The daily business briefing: July 29, 2021
Fed chair downplays Delta variant threat to economy, the Senate votes to advance $1 trillion infrastructure compromise, and more
Fed chair says Delta variant poses little risk to economy, for now
Federal Reserve Chair Jerome Powell said Wednesday at the close of a two-day policy meeting that the Delta variant of the coronavirus poses only a limited threat to the U.S. economy. "What we've seen is with successive waves of COVID over the past year and some months now," Powell said, "there has tended to be less in the way of economic implications from each wave. We will see whether that is the case with the Delta variety, but it's certainly not an unreasonable expectation." The Fed said in its statement following the meeting that the economy was moving closer to the progress necessary to justify reducing its $120 billion economy-boosting monthly bond purchases. It held interest rates near zero as expected.
Senate votes to advance bipartisan infrastructure proposal
The Senate on Wednesday voted 67-32 to consider a $1 trillion bipartisan infrastructure bill hammered out in negotiations involving centrist Republicans and Democrats, and the White House. The plan calls for big investments in the nation's public works system, including about $550 billion in new money for roads, bridges, rail, transit, water, and other physical infrastructure. Senate Minority Leader Mitch McConnell (R-Ky.) voted to advance the compromise legislation. President Biden called the deal "the most significant long-term investment in our infrastructure and competitiveness in nearly a century." He added: "Neither side got everything they wanted in this deal, but that's what it means to compromise and forge consensus — the heart of democracy."
Remington offers $33 million to settle Sandy Hook lawsuit
Remington Arms has offered to pay about $33 million to settle claims linking its marketing practices to the 2012 Sandy Hook elementary school massacre, which left 20 first-graders and six faculty dead, The Wall Street Journal reported Wednesday, citing court documents. Nine families of victims would get $3.66 million each from the now-bankrupt gun maker. A 2005 federal law granted gun makers immunity from such liability claims, but the Connecticut Supreme Court ruled in 2019 that Remington could be held legally responsible for marketing efforts for its Bushmaster assault-style rifle. Company lawyers didn't immediately comment. A lawyer representing families said they wanted to show banks and insurers that "companies that sell assault weapons to civilians are fraught with financial risk."
Stock futures mixed following Fed meeting
U.S. stock futures were mixed early Thursday after the Federal Reserve kept its asset purchases and interest-rate target steady at the close of its two-day policy meeting. Futures tied to the Dow Jones Industrial Average were up by 0.4 percent several hours before the opening bell. S&P 500 futures gained 0.2 percent. Futures for the tech-heavy Nasdaq were down by 0.1 percent. PayPal and Facebook shares dropped in after-hours trading by 5 percent and 3 percent, respectively, after they reported earnings and warned of slowing growth. Ford shares surged by nearly 4 percent even though its quarterly earnings fell short of analysts' expectations, after the automaker raised its outlook for the rest of the year.
Report: Pandemic aid programs cut poverty nearly in half
Massive government coronavirus pandemic aid programs will cut poverty nearly in half this year and reduce the share of Americans in poverty to a record-low level, according to the most comprehensive analysis to date of the emergency spending programs. "These are really large reductions in poverty — the largest short-term reductions we've seen," said Laura Wheaton of the Urban Institute, who produced the estimate with two colleagues. According to the analysis, which was requested by The New York Times, the number of poor Americans is projected to fall by nearly 20 million or nearly 45 percent from 2018 levels, the biggest such drop ever in such a short period. The gains could be brief, however, as the three programs with the biggest impact — stimulus checks, increased food stamps, and expanded unemployment insurance — have ended or will soon.