The daily business briefing: December 1, 2021
Powell says the Fed is considering tapering bond purchases sooner, FDA advisers recommend approving Merck COVID treatment, and more
Jerome Powell says Fed considering speeding up taper stimulus efforts
Federal Reserve Chair Jerome Powell told members of the Senate Banking Committee on Tuesday that the central bank might speed up plans to taper its bond-buying program, which is boosting the economic recovery, as it tries to counter accelerating inflation. The remarks came as the Fed tries to contend with both a strong recovery that is driving up prices for food and shelter, and the threat that another virus surge fueled by the newly discovered Omicron variant could prevent millions of people from returning to work and prevent disrupted supply chains from unclogging. Powell said it was too soon for anyone to know how the new coronavirus variant will damage the economy. He said it will take about a month to answer many questions, but "we'll know something … within a week or 10 days."
FDA panel narrowly recommends Merck COVID treatment
A Food and Drug Administration advisory committee voted Tuesday to recommend authorization of Merck's antiviral pill to fight severe COVID-19. The unexpectedly narrow 13-to-10 vote reflected concerns about the drug's limited effectiveness and possible reproductive harm. The FDA is not obligated to follow the recommendations of the panel of outside experts, who backed authorizing the pill for patients at high risk of severe illness. If regulators authorize the drug's use, it could be available to patients within weeks, as public health officials rush to prepare for the spread of the newly discovered Omicron variant of the coronavirus. In the coming weeks, the FDA will decide whether to authorize a similar pill developed by Pfizer that is believed to be more effective.
Thanksgiving weekend shopping traffic falls slightly
About 180 million Americans shopped in stores or online between Thanksgiving and Cyber Monday, down from 186 million last year and 190 million in 2019, the National Retail Federation said Tuesday. One reason for the decline was that many people started their holiday shopping early to avoid missing out on popular items due to supply disruptions caused by the coronavirus pandemic. Many shoppers were lured out as early as October by retailers that launched holiday promotions early. Retail analysts said it was too early to tell whether the Omicron strain of the coronavirus would affect the holiday shopping season. South Africa announced the detection of the fast-spreading new variant just before Black Friday.
U.S. moving to impose tighter COVID testing requirements on travelers
The U.S. is preparing to tighten coronavirus testing requirements for all air travelers entering the country as part of the Biden administration's response to the new Omicron coronavirus variant, the Centers for Disease Control and Prevention said Tuesday. Currently, vaccinated air travelers need to show a negative COVID test administered within three days of departure toward the U.S., while unvaccinated travelers must show a negative test within one day of arrival. Under a new rule expected to be announced by President Biden as soon as Thursday, all travelers, including U.S. citizens, will be required to show a negative test performed within one day of departure. Nearly all foreign nationals currently have to show that they have been fully vaccinated to enter the United States.
Stock futures rise as volatility continues
U.S. stock index futures rose early Wednesday as markets remained volatile due to the emergence of the new Omicron coronavirus variant. Futures tied to the S&P 500 and the Dow Jones Industrial Average were up by 1.1 percent and 0.8 percent, respectively. Futures for the Nasdaq gained 1.3 percent. The three main U.S. indexes fell sharply on Tuesday, after rebounding Monday from Friday's steep losses. The turmoil began after South Africa reported the existence of the new virus. It has since been detected in 20 countries. Gregory Daco, chief U.S. economist at Oxford Economics, said "markets appear to be having trouble digesting" uncertainty over the Omicron variant and the rising likelihood the Federal Reserve will fight high inflation by unwinding its economy-boosting policies more quickly.