation.

“While the underlying global disinflationary factors are likely to evolve over time, there is little reason to think that they have suddenly reversed or abated,” Mr. Powell said. “It seems more likely that they will continue to weigh on inflation as the pandemic passes into history.”

Mr. Powell offered a detailed explanation of the Fed’s scrutiny of prices, emphasizing that inflation is “so far” coming from a narrow group of goods and services. Officials are keeping an eye on data to make sure prices for durable goods like used cars — which have recently taken off — slow and even fall.

Mr. Powell said the Fed saw “little evidence” of wage increases that might threaten high and lasting inflation. And he pointed out that measures of inflation expectations had not climbed to unwanted levels, but had instead staged a “welcome reversal” of an unhealthy decline.

Still, his remarks carried a tone of watchfulness.

“We would be concerned at signs that inflationary pressures were spreading more broadly through the economy,” he said.

Jim Tankersley contributed reporting.

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U.S. and I.M.F. Apply a Financial Squeeze on the Taliban

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.

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.”

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July C.P.I. Report: Inflation Rose Quickly Again

Fed officials are willing to look past the elevated readings specifically because they are expected to be, as central bankers often say, “transitory.” They would worry more about a generalized, economywide pickup in prices that happens year after year, chipping away at consumer paychecks and potentially influencing how businesses and households live their economic lives.

But policymakers are still eager to see their expectation for an inflation slowdown borne out.

A “narrative for why the current supply and demand constraints might be expected to ease over time strikes me as a reasonable baseline,” Esther George, president of the Federal Reserve Bank of Kansas City, said in a speech Wednesday after the report, while emphasizing that the “narrative would be incomplete without acknowledging the risks.”

Ms. George pointed to the rise in coronavirus infections tied to the Delta variant, which could keep supply chains kinked, and to household savings, which could keep consumers spending strongly and economic conditions “tight.”

Economists have flagged other forces that could sustain inflation. Goldman Sachs noted in a recent research note that revised-down production schedules at automakers suggest that some price pressures in the car industry could last into the fall. Shipping experts report continued delays and cost increases, which could also feed into consumer prices.

And moderation alone is not enough to take the pressure off the Fed and White House: Policymakers need a substantial cool-down. July’s 0.5 percent monthly increase was less rapid than the 0.9 percent gain from May to June, but if the current pace continued for a year, inflation would pick up by nearly 6 percent on an annual basis. That could leave consumers with substantially less purchasing power.

Fed officials will be watching for signs that today’s price increases are getting locked into consumer and business expectations, which could make them more lasting.

Wage increases and inflation expectations offer key signals about the future of inflation. If pay takes off on a sustained basis, employers may find that they need to charge more to cover their expenses. Likewise, if consumers and businesses start to expect rapid price increases, they may be more willing to accept higher prices, setting off a self-fulfilling prophecy.

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A Wall Street Dressing Down: Always. Be. Casual.

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.’”

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