Biden’s Fed nominees say tackling inflation a priority; Central bank hawkish moves in Europe – WSJ

Have a good day. Sarah Bloom Raskin, President Biden’s nominee to become the Federal Reserve’s top banking regulator, told senators at a confirmation hearing on Thursday that she would not use the position to restrict lending to the oil industry. and gas. Republican Senator Pat Toomey called his statements “one of the most remarkable cases of confirmation conversion I have ever seen.” She had previously called for more aggressive regulatory action to move away from high-emissions investments. Ms. Raskin testified along with two economists nominated for other positions on the Fed board: Lisa Cook and Philip Jefferson. All three lawmakers said the Fed should make tackling high inflation a priority. Elsewhere, hawkish moves by central banks in Europe reflect a growing appreciation among policymakers that inflation will not come down as quickly as they had hoped. The Bank of England raised its benchmark rate for a second consecutive meeting, while European Central Bank President Christine Lagarde left the door open for an interest rate hike later this year, a reversal from from where it was seven weeks ago.

Now on to today’s news and analysis.

Top news

Raskin asked about his views on climate change and regulation

Sarah Bloom Raskin, President Biden’s nominee to become the Federal Reserve’s top banking regulator, said she would not use the position to restrict lending to the oil and gas industry, after previously calling for measures more aggressive regulatory away from high-emissions investments.

“It is inappropriate for the Fed to make credit decisions and allocations based on picking winners and losers,” Ms. Raskin said Thursday during her Senate Banking Committee confirmation hearing. “Banks choose their borrowers, not the Fed.”

As inflation soars, central banks scramble to raise rates

Europe’s central banks have signaled growing concern over soaring inflation and their determination to stem it by raising interest rates, a policy shift that creates risks for investors and lenders alike. ‘Mondial economy.

American economy

Variant of Omicron looms on January jobs report

The January jobs report will reveal how the Omicron variant of Covid-19 hurt US employment last month. Estimates vary widely on labor market performance in January. Economists polled by The Wall Street Journal expect employers to add 150,000 jobs last month. But some economists believe payrolls have shrunk due to illnesses among workers without paid sick leave.

Buyers caught off guard as prices change more frequently

Everyday items, from basic groceries to home decor, are priced closer to airline tickets and gasoline, where posted prices can fluctuate frequently within hours or days.

Rising rates reduce bond funds

According to data from Morningstar Direct, only a few U.S.-based bond funds focused on high-quality taxable debt had positive returns or traded flat through January, including interest payments and price fluctuations.

Decline in business bankruptcies reflects the new normal

US business bankruptcies have fallen to their lowest level in more than 15 years and that trend may continue despite the pandemic, as even relatively risky companies can have plenty of capital on hand to keep them in business.

Main developments around the world

Ukraine fails to raise new debt as Russian invasion looms

Ukraine’s access to debt markets hit a bump this week in a sign investors are getting nervous about the possibility of a Russian invasion, as a local government bond auction does not failed to increase its target amount.

Putin and Xi form united front amid standoff with West

Chinese leader Xi Jinping and Russian President Vladimir Putin met in Beijing for a summit just before the Winter Games, presenting a united front amid a tense standoff with the West over troop buildups Russians near Ukraine.

Ukraine crisis puts Germany’s cautious leader in the hot seat

Central Bank of Norway appoints NATO’s Jens Stoltenberg as Governor

NATO Secretary General Jens Stoltenberg has been appointed as the new Governor of the Central Bank of Norway. Norway’s finance ministry said Mr Stoltenberg is expected to start around December 1 and will hold the role for six years.

Overview of Financial Regulation

Global tax deal would cut US tax breaks, companies warn

The emerging global minimum tax agreement would make domestic tax breaks less valuable to some U.S.-based companies, potentially limiting the effectiveness of research, export and housing incentives for low-income people, according to businesses.

Wells Fargo Gamed System in Investor Arbitration, Says Judge

A Georgia judge has questioned the fairness of the financial industry’s dispute resolution process in a ruling stemming from a Wells Fargo & Co. client’s claim that the bank botched its investments.

Forward-looking indications

Friday (every hour ET)

8:30 a.m.: US Department of Labor releases January jobs report

Tuesday

N/A Time: National Bank of Poland issues policy statement

To research

Boston Fed reports on technical work around the digital dollar

The Federal Reserve Bank of Boston, in a new document released Thursday, laid out the first details of what could one day become an all-digital dollar, while being careful to keep them away from anything the Federal Reserve might implement. The newspaper says software has been developed for a so-called Fedcoin that can handle nearly two million transactions per second and complete a transaction in two seconds. The report indicates that security and privacy issues will be the next areas around a digital dollar to be examined. The Fed is currently considering options for a Fedcoin, and central bank officials have emphasized that they are more focused on effort than being first.

— By Michael S. Derby

The annual rate of growth in US home prices is expected to increase by 7% by the end of the year

Home price growth in the United States, which has been in double digits since the summer of 2020, is expected to slow to an annual rate of 7% by the end of this year, according to a forecast report from Redfin. Additionally, home sales are expected to remain relatively flat through 2022 due to the continued shortage of homes for sale, and Redfin economists expect the 30-year fixed mortgage rate to continue to rise steadily for to reach 3.9% during the year. “Even though the price of buying a home has never been higher, demand is only going to get stronger,” the report said, adding that “by this summer, higher prices and rates could induce buyers to pull out of the market.

-Chris Wack

Remark

American workers could be on the verge of being much more productive

Better productivity could be on the way because the coronavirus pandemic has precipitated changes to the way Americans work that, if the pandemic eases this year, could pay big dividends, Justin Lahart writes.

Basis Points

The services sector in the United States lost momentum in January as the Covid-19 Omicron variant limited activity, in particular due to the reduction in the workforce, according to the ISM Services report on the PMI of companies. the Institute for Supply Management. Its services activity indicator fell from 62.3 in December to 59.9 in January. The index suggests the services sector recorded a broad-based expansion last month as it remained above the 50-point mark separating growth from contraction. (Dow Jones Newswires)

The total value of U.S. homes jumped 19% in December from a year earlier to a record $38.6 trillion, according to Redfin, the largest annual dollar and percentage gain seen over the past a month of December since at least 2001. (DJN)

New orders for manufactured goods in the United States fell 0.4% month on month in December, according to the Commerce Department. Economists had expected the decline, the first since April 20 when orders fell 0.1% on the month. (DJN)

U.S. labor productivity rose at an annualized rate of 6.6% in the fourth quarter from the previous quarter, after a revised decline of 5% in the third quarter, the Labor Department said. (DJN)

Headline consumer inflation in South Korea eased in January, but remained above the central bank’s 2% target for 10 consecutive months. The benchmark consumer price index rose 3.6% from a year earlier, compared with a 3.7% gain the previous month, the statistics office said on Friday. (DJN)

German manufacturing orders rose in December, beating expectations amid continued supply chain disruptions. Factory orders rose 2.8% month on month in December in adjusted terms, after a revised 3.6% increase in November, according to data from federal statistics office Destatis released on Friday. (DJN)

(END) Dow Jones Newswire

February 04, 2022 09:07 ET (14:07 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.