Is Fed Planning Escape Route?
http://feedproxy.google.com/~r/DrudgeReportFeed/~3/uPPszlHGspA/  Connect the dots  Economists and investors will scour the Feds policy statement and economic projections later today, looking for small tweaks that could have big implications. The central bank will announce its latest moves at 2 p.m. Eastern, followed by a highly anticipated news conference with Chair Jay Powell. Any signs  however subtle  that recent economic data have altered the Feds cheap-money policies would mark a major turning point for the markets. They are not running for the exits, but they are at least planning the escape route, said Priya Misra of T.D. Securities. Rock-bottom interest rates and $120 billion in monthly bond purchases have propped up the economy and stock markets, and several Fed officials have said that they would like to soon discuss plans about how to start removing this support, even if that is months  or years  in the future. Economists at Goldman Sachs think a formal announcement of a taper in bond purchases could come in December, but Powell may drop hints about it at todays news conference. His comments about higher-than-expected inflation numbers will also be closely monitored for any sign that he is wavering about the spike being temporary. That year, the Fed might raise interest rates for the first time in years. Along with updated economic forecasts, a new dot plot of interest rate projections by Fed officials is expected to show a rate increase penciled in for 2023, a distant but important acceleration of monetary tightening. The previous plot, published in March, suggested no rate increases until at least 2024. For more on whats at stake today, read Jeanna Smialeks full preview of the Feds meeting. HERES WHATS HAPPENING  The U.S. nears 600,000 Covid-19 deaths as states continue to reopen. The record, the highest known death toll from the pandemic in the world, comes as states like New York and California lift most virus restrictions. President Bidens plan to pause new drilling leases on public land is set back. A federal judge in Louisiana granted a preliminary injunction against the presidents move, saying that only Congress could halt the issuance of new leases. It is a major roadblock to Bidens climate agenda and an early victory for 13 Republican-led states challenging his efforts. The E.U. blocks 10 big banks from huge bond sales. Lenders that had been involved in market-rigging scandals, including Citigroup and JPMorgan Chase, were barred from participating in auctions of bonds issued to support the blocs 800 billion euro ($970 billion) recovery program, The Financial Times reports. MacKenzie Scott gives away another $2.74 billion. The billionaire philanthropist announced a new round of grants to 286 organizations. She has now donated over $8 billion over the past year  but thanks to Amazons rising stock price, her net worth keeps climbing. (Its currently about $60 billion.) Over all, charitable giving in the U.S. rose to $471.4 billion last year, a record. Lordstown says its back on track. A day after ousting its C.E.O. and C.F.O., the electric truck maker said it was set to start producing vehicles in September, even without additional money. The optimistic news  which contradicted what it disclosed in a securities filing last week  was light on details. A short seller takes on DraftKings  Hindenburg Research, the hedge fund that has taken on a number of companies that went public via the shell corporations known as SPACs, announced the latest company it is betting against. Its DraftKings, the site that helped make fantasy sports popular  and which Hindenburg accuses of secretly profiting from questionable gambling operations. Hindenburg raised concerns about DraftKings valuation and business practices:  The hedge fund noted that the company traded at an extremely rich valuation equal to its four next-biggest rivals combined. More notably, it accused DraftKings of having exposure to black or unregulated markets, thanks to its merger last year with SBTech, a sports-betting technology company. It also questioned DraftKings heavy spending on promotion to win new customers, with the company continuing to run up losses. DraftKings is among the biggest SPAC companies that Hindenburg has targeted. The hedge fund has previously taken aim at the electric vehicle makers Nikola and Lordstown and the health insurer Clover Health. DraftKings, however, is more of a household name, counting the N.B.A. legend Michael Jordan and the supermodel Gisele Bndchen as advisers. The company hit back. A DraftKings spokesman told DealBook that the report was written by someone who is short on DraftKings stock with an incentive to drive down the share price and that the company was comfortable with SBTech after reviewing its business before their merger. We need all hands on deck as we take on some of the biggest monopolies in the world.   Senator Amy Klobuchar, Democrat of Minnesota, on President Bidens naming of Lina Khan as the Federal Trade Commissions new leader. The selection of Khan, 32, who shot to prominence as a law student for her tough views on reining in Amazon, is the latest sign of the White Houses plans to take on Big Tech. The hidden benefit to Amazon of high worker turnover  Amazon, which is on pace to become the nations largest employer in the next year or two, loses about 3 percent of its workers a week, adding up to as many as 1.5 million employees a year. That astounding turnover rate, almost double the industry average, is one of the key findings of an investigation by The Times. It got us thinking about how it could make Amazon  and other large companies  more difficult to unionize. The pandemic strained Amazons H.R. systems. The Timess investigation, which involved talking to 200 Amazon workers, suggests that at least some of the turnover, or perhaps a lot of it, is by design. Amazon told The Times that it has had personnel issues in the past year and has worked hard to resolve them. The company said the unhappy employees were outliers. After all, last month, Amazon workers at a warehouse in Alabama voted overwhelmingly to reject forming a union. That union outcome and high worker turnover could be more connected than they appear. Amazon is well aware that its constant churning of workers presents a formidable obstacle to any attempts for employees to organize into a union, Stuart Appelbaum, the president of the retail worker union that led the organizing effort in Alabama, told DealBook. Developing relationships with employees over time is hard to do if there is constant flux, he said. A union would raise the cost of firing and hiring workers, so it is in Amazons interest to encourage constant turnover, he added. But economists have struggled to draw conclusions about worker turnover and unions. Worker tenures in America have been dropping since the early 1980s, as has union participation. Its hard to tell whether one causes the other. But if a drop in unionization stems from companies encouraging  or not discouraging  more turnover, then unions may face an even higher hurdle than they think in regaining their hold of the American workforce. Financial emancipation in the digital age  On June 19, 1865  a day now commemorated as Juneteenth  federal troops arrived in Galveston, Texas, to end slavery, more than two years after President Abraham Lincoln issued the Emancipation Proclamation. It is hard to miss or mistake the link between Juneteenth and today, Representative Maxine Waters, the chair of the House Financial Services Committee, said yesterday at a Georgetown Law conference on banking and the digital economy held in honor of Juneteenth. Freedom wasnt immediate then and remains a work in progress, Waters argued, with much to be done to eliminate the racial wealth gap that results from a history of financial exclusion. New technology could help. Our mission is to fight systemic racism all the way to the moon and back, she vowed, referencing a popular cryptocurrency meme and calling on the blockchain industry to make good on promises to democratize finance and diversify its ranks. Access to capital has been an enormous challenge, said Senator Mark Warner of Virginia, a former venture capitalist. He said that Black entrepreneurs had less of a runway than he did, which he hopes to change. Warner, Waters and Sherrod Brown, the Senate Banking Committee chair, joined the conference after a White House event where Vice President Kamala Harris announced that the Treasury Department was giving $1.25 billion to Community Development Financial Institutions, nearly half of which are headquartered in communities of color. Disparity in access falls along geographic and racial lines. About 16 percent of the U.S. population lives in minority-majority areas that receive only about 9 percent of investment from mainstream financial institutions. This is part of the reason the racial wealth gap persists, Treasury Secretary Janet Yellen said at the White House event, calling access to credit the root of many long-term structural problems in our economy.  The Treasurys billion-dollar grant, which will be split among more than 800 institutions, is a welcome start, the Georgetown Law professor Chris Brummer, who convened the Juneteenth event, told DealBook. The next step, he said, is ensuring minority banks not only survive but also thrive in an economy that has gone digital in the wake of the pandemic.  THE SPEED READ  Deals  I.P.O.s in the United States have raised $171 billion so far this year, already surpassing last years annual record. (Reuters)  Platinum Equity agreed to buy the textbook publisher McGraw Hill from Apollo Global Management for about $4.5 billion, including debt. (WSJ)  The latest roadblock for Nvidias proposed $40 billion takeover of Arm: European summer vacations. (The Information)  Politics and policy  Cyberweapons, not nuclear arms, are now a primary focus of high-profile international summits. (NYT)  Major publishers are wary of selling a book by Donald Trump, even though its likely to be a best seller. (Politico)  Tech  Airbnb Is Spending Millions of Dollars to Make Nightmares Go Away (Bloomberg Businessweek)  Tim Berners-Lee is auctioning a package of files with his original source code for the web as a nonfungible token. (FT)  Best of the rest  The famed brokerage E.F. Hutton  or at least its name  is back. (Bloomberg)  A charity will buy $278 million in unpaid medical bills owed by low-income patients in the U.S. (WSJ)  The Girl Scouts are stuck with 15 million boxes of unsold cookies. (NYT)  Wed like your feedback! Please email thoughts and suggestions to [email protected]. appeared first on New York Times. Share this: Twitter  Facebook