The daily business briefing: June 23, 2021
Fed chair says the recent inflation spike is probably temporary, existing-home prices jumped to a record in May, and more
Fed chair says inflation spike likely temporary
Federal Reserve Chair Jerome Powell said Tuesday that spiking inflation was likely to be temporary. Powell was responding to Republicans in Congress who blamed rising prices on President Biden's $1.9 trillion coronavirus relief package, which lawmakers approved in March. Powell sidestepped the partisan clash over spending aimed at speeding the recovery from economic damage caused by the pandemic, but said that recent larger-than-expected increases in consumer prices were mostly due to supply bottlenecks that occurred when demand surged after the economy quickly reopened as coronavirus infections and deaths fell, and businesses from airlines to used car lots couldn't restart operations fast enough to keep up.
Existing-home prices rise to record
Existing-home prices in May were up nearly 24 percent from a year ago, the largest yearly price increase the National Association of Realtors has recorded in 22 years. The median existing-home price rose above $350,000 for the first time. Sales prices have been rising since last summer, when the first wave of coronavirus cases eased and Americans, forced by lockdowns to spend more time at home, started looking for more space. Many people moved after they started working remotely, allowing them to relocate to less expensive areas. But sales have started declining because there aren't enough available homes to meet demand. "Affordability appears to be now squeezing away some buyers," said Lawrence Yun, NAR's chief economist. "There are so many people who have been outbid, frustrated they are unable to buy."
Stock futures flat after Nasdaq's Tuesday record
U.S. stock futures were flat early Wednesday after the Nasdaq closed at a record high on Tuesday. Futures for the tech-heavy Nasdaq and the S&P 500 were up by less than 0.1 percent several hours before the opening bell. Futures tied to the Dow Jones Industrial Average rose by 0.1 percent. All three major averages rose on Tuesday, shaking off early losses with a boost from tech stocks. The Nasdaq rose by 0.8 percent. The S&P 500 gained 0.5 percent, leaving it 0.2 percent shy of an all-time high. The Dow closed up by 0.2 percent. Investors are concerned that rising inflation is going to push the Federal Reserve to raise interest rates sooner than previously expected, so "we should expect markets in the months ahead to be more volatile," said Paul O'Connor, head of the multiasset team at Janus Henderson Investors.
Most major utilities reduced emissions in 2020
A new analysis of Edison Electric Institute Data conducted by Morning Consult and released Tuesday found that most of the major utility companies that reported their data reduced their emissions between 2019 and 2020. Only two of the eight utilities in the review registered an uptick, including Duke Energy, which Morning Consult noted was the only utility to specifically mention its need to address risks from climate change in its 2019 qualitative report to EEI. Duke increased its carbon intensity by 13 percent, and it now has the highest average emissions of the companies analyzed. All companies, however, cut back on coal as part of their resource mix, with natural gas and nuclear power remaining the dominant energy sources.
Morgan Stanley to make New York office 'vaccine-only'
Morgan Stanley plans to bar employees and clients from its New York offices if they are not fully vaccinated against COVID-19, Reuters reported Wednesday, citing a source familiar with the matter. Those who confirm that they have received a complete course of a coronavirus vaccine will be allowed access to the bank's offices in New York and Westchester, Reuters reported. Staff members who have not been vaccinated will have to work remotely. The policy reportedly will go into effect July 12. Once it does, the company will lift requirements on face coverings and social distancing. Some Morgan Stanley divisions already had "vaccine-only" policies in place.