Overnight Finance

On The Money — Fed’s inflation tracker at fastest pace since ’82

Happy Friday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup. 

Today’s Big Deal: Inflation just keeps getting higher. We’ll also look at the Biden administration preparing banks for potential Russian sanctions and a push for antitrust legislation.  

But first, find out the name of the White House’s new cat. 

For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom.  Reach us at slane@thehill.com or @SylvanLane, afolley@thehill.com or @ArisFolley and kevers@thehill.com or @KarlMEvers.  

Let’s get to it. 

Inflation gauge hits fastest pace in 39 years

The Federal Reserve’s preferred gauge of inflation rose nearly 6 percent last year, marking the fastest rise in the closely watched index since 1982. 

  • The personal consumption expenditures (PCE) price index rose 5.8 percent annually in December and 0.4 percent between November and last month as high inflation continued to strain household budgets. 
  • Personal consumption expenditures, a measure of consumer spending, also fell 0.6 percent after four consecutive months of increases. 

The sharp rise in prices comes as the Fed plots a series of interest rate hikes, likely beginning in March, to quell a stretch of high inflation. Read more here. 

LEADING THE DAY

Biden calls for return of US manufacturing in Pittsburgh visit 

President Biden on Friday made the case for U.S. manufacturing as a way to rebuild the economy while on a visit to Pittsburgh.  

“From day one, every action I’ve taken to rebuild the economy has been guided by one principle: make it in America. Like we used to. No one knows that better than all the folks here in Pittsburgh,” he said at Carnegie Mellon University. 

Biden went to Pittsburgh to deliver remarks about the administration’s focus on strengthening supply chains, revitalizing American manufacturing and creating good-paying union jobs, including through the bipartisan infrastructure law.   

  • He touted the infrastructure law, which he signed in November, and the federal investments it will make to repair roads and bridges and in other areas, such as climate initiatives. 
  • Hours before he left the White House for the Keystone State, a bridge collapsed in Pittsburgh, and he added a stop to visit the site. He met with local officials and emergency responders, saying that the infrastructure bill is going to fix all of Pittsburgh’s vast number of bridges. 
  • The infrastructure bill will invest at least $1.6 billion in Pennsylvania’s bridges, including $327 million in fiscal year 2022 for bridge repairs in the state, the president said.  

He also promoted the economic growth seen in his first year in office, noting 6.4 million jobs were created in one year.  

And he mentioned Intel’s $20 billion investment to build chip factories, which was announced last week, and General Motors’ recent announcement that the auto giant will invest nearly $7 billion in electric vehicle manufacturing sites in Michigan. 

The Hill’s Alex Gangitano has more here. 

 

BIDEN BRIEFS BANKS

Biden administration briefs banks on possible Russian sanctions 

The Biden administration has spoken with the country’s largest banks this week about possible sanctions against Russia amid concerns over a potential Russian invasion of Ukraine. 

The talks included Citigroup, Bank of America, JP Morgan Chase and Goldman Sachs, Bloomberg News first reported, citing people familiar with the matter. Senior administration officials and members of the National Security Council (NSC) reportedly spoke with executives from the major companies. 

  • The NSC told The Hill that the administration is looking at a range of options “to deliver severe costs to the Russian economy” if Russia invades Ukraine. 
  • Biden officials have suggested that sanctions would primarily hit Russian state-owned banks and restrict exports of key supplies such as microelectronic components.   

Although most of the top banks don’t have a large presence in Russia, Biden administration officials briefed banks about their plans to ensure that sanctions don’t disrupt the global economy. 

Alex has more on the briefing here. 

IT’S APP-ENING

App company CEOs urge senators to back antitrust bill 

A coalition of tech executives are urging members of the Senate Judiciary Committee to support a bill aimed at reining in the market power of Apple and Google’s app stores. 

CEOs of 20 tech companies, including Spotify, Basecamp and Tile, wrote a letter to the committee members asking them to back the bipartisan Open Markets Act. They said that U.S. tech giants “use a vice-like grip to control developers and impose terms and conditions that undermine competition, throttle innovation, limit consumer choice, and lead to higher prices.” 

  • App developers have criticized Apple and Google over what they deem to be anticompetitive app store rules that favor the tech giants’ own services. 
  • The proposal in part would try to remedy the concerns by blocking app stores from requiring developers to use their payment system. It would also enshrine users’ rights to download apps from third-party stores.   

The antitrust proposal, co-sponsored by Sens. Amy Klobuchar (D-Minn.), Richard Blumenthal (D-Conn.) and Marsha Blackburn (R-Tenn.), is scheduled for a committee mark up on Tuesday.   

The Hill’s Rebecca Klar has more here. 

 

Good to Know

The Federal Aviation Administration (FAA) on Friday announced that it worked out a solution with Verizon and AT&T to deploy 5G towers near airports without disrupting flights.  

The FAA has previously blocked some 500 towers from activating over concerns that they would mess with aircrafts’ instruments. The agency’s most recent statement indicates that it is getting closer to resolving the 5G standoff that pitted airlines and the FAA against wireless carriers and the Federal Communications Commission.  

Here’s what else have our eye on: 

  • Apple last year reported its most profitable holiday season yet despite widespread supply shortages. 
  • Meta and TikTok have removed ads that appeared to link ADHD to obesity following inquiries from NBC News and Forbes. 
  • Bracing for the severe winter weather that will hit the East Coast beginning on Friday night, a number of governors in states like New York, Virginia, New Jersey and Maryland have already declared states of emergency for different areas of their states. 
  • Kia is recalling 410,000 vehicles because the airbags are defective and might not deploy in the event of a crash. 
  • Billionaire Republican donor Ken Langone made the maximum donation to Sen. Joe Manchin’s (D-W.Va.) PAC weeks after Manchin announced that he would oppose the Build Back Better Act. 

 

ON TAP NEXT WEEK

Tuesday

  • The House Rules Committee holds a hearing on the America Competes Act at 1 p.m. 
  • The Senate Budget Committee holds a confirmation hearing for Office of Management and Budget director nominee Shalanda Young and OMB deputy director nominee Nani Coloretti at 2:30 p.m. 
  • A Senate Commerce subcommittee holds a hearing entitled “Stopping COVID-19 Fraud and Price Gouging” at 2:30 p.m. 
  • A Senate Small Business subcommittee holds a hearing entitled “Review of SBA Entrepreneurial Development Programs and Initiatives” at 2:30 p.m. 
Office of Management and Budget acting director Shalanda Young answers questions during a Senate Budget Committee hearing to discuss President Biden's budget request for FY 2022 on Tuesday, June 8, 2020 at the U.S. Capitol in Washington, D.C.

Wednesday

  • A House Financial Services subcommittee holds a hearing entitled “Ending Homelessness: Addressing Local Challenges In Housing the Most Vulnerable” at 10 a.m. 
  • A House Energy and Commerce subcommittee holds a hearing entitled “Pandemic Profiteers: Legislation to Stop Corporate Price Gouging” at 10:30 a.m. 
  • The Brookings Institution hosts a webinar entitled “”Fintech in Black-majority communities: Addressing racial gaps, strengthening financial health and wealth.” 

Thursday 

  • The Senate Banking Committee holds a confirmation hearing for Federal Reserve vice chair of supervision nominee Sarah Bloom Raskin and governor nominees Lisa Cook and Phillip Jefferson at 10 a.m. 
  • A House Financial Services subcommittee holds a hearing entitled “Building Opportunity: Addressing the Financial Barriers to Minority and Women-Owned Businesses’ Involvement in Infrastructure Projects” at 10 a.m. 
  • The Bipartisan Policy Center hosts a discussion on economic policy with Federal Deposit Insurance Corp. Chairman Jelena McWilliams at 2 p.m. 

 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you Monday.

Tags Amy Klobuchar Joe Biden Joe Manchin Marsha Blackburn Shalanda Young

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