THE CAPE CHARLES MIRROR MAY 17, 2023 AT 8:09 PM
Paul R. Plante says:
So, here we have a benchmark date in this saga of Joe Biden’s RIGGED GREEN GAME that we, the American people are getting stuck with the bill for, along with the INFLATION TAX we are being forced to pay as a consequence of all the borrowed money Joe Biden is plowing into the economy, and that benchmark date is July 19, 2021, when in his “Remarks by President Biden on the Economy,” we had Joe Biden stating as follows with respect to Joe exacting a promise from Powell to in fact monetize Joe’s massive debt, as follows, to wit:
THE PRESIDENT: As I made clear to Chairman Powell of the Federal Reserve when we met recently, the Fed is independent.
But whatever different views some might have on current price increases, we should be united on one thing: passage of the Bipartisan Infrastructure Framework, which we shook hands on.
We shook hands on it.
end quotes
So using that date of July 19, 2021 as our benchmark, we can then search the internet to see if we can find any references from either Joe Biden or Jerome Powell as to what they did shake hands on, which first takes us to a CNBC article dated January 20, 2021, six months earlier, and titled “The Fed under Biden: New mandates, a close White House tie and big challenges ahead” by Jeff Cox, where we had as follows with respect to the relationship between Joe Biden and Jerome Powell, who is supposed to be independent from Joe Biden, but clearly is not, to wit:
The Federal Reserve is likely to enjoy a more cordial relationship with President Joe Biden than it did with Donald Trump, who once called central bankers “boneheads.”
end quote
A more cordial relationship, people?
How does that fit in with the concept of an independent Federal Reserve?
And was Trump wrong, given the abysmally poor record of the Federal Reserve, to call the central bankers “boneheads?”
Keep an open mind on that thought, considering where the Federal Reserve, in colluding with Joe Biden to finance his INSANE GREEN DREAM has brought us to, which takes us back to that CNBC article, where we have more on the incestuous relationship between the Biden administration and the Federal Reserve under Biden pet poodle Jerry Powell, to wit:
“He will respect the office.”
“Biden’s an old-fashioned guy,” said Christopher Whalen, a finance veteran and head of Whalen Global Advisors.
However, the Fed under Biden likely will be pushed toward addressing racial inequality and climate change.
“Above all else, what the Fed wants to do is to keep as much power as they can, and the way in which they keep their power is to keep the party in charge happy,” policy expert Ed Mills said.
end quotes
And right there goes any pretense that the Federal Reserve is independent of partisan politics right out the window, which is important for we, the American people to know, which takes us back to CNBC, to wit:
There likely will be no nasty tweets in the middle of the night excoriating the Federal Reserve to lower interest rates.
Nor will its officials be called “boneheads” should their actions not be in keeping with President Joe Biden’s wishes.
But that doesn’t mean the U.S. central bank won’t face pressure as it looks to navigate its way through a new administration.
Challenges ahead include the coronavirus pandemic, as well as demands for a more inclusive economy and a stronger approach toward social issues, such as racial equality and climate change.
There also will be an interesting new dynamic, where Treasury Secretary nominee Janet Yellen will, if confirmed, have the added benefit of being a former Fed chair.
Broad monetary policy changes are unlikely ahead.
Biden likely will enjoy the same low interest rate environment that the last two holders of the office have held.
end quotes
And let us stop right there for the moment with that statement from January 20, 2021 that Joe Biden likely would enjoy the same low interest rate environment that the last two holders of the office have held, because there is the fatal flaw in Joe Biden’s INSANE GREEN DREAM that has come back around to bite we, the American people right in the ***, because thanks to the inflation caused by Joe’s INSANE GREEN DREAM, it is no longer a low interest rate environment and that, people, spells danger down the road for us, so stay tuned for more on that very subject, courtesy of the Cape Charles Mirror!
http://www.capecharlesmirror.com/op-ed- ... ent-800870
THE ECONOMY
Re: THE ECONOMY
CNBC
"Dallas Fed President Logan says current data doesn’t justify pausing rate hikes yet"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED THU, MAY 18 2023
KEY POINTS
* Dallas Fed President Lorie Logan said Thursday that the data points so far don’t justify skipping a rate hike in June.
* “The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren’t there yet,” she said in prepared remarks for a speech.
* Fed Governor Philip Jefferson also said inflation is too high, but he’s watching to see the impact that the rate hikes will have on the economy before deciding on future moves.
Dallas Federal Reserve President Lorie Logan said Thursday that the economic data points so far don’t justify skipping a rate increase at the central bank’s next meeting in June.
While noting some progress in bringing down inflation and cooling the labor market, Logan said the Fed still has work to do in achieving its goal for price stability.
Logan is a voting member this year of the rate-setting Federal Open Market Committee.
“After raising the target range for the federal funds rate at each of the last 10 FOMC meetings, we have made some progress,” she said in prepared remarks for a speech to bankers in San Antonio.
“The data in coming weeks could yet show that it is appropriate to skip a meeting."
"As of today, though, we aren’t there yet.”
Market pricing indicates an expectation that the Fed will hold the line at its June 13-14 meeting, pausing a rate-hiking cycle at began in March 22.
The CME Group’s FedWatch gauge, which gauges prices in the fed funds futures market, puts a 26% probability for a 0.25 percentage point hike at the meeting, though the odds have been rising in recent days.
Like other Fed officials who have spoken recently, Logan emphasized that the decision ultimately will be based on inflation and employment data still to come before the next meeting.
In other remarks Thursday, Fed Governor Philip Jefferson also said inflation is too high, but he’s watching to see the impact that the rate hikes will have on the economy before deciding on future moves.
“History shows that monetary policy works with long and variable lags, and that a year is not a long enough period for demand to feel the full effect of higher interest rates,” Jefferson said in prepared remarks for a speech in Washington, D.C.
But Logan expressed concern that what she’s seen so far has indicated only modest impact from the Fed rate hikes, which have totaled 5 percentage points.
“We haven’t yet made the progress we need to make."
"And it’s a long way from here to 2% inflation,” Logan said, referring to the Fed’s longer-run goal.
She noted that the Fed’s preferred inflation data point, the core personal consumption expenditures price index, ran at a 4.9% annualized pace in the first quarter.
That was higher than the 4.4% pace in the fourth quarter of 2022.
https://www.cnbc.com/2023/05/18/dallas- ... s-yet.html
"Dallas Fed President Logan says current data doesn’t justify pausing rate hikes yet"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED THU, MAY 18 2023
KEY POINTS
* Dallas Fed President Lorie Logan said Thursday that the data points so far don’t justify skipping a rate hike in June.
* “The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren’t there yet,” she said in prepared remarks for a speech.
* Fed Governor Philip Jefferson also said inflation is too high, but he’s watching to see the impact that the rate hikes will have on the economy before deciding on future moves.
Dallas Federal Reserve President Lorie Logan said Thursday that the economic data points so far don’t justify skipping a rate increase at the central bank’s next meeting in June.
While noting some progress in bringing down inflation and cooling the labor market, Logan said the Fed still has work to do in achieving its goal for price stability.
Logan is a voting member this year of the rate-setting Federal Open Market Committee.
“After raising the target range for the federal funds rate at each of the last 10 FOMC meetings, we have made some progress,” she said in prepared remarks for a speech to bankers in San Antonio.
“The data in coming weeks could yet show that it is appropriate to skip a meeting."
"As of today, though, we aren’t there yet.”
Market pricing indicates an expectation that the Fed will hold the line at its June 13-14 meeting, pausing a rate-hiking cycle at began in March 22.
The CME Group’s FedWatch gauge, which gauges prices in the fed funds futures market, puts a 26% probability for a 0.25 percentage point hike at the meeting, though the odds have been rising in recent days.
Like other Fed officials who have spoken recently, Logan emphasized that the decision ultimately will be based on inflation and employment data still to come before the next meeting.
In other remarks Thursday, Fed Governor Philip Jefferson also said inflation is too high, but he’s watching to see the impact that the rate hikes will have on the economy before deciding on future moves.
“History shows that monetary policy works with long and variable lags, and that a year is not a long enough period for demand to feel the full effect of higher interest rates,” Jefferson said in prepared remarks for a speech in Washington, D.C.
But Logan expressed concern that what she’s seen so far has indicated only modest impact from the Fed rate hikes, which have totaled 5 percentage points.
“We haven’t yet made the progress we need to make."
"And it’s a long way from here to 2% inflation,” Logan said, referring to the Fed’s longer-run goal.
She noted that the Fed’s preferred inflation data point, the core personal consumption expenditures price index, ran at a 4.9% annualized pace in the first quarter.
That was higher than the 4.4% pace in the fourth quarter of 2022.
https://www.cnbc.com/2023/05/18/dallas- ... s-yet.html
Re: THE ECONOMY
REUTERS
"Fed emergency lending to banks little changed in latest week"
By Reuters Staff
MAY 18, 2023
NEW YORK, May 18 (Reuters) - Banks’ emergency borrowing from the Federal Reserve was little changed in the latest week, central bank data released on Thursday showed.
The Fed reported discount window borrowing moved to $9 billion on Wednesday from $9.3 billion the week before, while Bank Term Funding Program lending hit $87 billion, from $83.1 billion on May 10.
Meanwhile, Fed “other credit” tied to winding down failed banks stood at $208.5 billion on Wednesday, from $212.5 billion the prior week.
Altogether, emergency lending from the three programs stood at $304.5 billion, from $304.9 billion on May 10.
(Reporting by Michael S. Derby; Editing by Chris Reese)
https://www.reuters.com/article/usa-fed ... SS0N37F02T
"Fed emergency lending to banks little changed in latest week"
By Reuters Staff
MAY 18, 2023
NEW YORK, May 18 (Reuters) - Banks’ emergency borrowing from the Federal Reserve was little changed in the latest week, central bank data released on Thursday showed.
The Fed reported discount window borrowing moved to $9 billion on Wednesday from $9.3 billion the week before, while Bank Term Funding Program lending hit $87 billion, from $83.1 billion on May 10.
Meanwhile, Fed “other credit” tied to winding down failed banks stood at $208.5 billion on Wednesday, from $212.5 billion the prior week.
Altogether, emergency lending from the three programs stood at $304.5 billion, from $304.9 billion on May 10.
(Reporting by Michael S. Derby; Editing by Chris Reese)
https://www.reuters.com/article/usa-fed ... SS0N37F02T
Re: THE ECONOMY
REUTERSSBC CARES Act Oversight Hearing
Senate Committee on Banking, Housing, and Urban Affairs
CARES Act Oversight of Treasury and the Federal Reserve
Tuesday, November 30, 2021
Testimony
Janet L. Yellen, Secretary, U.S. Department of the Treasury
In her testimony, Yellen said December has the potential to be very consequential based on two decisions facing Congress – the debt limit and Build Back Better legislation.
She said if we do not address the debt limit, we will eviscerate our current recovery, and Americans would suffer financial pain as critical payments, like Social Security checks and military paychecks, would not reach their bank accounts.
https://www.sifma.org/resources/general ... t-hearing/
"Yellen reaffirms strength of US banking system in meeting with bank CEOs - Treasury"
By Pete Schroeder and Costas Pitas
May 18, 2023
WASHINGTON, May 18 (Reuters) - U.S. Treasury Secretary Janet Yellen reaffirmed the strength and soundness of the country's banking system in a meeting with bank CEOs on Thursday, a Treasury Department statement said.
During the meeting with more than two dozen CEOs and executives convened by the Bank Policy Institute, Yellen also discussed the "urgent need" for Congress to address the debt limit, the statement said.
Yellen's meeting with bank executives came as part of BPI's annual CEO meeting in Washington, which has seen top banking officials also meet with other government officials.
A BPI spokesperson declined to comment on the meeting.
While the meeting with Yellen was scheduled months in advance, according to a source familiar with the matter, it came amid a tumultuous time for banks and financial markets.
The banking sector is endeavoring to shake off several weeks of turmoil spurred by the sudden failure of Silicon Valley Bank, which led to regulators seizing two more failing institutions and backing uninsured depositors in an effort to tamp down fears of broader contagion.
The meeting also comes as government officials are looking for an agreement to raise the nation's borrowing cap.
Yellen and other officials have warned that a failure to do so could unleash chaos on financial markets, as the U.S. government would not be able to meet its obligations as early as June 1.
"She outlined how a failure to raise or suspend the debt limit would be catastrophic for the financial system, as well as American families and businesses, and underscored the Administration’s belief that the debt limit should be addressed without delay," the Treasury said in its statement.
President Joe Biden and top U.S. congressional Republican Kevin McCarthy have been negotiating over a potential deal to raise the borrowing cap.
Reporting by Costas Pitas; Writing by Katharine Jackson; Editing by Eric Beech
https://www.reuters.com/business/financ ... 023-05-18/
Re: THE ECONOMY
REUTERS
"US weekly jobless claims fall; labor market defying recession fears"
By Lucia Mutikani
May 18, 2023
Summary
* Weekly jobless claims drop 22,000 to 242,000
* Continuing claims decrease 8,000 to 1.799 million
* Mid-Atlantic manufacturing shrinks further in May
* Existing home sales fall 3.4% in April
WASHINGTON, May 18 (Reuters) - The number of Americans filing new claims for unemployment benefits fell more than expected last week, with applications in Massachusetts decreasing sharply, suggesting the labor market remains tight.
The steep decline in weekly jobless claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021.
That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.
The state's Department of Unemployment Assistance said last week it was "experiencing an increase in fraudulent claim activities in which people attempted to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits."
"The labor market is not deteriorating like we had thought as jobless claims were pumped up to recession levels by fraudulent applications for unemployment benefits," said Christopher Rupkey, chief economist at FWDBONDS in New York.
Initial claims for state unemployment benefits declined 22,000 to a seasonally adjusted 242,000 for the week ended May 13.
The drop was the largest since Nov. 20, 2021.
Economists polled by Reuters had forecast 254,000 for the latest week.
Unadjusted claims decreased 18,605 to 215,810 last week, with filings in Massachusetts plunging by 14,042.
Claims also fell considerably in Missouri and New Jersey, more than offsetting notable increases in Ohio and Illinois.
The labor market is being closely watched for signs of stress from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s.
The U.S. central bank is expected to keep interest rates unchanged next month for the first time since it started hiking them in March 2022.
Though it has shown some signs of cooling, the labor market has remained tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range that is consistent with a jobs market that is not generating too much inflation.
"While we expect the Fed to leave rates steady at its June meeting, a resumption of rate hikes can't be ruled out if labor market conditions don't ease more significantly," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
On Wall Street, the S&P 500 and the Nasdaq Composite were up, but the Dow Jones Industrial Average was slightly down in early afternoon trading.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
HOUSING SLUMP CONTINUES
The jobless claims report covered the period when the government surveyed business establishments for the nonfarm payrolls portion of May's employment report.
Claims were little changed between the April and May survey weeks.
The economy created 253,000 jobs in April, with the unemployment rate falling back to a 53-year low of 3.4%.
The strength in the labor market is at odds with the Conference Board's Leading Economic Index (LEI), a gauge of future economic activity, which has been flagging a recession since last year.
The LEI fell 0.6% in April, posting its 13th straight monthly drop, the Conference Board said on Thursday.
The economy's resilience is also evident in solid consumer spending, which prompted Walmart on Thursday to raise its annual sales and profit targets.
"We expect consumer spending to hold up until we see labor market slack materially spread," said Shannon Seery, an economist at Wells Fargo in New York.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 8,000 to 1.799 million during the week ending May 6, the lowest level since early March, the claims report showed.
The low so-called continuing claims suggest unemployed people are finding new work quickly.
Economists at Goldman Sachs speculated that the annual revision last month to the seasonal factor, the model that the government uses to strip out seasonal fluctuations from the data, could be distorting the continuing claims.
"We estimate that those distortions could exert a cumulative drag of up to 400,000 between April and September," Goldman Sachs said in a note.
The Fed's rate hikes have left the housing market mired in recession and manufacturing struggling, other reports showed on Thursday.
Existing home sales dropped 3.4% to a seasonally adjusted annual rate of 4.28 million units last month, the National Association of Realtors said.
The second straight monthly decline reflected tight inventory, with the NAR reporting prices rising in roughly half of the country, multiple offers and many homes being sold above list price.
Housing inventory is 44% below its pre-pandemic levels.
"The housing market will remain moribund until mortgage rates start to fall later this year," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
With higher borrowing eroding demand for goods, factory activity in the mid-Atlantic region continued to slump in May, though the pace of contraction slowed from the prior month.
The Philadelphia Fed's general activity index improved to -10.4 this month from -31.3 in April.
A reading below zero indicates contraction in the region's manufacturing sector.
It was the ninth consecutive negative reading in the index, which covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
Though manufacturers were pessimistic about business conditions in the next six months, they planned to increase employment over that period.
"Re-shoring of supply chains, infrastructure projects and a stabilization in rates and demand could provide support to manufacturing activity over time," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in New York.
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-w ... 023-05-18/
"US weekly jobless claims fall; labor market defying recession fears"
By Lucia Mutikani
May 18, 2023
Summary
* Weekly jobless claims drop 22,000 to 242,000
* Continuing claims decrease 8,000 to 1.799 million
* Mid-Atlantic manufacturing shrinks further in May
* Existing home sales fall 3.4% in April
WASHINGTON, May 18 (Reuters) - The number of Americans filing new claims for unemployment benefits fell more than expected last week, with applications in Massachusetts decreasing sharply, suggesting the labor market remains tight.
The steep decline in weekly jobless claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021.
That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.
The state's Department of Unemployment Assistance said last week it was "experiencing an increase in fraudulent claim activities in which people attempted to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits."
"The labor market is not deteriorating like we had thought as jobless claims were pumped up to recession levels by fraudulent applications for unemployment benefits," said Christopher Rupkey, chief economist at FWDBONDS in New York.
Initial claims for state unemployment benefits declined 22,000 to a seasonally adjusted 242,000 for the week ended May 13.
The drop was the largest since Nov. 20, 2021.
Economists polled by Reuters had forecast 254,000 for the latest week.
Unadjusted claims decreased 18,605 to 215,810 last week, with filings in Massachusetts plunging by 14,042.
Claims also fell considerably in Missouri and New Jersey, more than offsetting notable increases in Ohio and Illinois.
The labor market is being closely watched for signs of stress from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s.
The U.S. central bank is expected to keep interest rates unchanged next month for the first time since it started hiking them in March 2022.
Though it has shown some signs of cooling, the labor market has remained tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range that is consistent with a jobs market that is not generating too much inflation.
"While we expect the Fed to leave rates steady at its June meeting, a resumption of rate hikes can't be ruled out if labor market conditions don't ease more significantly," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
On Wall Street, the S&P 500 and the Nasdaq Composite were up, but the Dow Jones Industrial Average was slightly down in early afternoon trading.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
HOUSING SLUMP CONTINUES
The jobless claims report covered the period when the government surveyed business establishments for the nonfarm payrolls portion of May's employment report.
Claims were little changed between the April and May survey weeks.
The economy created 253,000 jobs in April, with the unemployment rate falling back to a 53-year low of 3.4%.
The strength in the labor market is at odds with the Conference Board's Leading Economic Index (LEI), a gauge of future economic activity, which has been flagging a recession since last year.
The LEI fell 0.6% in April, posting its 13th straight monthly drop, the Conference Board said on Thursday.
The economy's resilience is also evident in solid consumer spending, which prompted Walmart on Thursday to raise its annual sales and profit targets.
"We expect consumer spending to hold up until we see labor market slack materially spread," said Shannon Seery, an economist at Wells Fargo in New York.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 8,000 to 1.799 million during the week ending May 6, the lowest level since early March, the claims report showed.
The low so-called continuing claims suggest unemployed people are finding new work quickly.
Economists at Goldman Sachs speculated that the annual revision last month to the seasonal factor, the model that the government uses to strip out seasonal fluctuations from the data, could be distorting the continuing claims.
"We estimate that those distortions could exert a cumulative drag of up to 400,000 between April and September," Goldman Sachs said in a note.
The Fed's rate hikes have left the housing market mired in recession and manufacturing struggling, other reports showed on Thursday.
Existing home sales dropped 3.4% to a seasonally adjusted annual rate of 4.28 million units last month, the National Association of Realtors said.
The second straight monthly decline reflected tight inventory, with the NAR reporting prices rising in roughly half of the country, multiple offers and many homes being sold above list price.
Housing inventory is 44% below its pre-pandemic levels.
"The housing market will remain moribund until mortgage rates start to fall later this year," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
With higher borrowing eroding demand for goods, factory activity in the mid-Atlantic region continued to slump in May, though the pace of contraction slowed from the prior month.
The Philadelphia Fed's general activity index improved to -10.4 this month from -31.3 in April.
A reading below zero indicates contraction in the region's manufacturing sector.
It was the ninth consecutive negative reading in the index, which covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
Though manufacturers were pessimistic about business conditions in the next six months, they planned to increase employment over that period.
"Re-shoring of supply chains, infrastructure projects and a stabilization in rates and demand could provide support to manufacturing activity over time," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in New York.
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-w ... 023-05-18/
Re: THE ECONOMY
REUTERS
"Fed's hawks make a pitch against a rate-hike pause"
Reuters
May 18, 2023
May 18 (Reuters) - U.S. inflation does not look like it is cooling fast enough to allow the Federal Reserve to hit pause on the interest-rate hike campaign it began more than a year ago, two Fed policymakers said on Thursday.
The remarks, from Dallas Federal Reserve Bank President Lorie Logan and St. Louis Fed President James Bullard, appear to represent a minority hawkish view at the Fed, but one that has gained ground in the runup to the Fed's next meeting, on June 13-14.
On Thursday, rate-futures markets reflected a one-in-three chance of a June rate hike, compared with a one-in-10-chance seen a week ago.
The Fed has lifted borrowing costs at each meeting since March 2022, bringing them from near zero to a 5.00-5.25% range as of early this month.
Fed Governor and vice chair nominee Philip Jefferson, also speaking on Thursday, said that while progress on inflation is slowing, it is still too early for the full impact of those rapid rate increases to be fully felt.
It's a view that Fed Chair Jerome Powell has also sketched out as a reason to potentially take a break from rate hikes next month while policymakers assess those lagged effects.
He and others have also noted the potential for recent bank stress to further slow the economy by tightening credit conditions and squeezing lending.
Powell is scheduled to speak on Friday and investors anticipate he will update those views in light of what has arguably been mixed economic data since the Fed last met in early May.
Consumer price inflation, for instance, edged down to a 4.9% annual pace in April but is still far above the Fed's 2% goal.
Hiring has slowed, but unemployment at 3.4% is at its lowest since 1969.
Bank stress meanwhile appears to have been concentrated in a few regional banks and is not broadly impacting financial institutions with anything like the intensity in the immediate aftermath of the runs on Silicon Valley Bank and Signature Bank that led to their collapse in March.
SKIPPING?
Jefferson did not lay out an explicit case for what the Fed should do in June.
However, his embrace of the idea that there is still a lot of policy tightening in the pipeline suggests he could be comfortable with a pause.
Dallas Fed's Logan had the opposite presumption.
"The data in coming weeks could yet show that it is appropriate to skip a meeting," she told the Texas Bankers Association in San Antonio.
"As of today, though, we aren’t there yet."
And though inflation is down from last year's peaks and the economy overall is less out of balance than it had been, she said, "we haven’t yet made the progress we need to make" on inflation.
Speaking to the Financial Times, St. Louis Fed President James Bullard said the slow pace of progress on inflation "may warrant taking out some insurance by raising rates somewhat more to make sure that we really do get inflation under control."
Both Bullard and Logan said they remain open-minded about what to do in June.
Reporting by Ann Saphir
https://www.reuters.com/markets/us/feds ... 023-05-18/
"Fed's hawks make a pitch against a rate-hike pause"
Reuters
May 18, 2023
May 18 (Reuters) - U.S. inflation does not look like it is cooling fast enough to allow the Federal Reserve to hit pause on the interest-rate hike campaign it began more than a year ago, two Fed policymakers said on Thursday.
The remarks, from Dallas Federal Reserve Bank President Lorie Logan and St. Louis Fed President James Bullard, appear to represent a minority hawkish view at the Fed, but one that has gained ground in the runup to the Fed's next meeting, on June 13-14.
On Thursday, rate-futures markets reflected a one-in-three chance of a June rate hike, compared with a one-in-10-chance seen a week ago.
The Fed has lifted borrowing costs at each meeting since March 2022, bringing them from near zero to a 5.00-5.25% range as of early this month.
Fed Governor and vice chair nominee Philip Jefferson, also speaking on Thursday, said that while progress on inflation is slowing, it is still too early for the full impact of those rapid rate increases to be fully felt.
It's a view that Fed Chair Jerome Powell has also sketched out as a reason to potentially take a break from rate hikes next month while policymakers assess those lagged effects.
He and others have also noted the potential for recent bank stress to further slow the economy by tightening credit conditions and squeezing lending.
Powell is scheduled to speak on Friday and investors anticipate he will update those views in light of what has arguably been mixed economic data since the Fed last met in early May.
Consumer price inflation, for instance, edged down to a 4.9% annual pace in April but is still far above the Fed's 2% goal.
Hiring has slowed, but unemployment at 3.4% is at its lowest since 1969.
Bank stress meanwhile appears to have been concentrated in a few regional banks and is not broadly impacting financial institutions with anything like the intensity in the immediate aftermath of the runs on Silicon Valley Bank and Signature Bank that led to their collapse in March.
SKIPPING?
Jefferson did not lay out an explicit case for what the Fed should do in June.
However, his embrace of the idea that there is still a lot of policy tightening in the pipeline suggests he could be comfortable with a pause.
Dallas Fed's Logan had the opposite presumption.
"The data in coming weeks could yet show that it is appropriate to skip a meeting," she told the Texas Bankers Association in San Antonio.
"As of today, though, we aren’t there yet."
And though inflation is down from last year's peaks and the economy overall is less out of balance than it had been, she said, "we haven’t yet made the progress we need to make" on inflation.
Speaking to the Financial Times, St. Louis Fed President James Bullard said the slow pace of progress on inflation "may warrant taking out some insurance by raising rates somewhat more to make sure that we really do get inflation under control."
Both Bullard and Logan said they remain open-minded about what to do in June.
Reporting by Ann Saphir
https://www.reuters.com/markets/us/feds ... 023-05-18/
Re: THE ECONOMY
CNBC
"Fed Chair Powell says rates may not have to rise as much as expected to curb inflation"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED FRI, MAY 19 2023
KEY POINTS
* Federal Reserve Chair Jerome Powell said Friday that stresses in the banking sector could mean that “our policy rate may not need to rise as much as it would have otherwise to achieve our goals.”
* On balance, Powell said inflation is still too high and pledged the Fed would stay “steadfast” in its goal to reduce prices.
Federal Reserve Chair Jerome Powell said Friday that stresses in the banking sector could mean that interest rates won’t have to be as high to control inflation.
Speaking at a monetary conference in Washington, D.C., the central bank leader noted that Fed initiatives used to deal with problems at mid-sized banks have mostly halted worst-case scenarios from transpiring.
But he noted that the problems at Silicon Valley Bank and others could still reverberate through the economy.
“The financial stability tools helped to calm conditions in the banking sector."
"Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation,” he said as part of a panel on monetary policy.
“So as a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals,” he added.
“Of course, the extent of that is highly uncertain.”
Powell spoke with markets mostly expecting the Fed at its June meeting to take a break from the series of rate hikes it began in March 2022.
However, pricing has been volatile as Fed officials weigh the impact that policy has had and will have on inflation that in the summer of last year was running at a 41-year high.
On balance, Powell said inflation is still too high.
“Many people are currently experiencing high inflation, for the first time in their lives."
"It’s not a headline to say that they really don’t like it,” he said during a forum that also featured former Fed Chairman Ben Bernanke.
“We think that failure to get inflation down would, would not only prolong the pain but also increase ultimately the social costs of getting back to price stability, causing even greater harm to families and businesses, and we aim to avoid that by remaining steadfast in pursuit of our goals,” he added.
Powell characterized current Fed policy as “restrictive” and said future decisions would be data-dependent as opposed to being a preset course.
The Federal Open Market Committee has raised its benchmark borrowing rate to a target of 5%-5.25% from near zero where it had sat since the early days of the Covid pandemic.
Officials have stressed that rate hikes operate with a lag of a year or more, so the policy moves have not completely circulated through the economy.
“We haven’t made any decisions about the extent to which additional policy funding will be appropriate."
"But given how far we’ve come, as I noted, we can afford to look at the data and the evolving outlook,” Powell said.
Monetary policy in large part has been geared toward cooling a hot labor market in which the current 3.4% unemployment rate is tied for the lowest level since 1953.
Inflation by the Fed’s preferred measure is running at 4.6%, well above the 2% long-range goal.
Economists, including those at the Fed itself, have long been predicting that the rate hikes would pull the economy into at least a shallow recession, likely later this year.
GDP grew at a less-than-expected 1.1% annualized pace in the first quarter but is on track to accelerate by 2.9% in the second quarter, according to an Atlanta Fed tracker.
Powell spoke the same day that the New York Fed released research showing that the long-range neutral interest rate — one that is neither restrictive nor stimulative — is essentially unchanged at very low levels, despite the pandemic-era inflation surge.
“Importantly, there is no evidence that the era of very low natural rates of interest has ended,” New York Fed President John Williams said in prepared remarks.
https://www.cnbc.com/2023/05/19/fed-cha ... ation.html
"Fed Chair Powell says rates may not have to rise as much as expected to curb inflation"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED FRI, MAY 19 2023
KEY POINTS
* Federal Reserve Chair Jerome Powell said Friday that stresses in the banking sector could mean that “our policy rate may not need to rise as much as it would have otherwise to achieve our goals.”
* On balance, Powell said inflation is still too high and pledged the Fed would stay “steadfast” in its goal to reduce prices.
Federal Reserve Chair Jerome Powell said Friday that stresses in the banking sector could mean that interest rates won’t have to be as high to control inflation.
Speaking at a monetary conference in Washington, D.C., the central bank leader noted that Fed initiatives used to deal with problems at mid-sized banks have mostly halted worst-case scenarios from transpiring.
But he noted that the problems at Silicon Valley Bank and others could still reverberate through the economy.
“The financial stability tools helped to calm conditions in the banking sector."
"Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation,” he said as part of a panel on monetary policy.
“So as a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals,” he added.
“Of course, the extent of that is highly uncertain.”
Powell spoke with markets mostly expecting the Fed at its June meeting to take a break from the series of rate hikes it began in March 2022.
However, pricing has been volatile as Fed officials weigh the impact that policy has had and will have on inflation that in the summer of last year was running at a 41-year high.
On balance, Powell said inflation is still too high.
“Many people are currently experiencing high inflation, for the first time in their lives."
"It’s not a headline to say that they really don’t like it,” he said during a forum that also featured former Fed Chairman Ben Bernanke.
“We think that failure to get inflation down would, would not only prolong the pain but also increase ultimately the social costs of getting back to price stability, causing even greater harm to families and businesses, and we aim to avoid that by remaining steadfast in pursuit of our goals,” he added.
Powell characterized current Fed policy as “restrictive” and said future decisions would be data-dependent as opposed to being a preset course.
The Federal Open Market Committee has raised its benchmark borrowing rate to a target of 5%-5.25% from near zero where it had sat since the early days of the Covid pandemic.
Officials have stressed that rate hikes operate with a lag of a year or more, so the policy moves have not completely circulated through the economy.
“We haven’t made any decisions about the extent to which additional policy funding will be appropriate."
"But given how far we’ve come, as I noted, we can afford to look at the data and the evolving outlook,” Powell said.
Monetary policy in large part has been geared toward cooling a hot labor market in which the current 3.4% unemployment rate is tied for the lowest level since 1953.
Inflation by the Fed’s preferred measure is running at 4.6%, well above the 2% long-range goal.
Economists, including those at the Fed itself, have long been predicting that the rate hikes would pull the economy into at least a shallow recession, likely later this year.
GDP grew at a less-than-expected 1.1% annualized pace in the first quarter but is on track to accelerate by 2.9% in the second quarter, according to an Atlanta Fed tracker.
Powell spoke the same day that the New York Fed released research showing that the long-range neutral interest rate — one that is neither restrictive nor stimulative — is essentially unchanged at very low levels, despite the pandemic-era inflation surge.
“Importantly, there is no evidence that the era of very low natural rates of interest has ended,” New York Fed President John Williams said in prepared remarks.
https://www.cnbc.com/2023/05/19/fed-cha ... ation.html
Re: THE ECONOMY
REUTERS
"US bank deposits and credit slip in latest week, Fed data shows"
By Reuters Staff
MAY 19, 2023
(Reuters) - Deposits at all U.S. commercial banks slipped last week and overall credit provided by banks edged lower as well, Federal Reserve data released on Friday showed.
Deposits in the week ending May 10 totaled $17.10 trillion on a nonseasonally adjusted basis, down from $17.16 trillion a week earlier, the Fed’s weekly snapshot of the banking system’s assets and liabilities showed.
Deposits, which had dropped substantially after the collapse in March of Silicon Valley Bank, were down at large banks and little changed at smaller ones.
Meanwhile, credit provided by banks dropped to $17.32 trillion from $17.37 trillion a week earlier, led by a decline in securities holdings.
Loans and leases saw modest declines.
Reporting by Dan Burns; editing by Jonathan Oatis
https://www.reuters.com/article/usa-fed ... SS0N35N028
"US bank deposits and credit slip in latest week, Fed data shows"
By Reuters Staff
MAY 19, 2023
(Reuters) - Deposits at all U.S. commercial banks slipped last week and overall credit provided by banks edged lower as well, Federal Reserve data released on Friday showed.
Deposits in the week ending May 10 totaled $17.10 trillion on a nonseasonally adjusted basis, down from $17.16 trillion a week earlier, the Fed’s weekly snapshot of the banking system’s assets and liabilities showed.
Deposits, which had dropped substantially after the collapse in March of Silicon Valley Bank, were down at large banks and little changed at smaller ones.
Meanwhile, credit provided by banks dropped to $17.32 trillion from $17.37 trillion a week earlier, led by a decline in securities holdings.
Loans and leases saw modest declines.
Reporting by Dan Burns; editing by Jonathan Oatis
https://www.reuters.com/article/usa-fed ... SS0N35N028
Re: THE ECONOMY
REUTERS
"Fed's Powell says risks more balanced, June policy decision unclear"
By Howard Schneider
May 19, 2023
WASHINGTON, May 19 (Reuters) - Federal Reserve Chair Jerome Powell said on Friday it is still unclear if U.S. interest rates will need to rise further, as central bank officials balance uncertainty about the impact of past hikes in borrowing costs and recent bank credit tightening with the fact that inflation is proving hard to control.
In carefully scripted remarks at a Fed research conference in which Powell was interviewed by a top U.S. central bank staffer, the Fed chief reiterated that the central bank would now make decisions "meeting by meeting," but also flagged that after a year of aggressive rate increases, officials "can afford to look at the data and the evolving outlook to make careful assessments."
"We face uncertainty about the lagged effects of our tightening so far, and about the extent of credit tightening from recent banking stresses," Powell said during a panel session at the conference in Washington.
"So today, our guidance is limited to identifying the factors we'll be monitoring as we assess the extent to which additional policy firming may be appropriate to return inflation to 2%."
"The risks of doing too much or doing too little are becoming more balanced and our policy adjusted to reflect that," Powell said.
Ahead of a June 13-14 policy meeting "we haven't made any decisions about the extent to which additional policy firming will be appropriate."
U.S. policymakers remain on the fence about their upcoming policy decision, and will receive important jobs and inflation data in coming weeks that could sway the debate within the central bank's rate-setting Federal Open Market Committee.
Powell said he felt that data so far "support the committee's view that bringing inflation down will take some time."
He noted, for example, that some of the factors that may keep inflation elevated, such as the tight labor market, have yet to ease - particularly in the service industries where inflation is proving more persistent.
Policymakers are facing other constraints as well in offering clear guidance on the next meeting.
Regardless of the data, the Fed is unlikely to raise interest rates if a down-to-the-wire political standoff over the U.S. federal debt ceiling remains unresolved.
If an actual U.S. debt default is the result, the central bank may even be pushed towards emergency steps to ease the burden on the economy.
Powell's comments overall "were consistent with our takeaway from the May post-meeting press conference, which was that, while the (FOMC) wasn't sure whether further tightening would be necessary at some point, the committee's base case was a June pause," LHMeyer senior economist Kevin Burgett wrote.
This week has indeed seen some Fed policymakers call for a pause to further rate hikes.
But others have pushed for more increases, while vice chair nominee Philip Jefferson in remarks that walked a middle path citing risks on either side with no clear recommendation.
Atlanta Fed President Raphael Bostic captured the mood earlier this week when he said that while he was "inclined" to keep interest rates steady at the June meeting, even that decision would not say much about the future.
"I would say it was a pause, but a pause could be a 'skip,' or it could be a hold," Bostic said.
"There's a lot of uncertainty in the world."
"We will just have to see how things play out and get a sense of what's true signal and what's noise, and that is going to be a week-to-week thing."
'FRUSTRATING INCONSISTENCY'
The quarter-of-a-percentage-point rate increase approved by the Fed earlier this month was the tenth in a row since March of 2022, and raised the benchmark policy rate to the 5.00%-5.25% range, the level most policymakers had penciled in as the likely stopping point for rate hikes.
The Fed's policy statement at that meeting opened the door to a pause, though Powell in his post-meeting press conference said "it's not possible to say that with confidence now ..."
"We're going to have to see data accumulating" before deciding whether the door was closed on further rate hikes.
Data on inflation, jobs, and the banking industry since then have done little to clarify the situation, with nothing seeming to change very fast.
Job growth seems to be cooling but remains strong; inflation appears to be falling but is still high; overall demand, bank credit and the economy look to be slowing but also are holding up better than anticipated.
The result has been "a frustrating inconsistency" with some of the arguments developed by policymakers since the last meeting, said Tim Duy, chief U.S. economist at SGH Macro Advisors, with dovish officials keeping the possible need for more rate hikes open, hawkish ones noting the risks of tightening credit, and some trying to have it both ways.
"It's getting to be time to fish or cut bait," Duy said, and either agree the economy needs time to fully adjust to the aggressive rate hikes enacted over the last year - a core argument for pausing - or "stick with the hawkish position of waiting for inflation data to roll over" and continue raising rates until then.
Reporting by Howard Schneider; Editing by Dan Burns and Paul Simao
https://www.reuters.com/markets/us/feds ... 023-05-19/
"Fed's Powell says risks more balanced, June policy decision unclear"
By Howard Schneider
May 19, 2023
WASHINGTON, May 19 (Reuters) - Federal Reserve Chair Jerome Powell said on Friday it is still unclear if U.S. interest rates will need to rise further, as central bank officials balance uncertainty about the impact of past hikes in borrowing costs and recent bank credit tightening with the fact that inflation is proving hard to control.
In carefully scripted remarks at a Fed research conference in which Powell was interviewed by a top U.S. central bank staffer, the Fed chief reiterated that the central bank would now make decisions "meeting by meeting," but also flagged that after a year of aggressive rate increases, officials "can afford to look at the data and the evolving outlook to make careful assessments."
"We face uncertainty about the lagged effects of our tightening so far, and about the extent of credit tightening from recent banking stresses," Powell said during a panel session at the conference in Washington.
"So today, our guidance is limited to identifying the factors we'll be monitoring as we assess the extent to which additional policy firming may be appropriate to return inflation to 2%."
"The risks of doing too much or doing too little are becoming more balanced and our policy adjusted to reflect that," Powell said.
Ahead of a June 13-14 policy meeting "we haven't made any decisions about the extent to which additional policy firming will be appropriate."
U.S. policymakers remain on the fence about their upcoming policy decision, and will receive important jobs and inflation data in coming weeks that could sway the debate within the central bank's rate-setting Federal Open Market Committee.
Powell said he felt that data so far "support the committee's view that bringing inflation down will take some time."
He noted, for example, that some of the factors that may keep inflation elevated, such as the tight labor market, have yet to ease - particularly in the service industries where inflation is proving more persistent.
Policymakers are facing other constraints as well in offering clear guidance on the next meeting.
Regardless of the data, the Fed is unlikely to raise interest rates if a down-to-the-wire political standoff over the U.S. federal debt ceiling remains unresolved.
If an actual U.S. debt default is the result, the central bank may even be pushed towards emergency steps to ease the burden on the economy.
Powell's comments overall "were consistent with our takeaway from the May post-meeting press conference, which was that, while the (FOMC) wasn't sure whether further tightening would be necessary at some point, the committee's base case was a June pause," LHMeyer senior economist Kevin Burgett wrote.
This week has indeed seen some Fed policymakers call for a pause to further rate hikes.
But others have pushed for more increases, while vice chair nominee Philip Jefferson in remarks that walked a middle path citing risks on either side with no clear recommendation.
Atlanta Fed President Raphael Bostic captured the mood earlier this week when he said that while he was "inclined" to keep interest rates steady at the June meeting, even that decision would not say much about the future.
"I would say it was a pause, but a pause could be a 'skip,' or it could be a hold," Bostic said.
"There's a lot of uncertainty in the world."
"We will just have to see how things play out and get a sense of what's true signal and what's noise, and that is going to be a week-to-week thing."
'FRUSTRATING INCONSISTENCY'
The quarter-of-a-percentage-point rate increase approved by the Fed earlier this month was the tenth in a row since March of 2022, and raised the benchmark policy rate to the 5.00%-5.25% range, the level most policymakers had penciled in as the likely stopping point for rate hikes.
The Fed's policy statement at that meeting opened the door to a pause, though Powell in his post-meeting press conference said "it's not possible to say that with confidence now ..."
"We're going to have to see data accumulating" before deciding whether the door was closed on further rate hikes.
Data on inflation, jobs, and the banking industry since then have done little to clarify the situation, with nothing seeming to change very fast.
Job growth seems to be cooling but remains strong; inflation appears to be falling but is still high; overall demand, bank credit and the economy look to be slowing but also are holding up better than anticipated.
The result has been "a frustrating inconsistency" with some of the arguments developed by policymakers since the last meeting, said Tim Duy, chief U.S. economist at SGH Macro Advisors, with dovish officials keeping the possible need for more rate hikes open, hawkish ones noting the risks of tightening credit, and some trying to have it both ways.
"It's getting to be time to fish or cut bait," Duy said, and either agree the economy needs time to fully adjust to the aggressive rate hikes enacted over the last year - a core argument for pausing - or "stick with the hawkish position of waiting for inflation data to roll over" and continue raising rates until then.
Reporting by Howard Schneider; Editing by Dan Burns and Paul Simao
https://www.reuters.com/markets/us/feds ... 023-05-19/
Re: THE ECONOMY
REUTERS
"From sunglasses to milking machines, US halts more exports to Russia"
By Karen Freifeld
May 19, 2023
WASHINGTON, May 19 (Reuters) - The Biden administration halted the export of a wide range of consumer goods to Russia on Friday and added 71 companies to a trade blacklist, as the Group of Seven wealthy nations announced new sanctions on Moscow over its war in Ukraine.
The new curbs targeted items that can be used to help Russia's military, including items used in daily life like clothes dryers, snow plows and milking machines, which the U.S. thinks could be repurposed to support Moscow's war machine.
"You can't even ship contact lenses or sunglasses now," said Washington lawyer Kevin Wolf, a former U.S. Commerce department official, as he reviewed the new rules.
Wolf said "it would be simpler to describe the items that are not controlled for export to Russia."
The blacklisted companies include 69 Russian entities, one from Armenia and one from Kyrgyzstan.
They were added to the Commerce Department's "Entity List," primarily for supporting Russia's military and defense sectors, making it even harder to ship any goods to them.
The targeted companies include aircraft repair and parts production plants, gunpowder, tractor and automobile factories, shipyards and engineering centers in Russia.
The actions are part of the latest round of unprecedented sanctions and export controls by the United States and a coalition of 37 other countries in response to Russia's invasion of Ukraine in February 2022, designed to degrade Moscow's industrial base and its ability to sustain the war.
"We will continue to impose costs on the Kremlin for continuing this war both by further restricting their access to additional items, as well as through aggressive enforcement," Under Secretary of Commerce Alan Estevez said in a statement that summarized the additional sanctions.
The new rules build on controls already in place on Russia's industrial, commercial, chemical and biological sectors, adding a variety of electronics, instruments and carbon fibers, as well as chemicals including fentanyl and its precursors.
They also expand the list of foreign-produced items that require a license for Russia, Belarus and Iran to further limit Tehran's ability to provide Russia with drones.
Doug Jacobson, a Washington trade lawyer, noted that some newly restricted items may be controversial.
"Due to the broad scope of the new controls, licenses are now required to export items such as hearing aids, false teeth, and artificial joints," he said.
The new moves came as the United States and the rest of the "Group of Seven" major economies agreed to stiffen sanctions against Russia as they meet in Japan.
Matthew Axelrod, the Commerce Department's Assistant Secretary for Enforcement, said the U.S. is making it a priority to enforce controls on items that contribute to Russian weapons systems such as missiles and drones.
When a company is found to have engaged in evasion, Axelrod said in the statement, "we will use all of our authorities...to shut it down."
Last week, a Greek man was arrested in Paris and charged by New York prosecutors with smuggling U.S.-origin military technologies to Russia while he was operating as a defense contractor for NATO.
Reporting by Karen Freifeld and Susan Heavey; Editing by Doina Chiacu
https://www.reuters.com/world/us-commer ... 023-05-19/
"From sunglasses to milking machines, US halts more exports to Russia"
By Karen Freifeld
May 19, 2023
WASHINGTON, May 19 (Reuters) - The Biden administration halted the export of a wide range of consumer goods to Russia on Friday and added 71 companies to a trade blacklist, as the Group of Seven wealthy nations announced new sanctions on Moscow over its war in Ukraine.
The new curbs targeted items that can be used to help Russia's military, including items used in daily life like clothes dryers, snow plows and milking machines, which the U.S. thinks could be repurposed to support Moscow's war machine.
"You can't even ship contact lenses or sunglasses now," said Washington lawyer Kevin Wolf, a former U.S. Commerce department official, as he reviewed the new rules.
Wolf said "it would be simpler to describe the items that are not controlled for export to Russia."
The blacklisted companies include 69 Russian entities, one from Armenia and one from Kyrgyzstan.
They were added to the Commerce Department's "Entity List," primarily for supporting Russia's military and defense sectors, making it even harder to ship any goods to them.
The targeted companies include aircraft repair and parts production plants, gunpowder, tractor and automobile factories, shipyards and engineering centers in Russia.
The actions are part of the latest round of unprecedented sanctions and export controls by the United States and a coalition of 37 other countries in response to Russia's invasion of Ukraine in February 2022, designed to degrade Moscow's industrial base and its ability to sustain the war.
"We will continue to impose costs on the Kremlin for continuing this war both by further restricting their access to additional items, as well as through aggressive enforcement," Under Secretary of Commerce Alan Estevez said in a statement that summarized the additional sanctions.
The new rules build on controls already in place on Russia's industrial, commercial, chemical and biological sectors, adding a variety of electronics, instruments and carbon fibers, as well as chemicals including fentanyl and its precursors.
They also expand the list of foreign-produced items that require a license for Russia, Belarus and Iran to further limit Tehran's ability to provide Russia with drones.
Doug Jacobson, a Washington trade lawyer, noted that some newly restricted items may be controversial.
"Due to the broad scope of the new controls, licenses are now required to export items such as hearing aids, false teeth, and artificial joints," he said.
The new moves came as the United States and the rest of the "Group of Seven" major economies agreed to stiffen sanctions against Russia as they meet in Japan.
Matthew Axelrod, the Commerce Department's Assistant Secretary for Enforcement, said the U.S. is making it a priority to enforce controls on items that contribute to Russian weapons systems such as missiles and drones.
When a company is found to have engaged in evasion, Axelrod said in the statement, "we will use all of our authorities...to shut it down."
Last week, a Greek man was arrested in Paris and charged by New York prosecutors with smuggling U.S.-origin military technologies to Russia while he was operating as a defense contractor for NATO.
Reporting by Karen Freifeld and Susan Heavey; Editing by Doina Chiacu
https://www.reuters.com/world/us-commer ... 023-05-19/