The daily business briefing: June 23, 2022
Fed Chair Jerome Powell says a recession is possible but unlikely, the FDA reportedly plans to pull Juul e-cigarettes off the market, and more
Fed chair says recession possible
Federal Reserve Chair Jerome Powell told the Senate Banking Committee on Wednesday that a recession is possible but unlikely. He said the central bank is committed to bringing down high inflation, which hit a four-decade high of 8.6 percent in May, through interest-rate hikes and other measures. "We need to get inflation back down to 2 percent," Powell said. "We're using our tools to do that." Sen. Elizabeth Warren (D-Mass.) said the Fed shouldn't raise borrowing costs so high it sparks mass layoffs while supply-chain problems continue to push prices higher. "You know what's worse than high inflation and low unemployment?" Warren said. "It's high inflation and a recession with millions of people out of work."
FDA expected to order Juul e-cigarettes off the market
The Food and Drug Administration plans to order Juul Labs Inc. to remove its e-cigarettes from the domestic market as early as this week, The Wall Street Journal reported Wednesday, citing people familiar with the matter. The expected decision comes after a two-year review of data provided by Juul as it sought to keep selling its tobacco- and menthol-flavored products in the United States. Juul stopped selling most of its flavored e-cigarettes in 2019 after being accused of driving a sharp increase in underage vaping with sweet and fruity products, and marketing that appealed to young people. The FDA banned all but tobacco and menthol flavors in 2020, and required e-cigarette manufacturers to submit their products for review.
Britain faces 2nd national rail strike
The United Kingdom faces a second one-day national railway strike on Thursday, after union representatives and employers ended Wednesday talks without a deal. Thousands of workers represented by the Rail, Maritime, and Transport Union walked out on Tuesday, demanding better pay, working conditions, and job security. It was the U.K.'s biggest and "most disruptive" railway strike in 30 years, according to The Associated Press. The union blamed the government for Wednesday's deadlock and the Thursday walkout. The company Network Rail said it was "disappointed" union negotiators walked away from the table, and Prime Minister Boris Johnson criticized strike participants for "unnecessary" travel disruptions.
Stock futures rise as market aims for rebound
U.S. stock futures made modest gains early Thursday, the latest sign of a potential rebound as concerns mount about a potential recession. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.2 percent and 0.4 percent at 6:45 a.m. ET. Nasdaq futures were up 0.8 percent. All three of the main U.S. indexes fell by a little more than 0.1 percent on Wednesday, but they are up about 2 percent so far this week. On Thursday, investors will get new jobless claims data to digest. Federal Reserve Chair Jerome Powell, who told the Senate Banking Committee on Wednesday that a recession was possible but unlikely, will present remarks on monetary policy to the House.
American Airlines to stop flying to 4 airports due to pilot shortage
American Airlines announced Wednesday that it has made the "difficult decision" to stop flying to four small cities due to the "regional pilot shortage affecting the airline industry." The carrier said it would halt service on Sept. 7 to Dubuque Regional Airport in Iowa, the Eugene F. Kranz Toledo Express Airport in Ohio, and the Long Island MacArthur and Ithaca Tompkins International airports in New York. American said it would "proactively reach out to customers scheduled to travel after this date to offer alternate arrangements." American currently has two daily flights from each of the airports. A MacArthur Airport spokesperson said officials hope the decision "will not be permanent."