Good day. Sen. Elizabeth Warren is keeping the heat on Federal
Reserve Chairman Jerome Powell, this time by sending him a letter
calling for the timely release of information regarding financial
trading by all Fed governors and reserve bank presidents who served
from the start of last year until now. Delays in releasing such
information, stemming from a controversy in which the leaders of
the Dallas and Boston Fed banks were shown to have been trading in
financial markets while helping to set monetary policy, "compound
concerns about the Fed's lack of transparency and your commitment
to seriously and fully addressing the Fed's broken ethics culture,"
the senator said in the letter. Meanwhile, inflation has emerged as
a pressing concern for American voters, with majorities saying it
is causing them at least some financial strain and is bound to get
worse, a new Wall Street Journal poll finds.
Now on to today's news and analysis.
Top News
Warren Presses Powell for Information on Trading Controversy
Sen. Elizabeth Warren (D., Mass.) is continuing to press the
Federal Reserve for information detailing the extent of financial
trading by its leadership ranks, and wants a formal briefing on new
ethics rules adopted by the central bank.
In a letter sent to Fed Chairman Jerome Powell on Tuesday, the
senator said the Fed by Monday should provide a complete disclosure
of trading by all Fed governors and reserve bank presidents who
served from the start of last year until now. She also wants all
correspondence between the Fed's ethics office and officials from
the start of 2020 until the present.
Giant Gap Persists Between Job Openings and Available
Workers
U.S. job openings far outpace the number of available workers.
There are around 11 million openings, according to job-search site
ZipRecruiter, compared with 6.9 million people who are unemployed
but say they want to work.
U.S. Economy
Inflation Emerges as a Key Concern for Voters, WSJ Poll
Finds
Some 56% of American voters in a new survey said inflation was
causing them major or minor financial strain, including 28% who
said they felt major pressures. More than half said gas and
groceries were among their greatest concerns when it came to rising
prices.
Companies Plan Big Raises for Workers in 2022
A survey by the Conference Board finds that companies are
setting aside an average 3.9% of total payroll for wage increases
next year, the most since 2008, and that they plan on raising
salary ranges, which would result in higher minimum, median and
maximum salaries.
Stuck at Port for 54 Days: How a Ship's Delays Hurt Small
Businesses
In late August, the A Kinka left Hong Kong loaded with, among
other things, 50-inch Roku TVs, aluminum cookware and Fender
guitars. It arrived off the coast of Los Angeles on Sept. 12, and
waited 54 days before it finally got a chance to unload its
cargo.
U.S. Boosted Oil and Food Exports in October, Trade Deficit
Narrowed
The deficit in trade of goods and services fell by 17.6% to a
seasonally adjusted $67.1 billion in October, compared with a
record $81.4 billion gap in September. Imports rose 0.9% to $290.7
billion, but exports grew much more quickly, rising 8.1% to $223.6
billion.
Key Developments Around the World
Why the Turkish Lira Is Falling Like a Rock
At the center of Turkey's troubles are unorthodox economic
policies championed by President Recep Tayyip Erdogan. He argues
higher interest rates stoke inflation and lower rates will cause
inflation to ebb. This is the opposite of what economies around the
world have experienced through history. It also goes against what
other emerging market central banks have done this year. Russia,
Mexico and Brazil have lifted rates to fight inflation and stave
off a stronger dollar, which makes foreign-currency debts harder to
pay off.
Germany's Scholz Takes Power After Merkel's 16-Year Rule
Germany's parliament elected a new chancellor, ending Angela
Merkel's 16-year rule. Olaf Scholz, 63, and his Green and
free-market coalition partners have agreed on a four-year program
to overhaul Germany's economy.
China Evergrande Misses Payment Deadline, Heads Toward
Default
China Evergrande Group didn't make payments due on some U.S.
dollar bonds before a final deadline expired on Monday, people
familiar with the matter said, potentially setting the stage for a
massive default and one of the country's largest-ever debt
restructurings.
U.S. Strikes India Deal in Bid to Loosen China's Grip on Solar
Panels
A U.S. foreign-development agency intended to counter Beijing's
dollar diplomacy is lending $500 million to build a solar-panel
factory in India, putting American taxpayer money behind a bid to
weaken China's dominance of the solar industry's supply chain.
Financial Regulation Roundup
Saule Omarova, Biden Nominee to Oversee National Banks,
Withdraws
Saule Omarova, President Biden's nominee to oversee large
national banks, withdrew from consideration on Tuesday, amid
opposition from Republicans and moderate Democrats who had sought
to block her nomination, the White House said.
Bitcoin's Selloff Driven by Options, but Also Interest Rates,
Fed Policy
Some of the latest selloff was due to liquidations on options
exchanges, investors say. But it was also driven by concerns about
interest rates, market risk and Federal Reserve policy, they add --
issues that have been behind several days of seesaw trading in
stocks and other markets.
Businesses Seek to Soften Impact of Democrats' Minimum Tax
Congress is poised to create a new corporate tax, and pension
advocates, renewable-energy backers and manufacturers are pushing
for changes before the plan to impose a minimum 15% federal tax
rate on many companies is finished.
Using Robinhood to Jump Into Options Trades Worries
Regulators
The flood of everyday Americans into options trading has drawn a
skeptical eye from U.S. regulators, who are considering possible
rule changes for the era of smartphone brokerage apps. Retail
traders recently made up around one-quarter of all options
activity.
Crypto CEOs to Testify Before Lawmakers Weighing More
Regulation
The chief executive officers of half a dozen cryptocurrency
firms are set to appear before Congress today, as lawmakers and
regulators wrestle with how to bring the more than $2 trillion
market under government oversight.
Forward Guidance
Wednesday (all times ET)
Time N/A: National Bank of Poland releases policy statement;
Central Bank of Brazil releases policy statement
8:10 a.m.: European Central Bank's Enria, Schnabel speak on
panel at European Systemic Risk Board conference
10 a.m.: U.S. Labor Department releases October Job Openings and
Labor Turnover Survey
Thursday
2 p.m.: Bank of Canada's Gravelle speaks on the economy to
Surrey Board of Trade
Research
SGH Macro Economist Says March Rate Increase Possible
There is a real chance the Federal Reserve could opt at its
March policy meeting to lift its interest rate target off its
near-zero levels, Tim Duy, chief economist with SGH Macro Advisors,
writes in a note to clients. All signs point to an accelerated
drawdown in the pace of the central bank's bond buying stimulus,
which should be complete by March, he notes. "While the Fed
originally envisioned a substantial gap between the end of asset
purchases and the beginning of rate hikes, that expectation has
been overtaken by events," Mr. Duy writes. "If unemployment falls
further from the current 4.2%, and maybe if it even just holds
here, I think the Fed needs to use the January meeting to open the
door for a March rate hike."
-- Michael S. Derby
Basis Points
U.S. House leaders introduced legislation that would pave the
way for Democrats to raise the debt ceiling in the Senate without
Republican support, as lawmakers closed in on a procedural
agreement to resolve the partisan clash over lifting the
government's borrowing limit. The House voted to approve a $778
billion defense-policy and budget bill that authorizes $25 billion
more in defense spending than requested by President Biden and
contains a provision to create a commission on the War in
Afghanistan, three months after America's longest war ended in a
chaotic and bloody withdrawal.
Canada recorded its largest merchandise trade surplus in almost
a decade in October, as semiconductor shortages eased and
automotive exports and imports both rose, Statistics Canada said,
pointing to a goods-trade surplus of 2.09 billion Canadian dollars,
or the equivalent of US$1.64 billion. (Dow Jones Newswires)
Chile's consumer price index rose 0.5% in November, easing from
bigger increases during the previous two months, while the 12-month
inflation rate hit 6.7%, well-above the central bank's target
range, the national statistics agency said. (DJN)
Japan's economy shrank more than initially estimated in the
July-September quarter due to weaker spending by consumers and the
government, revised data showed. The world's third-largest economy
after the U.S. and China contracted 3.6% on an annualized basis,
which reflects what would happen if the third-quarter pace
continued for a full year. (DJN)
India's central bank held its key policy rate steady, as the
Omicron Covid-19 variant casts uncertainty over the country's
economic outlook. Reserve Bank of India Gov. Shaktikanta Das said
Wednesday that the monetary-policy committee decided to maintain
its policy repo rate at 4.00% and its reverse repo rate at 3.35%.
(DJN)
Economic expectations in Germany dropped in December due to the
worsening of the health situation, the ZEW economic research
institute said Tuesday, noting its expectations gauge fell from
31.7 in November to 29.9. (DJN)
(END) Dow Jones Newswires
December 08, 2021 09:18 ET (14:18 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.