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Stimulus Negotiations Have Made ‘Major Headway,’ McConnell Says
Senator Mitch McConnell, the majority leader, said congressional leaders are approaching agreement on a roughly $900 billion coronavirus relief package.
The Democratic leader and I worked into the evening alongside the speaker of the House and the House Republican leader. We made major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities. We committed to continuing these urgent discussions until we have an agreement. And we agreed we will not leave town until we’ve made law. The American people need more help. It’s that simple. Further targeted relief is now months overdue. We need vaccine distribution money. We need to re-up the Paycheck Protection Program to save jobs, we need to continue to provide for laid-off Americans. Congressional leaders on both sides are going to keep working until we get this done.
Senator Mitch McConnell, the majority leader, said congressional leaders are approaching agreement on a roughly $900 billion coronavirus relief package.CreditCredit…Anna Moneymaker for The New York Times
Senator Mitch McConnell, the majority leader, privately made the case to Republicans on Wednesday for a stimulus deal that includes another round of direct payments to struggling Americans, suggesting that delivering such help could boost the party’s hopes of hanging onto their majority in the Senate.
In a call on Wednesday afternoon, Mr. McConnell said that Senators Kelly Loeffler and David Perdue, who are both facing January runoffs that will determine which party controls the Senate, were “getting hammered” for Congress’s failure to deliver more pandemic aid to struggling Americans — particularly the direct payments — and that enacting the measure could help them. The Kentucky Republican also emphasized that the package could be signed by President Trump, who has pushed for another round of stimulus checks, and would help those devastated by the pandemic.
His comments, relayed by two people familiar with them who shared them on the condition of anonymity, came as congressional leaders closed in on an agreement on a coronavirus relief measure that could infuse the economy with as much as $900 billion, racing to complete both a pandemic aid package and a catchall federal spending measure before government funding lapses on Friday.
In an indication that a deal was imminent but not yet in hand, Mr. McConnell also warned senators to prepare to remain in Washington through the weekend as lawmakers and aides finalize the details and write legislative text.
Top Republicans and Democrats on Capitol Hill appeared to be nearing a compromise that would include both another round of direct stimulus payments to Americans and additional unemployment benefits, according to others familiar with the emerging plan who also described it on the condition of anonymity.
While the details were not yet final, the package was also expected to provide billions of dollars for vaccine distribution and support for schools and small businesses, but omit coronavirus liability protections long sought by Republicans and a dedicated funding stream for state and local governments insisted upon by Democrats — the two most contentious sticking points.
Senator John Thune of South Dakota, the No. 2 Republican, told reporters on Wednesday that the direct payments were likely to be $600 to $700 per person, about half the size of the checks included in the $2.2 trillion stimulus law enacted in March, which Democrats and some Republicans had pushed to replicate or exceed.
“Right now we’re going to do our best to get the $1,200, but this is a good start,” said Senator Bernie Sanders, the Vermont independent who joined forces with Senator Josh Hawley, Republican of Missouri, to lobby for the inclusion of the payments.
Senator Rand Paul, Republican of Kentucky and one of the fiercest opponents of government spending, said on Wednesday that he “will make a point to let people know that they’re giving away money they don’t have” but “won’t object to the time that it takes to do this.”
Negotiators were also still haggling over an expansion and extension of unemployment benefits and how long they would last. They were also discussing reinstituting federal supplemental jobless payments, which provided $600 per week until they lapsed over the summer but would likely be revived at a smaller amount. With the inclusion of another round of stimulus checks, there was some discussion that leaders would also cut the duration of the enhanced jobless payments in order to keep the measure’s overall cost below $1 trillion.
Fed Will Keep Interest Rates Near Zero
Jerome H. Powell, the Federal Reserve Chair, said Wednesday that the central bank will keep interest rates near zero to support the economy as coronavirus cases surge nationwide, adding that “a full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.”
The ongoing surge in new Covid-19 cases, both here in the United States and abroad, is particularly concerning, and the next few months are likely to be very challenging. A full economic recovery is unlikely until people are confident that it is safe to engage, re-engage in a broad range of activities. With regard to interest rates, we continue to expect it will be appropriate to maintain the current zero to one-quarter percent target range for the federal funds rate until labor market conditions have reached levels consistent with the committee’s assessment of maximum employment and inflation has risen to 2 percent, and is on track to moderately exceed 2 percent for some time. The case for fiscal policy right now is very, very strong. And I think that is widely understood, I would say now. The details of it are entirely up to Congress, but with the expiration of unemployment benefits, some of the unemployment benefits, the expiration of eviction moratoriums with the virus spreading the way it is, there’s a need for households and businesses to have fiscal support. And I do think that, again, I think that is widely understood.
Jerome H. Powell, the Federal Reserve Chair, said Wednesday that the central bank will keep interest rates near zero to support the economy as coronavirus cases surge nationwide, adding that “a full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.”CreditCredit…Al Drago for The New York Times
Jerome H. Powell, the chair of the Federal Reserve, said the economy still needs more fiscal support as virus cases continue to spike, millions remain out of work and funding has lapsed for several programs that were helping households and businesses stay afloat.
“The case for fiscal policy right now is very, very strong and I think that’s widely understood,” Mr. Powell said on Wednesday, speaking after the Fed’s final policy meeting of the year.
“Now that we can kind of see the light at the end of the tunnel, it would be bad to see people losing their business, their life’s work, even generations’ worth of work,” because they could not hold on for a few more months.
Mr. Powell has carefully, but consistently, urged Congress to provide more financial help to businesses and families that have been struggling amid the pandemic while promising to use all of the Fed’s tools to help cushion the economy.
He also downplayed concerns about the debt and the deficit — which many Republican lawmakers have cited as a reason to forego another large spending package — saying now was not the time to be worried about spending borrowed money.
“From my way of thinking the time to focus on that is when the economy is strong, unemployment is low and taxes are pouring in and there’s room to get on a sustainable path because the economy is doing well,” he said.
The Fed has spent much of the year trying to keep the economy from collapsing — slashing rates to near-zero and rolling out programs to help keep markets functioning and credit flowing to households, businesses and municipalities. The Fed left interest rates at near-zero on Wednesday and committed to buying $120 billion worth of government-backed bonds per month for the foreseeable future.
The central bank formally tied those purchases to its twin goals of maximum employment and stable inflation, saying they would continue at their current pace “until substantial further progress has been made toward the committee’s maximum employment and price stability goals.”
Mr. Powell said the Fed’s aim was to “ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete.”
Credit…New Mexico Office of the Governor, via Associated Press
With Congress wrangling for months over aid proposals, New Mexico has stepped in and begun distributing one-time payments of $1,200 each to about 130,000 unemployed residents to help ease persistent economic hardship in the state.
The payments are going to people who qualify for unemployment benefits or whose benefits have expired. Democrats and Republicans in the State Legislature came together in a special session in late November to support the payments as part of a $330 million relief package.
Gov. Michelle Lujan Grisham, a Democrat, commended the bipartisan action in a statement after the legislation was approved, saying that the payments were needed because “the economic pain caused by the spread of the virus is felt in every corner of New Mexico.”
The downturn has weighed heavily on industries like tourism and oil production that are important in New Mexico, one of the country’s least wealthy states. In Albuquerque, the state’s largest city, a similar distribution of $2,000 checks ran out of funds in nine hours, after thousands more people applied for the relief than the program could accommodate.
The unemployment rate in New Mexico was 8.1 percent in October, compared with 4.8 percent in the same month a year earlier. Nationally, the rate was 6.7 percent in November.
Most of the money for the payments comes from funds allocated to New Mexico, but not yet spent, under the CARES Act, the federal stimulus legislation passed as the pandemic’s first wave surged in the spring. The state has until Dec. 30 to spend those funds.
Tyson Foods has fired seven workers accused of being involved in a betting pool over how many employees would get the coronavirus, the company said Wednesday. The son of a meatpacking worker who died in April filed a suit claiming that the manager of the Waterloo, Iowa, pork plant organized a “cash buy-in, winner take all” betting pool. In all, about 1,000 workers at the plant — about a third of the work force — tested positive for the virus. Tyson had hired the law firm Covington & Burling to conduct an independent investigation of the matter, led by Eric H. Holder Jr., the former U.S. attorney general.
The National Retail Federation, an industry trade group, said retail workers should be prioritized for a coronavirus vaccine, citing their frontline work in stores, distribution centers, restaurants and delivery services. The request was made in a letter sent on Wednesday to the Advisory Committee on Immunization Practices, a panel of independent experts advising the Centers for Disease Control and Prevention on how to distribute the vaccines. The trade group estimated that the retail industry employs 32 million workers.
Ten state attorneys general on Wednesday accused Google of illegally abusing its monopoly over the technology that delivers ads online. The state prosecutors said that Google overcharged publishers for the ads it showed across the web and edged out rivals who tried to challenge the company’s dominance. They also said that Google had reached an agreement with Facebook to limit the social network’s own efforts to compete with Google for ad dollars. Google said the suit was “baseless” and that it would fight the case.
Domino’s Pizza said this week that it would pay bonuses of up to $1,200 to more than 11,500 hourly workers in December. The bonuses will total more than $9.6 million, the pizza chain said. Earlier this year, Domino’s paid a bonus to frontline workers at its corporate stores and supply chain centers.
By: Ella Koeze·Source: Refinitiv
A surprisingly dour report on retail sales took some of the enthusiasm out of the stock markets on Wednesday. The S&P 500 rose 0.2 percent after dipping into negative territory multiple times. The Stoxx Europe 600 index and the FTSE 100 in Britain were both about 0.8 percent higher.
Before the report showing that retail sales fell 1.1 percent in November, markets had been bolstered by signs of progress toward an economic stimulus package in Washington and a Purchasing Managers Index report offering a positive outlook on the European economy. The manufacturing index reached 56.6 points, up from 55.3 in November, and the composite output index hit 49.8 points, from 45.3 last month.
“The data hint at the economy close to stabilizing after having plunged back into a severe decline in November amid renewed Covid-19 lockdown measures,” said Chris Williamson, the chief business economist at IHS Markit, which compiles the reports.
Later on Wednesday, the Federal Reserve left rates near-zero at their December meeting and tied bond buying to their employment and price goals.
U.S. lawmakers held talks late Tuesday seeking an agreement on a pandemic stimulus bill ahead of a Friday deadline. Senator Mitch McConnell, the majority leader, said afterward that “we’re making significant progress,” and Speaker Nancy Pelosi offered a similar appraisal. On the table is a package of funding to support unemployed workers and troubled businesses, as well as an omnibus spending bill to keep government money flowing.
Credit…Jim Watson/Agence France-Presse — Getty Images
Massachusetts regulators charged the stock-trading app Robinhood on Wednesday with aggressively courting and manipulating inexperienced investors and then failing to protect them.
The enforcement action is the latest headache for Robinhood, whose popularity has soared with a new generation of day traders. The company has faced blowback over huge losses run up by inexperienced investors who say it provided no guardrails or support for them.
In the complaint, the Massachusetts secretary of the commonwealth, William F. Galvin, said that the online brokerage firm focused on signing up young traders with perks like free shares, and then used “gamification” marketing techniques to persuade them to trade often. Many of these investors were allowed to trade risky options without proper screening, the filing said.
Customers of Robinhood tend to trade the riskiest products more often than people at other retail brokerage firms and at the fastest pace, The New York Times has reported. The company’s business model is geared toward encouraging more trading: Robinhood makes money from “payment for order flow,” in which Wall Street firms pay per trade for the privilege of buying or selling securities on customers’ behalf.
A representative for Robinhood defended the company’s policies, saying in a statement that it did not make investment recommendations. “We disagree with the allegations in the complaint by the Massachusetts Securities Division and intend to defend the company vigorously,” the statement said.
The representative added that it had added safeguards and educational offerings to help better inform customers about options trading.
Mr. Galvin also criticized technological outages on the app, which customers have said cost them money when they were unable to gain access to their accounts at crucial moments in market trading.
“Although successful in rapidly expanding its customer base, Robinhood failed to take adequate steps to set up internal controls to protect both its customers and its platform,” the complaint read.
The enforcement action was made under a fiduciary standard that Massachusetts adopted this year, which requires broker-dealers to act in their clients’ best interests.
Mr. Galvin’s office is seeking an unspecified fine and a requirement that Robinhood alter its policies for options trading and submit to a review of its technological infrastructure.
The enforcement move comes as Robinhood is preparing a potential initial public offering, seizing on its popularity and stock investors’ hunger for shares of fast-growing technology companies. The brokerage firm has hired Goldman Sachs as an adviser, according to two people with knowledge of the matter.
Moët Hennessy, the premium spirits arm of the French luxury giant LVMH Moët Hennessy Louis Vuitton, is taking a stake in WhistlePig in a bet that it can make typically American rye whiskey a global hit, the DealBook newsletter reports.
It’s the second American whiskey brand that Moët Hennessy has invested in, after a 2017 investment in Woodinville Whiskey, which is produced in Washington State. Terms of the deal were not disclosed.
WhistlePig ages its whiskey in Vermont oak, and its 15-year aged whiskey sells for more than $200 a bottle. The company was founded by Wilco Faessen, now a senior banker at Evercore, and Raj Bhakta, an entrepreneur and onetime “Apprentice” contestant.
Mr. Bhakta sold his shares in the company when Byron Trott’s investment firm, BDT Capital, took a minority stake last year. BDT will keep its stake following the deal, in which no investors cashed out. The deal with Moët Hennessy does not include a path to an outright sale, Mr. Faessen said.
Mr. Faessen said that formal talks about a partnership began in January, and the pandemic did not alter the deal besides lengthening the time it took to work through the details. Sales for both WhistlePig and Moët Hennessy came under pressure as bars and restaurants shut, but the companies also noticed a shift to premium liquor during lockdowns.
“It’s just easier to treat yourself when you’re stuck at home and sick of doing Zoom meetings,” said Jeff Kozak, WhistlePig’s chief executive, who noted that sales were up this year.
Rye whiskey is consumed mostly in the United States, but Moët Hennessy thinks it can entice drinkers elsewhere. Connoisseurs who want to “expand their repertoire in the category of high-end whiskies” have recently turned to Japanese brands, said Philippe Schaus, the Moët Hennessy chief executive, “and we don’t see why we will not succeed to bring them to high-end American whiskeys.”
Credit…Philip Cheung for The New York Times
The economic upheaval caused by the pandemic is making this a very unusual holiday season.
Millions have lost jobs and face the imminent loss of federal unemployment benefits. For many, plans for travel and shopping outings have been upended because of health restrictions or financial hardship. For those with the opportunity to take on extra hours or seasonal work, there may be an incentive to do so.
How are you celebrating differently this year? What economic or personal choices have you had to make in observing the holidays? Are you cutting back on meals — or adjusting your charitable giving? We’d like to know about your situation and your plans.
We may reach out to you individually to chat some more about these questions, so please let us know if you’d be willing to share additional details with us.
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