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  • Biden's Economy

    An Overview of the Economic Outlook 2021 to 2031
    Congressional Budget Office February 2021
    https://www.cbo.gov/system/files/202...ic-Outlook.pdf



    The 2020–2021 coronavirus pandemic caused severe economic disruptions last year as households, governments, and businesses adopted a variety of mandatory and voluntary ­measures—collectively referred to here as social distancing—to limit in-person interactions that could spread the virus. The impact was focused on particular sectors of the economy, such as travel and hospitality, and job losses were concentrated among lower-wage workers.

    Over the course of the coming year, vaccination is expected to greatly reduce the number of new cases of COVID-19, the disease caused by the coronavirus. As a result, the extent of social distancing is expected to decline. In its new economic forecast, which covers the period from 2021 to 2031, the Congressional Budget Office therefore projects that the economic expansion that began in mid-2020 will continue. Specifically, real (inflation-adjusted) gross domestic product (GDP) is projected to return to its prepandemic level in mid-2021 and to surpass its potential (that is, its maximum sustainable) level in early 2025. In CBO’s projections, the unemployment rate gradually declines through 2026, and the number of people employed returns to its prepandemic level in 2024.

    Percent Change YoY _ 2020 _ _ 2021 _ _ 2022 _ 2023 _ _ 2024-25 _ _ 2026-31
    Real GDP _ _ _ _ _ _ -3.5% _ _ _4.6% _ _
    2.9% _ _ 2.2% _ _ _ 2.3% p.a._ _ _ 1.7% p.a.
    Nominal GDP _ _ _ _-2.3% _ _ _6.3% _ _ 4.9% _ _ 4.2% _
    _ __ 4.4% p.a. _ _ _ 3.8% p.a.
    PCE Deflator _ _ _ _ _1.2% _ _ _ 1.6% _ _1.8% _ _ 1.9% _
    _ _ _ 2.0% p.a. _ _ _ 2.1% p.a.
    CPI Inflation _ _ _ _ _ 1.3% _ _ _ 1.3% _ _2.1% _ _ 2.3% _
    _ _ _ 2.3% p.a. _ _ _2.4% p.a.
    Unemployment Rate _ 8.1% _ _ _ 5.7% _ _5.0% _ _ 4.7% _
    _ _ _4.2% p.a. _ _ _4.1% p.a.
    3 month T-bills rate _ 0.4% _ _ _ 0.1% _ _0.1% _ _ 0.2% _
    _ _ _0.4% p.a. _ _ _1.7% p.a.

    Uncertainties in the Economic Outlook
    CBO’s projections reflect an average of possible outcomes under current law. But these projections are subject to an unusually high degree of uncertainty, and that uncertainty stems from many sources, including the course of the pandemic, the effectiveness of monetary and fiscal policies, and the response of global financial markets to substantial increases in public deficits and debt. As a result, the economy could expand substantially more quickly or more slowly than CBO projects. Labor market conditions could likewise improve more quickly or slowly than projected, and inflation and interest rates could rise more rapidly or slowly as well. Also uncertain is the impact of the pandemic on the economy over the longer term, including its effects on productivity, the labor force, and technological innovation.

    Comparisons With Previous Projections
    CBO currently projects a stronger economy than it did in July 2020, in large part because the downturn was not as severe as expected and because the first stage of the recovery took place sooner and was stronger than expected (see Table 4).4 GDP and employment are projected to be higher and to be accompanied by modestly higher inflation and higher interest rates than they were in CBO’s July projections. The fact that the downturn was less severe and the recovery stronger than previously projected also changed the projected pattern of growth: CBO’s current projections of GDP growth are stronger, on average, for the 2021–2025 period than they were in July but weaker for the 2026–2031 period.


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  • #2
    Is it really Biden's economy yet though? We didn't start the Trump's economy thread until first quarter of 2018. Seems like we should be consistent on that point.
    Supporting or defending Donald Trump is such an unforgivable moral failing. It calls every bit your judgement and character into question. Nothing about you should be trusted if you can look at this man and think "that's the one for me”

    Comment


    • #3
      Some things such as the effect of his executive orders should be considered as part of Biden's economy, but since this is a long-term forecast, released after he took office, it mainly is about his term(s).
      Trust me?
      I'm an economist!

      Comment


      • #4

        Originally posted by CNN

        Yellen: US could reach full employment next year if Congress passes Biden's stimulus plan
        By Devan Cole, CNN
        Sunday, 07 February 2021

        (Washington, D.C.) - Treasury Secretary Janet Yellen said Sunday the US could see full employment next year if Congress passes President Joe Biden's proposed stimulus package, but warned the country's unemployment rate would remain elevated over the next few years without the additional $1.9 trillion in federal support.

        "I would expect that if this package is passed that we would get back to full employment next year," Yellen told CNN's Jake Tapper on "State of the Union."

        "The Congressional Budget Office issued an analysis recently and it showed that if we don't provide additional support, the unemployment rate is going to stay elevated for years to come," she added. "It would take (until) 2025 in order to get the unemployment rate down to 4% again."

        Yellen's assessment comes as the White House is pushing the President's package through Congress, where it faces resistance from Republicans opposed to its price tag as well as some of its key elements. Lawmakers are under pressure to pass a relief package as Americans continue to suffer financially amid the pandemic's economic fallout.

        Full employment does not mean the unemployment rate is at zero, but, instead, generally that employers have hired as many qualified professionals as they need.

        The January jobs report showed that even though 49,000 jobs were added last month, the nation is still down nearly 10 million jobs since before the crisis. The report also detailed that the unemployment rate fell to 6.3%, beating economists' expectations, marking the first decrease in two months.

        The CBO said in a report issued last week that the number of employed Americans won't return to its pre-pandemic level until 2024, showing just how long the job market still has to go to heal after suffering the steepest loss on record in April, when 20.5 million jobs were lost and the unemployment rate shot up to 14.7% in a single month as the coronavirus ravaged the country.

        Biden's plan, which the secretary said is "big enough to address (the) full range of needs" facing the country's economy, includes a wide range of immediate assistance for struggling families, such as $1,400 stimulus checks and extended unemployment, nutrition and eviction aid, and longer-term changes, such as a $15 hourly minimum wage.

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        Originally posted by PBS_NewsHour

        published on 28 January 2021


        There's a shortage of skilled tradespeople throughout the American economy, and it is a persistent problem that started well before the pandemic.

        But what's behind that gap and what can be done? Paul Solman reports for our series, "Work Shift", which focuses on navigating the job market in a post-COVID economy.

        Read the Full Transcript

        Judy Woodruff:

        There's a shortage of skilled tradespeople throughout the U.S. economy, a persistent problem that started well before the pandemic.

        But, given high unemployment, it is an important time to explore what's behind that gap and what can be done about it.

        Paul Solman has the story for our series Work Shift, which focuses on navigating the job market in a post-COVID economy.

        Paul Solman:

        Superstar Seattle, where the high-tech young make six figures and up. But you can make that much in low-tech too, says plumber Vinnie Sposari.

        Vinnie Sposari:

        Drain cleaning, light plumbing repairs and that kind of thing, we have got guys making over $100,000 a year.

        Paul Solman:

        Sposari owns Seattle's Mr. Rooter franchise.

        Vinnie Sposari:

        I have got plumbers that work for me today that make $200,000-plus a year.

        Paul Solman:

        And they're what age?

        Vinnie Sposari:

        Any age, in their 30s, 40s.

        Paul Solman:

        Making $200,000 a year or more?

        Vinnie Sposari:

        Absolutely.

        Paul Solman:

        That's because there simply aren't enough plumbers, not in boomtowns like Seattle, not anywhere.

        Vinnie Sposari:

        Manpower is one of the most frustrating parts of my job, filling all the spots, I could hire six, eight experienced plumbers right now.

        Paul Solman:

        But they're just not out there?

        Vinnie Sposari:

        They're just not out there. Guys that are my age, they're aging out.

        Paul Solman:

        But why aren't they being replaced with the young, given their historically low participation rate, made worse by the pandemic?

        There are all these kids who either aren't working at all or are working in dead-end, low-wage jobs. Why can't you just say to them, hey, by age of 25 or 30, you could be making six figures; just come with me?

        Vinnie Sposari:

        I would love to. I have gone to some career days. The kids, you're waiting for them to come talk to you. And they just don't.

        Paul Solman:

        So, why no takers?

        Trevor Caldwell:

        First and foremost is the perception of plumbing.

        Paul Solman:

        Trevor Caldwell is Vinnie Sposari's right hand man.

        Trevor Caldwell:

        There's this stigma that goes along with getting your hands dirty, just a plumber, not a person, just a plumber. And I don't want to be that guy.

        Paul Solman:

        Or that gal.

        Sarah Schnabel:

        You're doing manual labor. Some people tend to look down on that. And that makes people not want to go into it, clearly.

        Paul Solman:

        Sarah Schnabel isn't a plumber, but an Ithaca, New York, electrical apprentice, another well-paying trade which can't find good help these days, a frustration for Schnabel's boss, Brian LaMorte, and for his colleagues.

        Brian Lamorte:

        I know lots of guys in the trade who are contractors, and they're looking for help.

        Paul Solman:

        And willing to pay for it.

        Brian Lamorte:

        We have recently raised our rates as a business to $90 an hour, and we are not pushing the envelope. We were $75 a little while ago and $65 a little while before that.

        It's getting to the point where you probably pay us more to come fix your light switch than you do to go to the doctor.

        Paul Solman:

        So, again, why no takers?

        Sarah Schnabel:

        I do think, for people my age, it's definitely more glamorous to think of the tech job, where you're in a really nice cushy office building.

        We're the kind of people who are going to hire someone to go change a light bulb, let alone go into the trades. That's kind of where my generation is right now.

        Adrienne Bennett:

        I can't give them a power tool. They might kill themselves with it. They have never held a power tool in their life.

        Paul Solman:

        Yes, says Detroit master plumber Adrienne Bennett, whose firm is currently helping to revitalize Michigan's Central Station, it takes a non-cushy mind-set.

        Adrienne Bennett:

        This is physical work. You need to be there on the job site every day. And you got to be on time. And a lot of the young people today, they don't have work ethics.

        Paul Solman:

        But, of course, plenty do. Determined to breed new plumbers, Vinnie Sposari runs his own year-long training program, paying young people from the get-go to learn the trade.

        Vinnie Sposari:

        We're paying our trainees $15, $16, $18 an hour. And then, when you're done with the program, you're not a full licensed plumber, but you're a service technician who's able to snake drains and to do the kind of small plumbing repairs and whatnot and get close to that six-figure income. You're getting paid to learn that.

        Paul Solman:

        After a certain number of hours and possibly an exam — the requirements vary by locality — you can become a licensed plumber, a quality credential in an economy where only 11 percent of employers think colleges and universities are doing a good job of preparing people for the work force.

        Says Sposari of his apprenticeship program:

        Vinnie Sposari:

        It's open for everybody. I would welcome anybody.

        Paul Solman:

        But, says Sposari:

        Vinnie Sposari:

        You would be amazed how many people we want to hire, but our insurance company won't insure them because of driving violations, drugs, can't keep a job.

        You see some applicants come in here in a ripped T-shirt, hasn't shaved. You go out, look at his car and it's full of garbage. It hasn't been washed in a month. Those are the things we look at.

        Paul Solman:

        But, hey, plenty of young folks have intact T-shirts, clean faces, clean cars. Maybe they realize, or learn, that you need an apprenticeship to get licensed, says plumber Adrienne Bennett.

        Adrienne Bennett:

        And the apprenticeships are five years. And you start out at maybe $15, $16 an hour, and to get to $40, $50 an hour is going to take you five or six years.

        Paul Solman:

        Plus, to get a job, isn't it who you know? And few potential candidates know tradespeople, it seems.

        Manuel Rios:

        I didn't knew nobody.

        Paul Solman:

        Manuel Rios, a Mr. Rooter trainee, used to work on electric motors for $18 an hour, with little prospect of making much more. But, by chance, he met some plumbers there.

        Manuel Rios:

        They say that they make a lot of money. And I realized that the plumbing is never going to end, because you are always going to need a plumber. So the business is always going to be there.

        Paul Solman:

        The final barrier to entry in the trades is a familiar one, says electrician LaMorte.

        Brian Lamorte:

        There is a certain feeling that it's kind of like a white man's game, I hate to say it. So, people who are LGBTQ., minorities are a little bit intimidated by the boys club that exists.

        Paul Solman:

        And, of course, women.

        Added together, that's about two-thirds of the country. In the late 1970s, Adrienne Bennett was recruited as a union plumbing apprentice under a federal program targeting women. Similar programs exist today.

        Adrienne Bennett:

        This is something that will keep food on the table. It will keep clothes on your back. It will keep a roof over your head. I'm living proof.

        Paul Solman:

        Living proof, as CEO of her own industrial contracting plumbing business since 2008.

        For the "PBS NewsHour," Paul Solman.

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        Last edited by JRT; 07 Feb 21,, 18:31.
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        • #5
          Not strictly speaking the Biden Economy, but something that his advisers will need to consider

          The Federal Funds rate is an old name for the interest rate at which the Federal Reserve will lend money to banks. It is a useful measure of whether the Fed is being “accommodating,” that is providing easy access to money so as to stimulate the economy or job creation, or not.

          When this interest rate is above the rate of inflation, the Fed is said to be pursuing a “tight money” policy, one that is designed to reduce the rate of investment and thereby slow both investment (cooling off an over-heated economy) and reduce inflation.

          For the last 23-1/2 years, the average Fed Funds rate has been below zero (-0.09%)

          During that time, the average rate of inflation was 2.3%.

          For a very long time, it has been economic gospel that a prolonged period of negative interest rates would generate inflation. However, in the 22 years prior to the last 22 years (that is, 1974-97, as compared to 1998-2020), inflation averaged 5.5%, more than double the more recent 2.1% pace.

          For a very long time, it has been economic gospel that a prolonged period of negative interest rates would send the money supply soaring, which is the backbone of the monetarists' view of inflation. The broad money supply (M-2) rose an average 6.72% in 1974-97, vs. 6.81% in 1998-2020.

          For a very long time, it has been economic gospel that a prolonged period of negative interest rates would sharply increase the number of jobs (via investment stimulation). But, the unemployment rate in 1974-97 was 6.8%, vs. 5.9% in 1998-2020.

          Another counter-intuitive indicator is the rate of change in pay, adjusted for inflation: real manufacturing wages were -0.35% in 1974-97, vs. +0.33% in 1998-2020.








          Trust me?
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          • #6
            Biden's Budget

            (For this report, the latest in the series, the projections are based on the laws in effect as of January 12, 2021. CBO’s economic assessment is identical to the forecast the agency published on February 1, 2021.)

            CBO projects a federal budget deficit of $2.3 trillion in 2021, nearly $900 billion less than the shortfall recorded in 2020. At 10.3 percent of gross domestic product (GDP), the deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year. Those deficits, which were already projected to be large by historical standards before the onset of the 2020–2021 coronavirus pandemic, have widened significantly as a result of the economic disruption caused by the pandemic and the enactment of legislation in response.

            Deficit
            In CBO’s projections, annual deficits average $1.2 trillion a year from 2022 to 2031 and exceed their 50-year average of 3.3 percent of GDP in each of those years. They decline to 4.0 percent of GDP or less from 2023 to 2027 before increasing again, reaching 5.7 percent of GDP in 2031. By the end of the period, both primary deficits (which exclude net outlays for interest) and interest outlays are rising.

            Debt
            Federal debt held by the public—which stood at 100 percent of GDP at the end of fiscal year 2020—is projected to reach 102 percent of GDP at the end of 2021, dip slightly for a few years, and then rise further. By 2031, debt would equal 107 percent of GDP, the highest in the nation’s history.


            Revenues:
            • Individual income taxes: +$1,235.4 bn (+5.9%)
            • Payroll Taxes: +$365.1 bn (+2.6%)
            • Corporate income tax: +$66.3 bn (+2.2%)
            Spending:
            • Discretionary: +$477.7 bn (+3.3%)
            • Mandatory: -$62.6 bn (-0.2%)


            Trust me?
            I'm an economist!

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            • #7
              Originally posted by DOR View Post
              ...Federal debt held by the public which stood at 100 percent of GDP at the end of fiscal year 2020 is projected to reach 102 percent of GDP at the end of 2021...
              In consideration of this, does "Federal debt held by the public" include the Federal debt held by the Federal Reserve Banks?

              https://www.stlouisfed.org/in-plain-...-reserve-banks
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              • #8
                Originally posted by JRT View Post

                In consideration of this, does "Federal debt held by the public" include the Federal debt held by the Federal Reserve Banks?

                https://www.stlouisfed.org/in-plain-...-reserve-banks
                No, it does not include any federal paper -- T-bills, agency notes, etc -- that are held by public agencies like the Fed or Social Security Administration. That's because the government "owes" itself that money.
                Trust me?
                I'm an economist!

                Comment


                • #9
                  Originally posted by Associated_Press

                  Biden eyes $3T package for infrastructure, schools, families

                  by Lisa Mascaro and Josh Boak
                  23 March 2021

                  (WASHINGTON D.C.) — Fresh off passage of the COVID-19 relief bill, President Joe Biden is assembling the next big White House priority, a sweeping $3 trillion package of investments on infrastructure and domestic needs.

                  Biden huddled privately late Monday with Senate Democrats as Congress has already begun laying the groundwork with legislation for developing roads, hospitals and green energy systems as part of Biden’s “Build Back Better” campaign promise. Much like the $1.9 trillion virus rescue plan signed into law earlier this month, the new package would also include family-friendly policies, this time focusing on education and paid family leave.

                  The White House plans are still preliminary, with a combined $3 trillion in spending proposed to boost the economy and improve quality of life, according to a person familiar with the options who insisted on anonymity to discuss private conversations.

                  While the goal is a bipartisan package, Democrats in Congress have signaled a willingness to go it alone if they are blocked by Republicans.

                  “We need to get it done,” said Sen. Richard Blumenthal, D-Conn., ahead of the virtual meeting with Biden at the senators’ annual retreat Monday evening.

                  Biden’s outreach to Senate Democrats comes as the White House is under fire for its handling of the U.S.-Mexico border. Migrant crossings are skyrocketing, with images of cramped holding facilities posing a humanitarian and political dilemma for the administration and its allies in Congress. The focus on infrastructure shifts attention back toward priorities that are potentially more popular with Americans and potentially bipartisan.

                  An infrastructure package would include roughly $1 trillion for roads, bridges, rail lines, electrical vehicle charging stations and the cellular network, among other items. The goal would be to facilitate the shift to cleaner energy while improving economic competitiveness.

                  A second component would include investments in workers with free community college, universal pre-kindergarten and paid family leave.

                  No part of the proposal has been finalized and the eventual details of any spending could change.

                  The overall price tag first reported Monday by The New York Times has been circulating on Capitol Hill for weeks, since the start of the Biden presidency. With the House and Senate under Democratic control, the proposals are expected to draw support from all corners of Congress.

                  House Speaker Nancy Pelosi asked Democratic committee chairmen earlier this month to start working with their Republican counterparts to begin “to craft a big, bold and transformational infrastructure package.”

                  Pelosi said the goal is to build swiftly on the coronavirus rescue plan by developing an economic relief plan to help “people in every zip code by creating good-paying jobs for the future.”

                  The administration is positioning its priorities at a politically and fiscally sensitive time, after funding its $1.9 trillion relief package entirely with debt. The Federal Reserve estimates that spending could push growth this year to 6.5%, and additional spending would only add pressure to an economy already expected to run hot.

                  Biden’s campaign proposed higher corporate taxes and increases on people making more than $400,000 annually, effectively undoing much of the 2017 tax cuts by his predecessor, Donald Trump.

                  A White House official said the president has been very clear about his agenda, even though the details are only just starting to surface. The official insisted on anonymity to discuss private conversations.

                  On Monday, the House Energy and Commerce Committee debated a $300 billion-plus measure to invest in drinking water, broadband and other priorities. On Thursday, Transportation Secretary Pete Buttigieg is set to appear before the Transportation and Infrastructure Committee. Next week, the Senate Finance Committee is scheduled to release a white paper revisiting the overseas tax code as a way to pay for some of the spending.

                  Republican leader Mitch McConnell used his opening remarks Monday in the Senate to trash the infrastructure proposal, warning it would only lead to tax hikes and what he called “left-wing policies.”

                  “We’re hearing the next few months might bring a so-called infrastructure proposal that may actually be a Trojan horse for massive tax hikes and other job-killing, left-wing policies,” he said.

                  He derided the Democratic proposals as similar to the Green New Deal, a sweeping plan to address climate change that he said would cost “unbelievable sums.”

                  Biden is expected to roll out his budget in the weeks ahead as Congress presses forward on the infrastructure package, which lawmakers have said could be ready by summer.

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                  • #10
                    Originally posted by NPR_News

                    'What Are We Going To Do?': Towns Reel As Banks Close Branches At Record Pace

                    26 March 2021
                    Scott Horsely
                    NPR Morning Edition

                    https://www.npr.org/player/embed/979284513/981486767

                    A "Retail Space Available" sign is displayed in the window of a closed JPMorgan Chase & Co. branch in the Bronx borough of New York, on Feb. 22, 2019. Banks have been closing branches, a trend that has accelerated during the pandemic as more people manage their accounts online.
                    Bloomberg/Bloomberg via Getty Images
                    George Holland, the mayor of Moorhead Miss., still remembers the feeling when he heard Regions Bank was closing its branch in his small, rural town a few years ago.

                    "That was actually the only bank in our community and the next closest bank was probably 8, 9 miles to Indianola," Holland said. "I was thinking, 'What are we going to do?'"

                    Banks have been permanently shuttering branches for years, but the number of closures hit a record in 2020 as the pandemic accelerated the move by many customers to online banking.

                    Banks closed 3,324 branches last year, according to a tally by S&P Global Market Intelligence.

                    For banks it make financial sense, given the cost of operating branches.

                    "The reality is, the vast majority of the activity that happens in a branch is not revenue generating," said Steven Reider, who as president of the consulting firm Bancography, advises banks on branch locations. "In fact, it's cost-carrying activity."

                    Article continues after sponsor message

                    'We Still Face Much Uncertainty': Pandemic Hammers Big Banks
                    BUSINESS
                    'We Still Face Much Uncertainty': Pandemic Hammers Big Banks
                    And bank branch closures are especially impacting isolated neighborhoods in big cities or towns like Moorhead — a largely African American community in the heart of the Mississippi Delta.

                    Research by the National Community Reinvestment Coalition (NCRC) shows that poor communities, rural communities and areas with a high concentration of Black and brown residents have been hardest hit.

                    Part of the reason for that is that regulators cracked down on costly overdraft fees a decade ago, making it less profitable for many banks to operate branches in those communities.

                    "It's a good thing that banks are moving away from charging those kinds of fees, but it's a bad thing that they're moving away from serving those neighborhoods," said Jesse Van Tol, NCRC's CEO.

                    Small Business Rescue Earned Banks $10 Billion In Fees
                    BUSINESS
                    Small Business Rescue Earned Banks $10 Billion In Fees
                    When banks close, the impact can go beyond inconvenience. It can also push people to more expensive options like check-cashing stores or payday lenders.

                    "Lower-income consumers don't necessarily have automobiles," said Reider. "They don't have a lot of choices. And then of course those payday lenders come in and that just perpetuates a cycle of low-income, because consumers spend inordinate amounts just managing their financial services."

                    It's a trend that's unlikely to reverse, now that the pandemic has pushed more customers to bank on smart phones and computers.

                    Article continues after sponsor message

                    As banks close, many communities have been looking to non-profit credit unions and other alternatives to help fill the void.

                    "In the last 60 days, I've had two mayors reach out to me saying, 'Would you bring a bank branch here?'" says Darrin Williams, CEO of Southern Bancorp, which specializes in underserved communities.

                    Williams understands that for small towns banks can be more than a place to cash a check. It can also be the place to catch up or gossip about what's going on around town.

                    "In a lot of the rural communities we serve, the bank branch is part of the social fabric," Williams said. "If you go to Truman, Arkansas on a payday Friday, there are going to be ten people deep in the line. People want to come to that bank branch because it's social."

                    Biden's Win Shows Rural-Urban Divide Has Grown Since 2016
                    NATIONAL
                    Biden's Win Shows Rural-Urban Divide Has Grown Since 2016
                    Even though a lot of banking can now be done online, an FDIC survey found that 83% of people still met with a teller or other bank employee at least once during 2019. That same year, more than 40% of rural customers made at least ten visits to the bank.

                    Luckily for Moorhead, when Regions Bank pulled out, a non-profit credit union came in. Mayor Holland says it's actually been an improvement. Hope Credit Union signed up more customers, offers more services and even added an ATM — something the old bank never did.

                    "I can't say enough about what that meant to us, to be able to bank right here in our town," Holland said. "To be able have all these resources right here in our town without having to travel."

                    But not all towns or neighborhoods are lucky.

                    Steven Jackson, a parish commissioner in Shreveport, La, is watching the closures with alarm.

                    "A lot of banks have utilized the pandemic to justify downsizing even more," Jackson says.

                    And he worries about what that does to neighborhoods and towns like his.

                    "When you have young boys and girls riding by and seeing empty buildings, or that building which was once a bank is turned over to a payday lender, what message are we sending?" he asks. "Is my neighborhood not a priority?"

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                    • #11
                      Originally posted by CNN_Business

                      Powell: US economy is at 'inflection point'
                      by Jazmin Goodwin
                      Sunday, 11 April 2021

                      (New York) - Federal Reserve Chair Jerome Powell said the US economy is at an "inflection point," and that growth and job creation is poised to accelerate.

                      Powell made the comments during an interview on CBS News' "60 Minutes." In the interview, Powell provided a rosier economic outlook, in contrast to past remarks on the economy's recovery.

                      "What we're seeing now is really an economy that seems to be much at an inflection point," Powell told "60 minutes" during the interview. "And that's because of widespread vaccination and strong fiscal support, strong monetary policy support. We feel like we're at a place where the economy's about to start growing much more quickly and job creation coming in much more quickly. The outlook has brightened substantially."

                      But that's only if there isn't another wave of Covid-19.

                      "The principal risk to our economy right now really is that the disease would spread again. It's going to be smart if people can continue to socially distance and wear masks," he told "60 Minutes."

                      More than 183 million vaccines have been administered in the United States, according to CDC data.

                      This comes after minutes released from the central bank last week underscored that it would be some time "until substantial further progress" was made on employment and inflation. The Fed slashed interest rates to zero in March 2020 and said it expects to keep interest rates at historically low levels into 2023.

                      "We did not know how the economy would perform. We did not know the path of the disease," Powell said in the "60 Minutes" interview. "We had no idea when and how long it would take to do a vaccine."

                      When probed if he expected the current economic downturn to mirror anything like the 2008 financial crisis, Powell said that the chances are "very low." Instead, Powell mentioned "cyber risk" being the main concern, citing examples of large firms losing the ability to track payments its disbursing.

                      "We spend so much time and energy and money guarding against these things. There are cyber-attacks every day on all major institutions now," he told "60 Minutes." "That's a big part of the threat picture in today's world."

                      Last month, Powell said that any increases in inflation over the summer months would be temporary and not concerning for its monetary policy at this moment. During his interview with "60 Minutes", Powell reiterated that past economic cycles showed that inflation didn't increase much as unemployment went down.

                      "That means that we can afford to wait to see actual inflation appear before we raise interest rates," he said. Powell added that the Fed wants inflation to move up above 2% "on a sustainable basis" before it decides to raise interest rates.

                      "We do have the ability to wait to see real inflation, and that's what we plan on doing," Powell said in the interview.

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                      • #12
                        Originally posted by JRT View Post


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                        Since the pandemic is directly quoted in the articles in these latest posts, they should probably be in the COVID economic thread.
                        Trust me?
                        I'm an economist!

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                        • #13

                          Ray Dalio has been anticipating that markets won't have much demand for muti-trillions in new treasury debt, that the Fed will not tolerate the lower prices and higher yields needed to stimulate increased demand, and so the Fed will roll up much of that new debt into an expanded balance sheet, will monetize the debt.



                          Last edited by JRT; 13 Apr 21,, 20:08.
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                          • #14
                            Originally posted by JRT View Post
                            Ray Dalio has been anticipating that markets won't have much demand for muti-trillions in new treasury debt, that the Fed will not tolerate the lower prices and higher yields needed to stimulate increased demand, and so the Fed will roll up much of that new debt into an expanded balance sheet, will monetize the debt.



                            Sounds about right.
                            Remember, this isn't a stimulus budget, but rather an investment budget.
                            In a stimulus budget, the goal is to get the money circulating; in an investment budget, the goal (in this case) is to stop things from falling apart.
                            Trust me?
                            I'm an economist!

                            Comment


                            • #15
                              Financial Stability Report - 06 May 2021
                              Board of Governors of the Federal Reserve System

                              Statement by Governor Brainard


                              "This report summarizes the Federal Reserve Board’s framework for assessing the resilience of the U.S. financial system and presents the Board’s current assessment. By publishing this report, the Board intends to promote public understanding and increase transparency and accountability for the Federal Reserve’s views on this topic."


                              Originally posted by CNBC
                              Fed warns about potential for ‘significant declines’ in asset prices as valuations climb

                              06 May 2021
                              by Jeff Cox, CNBC


                              KEY POINTS
                              • Rising asset prices are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday.
                              • Fed Governor Lael Brainard said the situation bears watching and points up the importance of making sure the system has proper safeguards.
                              • “Asset prices may be vulnerable to significant declines should risk appetite fall,” the central bank said.
                              Rising asset prices in the stock market and elsewhere are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday.

                              In its semi-annual Financial Stability Report, the central bank said that the system overall has remained largely stable, even through the Covid-19 pandemic, but future dangers are rising, in particular should the aggressive run on stocks tail off.

                              Investors have snapped up equities, corporate bonds and cryptocurrencies. They’ve poured billions into blank-check companies called SPACs, and the market has been mostly brisk for traditional initial public offerings.

                              Fed Chairman Jerome Powell and others have been asked repeatedly about whether they’re concerned over the rising prices. Powell specifically has said that as long as interest rates stay low, the valuations are justified.

                              However, the report notes that there’s danger lurking should market sentiment change.

                              “High asset prices in part reflect the continued low level of Treasury yields. However, valuations for some assets are elevated relative to historical norms even when using measures that account for Treasury yields,” the report states. “In this setting, asset prices may be vulnerable to significant declines should risk appetite fall.”

                              In an accompanying statement, Fed Governor Lael Brainard said the situation bears watching and points out the importance of making sure the system has proper safeguards. She specifically mentioned having banks increase their capital requirements during economic expansions as a buffer against downturns.

                              The report also mentions risk at hedge funds and other nonbank financial institutions on several occasions as potential threats to the system.

                              “Vulnerabilities associated with elevated risk appetite are rising. Valuations across a range of asset classes have continued to rise from levels that were already elevated late last year,” Brainard said. “The
                              combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event.”

                              The report notes that particular sectors including energy, travel and hospitality have particularly high vulnerabilities because of their sensitivity to the pandemic. The Fed also talks about potential threats from money market and open-end funds.

                              The Fed goes into a few specific scenarios that show potential risks to the system. It specifically talked about the Archegos Capital Management episode, when the firm could not meet margin calls, causing several large banks to take big losses.

                              “While broader market spillovers appeared limited, the episode highlights the potential for material distress at [nonbank financial institutions] to affect the broader financial system,” the report said.

                              Overall, the Fed said the current state of the system is sound, with household balance sheets in good shape, and corporations supported by an improving economy and low interest rates that have allowed default rates to fall.

                              Even the $1.7 trillion in student loans pose “limited” risks to the economy, given that most education debt is held by the top 40% of earners.

                              A survey the Fed conducted across a variety of 24 market contacts showed that the biggest worry is virus-related, specifically focusing on vaccine-resistant variants. That’s followed by a sharp increase in interest rates, a surge in inflation, and tensions between the U.S. and China.

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