Business News

WASHINGTON (AP) – President Jerome Powell said Wednesday that he supports the traditional quarter-point increase in the Federal Reserve’s base short-term interest rate when the Fed meets later this month, instead of the larger increase some of his politicians have offered.

But Powell has opened the door for a bigger boost in the event that inflation, which has peaked in four decades, does not fall sharply this year, as the Fed expects.

“I’m willing to propose a four-point increase in interest rates to fight the acceleration of inflation that has gripped the economy in recent months,” Powell told the House Financial Services Financial Services Commission on the first of two days of half-yearly before Congress.

Most other Fed officials in recent weeks have backed such a modest rise, while several have said they support a half-point increase. or at least are open to such an increase. Higher Fed interest rates tend to lead to higher spending on consumer and business loans, including housing and car loans and credit cards.

“We expect inflation to peak and start declining this year,” Powell said. But he added: “As inflation rises … then we would be prepared to act more aggressively,” raising interest rates by more than a quarter of a point later this year.

The stock market rose in response to Powell’s support for the smaller increase. The S&P 500 jumped 1.7% in mid-day trading.

The chairman of the Fed warned that the economic consequences of the Russian invasion of Ukraine and the resulting US and European sanctions are “very uncertain” and say it is “too early to say” how they could influence the Fed’s policy.

Prior to Russia’s invasion, the Fed plans to make a “series” of interest rate hikes this year, Powell said, potentially in each of the Fed’s remaining seven meetings. For now, the Fed will “continue carefully along the lines of this plan.”

Economists predict that the Fed will implement five to seven increases by a quarter. This month’s increase will be the first since 2018. And it will mark the beginning of a delicate challenge for the Fed: it wants to raise interest rates enough to cut inflation, which is now at its peak in four decades, but not so fast as to stifle growth and hiring. Powell argues that with a low unemployment rate of 4% and solid consumer spending, the economy can withstand moderately higher borrowing costs.

The Fed’s interest rate is now fixed close to zero, where it has been since the pandemic struck in March 2020, and the Fed has responded by cutting interest rates to help the economy.

Powell acknowledged that consumer price hikes have jumped far above the Fed’s 2% target – inflation reached 7.5% in January compared to a year earlier – and that higher prices lasted longer than expected. He also promised to use the Fed’s tools to bring inflation back to its target.

“We understand that high inflation imposes significant difficulties, especially on those who are least able to cover the higher costs of basic things such as food, housing and transport,” he said.

However, he added that the central bank expects inflation to fall gradually this year as tangled supply chains unravel and consumers withdraw some of the cost.

Most economists agree that inflation is likely to fall from its current level, but will remain high. Rising prices are spreading beyond the items damaged by the pandemic – cars, electronics, furniture and other household goods – into broader cost categories, especially rental costs..

Goldman Sachs has raised its inflation forecast and now predicts that prices, according to the Fed’s preferred measure, will still rise at a relatively high annual rate of 3.7% by the end of the year. That’s well above the Fed’s latest own forecast, released in December, at 2.7 percent. When the central bank’s politicians meet in two weeks, they will update this forecast.

Powell said the Fed would also begin to cut its huge $ 9 trillion balance, which more than doubled during the pandemic when the Fed bought trillions of dollars in bonds to try to keep long-term interest rates. He said central bank politicians were likely to agree on a plan on how to shrink their bonds when they meet in two weeks, but declined to say when the plan could be implemented. The shrinking balance of the Fed leads to a further increase in the cost of long-term loans.

In public statements, central bank officials discuss whether to raise interest rates by half a percentage point this month – an aggressive move – although most backed the traditional quarter-point increase. Russia’s invasion of Ukraine made an increase of half a point even less likely.

The invasion of Ukraine has raised oil prices by about 18% to about $ 110 a barrel, which will make gas more expensive. Some economists predict that average gas prices could soon reach $ 4 a gallon, compared to the national average of $ 3.66 on Wednesday.

More expensive energy will lead to even higher inflation than it would otherwise be in the coming months, which will strengthen the arguments for raising Fed interest rates. But more expensive gas also deprives consumers of money to spend on other things. This, in turn, is likely to hold back consumer spending and potentially weaken the economy, a scenario that would normally discourage the Fed from raising interest rates.

Apart from its effect on inflation, the war may have only a limited impact on the US economy, analysts say, as long as it does not escalate significantly. Only about 0.5% of US trade is with Russia.

Powell warned that the war could lead to a shortage of goods such as neon gas and palladium, which are used to make semiconductors. The lack of computer chips last year slowed down the production of cars and electronics and contributed to high inflation.

But the Fed chairman also suggested that the overall effect of the war on the US economy could be limited as long as the conflict does not escalate significantly.

“Our financial institutions and our economy do not have much interaction with the Russian economy,” he said. “And it’s getting smaller and smaller in recent years.”

Now Ukraine accepts Dogecoin donations, said Deputy Prime Minister Mikhail Fedorov.

“Now even the meme can support our army and save lives from Russian invaders,” Fedorov tweeted.

This is the latest move on cryptocurrencies on behalf of the Ukrainian government to raise funds amid the Russian invasion.

Crypto donations and Ukraine

Last week, the government’s official Twitter account was shared bitcoin and Ethereum addresses when it announcements Ukraine is now “accepting donations of cryptocurrency.” According to blockchain records, Ukraine has raised more than $ 20 million in Bitcoin and Ethereum combined so far.

The country also accepts Donations from Polkadot. The government tweeted the message just a day ago, saying “the people of Ukraine are grateful for the support and donations from the global crypto community as we defend our freedom.”

There was also an air release announcements for March 3, 2022 at 6 pm Kyiv time.

According to blockchain analysis firm Elliptic, the country has raised a total of more than $ 35 million in various cryptocurrencies.

https://decrypt.co/94217/ukraine-now-accepts-dogecoin-donationsrussian-invasion

Top 5 crypto news and features in your inbox every day.

Get Daily Digest for the best of Decrypt. News, original features, etc.

Self-described meme monkey Adam Aron throws a smelly, smoldering pile of feces at those people who say the streaming movement will put an end to the movie theater business.

“There are so many conventional wisdoms floating around that movie theaters can’t coexist and can’t thrive in a world of streaming. What a load like cow dung. Here, that cleans it up well. What a load of cow dung,” he said. the outspoken CEO of AMC to analysts during a conversation about profits on Tuesday night.

Aaron finally has better funding to support his three-month praise, as the relief of the COVID-19 pandemic brought people back to theaters.

AMC’s said fourth-quarter sales were the strongest on a quarterly basis for two full years. Total sales rose to $ 1.12 billion from $ 162.5 million caused by the pandemic a year ago.

Attendance levels reached 59.7 million compared to about 8 million a year earlier. The number of cinema-goers has improved dramatically both in the United States and abroad.

Improved attendance led to adjusted operating gains of $ 159.2 million, a significant improvement over the previous year’s loss of $ 327.5 million.

Shares of AMC fell 2% on Wednesday despite a stronger tone around business trends.

The company is so confident in its momentum that it is using dynamic pricing for Batman’s latest film, which debuts next weekend.

“Right now, our prices for Batman, which launches this week, are a little higher than the prices we charge for other movies that are playing in the same theaters at the same time,” Aaron said.

The CEO, using Twitter, had a few farewell thoughts about his brand’s haters, as usual.

Aaron said, “The problem with conventional wisdom is that conventional wisdom is so often just completely wrong. Remember the brokers who announced that AMC would file for bankruptcy in 2021. Well, remember that otherwise highly respected experts called for the price of AMC shares to fall to $ 2, $ 1 or even a penny by February or March 2022. Now for the whole world I’m listening to[‘m] does not make any prediction for the future. I look only retrospectively, but these experts greatly underestimated the AMC. With the full benefits of retrospective, we can now happily say, because now it is a simple fact. They were wrong, they were wrong, they were wrong. “

The story continues

Spoken as a true leader of the monkey memes.

Brian Sosie is the editor – in – chief and a leader in Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and so on LinkedIn.

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTubeand reddit

The OPEC + group decided on Wednesday to impose another 400,000 barrels per day (bpd) increase in its total oil production in April, despite rising oil prices after a key member of the pact, Russia, invaded Ukraine.

During a brief OPEC + ministerial meeting, ministers decided to continue with the monthly increase agreed last summer, in a move widely expected by analysts.

In the days leading up to the meeting, OPEC + sources and analysts signaled that there would be no change in the pact’s production plan, despite soaring oil prices, which are now well beyond those comfortable for major oil-consuming countries, including the United States.

The problem with increasing production more than planned – even if OPEC + wanted – is that only Saudi Arabia and the UAE actually have the capacity to do so, but a large increase in production by these two influential OPEC members would mean a critical reduction in reserve production capacity. world Wide. Others most often do not have the capacity to pump their quotas, and the gap between the monthly nominal increase of 400,000 barrels per day and the actual increase rises to as much as 900,000 bpd in January, according to the International Energy Agency.

The OPEC + meeting on Wednesday decided to leave the plan as it is and did not mention the Russian war in Ukraine, which was the reason why oil prices jumped to over $ 100 a barrel last week for the first time since 2014 and continued. to Grow $ 111 Early Today.

OPEC + said in a press release after a record brief meeting that “it was noted that the current fundamentals of the oil market and the consensus on its prospects point to a well-balanced market and that the current instability is not caused by changes in market fundamentals but by current geopolitical developments. . “

According to the production schedule for April provided by OPEC, the collective quota of the OPEC + alliance is 41.697 million barrels per day. The pact’s leaders, Saudi Arabia and Russia, have a quota of 10.436 million barrels a day in April.

Oil prices continued to rise, with Brent reaching $ 112 and crude oil WTI $ 110 a barrel half an hour after OPEC + closed.

By Tsvetana Paraskova for Oilprice.com

More popular readings from Oilprice.com:

With these revisions, the increase in jobs in February was actually the weakest since August, although it exceeded expectations.

“You can see in all the data that the huge upheavals and fluctuations in the first days of the pandemic will affect measurements and seasonal adjustments,” Richardson told CNN Business. That is why the revisions in economic models are so great at the moment.

But instead of losing faith in the ability of economists to forecast, we need to keep the perspective, Richardson urged.

Last year, the US economy still added more than six million jobs, and 2022 is expected to be another strong year for the labor market as employers continue to struggle with labor shortages.

Weekly unemployment claims are returning to pre-pandemic levels, reflecting that companies are reluctant to lay off workers, Richardson added.

In February, the leisure and hotel sector added the most positions – 170,000. None of the main sectors lost their jobs, although growth was low in education as well as in mining.

In terms of business size, large companies with more than 1,000 employees have added the most staff, while small companies with up to 49 employees are cutting jobs.

The ADP report tracks private sector employment and is not linked to the official number of government jobs scheduled for Friday morning. Economists polled by Refinitiv forecast 400,000 jobs for the government report. However, the report on private wages is closely monitored and is considered key to the US labor market.

The company also raised its forecast for the production and profitability of electric vehicles. Electricity is expected to account for a third of global sales by 2026 – or a total of around two million EVs – and half of global sales by 2030, up from the previous 40% target. Ford also raised its forecast for the operating profit margin to 10% by 2026 from the previous 8% target.

The plan is one of the company’s boldest steps to date with CEO Jim Farley to accelerate the development of new battery-powered models. This also comes when investors raise Tesla’s ratings Inc.

and other start-ups that are not burdened by a legacy business and focus solely on the sale of electric vehicles.

Shares of Ford were ahead by about 5% at $ 17.55 in morning trading. Before Wednesday, shares fell by about 20% year-on-year.

Mr Farley, who took the top spot in 2020, has repeatedly said that the business of developing and selling electric vehicles is significantly different from his conventional gas engine operations, which require new technical expertise and a separate sales strategy. .

“Our legacy is holding us back. We had to change, “he told a news conference on Wednesday.

Ford needs to continue producing gas and diesel vehicles – which today provide its entire end line – to boost profitability as it sharpens its focus on battery-powered vehicles, which it expects to boost growth over the next decade. . Said Farley. He said the new structure would help Ford reduce complexity and reduce annual costs by $ 3 billion from the gas engine business by focusing more closely on reducing quality issues and simplifying the model range.

Ford said the part of the business that will focus on electric vehicles and digital innovation will be called the Ford Model e. The other side, Ford Blue, will work to improve the profitability of its internal combustion engine vehicles.

Mr. Farley will serve as President of Ford Model e, while continuing as Chief Executive Officer. Ford Blue’s business will be led by Kumar Galhotra, now the company’s president for America and international markets.

The reorganization plans follow speculation among investors and the media about whether Ford can separate its electric vehicle business as a way to unlock value.

On Wednesday, Mr Farley said his team had considered a spin-off, but decided the company was able to fund the transition to EV without using the capital markets. He also said Ford needed a division focused on future technologies such as batteries and software, as well as the engineering and manufacturing experience of Ford’s legacy business.

“New startups would like to have our company’s industrial know-how,” he said. “Why separate Model e and risk it?”

Ford CFO John Lawler later added that there were no ongoing plans to separate or create another way for investors to bet on the EV part of Ford’s business, such as stock tracking.

“Once we start counting segments, you’ll be able to see value creation in each of the divisions,” he said. “We have to get credit for that.”

In the last few years, many of the world’s largest carmakers have set out strategies to shift capital spending to electric vehicles and digital services that are expected to generate revenue after initial sales. Ford, General Motors Co.

Volkswagen AG

pouring billions of dollars into battery plants and new electric vehicle factories as they race to launch more electric vehicles, which now account for only about 4% of U.S. car sales.

The creation of separate divisions by Ford goes further than most other car companies. Rival rivals, for example, split the management of their electric vehicle and internal combustion businesses in 2019 and set up new digital innovation and EV charging infrastructure, but focused on separate divisions with their own profit and loss statements.

Leaders of GM and other carmakers said they were open to options, but that there was too much overlap between the EV and the internal combustion parts business to separate one or the other.

On Tuesday, jeep maker Stellantis NV told investors it expected electricity to account for half of its sales in the United States and all of its European sales by the end of the decade.

Barclays analyst Brian Johnson said Ford’s actions should give investors a better idea of ​​the efficiency of electric vehicle operations and should accelerate Ford’s plans for electric vehicles. But as it seems unlikely to lead to secession in the short term, “we consider the message neutral,” he said.

Last year, Ford’s range included only one electric vehicle: the Mustang Mach-E. Ford sold about 27,000 SUVs last year, or 1.4 percent of U.S. sales. By comparison, Tesla sold about 352,500 vehicles in the United States last year, according to research firm Motor Intelligence. Tesla does not distribute deliveries by region.

Ford is adding to its EV offerings in the coming weeks, including the introduction of an electric version of its Transit cargo van. The F-150 Lightning, the electric version of the country’s best-selling pickup, is scheduled to go on sale this spring. Ford has said it will spend $ 30 billion on electric vehicles by 2025.

As estimates by Tesla and other electric car manufacturers have risen over the past few years, investors have questioned whether traditional car companies can set aside their assets for electric cars to boost their ratings.

Bank of America analyst John Murphy said the Ford overhaul should help Ford attract talent to help it move into electric vehicles and digital services. He also said it could reduce Ford’s capital costs by potentially allowing it to use the green bond market, which is issued to fund environmental projects.

Write to Mike Colias at [email protected]

Фor for the past five months, Anna Hokuf has lived in her car with her cat after leaving a violent home environment. Trying to save enough money to secure an apartment that does strange things while homeless is difficult enough for the 19-year-old. Now rising gas prices have made everything almost impossible.

“I don’t have the ability to save a lot of money, and gas prices are as high as almost $ 4 a gallon, it really makes you homeless difficult,” said Hokuf of the Lihai Valley, Pennsylvania region. “I have to keep my car turned on all the time to keep warm and keep my cat warm, which consumes more gasoline and causes tension in my car.”

It takes about $ 60 to fill the Hokuf’s car tank and about $ 40 a day for gas to keep warm at night. Food options are limited because it has no way to heat food. She bathes and washes periodically when she manages to find enough money for a hotel room for one or two nights. “Unfortunately, all the money I can get usually goes to petrol or food for my cat,” she said.

Gas prices have risen over the past year and are expected to continue to rise as Russia’s invasion of Ukraine further disrupts oil production, a production that already suffers from the effects of Covid-19. Last week, the price of oil reached its highest level in more than seven years, and the war threatens to inflame the already alarming problems of the United States with inflation.

The Biden administration has vowed to take action to curb rising gas prices by imposing economic sanctions on Russia, the world’s second-largest oil producer and exporter. So far, the sanctions have not covered the Russian oil and gas industry, as Europe is heavily dependent on it and this would lead to an even bigger jump in oil prices.

According to the American Automobile Association, the average gallon of gas in the United States was $ 3,619 as of March 1, compared to $ 2.72 per gallon a year ago. The states with the highest average gas prices include California at $ 4,837 per gallon and Hawaii at $ 4,565 per gallon, with Arkansas having the lowest at $ 3,243 per gallon.

Oil companies have reaped huge profits from rising gas prices in the past year, with the top 24 oil companies reporting $ 174 billion in profits in the first nine months of 2021 as companies turned down requests to increase oil production to mitigate price increases.

Rising gas prices, meanwhile, are disproportionately hurting low-income Americans, especially the growing segment of the homeless population in the United States who live without their vehicles.

In Michigan, a young woman living outside her car who asked to remain anonymous made money by delivering food and groceries through concert apps, spending from $ 10 to $ 15 a day to $ 100 a day on gasoline. They have been living in their car since the end of December, after losing their jobs in September and unable to afford to stay in their apartment. They rely on membership in the Planet Fitness gym to bathe regularly

“I have to idle for heating when I’m in colder areas, it definitely affects my gas consumption,” they said. “I don’t have the most credit, so buying a home is out of my reach right now, and with rents skyrocketing and the most demanding income being two to three times higher than rent, it’s impossible to find something affordable. “

Louis Vashiomiati of Auburn, Washington, moved into his van about two months ago when his landlord for three years chose to sell the house where he rented a basement and he could not afford to move to a new apartment in the area. as rents have risen in the last year.

“It’s the most stressful thing I do every day,” Vashomiati said. I didn’t know how much gasoline would cost when I moved to my van.

He spends about $ 40 a day on gasoline, much of which is used to keep warm in the winter. He is currently working in retail and struggling to save money on high gas prices, as apartments in his area require rent for the first and last month in addition to a deposit.

Rising gas prices are also significantly hurting rideshare drivers, who are already operating at low profit margins.

Ben Valdes, a part-time Uber driver in Los Angeles, California, has reduced his working hours for six years to only when there is a higher price, as gas prices in the area have reached about $ 5 a gallon.

“With rising gas prices and declining demand, I’m just starting to see fewer and fewer reasons to drive,” said Valdes, who spends $ 35 a night driving to $ 75 to fill his gas tank. . “A lot of drivers are starting to feel the pinch. Indeed, it is very expensive to put gas. “