US ECONOMY & POLITICS

Fed Pencils In Earlier Interest-Rate Increase – Wall Street Journal, 6/17/2021

• Federal Reserve officials signaled they expect to raise interest rates by late 2023, sooner than they anticipated in March, as the economy recovers rapidly from the effects of the pandemic and inflation heats up.
• Their median projection showed they see lifting their benchmark rate to 0.6% from near zero by the end of 2023.
• In March they had expected to hold it steady through that year.
• Fed officials also discussed an eventual reduction, or tapering, of the central bank’s bond-buying program, Chairman Jerome Powell said in a press conference Wednesday after the central bank’s two-day policy meeting.
• The timing of such a move remains uncertain, he added.
• In updated projections released Wednesday 13 of 18 Fed officials indicated they expect to lift short-term rates by the end of 2023, up from seven who expected that outcome in March. In March, most anticipated holding rates steady through 2023.
• Seven officials expected to raise rates by the end of 2022, up from four in March. None projected lifting rates this year.
• Policy makers now expect the Commerce Department’s personal-consumption expenditures price index—their preferred measure of inflation—to rise 3.4% in the fourth quarter of 2021 from a year earlier, up from a March forecast of 2.4%.
• They revised up their projection for fourth-quarter-to-fourth-quarter economic growth to 7% from 6.5%.
• Officials left their forecast for unemployment in the fourth quarter of this year at 4.5%, unchanged from their March projection. The jobless rate stood at 5.8% in May.

Jobless Claims Rose Last Week, Pausing Downward Trend – Wall Street Journal, 6/17/2021

• Worker filings for initial unemployment benefits rose by 37,000 to 412,000 last week, marking the first increase since late April and pausing what had been a steady downward trend in filings.
• The four-week moving average, which smooths out week-to-week volatility, reached a new pandemic low of 395,000.
• This is the lowest average level since March 2020, when the pandemic first took hold in the U.S.
• Thursday’s report showed unemployment rolls shrank late last month. The number of ongoing benefit claims—a proxy for those receiving payments—fell by more than 500,000 to 14.8 million the week ended May 29.
• The total number of workers collecting unemployment benefits through regular state programs for the week ended May 29 was 3.5 million, a pandemic low but still more than double levels in late 2019.
• With federal pandemic-related programs included, the number of so-called continuing claims was 15.3 million in the week ended May 22.

U.S. Mortgage Rates Slip to Lowest Level in Four Months at 2.93% – Bloomberg, 6/17/2021

• The average for a 30-year loan was 2.93%, down from 2.96% last week and lowest since Feb. 18, Freddie Mac said Thursday.
• Cheaper borrowing costs have fueled the pandemic housing rally for the past year, giving Americans searching for properties more buying power. After hitting a record low at 2.65% in January, rates have been hovering near 3% for about two months.
• Even with borrowing costs at historic lows, potential buyers are struggling to find homes they can afford as an inventory shortage and frenzied demand drive up prices.

Manchin’s Compromise Voting Legislation Faces Bipartisan Wariness – Wall Street Journal, 6/17/2021

• Sen. Joe Manchin (D., W.Va.) laid out what he would like to see in sweeping elections legislation, aiming to stake out a position he hopes could draw bipartisan support while including provisions each party has long opposed.
• His proposal, which he has shared with Senate Majority Leader Chuck Schumer (D., N.Y.) and other Democrats, reflects support for some core measures of Democrats’ “For the People Act”—which faces a test vote on the Senate floor next week—such as mandating at least 15 days of continuous, early voting and automatic voter registration for anyone with a driver’s license.
• He also endorsed making Election Day a national holiday and forcing the disclosure of large donations to politically active groups that currently aren’t subject to such disclosure requirements.
• Mr. Manchin’s plan is at odds with some core features of the Democratic bill, a version of which passed the House in March almost entirely on party lines.
• Mr. Manchin wants to preserve the ability of states to require voters to verify their identities, while Democratic legislation would greatly loosen voter ID requirements by allowing a voter to sign a statement attesting to his or her identity instead of presenting an identification card.

Supreme Court Leaves Affordable Care Act Intact – Wall Street Journal, 6/17/2021

• The Supreme Court on Thursday rejected a challenge to the Affordable Care Act, the third time it has preserved the 2010 healthcare law.
• Texas and other Republican-leaning states, backed by the Trump administration, sought to strike down the law on technical arguments after Congress reduced to zero the tax penalty for failing to carry health insurance.
• Thursday’s 7-2 decision, written by Justice Stephen Breyer, found that none of the plaintiffs suffered any injury from zeroing out the penalty and thus they lacked legal standing to bring the lawsuit at all.
• Joining the majority were Chief Justice John Roberts and Justices Clarence Thomas, Sonia Sotomayor, Elena Kagan, Brett Kavanaugh and Amy Coney Barrett.

House to Vote on Repealing 2002 Iraq War Law – Wall Street Journal, 6/17/2021

• The House is expected to vote Thursday to revoke the 2002 law that authorized war in Iraq, reviving a long-simmering debate over Congress’s constitutional power to declare war and the commander in chief’s latitude to send American troops into combat abroad.
• The measure is expected to pass with bipartisan support, reflecting the growing unpopularity among American voters with the so-called forever wars.
• The Biden administration said in a statement Monday that it supported termination of the 2002 authorization for the use of military force, or AUMF.
• Similar legislation in the Senate is expected to get a vote on June 22 in the Committee on Foreign Relations.
• An even tougher legislative fight looms this year over the 2001 AUMF that Congress passed in reaction to the 9/11 terrorist attacks. That authorization is broader and more frequently used than either the 2002 or 1991 AUMFs.

U.S., EU Forge Closer Ties on Emerging Technologies to Counter Russia and China – Wall Street Journal, 6/17/2021

• The U.S. and European Union plan to cooperate more on technology regulation, industrial development and bilateral trade following President Biden’s visit, in a bid to help Western allies better compete with China and Russia on developing and protecting critical and emerging technologies.
• Central to the increased coordination will be a new high-level Trade and Technology Council the two sides unveiled Tuesday.
• The aim of the TTC is to boost innovation and investment within and between the two allied economies, strengthen supply chains and avert unnecessary obstacles to trade, among other tasks.
• In a sign of both sides’ aspirations for the council, it will be co-chaired on the U.S. side by Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai.
• The EU side will be co-chaired the Ms. Vestager, the bloc’s top competition and digital-policy official, and fellow Executive Vice President Valdis Dombrovskis, who handles trade.

EUROPE & WORLD

TikTok Owner ByteDance’s Annual Revenue Jumps to $34.3 Billion – Wall Street Journal, 6/17/2021

• ByteDance, the owner of popular short-video app TikTok, told employees that its revenue last year more than doubled to $34.3 billion, underscoring why the Chinese technology giant is one of the world’s hottest startups.
• ByteDance said its total revenue grew 111% from a year ago, while gross profit rose 93% to $19 billion, according to excerpts of a company memo viewed by The Wall Street Journal.
• ByteDance had about 1.9 billion monthly active users across all its platforms as of December 2020, according to the memo.
• At the end of 2019, ByteDance had about 1.5 billion monthly active users.
• Its net loss for 2020 totaled $45 billion, due largely to an accounting adjustment the company made for an increase in the fair value of its convertible redeemable preferred shares.

Energy, services boost euro zone inflation in May as expected – Reuters, 6/17/2021

• A sharp spike in energy prices and more expensive services boosted euro zone consumer inflation in May as expected, data confirmed on Thursday, taking the rate of price growth just above the European Central Banks target.
• The European Union’s statistics office Eurostat confirmed inflation in the 19 countries sharing the euro rose 0.3% month- on-month for a 2.0% year-on-year increase, as estimated earlier. The ECB wants to keep inflation below, but close to 2%.
• Energy prices added 1.19 percentage point to the overall year-on-year figure and services 0.45 point, while food, alcohol and tobacco added 0.15 point.
• Without the most volatile components of energy and food, or what the ECB calls core inflation, prices rose 0.2% on the month and only 0.9% year-on-year.

Hong Kong Police Arrest Apple Daily Editor Under China National Security Law – Wall Street Journal, 6/17/2021

• Authorities sent shudders through Hong Kong media outlets after police arrested the top editor of a popular daily newspaper and the city’s security chief warned of severe punishment for anyone who uses news to challenge China’s national security.
• More than 500 officers on Thursday searched the newsroom of Apple Daily, founded by jailed Beijing critic Jimmy Lai, and arrested five executives, including its editor-in-chief Ryan Law, who was led away in handcuffs from his home.
• Police said the arrests were related to more than 30 unspecified Apple Daily articles published since 2019 that played a crucial part in a conspiracy to encourage foreign sanctions against Hong Kong and China.
• Beijing’s representative office in Hong Kong said in a statement that “press freedom is no shield for illegal activities.”

Factmonster – TODAY in HISTORY

• The Battle of Bunker Hill took place during the American Revolution. (1775)
• The Statue of Liberty arrived in New York City aboard the French ship Isere. (1885)
• U.S. Supreme Court ruled that no locality may require recitation of Lord’s Prayer or Bible verses in public schools. (1963)
• Burglary of Democratic Party headquarters in Washington, DC, started the Watergate political scandal. (1972)
• O. J. Simpson’s slow-speed chase by the police, watched by millions on TV, ended in his arrest. (1994)