The daily business briefing: May 13, 2022

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1. Senate confirms Fed Chair Jerome Powell to 2nd term
2. Biden administration promises steps to ease baby-formula shortage
3. Musk says Twitter deal 'on hold' until he sees info on fake accounts
4. Powell says Fed might not be able to guarantee a 'soft landing'
5. Stock futures gain but cryptocurrency investors panic

published 13 May 2022

1. Senate confirms Fed Chair Jerome Powell to 2nd term

The Senate overwhelmingly confirmed Federal Reserve Chair Jerome Powell to a second four-year term on Thursday. Powell this spring started a campaign of interest rate hikes and asset sales in a bid to slow growth and bring down the highest inflation in 40 years. The central bank has faced criticism for not taking action against rising prices sooner, but senators still backed Powell in a bipartisan 80-19 vote. Senate Banking Chair Sherrod Brown (D-Ohio) praised Powell and the three other new Fed leaders nominated by President Biden: Lael Brainard, named as the Fed's No. 2; Lisa Cook, who will be the first Black woman to serve on the board; and economist Philip Jefferson. All have been confirmed.

The Biden administration said Thursday it will take steps to address a worsening baby formula shortage. The White House said after a meeting between Biden and retailers and manufacturers that the administration will push states to waive packaging regulations to help get formula into stores faster. The Federal Trade Commission and state authorities will take steps to discourage price gouging. Biden is also urging companies to impose buying limits to discourage hoarding. The Food and Drug Administration is expected to announce within days that the United States will start importing formula from Mexico, Chile, Ireland, the Netherlands, and other countries. Republicans complained that the Biden administration was sending formula to the border to feed migrant babies during the shortage.

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Elon Musk says he has put his $44 billion deal to buy Twitter "temporarily on hold" until he sees the calculations behind Twitter's report that false or spam accounts made up less than 5 percent of its 226 million monetizable daily active users. "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 percent of users," Musk tweeted. Twitter data hasn't always checked out. The company said in an earnings report recently that it overcounted daily users by as much as 1.9 million each quarter for three years in a row, because a technical error caused Twitter to count multiple accounts tied to a single user as separate accounts.

Federal Reserve Chair Jerome Powell acknowledged for the first time Thursday that high inflation and global economic problems might thwart the central bank's efforts to prevent a recession. The Fed has started raising interest rates and plans to reduce its balance sheet after months of purchasing assets to boost the recovery from the coronavirus crisis. But those moves to curb inflation and keep the economy from overheating might be undercut by economic slowdowns in Europe and China, Powell said in an interview on NPR's Marketplace on the day he was confirmed to a second term. "The question whether we can execute a soft landing or not — it may actually depend on factors that we don't control," Powell said.

U.S. stock futures rose early Friday after a mixed day on Thursday. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.7 percent and 1.1 percent at 6:30 a.m. ET. Nasdaq futures were up 1.6 percent. The Dow and the S&P 500 fell 0.3 percent and 0.1 percent on Thursday. The tech-heavy Nasdaq rose 0.1 percent. After several volatile months, the S&P 500 is now down more than 18 percent from its record high, putting it close to bear-market territory, which is defined as a loss of 20 percent. Bitcoin bounced back above $30,000 on Friday despite continuing problems for stablecoin TerraUSD that have panicked cryptocurrency investors. The value of Luna, a token closely associated with UST, has fallen to $0.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.