Powell Said All the Right Things. But Inflation Has a Mind of Its Own.

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In many ways, Federal Reserve Chairman Jerome Powell did a brilliant job interrogating the senator, all things considered.

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The Fed is following such strictness right now, its comments were being closely monitored by all commerce. After the testimony on Tuesday, all three major US indices converted early losses into gains.

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Powell didn’t fall into the trap of addressing how much rate hikes are likely this year or exactly when the Fed might start shrinking its $9 trillion balance sheet. Both have turned markets in recent days following the central bank’s December minutes. Hawkish’s remarks on either could have had an adverse effect on equities.

But Powell’s expertly calculated ambiguity and subsequent success in reassuring markets could be undone in the blink of an eye in the coming days, as inflation figures resurface.

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Inflation is expected to rise well into the middle of this year, but the Fed will raise interest rates more over time if it remains in place longer than expected, Powell said.

Those comments on inflation will be tested almost immediately by Wednesday’s December consumer-price index data. Economists expect 7% year-on-year growth, another 40-year high after November’s 6.8% rate, the fastest annual pace since 1982. Anything stronger than this can cause instability.

Another indication of how hot inflation is faring will come on Thursday when producer-price index data is released. Wholesale prices rose 9.6% year-on-year in November, the fastest pace on record.

Both readings will reveal more about when inflation may peak, which will have major implications for the timing and scale of the Fed’s policy and the direction of the stock market.

,Callum Keon

*** Join Baron’s reporter Carleton English this afternoon for a conversation with investors, Dina Shakir, partner at Lux Capital, and Stacey Olivares, a former Calpars board member, about whether 2022 is finally the year for female founders and funders. Will happen. Register here.


Fauci, Valensky defend administration’s Covid response

Dr. Anthony S., director of the National Institute of Allergy and Infectious Diseases. Fauci and the director of the Centers for Disease Control and Prevention, Dr. Rochelle Valensky, defended the administration’s response to the pandemic in the Senate on Tuesday against criticism. Testing and other policies.

What will happen next: White House press secretary Jen Psaki said the supply of 500 million free tests would begin “in the coming weeks, very soon,” and added details about the website and a hotline to request tests later this week. will be issued in

—Janet H. Cho


Flight cancellations are slowing down from holiday week highs

airline flight cancellations seemed set be in the hundreds For the third straight day on Wednesday, a 15-day series of 1,000 or more daily cancellations ended after Monday due to winter storms and Omicron-related staffing shortages.

What will happen next: Travel demand is close to pre-pandemic levels. Cowen analyst Helen Baker forecasts an increase in travel “through the spring break and the Easter and Passover holidays and into the summer months”, and is optimistic that both business and international travel will reach 90% of 2019 levels by the end of 2022. % can be returned.

,Janet H. Cho


Omicron. Due to the return of empty shelves at grocery stores

Empty supermarket shelves are back as more grocery workers called in sick and delayed food shipments. Albertsons reports supply-chain challenges and rising costs despite better-than-expected earnings, latest Covid-19 surge prolong short list and missing items.

What will happen next: Fashion retailer American Eagle raised its expectations for 2023 revenue from $5.5 billion to $5.8 billion. When asked about Omicron’s impact, CFO Mike Mathias said: “We think it will be short-lived, if there is an impact, and more isolated in January … maybe in February.”

,Janet H. Cho


Biogen’s Alzheimer’s treatment to get limited Medicare coverage

Treatment for Alzheimer’s disease will be limited to patients with early-stage symptoms under Medicare coverage who are enrolled in an eligible clinical trial, another setback for the first such drug approved by the Food and Drug Administration in 20 years.

What will happen next: The Centers for Medicare and Medicaid Services will allow public comment on its Biogen treatment proposal for 30 days and announce its final decision by April 11. The result could affect Eli Lilly as well.,
Which is awaiting FDA approval on a competing treatment.

,Liz Moyer


Chip shortage hit Volkswagen sales, Omicron

Volkswagen said on Wednesday it delivered 8.8 million vehicles in 2021, a decline of 4.5% compared to 2020, as supply-chain constraints hurt the group’s ability to meet demand during a global economic recovery.

What will happen next: After semiconductor and supply-chain woes, global carmakers may soon find that the fast-spreading Omron variant could be their next Chinese problem, if the country’s zero-tolerance approach leads to large industries in the country’s industrial hubs. Lockdown happens.

,Pierre Briançon


Dear Quentin,

My father passed away last year. My sister has a power of attorney, and is now the executor of my father’s estate. My sister’s husband has taken on the role of managing my parents’ net worth of $9 million. Last year, the estate made about $300,000, which is very little.

My sister and brother-in-law told me and my younger sister that our parents did not want her to share any information about their property. Instead, he sent us the spreadsheet as a courtesy—and he said it wasn’t even necessary.

My sister and I don’t think he is dishonest but we think he is not able to handle that much money. Anyway he has no legal right to do so. is he? We hate to get into legal battles but we want the portfolio to be managed properly.

-Heirs, apparently

Read The Maniast’s response here.

,Quentin Fottrell


—Newsletter Edited by Liz Moyer, Camilla Imperial, Rupert Steiner, Callum Keon


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