The daily business briefing: January 12, 2022
Bank of America ends bounced-check fees, Fed Chair Jerome Powell vows to hike rates as needed to counter inflation threat, and more
Bank of America cuts overdraft fees
Bank of America announced Tuesday that it is ending fees for insufficient funds, and cutting overdraft fees from $35 to $10. The bank said the bounced check fee will disappear next month, and the overdraft fee cut will take effect in May. Once the changes are in place, the institution's fees for overdrafts will be reduced by 97 percent from 2009 levels. Bank of America's president of retail banking, Holly O'Neill, said the changes were part of an effort to "help clients manage their deposit accounts and overall finances responsibly." The news came just over a month after Capital One, the sixth biggest U.S. bank by assets, announced that it would stop penalizing customers who withdraw or write checks for more money than they have in their accounts.
Powell: Fed will counter inflation threat with rate hikes as needed
Federal Reserve Chair Jerome Powell said in Tuesday's Senate hearing for his confirmation to a second term that the U.S. economy is strong enough that the Fed's aggressive stimulus measures are no longer necessary. Powell said high inflation had become a "severe threat" to the recovery from the damage of the coronavirus pandemic, and the central bank would start tapering its asset purchases and raising interest rates to prevent the economy from overheating. Powell said supply-chain bottlenecks that have contributed to rising prices should ease this year, but that if inflation persists and "we have to raise interest rates more over time, we will." Sen. Richard Shelby (R-Ala.) said he feared "the Fed missed the boat on addressing inflation sooner."
Pfizer moving ahead with plans for Omicron-targeted vaccine
Pfizer officials said this week that they were pushing to produce 50 million to 100 million doses of a version of the company's coronavirus vaccine adapted to target the new Omicron variant that is driving an unprecedented wave of infections. The drugmaker is testing larger doses and hybrid vaccines to fight multiple strains. Pfizer CEO Albert Bourla said the company is developing the vaccines "at risk," meaning it will absorb the costs if they are not needed. The weeks it will take to develop and distribute the vaccines mean that they won't be available until after the point later this month when public health officials have predicted the Omicron surge will peak, but Bourla said if the Omicron-targeted vaccine is needed, Pfizer will have it ready.
China's new COVID-19 lockdowns threaten more supply problems
New lockdowns China has imposed in several cities to counter the latest coronavirus surge have clogged ports and forced companies to shut factories, threatening to cause fresh supply-chain disruptions just as global bottlenecks were starting to clear, The Wall Street Journal reported Tuesday. Due to China's zero-tolerance policy, for example, about two dozen COVID-19 cases prompted restrictions on trucks and warehouses that threaten to worsen backlogs at the world's third-busiest container port of Ningbo-Zhoushan. The lockdowns and mass testing currently in effect in China are the most aggressive in nearly two years. The measures already have caused production problems for numerous companies, including memory-chip maker Samsung Electronics, German automaker Volkswagen, and a textile supplier to Nike and Adidas.
Stock futures edge up after Tuesday's rally
U.S. stock futures inched higher early Wednesday ahead of the release of key inflation data. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up by 0.1 percent at 6:30 a.m. ET. Futures for the tech-heavy Nasdaq were up by 0.3 percent. The overnight gains came after the S&P 500 snapped a five-day losing streak, as investors bought the dip. The S&P 500 rose by 0.9 percent on Tuesday. The Consumer Price Index is expected to show that prices jumped by a four-decade high of 7 percent in 2021 through December. "A higher reading could spook investors once again just as equity markets appear to be stabilizing," said Craig Erlam, senior market analyst at Oanda.