The daily business briefing: May 3, 2021
Yellen says Biden spending plans won't trigger inflation, Baidu launches China's 1st commercial "robotaxi" service, and more
Yellen says Biden spending proposals wouldn't cause inflation spike
Treasury Secretary Janet Yellen, a former Federal Reserve chair, said Sunday that President Biden's proposals to spend trillions on infrastructure, families, and education would not trigger a spike in inflation because the programs would be phased in over a decade. "It's spread out quite evenly over eight to 10 years. So the boost to demand is moderate," Yellen said on NBC's Meet the Press. "I don't believe that inflation will be an issue, but if it becomes an issue, we have tools to address it." Recent economic data indicates that the recovery from the damage of the coronavirus pandemic is gaining strength. Americans' incomes made their biggest jump ever in March, with a boost from the latest $1,400 coronavirus relief checks, and the economy grew at a 6.4 percent annual rate in the first quarter.
Baidu introduces China's first commercial 'robotaxi' service
Chinese tech giant Baidu on Sunday launched its paid driverless taxi service, sending the cars onto the road without a safety driver for the first time. The company still has a safety monitor seated in the front passenger seats of the roughly 10 "robotaxis" to handle emergencies. The vehicles are picking up and dropping off passengers in western Beijing, making Baidu the first company to start commercial operations of autonomous vehicles in China. The driverless cars are traveling routes with eight stops in Shougang Park, a redeveloped former site of iron and steel plants that will be a venue for the 2022 Beijing Winter Olympics.
Biden, Republicans to discuss rival infrastructure proposals
White House Chief of Staff Ron Klain said Sunday that President Biden had invited leading Republican lawmakers to the White House to accelerate negotiations over their competing infrastructure proposals this week. One of those invited was Sen. Shelley Moore Capito (R-W.V.), a leading GOP negotiator on the proposals. "We're going to work with Republicans," Klain said on CBS. "We're going to find common ground." Biden has proposed $2.3 trillion in spending on infrastructure programs and services over eight years. Republicans say Biden's plan goes beyond conventional infrastructure. They have proposed a $568 billion alternative plan. Republican lawmakers say compromise is possible on a package targeting roads, bridges, and other physical infrastructure.
Stock futures gain ahead of another big week of corporate earnings
U.S. stock index futures rose early Monday ahead of the first trading day in May. Futures for the Dow Jones Industrial Average were up by nearly 200 points, or 0.6 percent, several hours before the opening bell. Futures tied to the S&P 500 and the Nasdaq gained 0.5 percent and 0.2 percent, respectively. The S&P 500 slipped on Friday but still finished up by more than 5 percent in April, its third straight month of gains. The benchmark index reached a record high on Thursday following blowout quarterly earnings reports by Apple and Facebook. More corporate earnings stream in this week. Investors also will have more economic data to digest, starting with April manufacturing figures coming out at 9:45 a.m. Monday.
U.S., WTO to discuss easing patent restrictions on coronavirus vaccines
The United States is scheduled to launch talks with the World Trade Organization this week over waiving patents on coronavirus vaccines as India and other countries struggle to fight devastating waves of COVID-19. White House Chief of Staff Ron Klain said Sunday on CBS' Face the Nation that U.S. Trade Representative Katherine Tai would discuss with the WTO ways to "get this vaccine more widely distributed, more widely licensed, more widely shared." Western pharmaceutical companies have been lobbying to protect vaccine patents but India, South Africa, and other countries are pleading with the WTO to get the U.S. and other countries to lift restrictions so developing nations can manufacture vaccines and get more people protected.