Business & Economy
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Business & Economy
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The Labor Department will release its consumer price index (CPI) on Tuesday, revealing monthly inflation data that could make or break the U.S. economy.
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If inflation comes in too hot, the Federal Reserve may decide to put its foot back on the gas and announce larger interest rate hikes designed at slowing down the economy and reducing demand for goods and services.
The Fed is likely wary after the Labor Department last week revised its inflation figures up for previous months. Those changes revealed that prices rose 0.1 percent from November to December, instead of falling 0.1 percent.
The central bank recently committed to smaller interest rate hikes based on the premise that inflation was easing. But the revisions indicate the Fed hasn’t made as much progress fighting inflation as it once thought.
Fed Governor Michelle Bowman said Monday that the Fed needs to keep hiking rates to “bring demand and supply into better balance.”
Continued rate increases would spell bad news for markets and the broader U.S. economy, increasing the risk of a recession. But Fed officials have stuck with their goal of reducing inflation to 2 percent, even if more than 1 million people lose their jobs.
Analysts predict that annual inflation will come in at 6.2 percent in January, down from 6.5 percent in December, while prices are expected to jump 0.5 percent month-to-month. That represents an acceleration from previous months.
The Labor Department is changing its CPI calculation for the January report by placing more of an emphasis on the housing market and less on used cars, which could lead to a higher figure. The Hill’s Tobias Burns has the details in this story.
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Welcome to The Hill’s Business & Economy newsletter, we’re kevers@digital-staging.thehill.com, afolley@digital-staging.thehill.com and slane@digital-staging.thehill.com — covering the intersection of Wall Street and Pennsylvania Avenue.
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Key business and economic news with implications this week and beyond:
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President Joe Biden is pursuing an aggressive economic agenda aimed at boosting worker power, taxing the rich, reducing fees and taking on dominant corporations. But with Republicans in control of the House — and eager to block the president’s wishlist — Biden doesn’t have a pathway to enact many of the economic reforms announced at his State of the Union address, including a four percent tax on stock buybacks, a wealth tax …
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Battle lines have emerged in the fight over the next secretary of Labor, a crucial decision for President Biden as he steps up his efforts to appeal to blue-collar workers ahead of 2024. Asian Americans in Congress are hopeful that with the expected exit of Labor Secretary Marty Walsh, Biden will finally name an Asian American to his Cabinet by promoting deputy secretary Julie Su. But ex-Speaker Nancy Pelosi (D-Calif.) has …
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Capitol Hill is talking more about Social Security, which estimates show is on track to becoming insolvent in little more than a decade, as both sides feud over how to address the rising national debt. A recent report from the Congressional Budget Office (CBO) found that spending for Social Security benefits increased by 10 percent, or $37 billion, in the four-month stretch ending in January, compared to the same period the …
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Upcoming news themes and events we’re watching:
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- The Labor Department is set to release its highly anticipated consumer price index, which measures inflation, at 8:30 a.m. ET on Tuesday.
- The Congressional Budget Office will release its updated 10-year budget and economic outlook report at 2 p.m. on Wednesday. It will also include its latest expectation on when the Treasury will run out of its “extraordinary measures” to stave off a federal default without action from Congress.
- The Senate Finance Committee will hold a hearing at 10:30 a.m. on Wednesday to weigh President Biden’s nomination of Danny Werfel to serve as IRS chief.
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Branch out with more stories from the day:
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DETROIT (AP) — Ford Motor Co. plans to build a $3.5 billion factory in Michigan that would employ at least 2,500 people to make lower-cost batteries for a variety of new and existing electric vehicles. The plant, to be built on land being readied for industrial development about 100 miles (160 kilometers) west of Detroit, would start making batteries in 2026. It would crank out enough batteries to supply 400,000 vehicles per …
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Top stories on The Hill right now:
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Frustration on Capitol Hill is mounting after a string of aerial objects were shot down over U.S. and Canadian airspace in the last few days, raising a long list of questions that lawmakers say President Biden should publicly address. Three unidentified flying objects (UFOs) have been shot … Read more
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President Biden fired Architect of the Capitol Brett Blanton on Monday, a White House official told The Hill, following outrage over an inspector general report that found Blanton misused a government vehicle and allegedly impersonated a law enforcement officer. “After doing our due diligence, the … Read more
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Opinions related to business and economic issues submitted to The Hill:
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You’re all caught up. See you tomorrow!
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