Posted on

Fear of Inflation Finds a Foothold in the Bond Market

The so-called bond vigilantes may be back, 30 years after they led a sell-off in Treasury securities over the prospect of higher government spending by a new Democratic administration.The Federal Reserve has downplayed the risk of inflation, and many experts discount the danger of a sustained rise in prices. But there is an intense debate underway on Wall Street about the prospects for higher inflation and rising interest rates.Yields on 10-year Treasury notes have risen sharply in recent weeks, a sign that traders are taking the inflation threat more seriously. If the trend continues, it will put bond investors …

Read More

Posted on

Treasury Ramps Up Racial Equity Review as It Deploys Relief Funds

WASHINGTON — The Treasury Department is moving ahead with a formal racial equity review of the agency and its programs, putting in place an effort to ensure that economic fairness is prioritized throughout the Biden administration as it begins to disburse $1.9 trillion in relief money.The initiative is expected to be led by Adewale Adeyemo once he is confirmed as deputy Treasury secretary, according to people familiar with the matter. It will be undertaken in close collaboration with Treasury Secretary Janet L. Yellen, who is making racial equity a centerpiece of her agenda as she oversees the disbursement of much of …

Read More

Posted on

Why Market Investors Are Now Troubled by Signs of Surging Growth

Investors had no trouble gliding past the death and economic devastation wrought by the pandemic last year to drive the market to record highs. An increasingly healthy economy is what’s making them panic.In recent days, the S&P 500 stock index has wobbled, suffering its worst weekly performance in a month last week, before rising on Monday, only to dip again on Tuesday and fall 1.3 percent on Wednesday. The bond market, too, is showing anxiety, with yields rising sharply as returns in the market for Treasury bonds have fallen roughly 3 percent this year.The market conniptions are a direct …

Read More

Posted on

Janet Yellen on Jobs, Debt, Taxes, Climate and Cryptocurrency

Janet L. Yellen, the Treasury secretary, has given only a handful of interviews since taking up her post about a month ago. Business leaders and investors hang on her every word, trying to divine how she and the Biden administration will steer policy and how this will impact the economy and the markets. Ms. Yellen, previously the chair of the Federal Reserve, is skilled at staying on message, but in an interview with me for the DealBook DC Policy Project, she hinted at some policy priorities in her typically understated way.Here are the highlights of what she said about …

Read More

Posted on

Senate Confirms Janet L. Yellen as Treasury Secretary

WASHINGTON — The Senate confirmed Janet L. Yellen, a labor economist and former Federal Reserve chair, to be Treasury secretary on Monday, putting in place a key lieutenant to President Biden at a perilous economic moment, as the new administration tries to revive an economy that has been battered by the coronavirus pandemic.By a vote of 84 to 15, the Senate confirmed Ms. Yellen, making her the first woman to hold the top job at Treasury in its 232-year history. Her quick bipartisan confirmation underscored the support she has from both Republicans and Democrats given her previous stint as Fed chair from 2014 …

Read More

Posted on

Blackstone’s Schwarzman Stays Loyal to Trump

To Mr. Schwarzman, the notion appeared absurd. “This has been a tough time,” he said, according to a participant who shared details from a transcript of the call. Both the media coverage and the polls had misled people, Mr. Schwarzman said, and as a result, “people generally are skeptical about what anyone’s telling them.” He argued that the vote counts, which were continuing days after the election, had created a perception problem, especially in places where Mr. Trump appeared to have an early win only for a Biden victory to be declared later. His comments didn’t sit well …

Read More

Posted on

How Full Employment Became Washington’s Creed

As President-elect Joseph R. Biden, Jr. prepares to take office this week, his administration and the Federal Reserve are pointed toward a singular economic goal: Get the job market back to where it was before the pandemic hit.The humming labor backdrop that existed 11 months ago — with 3.5 percent unemployment, stable or rising work force participation and steadily climbing wages — turned out to be a recipe for lifting all boats, creating economic opportunities for long-disenfranchised groups and lowering poverty rates. And price gains remained manageable and even a touch on the low side. That contrasts with efforts to push the labor …

Read More

Posted on

The Year the Fed Changed Forever

WASHINGTON — As Jerome H. Powell, the Federal Reserve chair, rang in 2020 in Florida, where he was celebrating his son’s wedding, his work life seemed to be entering a period of relative calm. President Trump’s public attacks on the central bank had eased up after 18 months of steady criticism, and the trade war with China seemed to be cooling, brightening the outlook for markets and the economy.Yet the earliest signs of a new — and far more dangerous — crisis were surfacing some 8,000 miles away. The novel coronavirus had been detected in Wuhan, China. Mr. Powell and his colleagues were …

Read More

Posted on

What Is 13-3? Why a Debate Over the Fed Is Holding Up Stimulus Talks

As markets melted down in March, the Federal Reserve unveiled novel programs meant to keep credit flowing to states, medium-sized businesses and big companies — and Congress handed Treasury Secretary Steven Mnuchin $454 billion to back up the effort.Nine months later, Senate Republicans are trying to make sure that those same programs cannot be restarted after Mr. Mnuchin lets them end on Dec. 31. Beyond preventing their reincarnation under the Biden administration, Republicans are seeking to insert language into a pandemic stimulus package that would limit the Fed’s powers going forward, potentially keeping it from lending to businesses and municipalities in …

Read More

Posted on

Fed Closes Out Wild Year as All Eyes Focus on Bond-Buying Program

The Fed is also low on new tricks, but not entirely out of them. Officials could, as early as this week’s meeting, change the way they are buying bonds in order to have more of an economic impact.Policymakers are mulling whether to shift toward longer-term debt and away from short-term notes. That wonky maneuver may seem technical, but it could have the effect of holding down borrowing costs on things like mortgages and business loans and, in doing so, set the stage for stronger growth.Updated Dec. 16, 2020, 11:50 a.m. ET“The economy is far more sensitive to longer-term …

Read More