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VideoFormer Federal Reserve Chair Janet Yellen testifies at the Senate Finance Committee hearing that she has been named Treasury Secretary.recognitionRecognition…Kriston Jae Bethel for the New York Times
Janet L. Yellen, President-elect Joseph R. Biden's candidate for Treasury Secretary, said at her confirmation hearing Tuesday that investing in vaccine distribution and expanding unemployment benefits is the biggest "bang" for the economy rolled into one The future stimulus package will help Americans get through the current "dark" economic season.
Speaking before the Senate Finance Committee, Ms. Yellen said her primary focus will be helping struggling workers find good jobs and get better wages, and she explained the impact the pandemic is having on the economy.
"It has been particularly brutal to minorities and women," said Ms. Yellen.
The Treasury candidate said additional incentive measures should target those who are hardest hit and that expanding unemployment insurance and grocery stamps would be a critical way to achieve this. However, the top priority is spending to ensure the vaccine is delivered quickly and widely so that the pandemic can end and normal economic activity can resume, she said.
With the Democrats looking to take control of the Senate, the hearing was missing part of the dispute shown when Trump administration candidates sat for confirmation hearings.
Oregon Senator Ron Wyden, the top Democrat on the finance committee, said "no one could be better qualified for the job" than Ms. Yellen.
Senator Charles E. Grassley of Iowa, the current Republican chairman of the committee, urged Ms. Yellen to stop the Biden administration from levying taxes on the middle class and small businesses. He also urged them to work transparently with the oversight of Congress. However, he did not criticize her qualifications for the job.
There are areas of tension, however, including the Biden administration's plans to raise taxes on wealthy Americans and businesses, and increase spending to fight the pandemic.
Republican senators, including Mr Grassley, urged Ms. Yellen to pledge not to levy taxes on small businesses and also asked if she would withdraw the 2017 tax package that President Trump pushed through without Democratic support.
Ms Yellen said Mr Biden has no plans to repeal the entire 2017 tax bill, but that after the pandemic ends, he will attempt to reverse provisions in the law that will benefit rich and large corporations.
Ms. Yellen turned it down when asked if she would oppose lifting a cap set by lawmakers as part of the 2017 tax overhaul on state and local tax deductions. This limit has particularly harmed high earners in highly taxed, largely blue states, and many Democrats have pushed for the limit to be lifted.
Ms. Yellen said she believes "in fair and progressive tax legislation, where high net worth individuals and corporations pay their fair share" but she wants to "study and evaluate the implications for state and local governments" before taking a decision meets.
Republicans also pushed Ms. Yellen on the federal deficit, which skyrocketed under Mr. Trump's watch as he pushed through tax cuts and higher government spending before the pandemic.
Ms. Yellen agreed that "long-term budgetary developments are a cause for concern," but said that without further financial help, the economy will suffer severe damage during the pandemic.
"To avoid doing what we need to do now to address the pandemic and the economic damage it is causing, we would likely be left in a worse place economically and in terms of our debt position than doing what is necessary ", she said.
Ms. Yellen took a hard line on China at her confirmation hearing on Tuesday, warning that she would use a "full range" of tools to combat what she called abusive economic practices.
"China is clearly our main strategic competitor," said Ms. Yellen, suggesting that the Biden government would be skeptical of the world's second largest economy.
Ms. Yellen accused China of dumping products, stealing intellectual property, giving illegal subsidies to its companies, and having poor labor and environmental standards. She said the United States must work with its allies to force China to curb such abuses.
The Biden administration inherits a strained relationship with China that frayed during President Trump's trade war and then again amid the pandemic. The United States accuses China of not doing enough to prevent the virus from leaving its borders.
One of the biggest decisions by the Biden administration and Ms. Yellen is whether to keep Mr Trump's tariffs on Chinese imports valued at $ 360 billion, which has increased costs for many American companies. Ms. Yellen was not asked whether she would prefer to keep them in place or not.
Her harsh words, however, come almost a year after the Trump administration signed the first phase of a trade agreement between the two countries, suggesting that it doesn't believe the deal managed to address the most critical structural problems in economic ties to resolve between the two countries.
Ms. Yellen is expected to take a slightly different approach than the Trump administration, including working with allies to fight China and investing in the American economy to help the nation better compete with China.
Ms. Yellen suggested that the United States invest heavily in infrastructure and adopt an economic policy against climate change which she described as "one of the most critical issues for the economy and the world".
Investing in clean technologies, renewable energy and incentives for electric cars would be priorities for protecting the environment and creating jobs, said Ms. Yellen.
Recognition…Win Mcnamee / Getty Images
Janet L. Yellen won the endorsement of eight former Treasury Ministers on Tuesday demanding her swift Senate endorsement to accept the job under President-elect Joseph R. Biden Jr.
The letter of support was released shortly before Ms. Yellen testified during her verification hearing before the Senate Finance Committee. The group said any delay at a critical time would pose an unnecessary risk to the economy.
“With millions of Americans unemployed, long-term unemployment rises and activity in major sectors of the economy stalling, the new administration faces formidable challenges. Solving these urgent problems requires careful engagement from the Treasury, ”they write. "Any loophole in leadership would run the risk of rolling back the recovery effort."
They added that a delay in confirming Ms. Yellen would also create confusion among American allies who traditionally rely on the United States as global business leadership in times of crisis.
The letter was signed by George P. Shultz, James A. Baker III, Robert E. Rubin, Lawrence H. Summers, John W. Snow, Henry M. Paulson Jr., Timothy F. Geithner, and Jacob J. Lew. This all-male crew reflects the importance of Ms. Yellen's nomination – if confirmed, she would be the first woman to head the Treasury Department in its 231-year history.
The former secretaries said that Ms. Yellen, a former Federal Reserve chairwoman, was uniquely qualified for the job because of her experience and knowledge.
A smooth path to confirmation is expected from Ms. Yellen. An acting Treasury Secretary is expected to fill the gap in the division between Treasury Secretary Steven Mnuchin's departure at 12:00 noon on Wednesday and Ms. Yellen's confirmation.
Recognition…David Zalubowski / Associated Press
The average price for a one-way domestic flight fell to $ 135 last summer, its lowest level in at least two decades. This was the result of an analysis of new federal data by Cirium, an aviation data company.
Usually personal travel increases in summer and decreases in autumn. This decrease is usually offset by business travel. However, with few people aboard planes and corporations disrupting most employee travel during the pandemic, airlines lowered fares to fill the reduced number of seats they were still selling.
"Summer was their last best chance to generate sales," said Jon Jager, a Cirium analyst.
The company presented its estimates by analyzing the transportation department's data on airfare from July to September, released Tuesday. The average price of $ 135 for a one-way ticket last summer, including taxes and fees, is the lowest pre-inflation-adjusted quarterly average fare since at least 2000, according to Cirium. The price is also a 32 percent decrease from the summer average of $ 198 2019.
Air traffic has recovered somewhat since it fell by more than 95 percent in April, but remains subdued. Just over 875,000 people were screened by the Transportation Security Administration on Monday, compared with nearly 2.3 million the same day last year. In the past week, the agency examined only about 37 percent as many passengers as it did a year ago.
The fare data also varies significantly depending on the airline. At Delta Air Lines, for example, the gross price for a one-way ticket from New York to Los Angeles fell by 21 percent to 298 US dollars from summer 2019 to summer 2020. Tariffs on the same route fell 32 percent for United Airlines and 46 percent for American Airlines over the same period.
Overall, Delta's airfare fell 20 percent from the first quarter of 2020 through the third quarter, while prices for Southwest Airlines fell 26 percent, United Airlines fell 27 percent and American Airlines prices fell 31 percent.
Recognition…Anna Moneymaker for the New York Times
Federal Trade Commission chairman Joseph Simons said he would leave office on Jan. 29 after a tenure during which the agency took several key enforcement actions against Facebook.
Mr Simons, a Republican chosen by President Trump to head the agency, became head of the agency in the middle of a Facebook privacy investigation. The case resulted in a record $ 5 billion fine for the social media giant. Late last year, he joined the five-member agency's two Democrats to sue Facebook for antitrust violations.
Mr Simons leaves as the agency continues investigations into Big Tech, including an antitrust investigation against Amazon.
"As technology and our economy evolve in the digital age, the FC staff work tirelessly to ensure that consumers continue to benefit from a fair and competitive market," Simons said in a statement. "It was a privilege to be part of this effort."
President-elect Joseph R. Biden will not only replace Mr Simons in the agency, but will also have to fill the place of Democratic Commissioner Rohit Chopra. Mr Biden's transition team has announced plans to appoint Mr Chopra as director of the Bureau of Consumer Financial Protection.
Recognition…Paul Sancya / Associated Press
Microsoft has agreed to invest in General Motors' autonomous vehicle division called Cruise to become a technology provider for self-driving cars.
The software giant is participating in an investment round that brings Cruise $ 2 billion. G.M. and Honda are also participating in this round, in which the business is valued at $ 30 billion.
"Microsoft, as the gold standard for trustworthy democratization of technology, will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles," said Dan Ammann, Cruise CEO, in a statement.
As part of the partnership, G.M. has agreed to use Microsoft's Azure cloud computing service to manage and deliver data services for autonomous vehicles.
Cruise develops vehicles that G.M. hopes to be used in driverless taxi and delivery services, although it is not clear when the company will begin such services. The automaker, Tesla, and other companies have lagged behind the schedules they once offered to have large commercial fleets of autonomous cars on the road picking up passengers and delivering goods.
Recognition…Gian Ehrenzeller / EPA, via Shutterstock
The global pandemic that has ravaged American businesses and low-wage workers has barely affected the revenues and profits of the country's largest banks. Now banks are saying the pandemic's worst potential to harm them has passed.
Bank of America announced Tuesday that it had adjusted its calculations based on how much cash it would need for a disaster and, along with other major American banks, had released some rainy day funds based on an improved economic forecast. Goldman Sachs announced Tuesday that reserves have been adjusted, decreased for some of its businesses and slightly increased for the new consumer credit card division.
Banks can now use the money they have released to do things they avoided in the past year, such as making new loans. They are also preparing to redistribute money to shareholders after the Federal Reserve lifted temporary restrictions on share buybacks and dividend payments late last year.
"We continued to see signs of recovery, led by increased consumer spending, stabilization in credit demand from our commercial customers and strong markets, and investment activity," said Brian Moynihan, CEO of Bank of America, in a statement on the bank's earnings report.
The bank released $ 828 million, less than its counterparts Citigroup and JPMorgan Chase. However, the move reflected similar changes in expectations for economic development this year after a vaccine against the coronavirus began spreading and Congress passed another stimulus package.
In the fourth quarter of 2020, Bank of America made $ 5.5 billion after generating sales of just over $ 20 billion. The numbers weren't record breaking – for the same period in 2019, profits were $ 7 billion and sales were $ 22.3 billion – but they did signal that the bank had weathered the economic conditions caused by the pandemic without any problems. Sales and earnings in the huge consumer business were down year over year, but the Wall Street division was doing better.
For the final three months of 2020, the bank generated $ 3.9 billion in revenue from trading in the financial markets and other related activities. This corresponds to an increase of 14 percent compared to the same period of the previous year. The division earned $ 834 million in the quarter, compared to $ 638 million in the same period in 2019.
Goldman Sachs made just over $ 4.5 billion in the final quarter of 2020 with revenue of $ 11.7 billion, up 18 percent from the same quarter of 2019, thanks to a jump in Wall Street trading and trading Investment banking business. It reduced the amount of money it had earmarked to deal with losses on wholesale loans, but added more for the consumer credit card business that started in spring 2019.
Recognition…Erik S Lesser / EPA, via Shutterstock
As Washington prepares for the inauguration of President-elect Joseph R. Biden Jr. on Wednesday, lawmakers have sought help from transportation and hospitality companies "to identify and prevent the ongoing and extreme threat of further violent attacks." How companies react:
Airlines: American, Delta, Southwest and United have banned firearms in checked baggage on flights to the Washington area. American has also stopped alcohol service, and Alaska Air has limited the number of tickets available for flights to and from Washington.
Hotels and hospitality: Airbnb canceled reservations in Washington for this week. Expedia's Vrbo continues to accept bookings, but on Monday it rolled out new procedures that include screening guests against federal threat lists. A Hyatt spokesman said the chain had increased security staff and restricted the hotel's access to registered guests. The InterContinental Hotels Group is hiring additional security for its company-owned hotels and recommending its franchise hotels to do the same, a spokesman said. A representative from Hilton declined to discuss security measures, but said it was "well informed and informed about current events".
Other tour operators: To avoid disruptions in Washington, the bus operator Vamoose has stopped the service from Tuesday to Thursday. And the electric scooter companies Lime, Lyft, Spin and Helbiz are deactivating the service in the city center.
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Shares rose Tuesday and Wall Street rebounded from a slight decline the week before when Janet Yellen, selected as Treasury Secretary by the Biden administration, advocated a strong response to the pandemic at a Senate hearing.
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The S&P 500 rose about half a percent in early trading after mixed trade in Europe and a rally in Asia.
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Ms. Yellen, the former chairman of the Federal Reserve, told the senators at her ratification session Tuesday morning that the United States needed a robust stimulus package.
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US Treasury bond prices fell Tuesday. The 10-year bond yield rose three basis points, or 0.03 percentage points, to 1.11 percent. While government bond yields remain extremely low by historical standards, they rose this month in anticipation of a Democratic White House and Congress that have a big spending plan. President-elect Joseph R. Biden Jr. proposed a $ 1.9 trillion aid package last week.
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Oil prices rose. Brent futures, Europe's benchmark, rose 1.2 percent to $ 55.38 a barrel. West Texas Intermediate futures rose to $ 52.54 a barrel. The International Energy Agency cut its estimates for oil demand for 2021 due to lockdowns to contain the spread of the coronavirus. But oil prices have rallied in recent months after Saudi Arabia and several other nations cut production.
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The Senate confirmation hearing of Janet Yellen as Treasury Secretary begins Tuesday with an emphasis on revitalizing the pandemic economy, restoring lost jobs and regulating Wall Street. Regarding the economic incentives: "With interest rates at historic lows, the smartest way to act right now is to act big," Ms. Yellen will say in her opening speech.
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The corporate profit season is starting and more US banks are posting fourth quarter earnings. Bank of America and Goldman Sachs reported on Tuesday, while Morgan Stanley stepped up on Wednesday.
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Netflix also reports its latest earnings on Tuesday, followed by Procter & Gamble and United Airlines on Wednesday, and IBM and Intel on Thursday.
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Joseph R. Biden Jr. is expected to release dozens of executive orders on Thursday, his first full day in office as President. He will also propose legislative proposals for a $ 1.9 trillion stimulus package, changes to immigration laws, and other administrative priorities.
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The U.S. Federal Housing Finance Agency on Tuesday extended its moratorium on foreclosures and evictions related to foreclosure from late January to late February. The extension should give the future Biden administration more time, suggesting it plans to extend both the moratorium on foreclosures and lease evictions by several months – or at least until the pandemic subsides.