Fed reverse repo volume sparks worries U.S. short-term rates could go below zero Financial institutions flush with cash have flocked to the Federal Reserve's reverse repurchase (RRP) facility, loaning the U.S. central bank money at 0% interest and raising concerns in the bond market that key short-term interest rates could actually fall below zero.
Some businesses ban vaccinated customers as fertility misinformation goes viral "You can't fact-check someone's personal experience," said one expert. "With Instagram stories, people share their testimony, and the first round of it feels so intimate and immediate."
Looks like we are starting to see some cones that inflation is not likely transitory, and if not, needs to have rates start moving north.
Inflation Data Test Fed's Strategy and Outlook Policy makers expect stronger inflationary pressures to fade before the labor market recovers. More economists are questioning that view.
Bad news. Cyberattack forces closure of largest U.S. refined-fuel pipeline Colonial Pipeline carries roughly 45% of gasoline and diesel fuel consumed on the East Coast
Copper is 'the new oil' and low inventories could push it to $20,000 per ton, analysts say The world risks "running out of copper" amid widening supply and demand deficits, according to Bank of America, and prices could hit $20,000 per metric ton by 2025.
Will COVID-19 vaccines protect you against variants? 9 questions about variants, answered. How coronavirus variants are affecting vaccines, treatments, and our attempts to return to normal.
The right thing to do is to release our excess stockpile to help other nations. Also, to fix bottlenecks where they exist as much as possible. It is disingenuous to waive a patent as a symbolic gesture if it is known it will do nothing while many people would prefer to get the vaccine.
The U.S. is supporting discussions about waiving vaccine patent rights in order to help increase vaccine production globally as a new wave of coronavirus cases, particularly in India, is causing concern.
U.S. Trade Representative Katherine Tai said in a statement Wednesday the country would engage in text-based negotiations with the World Trade Organization.
But Tai also tempered expectations, noting that, "Negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved."
The negotiations center around the Trade-Related Aspects of Intellectual Property Rights, known informally as the TRIPS Agreement. Both India and South Africa pushed for waivers in October.
Many health and policy experts, however, believe the move, while unprecedented, is unlikely to have any real impact.
"I don't see what this move gets us in terms of getting more vaccines," said Craig Garthwaite, director of health care at the Kellogg School of Management at Northwestern University.
Garthwaite told Yahoo Finance it appears more of a symbolic gesture to signal that the U.S. is taking the surge in India seriously.
But if the Biden administration were taking the crisis more seriously, it would have already sent tens of millions of stockpiled AstraZeneca (AZN) doses to India, he said.
The Biden administration has faced stark criticism over its hoarding of AstraZeneca doses, especially after Chief White House Medical Adviser Dr. Anthony Fauci said the U.S. would not need them.
One vaccine expert, Dr. Peter Hotez at Baylor College of Medicine, said the U.S. doses would be a "drop in the bucket" of what India needs.
Manufacturing bottleneck
Experts like bioethicist NYU Langone's Dr. Arthur Caplan say the patent waivers are no more than a red herring, "because no one is going to get a vaccine by next month."
The issue hasn't been the technology, but rather the manufacturing process, Caplan told Yahoo Finance. So a patent waiver and technology transfer is useless, he added.
The CEO of industry trade group BIO said in a statement that the effort is pointless, and the U.S. should instead focus on ramping up to provide to the world.
"Handing needy countries a recipe book without the ingredients, safeguards, and sizable workforce needed will not help people waiting for the vaccine. Handing them the blueprint to construct a kitchen that - in optimal conditions - can take a year to build will not help us stop the emergence of dangerous new COVID variants," Dr. Michelle McMurry-Heath said.
Pfizer (PFE) CEO Albert Bourla recently told Yahoo Finance that the process to manufacture the vaccine involves 19 countries already — signifying a global effort for sourcing and production— for a technology that didn't exist at scale before the pandemic.
"Right now, the bottleneck is related with the ability to ramp up manufacturing at the levels that the demand is. The issues are with raw materials that are in limited supply. These are highly specialized raw materials ... It's not simple chemicals," Bourla said.
Which is why, even if a company were to get the technology and try to produce more vaccines, they wouldn't be able to sustain regular production, and it would take them at least two years to scale up, Bourla said.
Garthwaite echoed Bourla's comments, noting that making a vaccine, "is not like trying to make a cheesecake."
Meanwhile, Moderna (MRNA) had already voluntarily waived its patent enforcement in October, with no reports of takers on the offer.
Even if there were, CEO Stéphane Bancel told Yahoo Finance that the company doesn't have resources to allocate to bring in a new partner.
"Because we are still a small company, you know Moderna is 1,300 people ... the tech transfer would take resources away this year, to prepare for next year if we were to outsource the technology. That will limit our ability to make as many doses as we can this year," Bancel said.
People wearing face shields and masks as a precaution against the coronavirus as they wait to receive COVID-19 vaccine in Mumbai, India, Thursday, April 29, 2021. India set another global record in new virus cases Thursday, as millions of people in one state cast votes despite rising infections and the country geared up to open its vaccination rollout to all adults amid snags. (AP Photo/Rajanish Kakade)
IP is the holy grail
But the biggest questions circulating have been about what it means for future intellectual property protections and how that could affect the U.S.'s standing in the biotechnology sector.
"The holy grail of the U.S. is IP," said Raymond James analyst Chris Meekins.
Meekins told Yahoo Finance Wednesday that the unprecedented move raises questions for something that "has always been a lockbox for good reason."
He noted Tai's comment on the pace of negotiations was important, because the idea that a waiver would be "game-changing action for India or South America in the next three months is wishful thinking."
Caplan said that it's also possible that negotiations could sour if trade partners ask for things the U.S. and pharma companies are not willing to give. On the other hand, a limit to only use this strategy for pandemics, and to set a reimbursement rate of some sort, could make it more appealing for the U.S., he added.
"It's ludicrous to try and protect patents in a worldwide pandemic," Caplan said.
Pretty soon this starts to paint the picture of "we are coming into full employment and can start raising interest rates a little.". Once that happens the market will take a serious cooling off. Crazy dance to play.
New weekly jobless claims set a new pandemic-era low last week, falling below 500,000 for the first time since the start of the pandemic, with initial filings trending decidedly lower in recent weeks amid the pick-up in economic activity.
The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended May 1: 498,000 vs. 538,000 expected and 553,000 during the prior week
Continuing claims, week ended April 24: 3.690 million vs. 3.620 million expected and 3.660 million during the prior week
Consensus economists expected initial unemployment filings to hold below 600,000 for a fourth straight week, dipping to the lowest level since mid-March 2020. Initial filings have slid over the course of the past year, pulling back sharply from a pandemic-era high of more than 6 million. New claims during the comparable week last year totaled nearly 3 million, but have held below 1 million since August 2020 as layoffs and other separations slowed.
But while new filings decline, an elevated number of Americans remain unemployed. More than 16.5 million Americans were still receiving unemployment benefits across all programs as of mid-April, for a decrease of nearly 1 million from the previous week. That included more than 12 million Americans on the federal Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation program, which both expire in September. And based on the Labor Department's monthly non-farm payrolls report, the U.S. economy is still more than 8 million jobs short of its pre-pandemic levels from February 2020.
On Friday, the Labor Department will give an updated snapshot of the labor market in April's monthly jobs report. Economists expect to see non-farm payrolls rose by a staggering 1 million during the month, which would mark the most since August. The unemployment rate likely fell to a pandemic-era low of 5.8% from 6.0% in March, but would still remain well above the pre-pandemic level of 3.5%. During the survey week for the monthly jobs report around the 12th of the month, initial jobless claims had dipped to 566,000.
On Wednesday, ADP's closely watched monthly report on private payrolls showed 742,000 jobs were added back in April. While below consensus estimates, the figure still marked the greatest number of jobs added since September. And ADP's numbers have typically undershot the payrolls totals in the Labor Department's monthly jobs report over the past year, suggesting some upside for Friday's report.
This post will be updated with the results of the Labor Department's weekly jobless claims report Thursday morning at 8:30 a.m. ET. Check back for updates.
Treasury Secretary Janet Yellen is calling on the wealthy to pay their fair share of taxes and to close the tax gap by improving tax compliance and audits.
"It's really shocking and distressing to see estimates suggesting that the gap between what we're collecting in taxes on current tax and what we should be collecting — if everybody were paying for taxes that are due — that amounts to over $7 trillion over a decade," Yellen said during the Atlantic's Future Economy on Tuesday. "We're trying to make meaningful steps to close that gap."
The tax gap that would accumulate between 2020 and 2029 is estimated to be $7.5 trillion, according to a 2019 paper by former Treasury Secretary Larry Summers and economist Natasha Sarin. The study found that the IRS could shrink the tax gap by around 15% in the next decade and generate over $1 trillion in additional revenue by conducting more audits that specifically target those at the top.
Secretary of the Treasury Janet Yellen and Vice President Kamala Harris participate in a virtual roundtable with participants from local Black Chambers of Commerce from across the country to discuss the importance of passing the American Rescue Plan in the South Court Auditorium on the White House complex on Friday, Feb 05, 2021 in Washington, DC. (Photo by Jabin Botsford/The Washington Post via Getty Images)
Recently, the Internal Revenue Service Commissioner Charles Rettig put an even bigger price tag on it, saying that the tax gap "could approach and possibly exceed $1 trillion per year," Rettig added.
In his American Families Plan, Biden allocates $80 billion to the IRS for enforcement with the aim to raise $700 billion in revenue over 10 years by minimizing the tax gap. The increased revenue would come on top of raising taxes for corporations and wealthy individuals in an effort to make them "contribute their fair share," Yellen said.
'A fairer tax code in exchange for a higher quality of life'
Biden's call for IRS funding comes after years of budget and staff cuts for the agency. Since 2010, the IRS has lost 21,000 employees and its budget has declined around 20% when taking inflation into account. The audit staff has declined by a third during that same period, to the point that the 2019 audit rate for individuals was the lowest in over 20 years.
The $80 billion in funding would be used to overhaul technology to improve compliance as well as hire and train auditors on complex investigations of corporations, partnerships, and wealthy individuals. Banks would also have to report inflows and outflows from taxpayers' accounts, giving the IRS additional information about business revenue and expenses to better target audits
"A well-functioning tax system requires that all taxpayers pay what they owe," the Treasury Department said when the plan was unveiled. "An unfortunate characteristic of the current system, however, is an asymmetric adherence to tax law by the nature of income received…Noncompliance is concentrated at the top."
The wealthiest Americans fail to report more than a fifth of their taxable income by using sophisticated forms of tax evasion, a recent study by the National Bureau of Economic Research (NBER) found.
"A fairer tax code in exchange for a higher quality of life for most American families?" Yellen said in a statement when Biden's tax plan was unveiled. "There are some economic trade-offs that are tough calls. This is not one of them."
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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
