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The Morning Risk Report: Biden to Nominate Jerome Powell for Second Term as Federal Reserve Chairman
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President Biden said he would nominate Federal Reserve Chairman Jerome Powell to a second term leading the central bank, opting for continuity in U.S. economic policy despite pushback from some Democrats who wanted someone tougher on bank regulations and climate change.
Mr. Biden said he would also nominate Fed governor Lael Brainard as vice chairwoman of the central bank’s board of governors. Prominent liberals like Sen. Elizabeth Warren (D., Mass.) had warned the president against picking Mr. Powell, and progressive groups mounted a last-ditch campaign to pressure the president to tap Ms. Brainard for the top job.
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The announcement caps months of behind-the-scenes deliberations by Mr. Biden and his senior aides over one of the world’s most important economic policy posts at a time of high inflation and intraparty divisions.
The president’s decision reflected a desire by Mr. Biden to maintain stability at the central bank amid public concerns about high prices for everything from groceries to fuel, administration officials said. Mr. Biden’s advisers said they want to focus much of their attention on passage of their social spending and climate legislation and believe Mr. Powell will more easily win Senate confirmation, despite objections from progressives.
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Tesla CEO Elon Musk rarely backs down after offering sharp words for critics. PHOTO: PATRICK PLEUL/ZUMA PRESS
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Elon Musk and Jamie Dimon don’t get along.
Mr. Musk has spurned Mr. Dimon’s JPMorgan Chase & Co. for years, turning to other banks while expanding Tesla Inc. and his broader empire. Conversations over the years between the two companies have often upset one side or the other, according to people familiar with the matter.
Messrs. Musk and Dimon have tried to patch things up but clashed instead, the people said. JPMorgan decided some time ago that it is better off without Tesla, according to people familiar with the matter.
A small part of the quiet feud, which pits America’s most valuable car maker against its biggest bank, spilled into the open last week when JPMorgan sued Tesla. In its lawsuit, JPMorgan said Tesla owes it $162 million from a trade the bank helped arrange in 2014. Typically, bankers seek to avoid public fights with big clients and even potential clients, anxious about winning fees and worried the slightest insult could cost them access.
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American Airlines Group Inc. and JetBlue Airways Corp. asked a judge to throw out the U.S. Justice Department’s antitrust suit challenging the alliance between the two carriers.
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The suit, filed in a Massachusetts federal court in September, alleged the American-JetBlue agreement would eliminate head-to-head competition in key traffic hubs in the Northeast, hurting travelers across the country by diminishing JetBlue’s impetus to compete with American. That could mean higher prices, fewer options and poorer customer service, the suit alleged. Six states and the District of Columbia joined the Justice Department.
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Former New York Gov. Andrew Cuomo misused state resources for personal profit when he required government aides to help produce his pandemic memoir during work hours, according to a report issued Monday by a state committee investigating possible impeachment of the former Democratic governor.
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Federal contractors, including janitors, security guards and child-care workers who provide services to the government, will soon be paid a $15-an-hour minimum wage, the Labor Department said Monday.
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One of former Prime Minister Benjamin Netanyahu’s closest advisers testified against him Monday in a long-running corruption case that could decide the political fate of Israel’s longest-serving leader.
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Elizabeth Holmes took jurors into the Theranos Inc. lab Monday during her continued testimony at her criminal-fraud trial, describing ways the startup sought to reduce errors in lab testing and miniaturize traditionally bulky blood-testing machines.
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Life insurers are backing policies with bigger slugs of riskier, higher-yielding investments. Holdings of real estate, below-investment-grade bonds, mortgage loans, private equity, hedge funds, limited partnerships and privately placed debt increased 39% from 2015 to 2020.
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U.S. military officials concede that America’s hypersonic weapons-development program trails China’s. New missile technology was displayed by China during a parade in Beijing. PHOTO: NG HAN GUAN/ASSOCIATED PRESS
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China is expanding its capacity to develop weapons that can be fired from hypersonic missiles, suggesting a test this summer that surprised U.S. military officials with its technological accomplishment is part of a program to create new threats for U.S. missile defenses.
The state-controlled AVIC Aerodynamics Research Institute said it is set to open a new wind tunnel capable of replicating the speeds and high temperatures faced by hypersonic missiles. The new wind tunnel’s roles include testing the “separation and release” of weapons from hypersonic vehicles, the institute said in a news release Sunday.
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The Kremlin denied that a buildup of Russian military forces near Ukraine was a prelude to invasion, and accused Washington of destabilizing the region.
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Turkey’s currency crisis intensified after President Recep Tayyip Erdogan defended an unorthodox policy of cutting interest rates to fight soaring inflation.
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PHOTO: TIMO LENZEN
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The pitch went out to eye doctors, McDonald’s Corp. franchisees and payroll companies: “Reduce your taxable income burden to Uncle Sam.”
In phone calls, emails and in-person meetings with thousands of business owners, American Express Co. salespeople laid out the strategy. Use AmEx to pay your employees and suppliers, they said. You’ll have to pay a fee, but you’ll come out ahead. That’s because you can earn rewards on the transaction that can be converted into untaxed cash, while also deducting the transaction fees for tax purposes.
The pitch helped AmEx bring in billions of dollars of transaction volume since at least 2018, according to people familiar with the matter and documents reviewed by The Wall Street Journal. But there was a problem: The strategy relied on a shaky interpretation of how tax law treats rewards points.
In July, a whistleblower filed a report with the Internal Revenue Service alleging that AmEx knowingly persuaded business owners to underreport their income and taxes.
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Deutsche Bank has hired a new group chief risk officer. PHOTO: LAURYN ISHAK/BLOOMBERG
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Deutsche Bank AG has named Olivier Vigneron group chief risk officer effective June 1, it said Sunday.
The German lender said that Mr. Vigneron will succeed Stuart Lewis, who is retiring after the 2022 annual general meeting.
Mr. Vigneron will join Deutsche Bank as senior group director on March 1. He was previously chief risk officer at France's Natixis and has more than two decades of experience working in the financial-services sector, the bank said.
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The Biden administration expects to release a full breakdown of its vaccine compliance data on Wednesday. PHOTO: JOHN LOCHER/ASSOCIATED PRESS
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About 95% of federal employees will have received their first Covid-19 vaccination shot or have a pending or approved exception by the end of Monday, the deadline set by President Biden for federal employees to get vaccinated, according to a senior administration official.
The official also said that more than 90% will have received at least one shot and that most of 3.5 million federal employees are fully vaccinated.
Agencies within the federal government are still processing information from their employees and have begun an “education and counseling process” for employees who haven’t received a shot or filed for an exemption, the official said. More enforcement steps will follow for those employees if needed.
The administration expects to release a full breakdown of its compliance data on Wednesday.
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Austria put its economy under partial lockdown on Monday with the toughest in an array of restrictions that are spreading across Europe, sometimes meeting violent protests, as governments seek to fend off a steep rise in Covid-19 cases and hospitalizations despite widespread vaccinations.
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Nurses have played a critical role during the pandemic, tending to Covid-19 patients in addition to their work with more typical patients. PHOTO: NIC COURY/BLOOMBERG NEWS
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Nurses are winning raises worth thousands of dollars a year from hospitals, the latest employer reckoning with a tight labor market.
HCA Healthcare Inc., one of the nation’s largest hospital chains, increased nurse pay this year to handle heavy Covid-19 pandemic case loads and keep pace with rivals that are also trying to fill vacancies and hold on to existing staff, the company’s human resources chief said. Raises varied by market; an HCA spokesman declined to say by what amounts.
Other hospitals say they have raises in the works to keep up with competitors’ offers. A small Missouri hospital desperate for nurses this month raised nurse salaries by up to 5% after hospitals nearly 40 miles away boosted wages.
“We were forced to,” said Sarah Hanak, chief nursing officer at Citizens Memorial Hospital in Bolivar, Mo. “We absolutely have to stay competitive.”
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The financial toll of a 35-day worker strike at Deere & Co. will become clearer this week as the farm and construction equipment manufacturer reports quarterly results and its profit outlook for next year.
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