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Fed's Brainard Says Climate Change Already Affecting Economy; Yellen Defends $1.9 Trillion Stimulus Plan
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Good day. Fed governor Lael Brainard said climate change is already a factor for the U.S. economy and financial system. “Future financial and economic impacts will depend on the frequency and severity of climate-related events and on the nature and the speed at which countries around the world transition to a greener economy,” she said. Meanwhile, Treasury Secretary Janet Yellen said she hopes Congress will soon approve President Biden’s $1.9 trillion stimulus package. The former Fed chairwoman said the Biden administration thinks it is “very important to have a big package” to provide additional relief from the economic effects of the pandemic.
Now on to today’s news and analysis.
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Fed's Brainard: Climate Change Affecting Economy, Financial System
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Federal Reserve governor Lael Brainard. PHOTO: TAYLOR GLASCOCK/BLOOMBERG NEWS
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Federal Reserve governor Lael Brainard said Thursday the economy and financial system are already being affected by climate change, and said the central bank is ramping up work to ensure the financial system can deal with the risks that lay ahead of it.
“Climate change is already imposing substantial economic costs and is projected to have a profound effect on the economy at home and abroad,” Ms. Brainard said in a speech. “There is growing evidence that extreme weather events related to climate change are on the rise—droughts, wildfires, hurricanes, and heat waves are all becoming more common.”
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Yellen Defends Administration’s $1.9 Trillion Coronavirus Relief Bill
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Treasury Secretary Janet Yellen defended the size of the administration’s $1.9 trillion relief package in an interview with CNBC Thursday, and said she hopes the measure will be enacted in coming weeks.
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Unemployment Claims Rise, Pausing Recent Downward Trend
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The increase to 861,000 was accompanied by a 55,000 upward revision of claims in the prior week, on a seasonally adjusted basis, putting the four-week moving average at 833,000, the Labor Department said.
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Key Developments Around the World
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Global Economy Moving at Two Speeds as Factories Thrive
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Factories in Europe and Japan reported a faster pickup in activity during February, even as service providers saw deeper declines, reflecting the increasingly selective impact of the Covid-19 pandemic on global economic activity.
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Chinese Consumers Big Spenders During the Lunar New Year Holiday
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Consumption at major retailers and restaurants over the holiday, from Feb. 11 to Feb. 17, hit 821 billion yuan, the Commerce Ministry said, or the equivalent of about $127 billion and a 29% jump from last year’s pandemic-disrupted holiday.
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Shipping Container Shortage Gives Commodity Prices Extra Boost
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Ocean freight rates began to soar last summer and haven’t let up, partly because consumers have splashed out on goods that move by sea, while retailers and manufacturers have rushed to rebuild inventories.
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Financial Regulation Roundup
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HSBC Doesn't Have to Give Documents to Huawei CFO, Judge Says
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HSBC Holdings PLC doesn’t have to hand over banking documents requested by HuaweiTechnologies Co. Chief Financial Officer Meng Wanzhou as part of her effort to resist a U.S. extradition order, a judge in London’s High Court said.
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Lawmakers Grill Robinhood, Citadel CEOs in Wake of GameStop Saga
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In a Congressional hearing, Robinhood Markets Inc.’s chief executive officer offered an apology for the company’s decision to temporarily curb trading in some stocks, including GameStop Corp., on Jan. 28 amid extraordinary volatility.
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Barclays Trading Arm Provides Lifeline Through Pandemic
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Barclays PLC posted a profit in 2020 as buoyant securities trading made up for a lackluster performance in the U.K., where the bank expects pent-up savings to give the economy a boost as the coronavirus pandemic wanes.
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Tech Industry Challenges Maryland Online Ad Tax
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Groups representing major technology companies filed a lawsuit Thursday challenging Maryland’s new online tax, contending the gross-receipts tax on digital advertising revenue is an improper levy on the internet.
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8 a.m.: Richmond Fed’s Barkin speaks online on economic outlook
10 a.m.: National Association of Realtors releases January U.S. existing-home sales
11 a.m.: Boston Fed’s Rosengren gives keynote speech online at the Yale Economic Development Symposium
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7 a.m.: Bank of Israel releases policy statement
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Bitcoin Is Hitting Record Highs. Why It’s Not Too Late to Dig for Digital Gold.
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Many investors may justifiably feel that buying bitcoin or other tokens directly as a way to tap into the upward momentum is too speculative or volatile, Telis Demos writes. But it may be time for even the crypto-agnostic to start thinking about getting exposure to the emerging ecosystem around bitcoin and other digital assets—not necessarily for the value of those assets themselves, but how finance and banking might evolve because of them.
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Construction of new homes in the U.S. decreased in January following four consecutive months of rises, the Commerce Department said, noting that housing starts fell 6% from December to a seasonally adjusted annual rate of 1.580 million. (Dow Jones Newswires)
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U.S. manufacturing activity in the Philadelphia area softened its expansion pace in February from the previous month, according to the Federal Reserve Bank of Philadelphia, whose index for current general activity in the region fell to 23.1 from 26.5 in January. (DJN)
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U.S. import prices rose 1.4% in January, the largest one-month increase since March 2012, driven by petroleum costs that climbed 8.3% over the month, the Bureau of Labor Statistics said. (DJN)
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The confidence of U.S. CEOs rose in the first quarter to the highest level since the first quarter of 2004, according to The Conference Board, which said its confidence index stood at 74 points, up from 64 in the previous quarter. (DJN)
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U.S. mortgage rates rose to the highest level since mid-November, lifting the 30-year fixed-rate mortgage to an average 2.81% for the week ending Feb. 18, up eight basis points from the week prior, Freddie Mac said. (DJN)
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Foreign direct investment in Mexico totaled $29.1 billion in 2020, down from $34.1 billion in 2019, the Economy Ministry said, attributing the decline to effects of the coronavirus pandemic on global direct investment flows. (DJN)
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Nigeria's economy has emerged from recession, according to the National Bureau of Statistics, which said gross domestic product grew by 0.11% in real terms in the fourth quarter of 2020, the first positive quarterly growth in the last three quarters. (DJN)
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This newsletter is compiled by James Christie in San Francisco and Ed Ballard in London.
Send us your tips, suggestions and feedback. Write to:
Jon Hilsenrath, Michael Derby, Nell Henderson, Nick Timiraos, Jason Douglas, Paul Hannon, Harriet Torry, Kate Davidson, David Harrison, Kim Mackrael, Tom Fairless, Megumi Fujikawa, Michael Maloney, Paul Kiernan, James Glynn
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