The notion that the United States could essentially talk itself into a recession is not new. As recently as 2019, before the pandemic, markets were roiled by former President Donald J. Trump’s trade war with China and consumer sentiment started to dip. Mr. Trump accused his critics and the media of “doing everything they can to crash the economy because they think that will be bad for me and my re-election.”

Mr. Furman pointed out that economic sentiment can often diverge along party lines depending on what party is in power, but that it is uncertain to what extent those feelings will influence hiring and investment plans.

“Republicans became much more pessimistic about the economy after Biden was elected,” he said.

Beyond campaign ads, the sense of economic doom is being amplified by right-leaning media outlets, which consistently tie inflation to Mr. Biden’s policies.

Monica Crowley, a conservative commentator who appears regularly on Fox News, said that inflation was a regular topic during her appearances and on her podcast. She argues that the jump in prices coincided directly with the passage of the pandemic relief package last year and predicts that Democrats will pay the price for inflation because it is harming their low-income and working class base the hardest.

“This is not some obscure fiscal or monetary issue that the American people might have some issue understanding,” Ms. Crowley, a former senior Treasury Department official during the Trump administration, said. “Inflation affects everybody. The political fallout for the Democrats is going to be very significant.”

The Biden administration has argued that the focus on inflation has in some cases been unfair.

Jared Bernstein, a member of the White House’s Council of Economic Advisers, dismissed the notion that Mr. Biden was facing “Jimmy Carter déjà vu” in terms of inflation and suggested in an interview with Fox News that the network was trying to cast the data in the most negative light.

“You like to focus on the headwinds,” Mr. Bernstein said to Neil Cavuto of Fox on Wednesday. “And I get it — if it bleeds, it leads.”

Article source: https://www.nytimes.com/2022/07/14/us/politics/democrats-republicans-inflation-midterms.html

The Fed has been raising interest rates since March in an effort to slow consumer and business demand, hoping to cool the economy and bring inflation back down. The central bank has sped up those rate moves as price increases have proved surprisingly stubborn, and the new inflation report spurred speculation that the Fed might turn even more aggressive.

Officials lifted rates by 0.75 percentage points in June, the biggest move since 1994, and had been expected to make a similarly sized move at its meeting in late July. But after the new inflation data, investors began to expect a percentage-point move, based on market pricing.

Fed officials themselves were hesitant to call for such a large move.

“My most likely posture is 0.75, because of the data I’ve seen,” Mary Daly, president of the Federal Reserve Bank of San Francisco, said in an interview Wednesday night. She explained that she had expected a high number, so the report did not sway her.

“I saw that data and thought: This wasn’t good news, wasn’t expecting good news,” she said.

Ms. Daly said she could see a situation in which a bigger, one-percentage-point increase would be possible should consumer inflation expectations move higher and consumer spending fail to slow down.

Loretta Mester, president of the Federal Reserve Bank of Cleveland, said on Bloomberg Television on Wednesday night that the new inflation report was “uniformly bad” and that there would be no reason to do less than the 0.75 points that the Fed approved in June. But she also suggested that she would watch incoming data and wait to see how the economy evolved before deciding whether an even larger move might be appropriate. The Fed’s next policy meeting is July 26-27.

Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, told reporters on Wednesday that “everything is in play,” but he, too, made it clear that he was “not wedded to any specific course of action.”

Article source: https://www.nytimes.com/2022/07/13/business/economy/inflation-june-soaring-consumers.html

The Fed has been raising interest rates since March in an effort to slow consumer and business demand, hoping to cool the economy and bring inflation back down. The central bank has sped up those rate moves as price increases have proved surprisingly stubborn, and the new inflation report spurred speculation that the Fed might turn even more aggressive.

Officials lifted rates by 0.75 percentage points in June, the biggest move since 1994, and had been expected to make a similarly sized move at its meeting in late July. But after the new inflation data, investors began to expect a percentage-point move, based on market pricing.

Fed officials themselves were hesitant to call for such a large move.

“My most likely posture is 0.75, because of the data I’ve seen,” Mary Daly, president of the Federal Reserve Bank of San Francisco, said in an interview Wednesday night. She explained that she had expected a high number, so the report did not sway her.

“I saw that data and thought: This wasn’t good news, wasn’t expecting good news,” she said.

Ms. Daly said she could see a situation in which a bigger, one-percentage-point increase would be possible should consumer inflation expectations move higher and consumer spending fail to slow down.

Loretta Mester, president of the Federal Reserve Bank of Cleveland, said on Bloomberg Television on Wednesday night that the new inflation report was “uniformly bad” and that there would be no reason to do less than the 0.75 points that the Fed approved in June. But she also suggested that she would watch incoming data and wait to see how the economy evolved before deciding whether an even larger move might be appropriate. The Fed’s next policy meeting is July 26-27.

Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, told reporters on Wednesday that “everything is in play,” but he, too, made it clear that he was “not wedded to any specific course of action.”

Article source: https://www.nytimes.com/2022/07/13/business/economy/inflation-june-interest-rates.html

Already, new home construction has dropped sharply as borrowing costs climb, declining 14.4 percent in May to the lowest rate in more than a year. Early data suggest that apartment construction is also taking a hit — something industry executives can attest to.

David Wali, who runs the Boise office of the Gardner Company, a developer of residential and commercial properties throughout the mountain West, said the question of whether to build has been clouded by inflation, rising interest rates, and the continued disruption of supply chains, which has builders worried they might finish projects, be ready to rent out the units, “and be left with no appliances.”

Those risks have in turn caused lenders to turn more conservative by requiring developers to put more of their own money into projects, further crimping development.

Mr. Wali has already started delaying projects, including 500 apartments in the Boise area, and he said that as the lack of new development works its way through the system in the coming months, supply will be even more squeezed. The flip side — good for him, bad for renters — is that rising rental demand has him feeling good about rent levels on apartments his company already owns.

“Those are fantastic,” he said.

The nation may be seeing a geographic shift in which rental markets are hot. Early in the pandemic, as remote work gave people geographic flexibility, places like Orlando and Tampa, Fla., and Rochester, N.Y., experienced pronounced rent growth. Now, some cities in the middle of the country are cooling, even as offices recall workers and coastal markets like New York City heat up.

“I’ve been practicing for 42 years, and I’ve never seen the huge, across-the-board demand for rent increases that I’m seeing now,” said Samuel Himmelstein, a tenants’ rights lawyer in New York City who said that clients were regularly getting in touch with him now to see if there is anything they can do about landlord demands for 20 to 30 percent higher rent.

Article source: https://www.nytimes.com/2022/07/11/business/economy/rent-inflation-interest-rates.html

At its core, the cap proposal is an attempt to use the West’s influence over Russian oil shipments to dictate the price Moscow can command for its oil exports.

The cap plan seeks to keep the Russian oil moving to market, but only if it is steeply discounted. Russia could still ship its oil with Western backing if that oil is sold for no more than a price set by the cap. Negotiators are working to set that price, which would be high enough to ensure Moscow would still profit off its oil sales but lower than the price it is commanding now, of about $30 below the global price.

Insurers and financing companies would need to join the effort to make it work. So would many of the countries outside Europe that would buy the discounted oil. But even if some countries refuse to sign on, like China and India, administration officials are confident a well-designed cap would drive down prices anyway — because no country wants to pay more than it has to for any vital commodity.

Ideally, the officials say, the plan could bring down global oil prices by reducing the risk of a future supply disruption, which traders may be factoring into their decisions.

Some experts doubt the plan will work, saying it is ripe for evasion and will still provide Russia with plenty of energy revenue. There is also the chance that a low cap would induce Moscow to refuse to ship any discounted oil, instead paying to cap wells and halt production.

“It’s another half-measure idea, as opposed to making the tough decision to actually stop purchasing Russian crude and using secondary sanctions,” said Marshall S. Billingslea, who was the assistant Treasury secretary for terrorist financing in the Trump administration.

Article source: https://www.nytimes.com/2022/07/09/business/economy/biden-gas-price-cap-russia.html

Mr. Schumer has worked to salvage key components of the plan that could meet that test, including a plan released on Wednesday to lower the cost of prescription drugs. Mr. Manchin has repeatedly said such legislation should focus on tax reform and drug pricing, as well as efforts to lower the national debt. The bill is also expected to include some climate and energy provisions, a key priority for Democrats, although they have yet to be agreed upon.

Democratic leaders, who hope to move the legislation through the Senate this month, are expected to formally release the Medicare plan in the coming days, according to the officials, who disclosed preliminary details on the condition of anonymity.

The fast-track budget process that the party plans to use for the overall package, known as reconciliation, requires legislation to abide by strict budgetary rules enforced by the Senate parliamentarian. The prescription drug legislation has been submitted to the parliamentarian, and Democrats plan to submit the tax increase and Medicare piece in coming days.

The portion of Medicare that pays for hospital bills is funded through a special trust fund, largely financed by payroll taxes. But with escalating health care costs and an aging population, current revenues won’t be enough to pay all of Medicare’s hospital bills forever. According to the most recent report from Medicare’s trustees, the fund will be depleted in 2028 without new revenues or spending cuts.

Article source: https://www.nytimes.com/2022/07/07/us/politics/medicare-solvency-taxes.html

“I think it will be really interesting to see what the long-term consequences are on mothers’ career opportunities,” said Ariane Hegewisch, the program director in employment and earnings at the Institute for Women’s Policy Research. “Women have continued to work, but they clearly had to cut back.”

America’s long-running caregiving shortage, for both children and older adults, was compounded by the pandemic.

The professional caregiving work force — also disproportionately female — hasn’t recovered. More than one child care worker in 10 hasn’t returned, according to the Bureau of Labor Statistics (although that data may not capture all the single-employee, home-based operators that make up a huge part of the sector). The number of nursing home workers remains 11.5 percent below its level in February 2020. Together, the two categories represent a loss of 500,000 jobs.

“For women, that’s the double whammy — most of those workers are women, and most of the people who need those supports to enter the work force themselves are women,” said Katherine Gallagher Robbins, a senior fellow with the National Partnership for Women and Families.

At the same time, there is new demand for care. After a decrease in the number of births early in the pandemic, nearly 3.7 million people were born last year, up 1 percent from 2020 and the first such increase since 2014.

Christy Charny, a college administrative assistant in Fort Collins, Colo., recently talked to her manager about dialing back her hours from full time to part time. She likes her job and needs it for the health insurance it provides, but her 12-week-old daughter was having trouble nursing, and paying for full-time infant care was a nonstarter for her and her husband.

Article source: https://www.nytimes.com/2022/07/07/business/economy/women-labor-caregiving.html

Mr. Powell has repeatedly stressed that whether the Fed can gently slow the economy and cool inflation will hinge on factors outside of its control, like the trajectory of the war in Ukraine and global supply chain snarls.

For now, Fed officials are unlikely to interpret nascent evidence of a cooling economy as a surefire sign that it is tipping into recession. The unemployment rate is hovering near the lowest level in 50 years, the economy has gained an average of nearly 500,000 jobs per month so far in 2022 and consumer spending — while cracking slightly under the weight of inflation — has been relatively strong.

Meanwhile, officials have been unnerved by both the speed and the staying power of inflation. The Consumer Price Index measure picked up by 8.6 percent over the year through May, and several economists said it probably continued to accelerate on a yearly basis into the June report, which is set for release on July 13. Omair Sharif, the founder of Inflation Insights, estimated that it could come in around 8.8 percent.

“You do probably get a few months of moderation after we get this June report,” he said.

The Fed’s preferred inflation measure, the Personal Consumption Expenditures index, may have already peaked, economists said. But it still climbed by 6.3 percent over the year through May, more than three times the central bank’s 2 percent target. Many households are struggling to keep up with the rising cost of housing, food and transportation.

While there are encouraging signs that inflation might slow soon — inventories have built up at retailers, global commodity gas prices have fallen this week and consumer demand for some goods may be beginning to slow — those indicators may do little to comfort central bankers at this stage.

The Fed has been repeatedly disappointed by false dawns. Officials had hoped that inflation peaked last summer, only to watch it reaccelerate into the fall. They have been receiving regular Wall Street predictions that it might be reaching its zenith, but those have yet to prove correct.

Article source: https://www.nytimes.com/2022/07/06/business/economy/fed-rate-increase-inflation.html

Only a small subset of Goldman’s clients qualified to buy investments linked to crypto through the bank, said Mary Athridge, a Goldman Sachs spokeswoman. Clients had to go through a “live training” session and attest to having received warnings from Goldman about the riskiness of the assets. Only then were they allowed to put money into “third party funds” that the bank had examined first.

Morgan Stanley clients couldn’t put more than 2.5 percent of their total net worth into such investments, and investors could invest in only two crypto funds — including the Galaxy Bitcoin Fund — run by outside managers with traditional banking backgrounds.

Still, those managers may not have escaped the crypto crash. Mike Novogratz, the chief executive of Galaxy Digital and a former Goldman banker and investor, told New York magazine last month that he had taken on too much risk. Galaxy Digital Asset Management’s total assets under management, which peaked at nearly $3.5 billion in November, fell to around $2 billion by the end of May, according to a recent disclosure by the firm. Had Galaxy not sold a major chunk of Luna three months before it collapsed, Mr. Novogratz would have been in worse shape.

But while Mr. Novogratz, a billionaire, and the wealthy bank clients can easily survive their losses or were saved by strict regulations, retail investors had no such safeguards.

Jacob Willette, a 40-year-old man in Mesa, Ariz. who works as a DoorDash delivery driver, stored his entire life savings in an account with Celsius that promised high returns. At its peak, the stored value was $120,000, Mr. Willette said.

He planned to use the money to buy a house. When crypto prices started to slide, Mr. Willette looked for reassurance from Celsius executives that his money was safe. But all he found online were evasive answers from company executives as the platform struggled, eventually freezing more than $8 billion in deposits.

Celsius representatives did not respond to requests for comment.

“I trusted these people,” Mr. Willette said. “I just don’t see how what they did is not illegal.”

Article source: https://www.nytimes.com/2022/07/05/business/economy/wall-st-cryptocurrency-prices.html

The Biden administration has been looking for ways to lower oil prices globally. Treasury Secretary Janet L. Yellen has been pressing her European counterparts to impose a price cap on Russian oil exports, and the Group of 7 industrialized nations agreed last week to explore the idea.

Some of the proposals for easing the pain of inflation on Americans, such as the gas tax holiday or student loan debt forgiveness, have been dismissed by economists who say they might make inflation worse. Others have been criticized, like Mr. Biden’s upcoming trip to Saudi Arabia, which some have called pandering to a state that the president once likened to a “pariah” over its role in the assassination of Jamal Khashoggi, a Washington Post columnist and a prominent dissident. Mr. Biden said last week that he would not ask the Saudis to increase oil production.

C. Fred Bergsten, the assistant secretary for international affairs at the Treasury Department from 1977 to 1981, said the United States should avoid the kind of domestic oil price controls that were in place during the 1970s and that the Carter administration eventually abandoned in 1979. Describing them as an “abysmal failure,” Mr. Bergsten said they distorted energy markets.

“One lesson from the Carter administration is don’t do that,” Mr. Bergsten, 81, said. “Energy price controls discourage production and held down the supply side over time.”

Mr. Bergsten suggested that rolling back some of the Trump-era tariffs on $360 billion worth of Chinese goods that economists say have driven up costs for American consumers could offer some marginal relief from inflation. He also thinks Democrats should consider tax increases that would be targeted mostly at the wealthy to reduce the pent-up demand in the economy that continues to push prices higher. Proposals such as the gas tax holiday would most likely just fuel more inflation, he predicted, by giving drivers more money to spend, and would make the Biden administration look desperate by resorting to gimmicks.

Article source: https://www.nytimes.com/2022/07/05/business/economy/inflation-biden-jimmy-carter.html