Category Archives: US economy

SVB collapse may be start of ‘slow rolling crisis’, warns BlackRock boss

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Larry Fink tells investors more ‘shutdowns and seizures’ in US possible and predicts inflation and interest rates to rise

The collapse of Silicon Valley Bank could just be the start of “a “slow rolling crisis” in the US financial system with “more seizures and shutdowns coming”, the chief executive of the world’s largest asset manager has warned.

The CEO of BlackRock, Larry Fink, also predicted in a letter to investors and company bosses that inflation would persist and rates continue to rise, trends that both contributed to SVB’s collapse.

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‘Banking system is safe’: Joe Biden reassures markets in address on Silicon Valley Bank collapse – live updates

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Failure of bank last weak sparked fears of financial crisis, as US government announces plans to stabilize situation

Have you been affected by the collapse of Silicon Valley Bank?

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Yellen rejects Silicon Valley Bank bailout as regulators auction assets

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US treasury secretary says Biden administration is working closely with regulators to help depositors as fears of banking crisis rise

The US treasury secretary, Janet Yellen, said on Sunday there would be no bailout for Silicon Valley Bank, which collapsed this week, raising fears of a crisis, but also said the Biden administration was working with regulators to help depositors hit by the fall of SVB.

Yellen said conditions did not match the 2008 financial crisis, when the collapse of large institutions threatened to bring down the global financial system. She also sought to calm fears the $23tn US banking system could be affected by the fall of a regional bank.

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Silicon Valley Bank fails in largest bank collapse since 2008 crisis

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US regulators seize SVB’s assets after a run on the bank, as global institutions monitor situation closely

US regulators rushed to seize the assets of top tech lender Silicon Valley Bank on Friday after a run on the bank, marking the largest failure of such an institution since the height of the financial crisis more than a decade ago.

Silicon Valley Bank (SVB), the nation’s 16th largest bank, failed after depositors – mostly technology workers and venture capital-backed companies – hurried to withdraw their money this week as anxiety over the bank’s situation spread.

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US Federal Reserve’s key inflation gauge ticks up in January

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Consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to December

The Federal Reserve’s preferred inflation gauge ticked higher in January, a sign that price pressures remain entrenched in the US economy and could lead the Fed to keep raising interest rates well into this year.

Friday’s report from the commerce department showed that consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to December. On a year-over-year basis, prices rose 5.4%, up from a 5.3% annual increase in December.

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US could default this summer unless $31.4tn debt ceiling is raised, CBO warns

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Historic federal debt default could occur before July, cautions non-partisan agency

The Congressional Budget Office (CBO) on Wednesday said the US treasury department will exhaust its ability to pay all its bills sometime between July and September, unless the current $31.4tn cap on borrowing is raised or suspended.

In a report issued alongside its annual budget outlook, the non-partisan CBO cautioned that a historic federal debt default could occur before July if revenue flowing into the treasury in April – when most Americans typically submit annual income tax filings – lags expectations.

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‘Pride is coming back’: Biden touts victories on jobs and climate in State of the Union address

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President hopes to combat widespread sense of pessimism and to tout his accomplishments from first two years in office

Joe Biden called on Republicans to help him to “finish the job” of rebuilding the economy and restoring faith in American democracy in his second State of the Union address on Tuesday night, as he made an unfettered call to action on police reform, gun control and the climate crisis.

Addressing a divided Congress for the first time, an optimistic Biden made the case that the nation was stronger and more stable than when he assumed office two years ago.

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US heads for debt-ceiling standoff as House Republicans refuse to budge

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Hard-right Republicans say no to ‘clean’ debt ceiling increase, raising dire possibility of US defaulting on financial obligations

The US economy could be headed for a crisis manufactured by a handful of House Republicans.

The treasury secretary, Janet Yellen, informed congressional leaders on Thursday that the US has hit its debt ceiling, which limits the amount of money that the government can borrow to pay all of its bills. Yellen urged Congress to work as quickly as possible to raise the debt ceiling and prevent the US from defaulting on any of its financial obligations, which would have catastrophic consequences.

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US hits borrowing limit, kicking off fight between Republicans and Democrats – live

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Urban Institute economist Len Burman has a reality check for those in Congress flirting with not raising the debt ceiling.

A default could undermine the America’s pre-eminence in global markets, where the dollar is used as many countries’ dominant reserve currency. But more immediately, it would actually force Washington to spend even more, because a default would drive up interest rates, forcing the government to shell out more money to owners of its trillions of dollars in debt:

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US government hits debt ceiling as Biden and House Republicans face off

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Treasury secretary says department will take ‘extraordinary measures’ to skirt default while also urging Congress to act

The US government has hit the ceiling on its debt, brushing up against its legal limit of $38.381tn and piling pressure on Congress to approve an increase to avoid a debt default in the coming months that would send a shock wave through the global economy.

In a letter to congressional leaders, the treasury secretary, Janet Yellen, said it would begin taking “extraordinary measures” to make the government’s cash on hand last until Congress acts. These include a “debt issuance suspension period” lasting from today until 5 June, as well as suspending investments into two government employee retirement funds.

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JP Morgan chief says US should not be ‘playing games’ with debt ceiling

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Jamie Dimon warns that US creditworthiness should be ‘sacrosanct’ as country’s debt races toward $31.4tn limit

The US should not be “playing games” with the debt ceiling, the JP Morgan chief executive, Jamie Dimon, warned warring US political factions on Thursday as a heated row over the federal borrowing limit reached a crisis point.

“We should never question the creditworthiness of the US government. That is sacrosanct and it should never happen,” Dimon said on Thursday in an interview on CNBC. “This is not something we should be playing games with at all.”

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Microsoft to cut 10,000 jobs in March as tech firms, including Amazon, thin ranks

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Sector reacts to post-pandemic shift in digital spending and gloomy economic outlook for 2023

Microsoft is cutting 10,000 jobs as it cited a post-pandemic shift in digital spending habits and weakness in the global economy.

The tech group joined a list of US peers making extensive job cuts, including Facebook owner Meta, Amazon, and business software-maker Salesforce, who have scaled back on workforce expansions stoked by a pandemic-related boom in demand for their services and products that have lost momentum.

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Treasury secretary: US to reach debt ceiling on Thursday

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Janet Yellen told Congress that ‘extraordinary measures’ would be taken to avoid default until legislation is passed to raise ceiling

Janet Yellen, the US treasury secretary, has notified Congress that the US is projected to reach its debt limit on Thursday, 19 January, and will then resort to “extraordinary measures” to avoid default.

In a letter to House and Senate leaders on Friday, Yellen said her actions will buy time until Congress can pass legislation that will either raise the nation’s $31.4tn borrowing authority or suspend it again for a period of time.

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World Bank walking tightrope as it mulls increased lending to poorest

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Campaigners say bank should rush to rescue countries facing recession – but can it do so without resulting in mass debt write-offs?

Not since the early 1990s has the world faced such a period of low growth.

Discounting the havoc caused by the financial crash of 2008 and the initial impact of the Covid-19 pandemic, the World Bank says that by the end of 2024 it will have been 30 years since the global economy grew at an average of less than 2% a year.

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Goldman Sachs bankers brace for hefty cut to bonuses

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Bonus pool could be slashed by up to 40%, in possibly the lender’s largest cut to payouts since the financial crisis

Goldman Sachs bankers are reportedly at risk of having their bonus pool slashed by up to 40%, in what could be the lender’s largest cut to payouts since the 2008 financial crisis.

The bank is still in the process of deciding the size of its bonus pools for 2022, but the prospective cut could mean its 3,000 investment bankers endure the most significant drop in variable pay among their peers, according to the Financial Times, which first reported the news.

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‘We’re really worried’: US supermarket mega-merger raises mass layoff fears

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Kroger and Albertsons seek deal through FTC but employees say previous merger experience has them deeply concerned

Thousands of workers at two of America’s biggest supermarkets are warning of potential mass layoffs as the giant firms push for a merger.

Kroger, the second largest grocery chain in the US, and Albertsons, the fourth largest, are pushing for a merger through the Federal Trade Commission, which is reviewing the proposal.

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Federal Reserve to slow interest rate rises as it tackles 40-year inflation high

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Jerome Powell warned there ‘was more ground to cover’ and rates would stay higher for an extended period

The Federal Reserve chair, Jerome Powell, indicated the central bank is preparing to slow the pace of interest rate rises as it tackles a 40-year high in inflation. But Powell warned there “was more ground to cover” and rates would stay higher for an extended period.

In a speech to the Brookings Institution, Powell said that the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point, after four straight three-quarter point hikes.

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‘It’s killing us all slowly’: how the night shift is taking a toll on US workers

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Millions of workers in the US work throughout the night, and the impacts can be profound on their health

Roger Reinhardt works third shift at a beer production facility in Michigan from 10pm-8am, four days a week. He initially started working nights because it was the only shift available when he started working but he has continued doing it for the extra pay.

But is not not easy.

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US inflation rate cools slightly as consumer prices rise 7.7% in October

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Bureau of Labor Statistics data represents decrease from September but core inflation rate remains high

Prices of goods and services in the US were up 7.7% in October compared with the same time last year, a sign that inflation is slowly starting to cool after reaching decades-high records over the last few months.

The US Bureau of Labor Statistics reported on Thursday that in October, the consumer price index showed a 7.7% rise in prices over the last 12 months, a 0.5 percentage-point decrease from September, which saw a rate of 8.2%. The October inflation rate is the lowest since January, when rates rose to 7.5%.

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Wall Street surges and dollar tumbles as US inflation rate drops to 7.7% – business live

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Dollar slides and stocks rally in New York on hopes that the Federal Reserve will slow its interest rate rises

The cost of living crisis is driving UK food banks to “breaking point” with almost 1.3m emergency parcels given to people over just six months.

The Trussell Trust charity has said families face record-breaking levels of need, with one in five individuals referred to its network now coming from working households.

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