“Given where we are today, I think the Fed is on track to continue policy normalization, but it’s likely to be gradual and measured,” says chairman Jerome Powell at his semi-annual testimony before the Senate Banking Committee. Powell also gave a peek into the Fed’s next move: raising interest rates three times this year.

One of the most important questions in economy today might be what the inflation rate is. The Fed Chair and his team, on the other hand, have a different question: how much is too much? Ben Bernanke, the U.S. Federal Reserve chairman, became the first central banker in the world to testify before Congress on Thursday. The question: how much is too much?

Daily business meeting

15. July 2021Updated

15. July 2021, 13:37. AND

15. July 2021, 13:37. AND

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Inflation up sharply, says Fed chairman

Federal Reserve Chairman Jerome H. Powell testified before the House of Representatives on the impact of the coronavirus on the economy and inflation issues in the context of the financial sector recovery.

As outlined in the Monetary Policy Report, supply constraints are slowing economic activity in some sectors, notably the automotive industry, where global shortages of semiconductors have driven output down sharply so far this year. The labour market situation continues to improve, but there is still a long way to go. The demand for labour appears to be very high. The number of vacancies has reached a record high. Employment is expected to increase significantly in the coming months as public health continues to improve. And as some other factors related to the pandemic now weighing on them, overwhelming them. As noted in the Monetary Policy Report, the pandemic-related decline in employment last year was greatest among low-wage workers and African Americans and Hispanics. Despite significant improvements for all racial and ethnic groups, there is still room for improvement for the most affected groups. Inflation has risen significantly and is expected to remain high in the coming months before falling. Inflation rises temporarily due to base effects, as the sharp fall in prices caused by the pandemic last spring is removed from the 12-month calculation.

Mastercard has a 33% share of card payments in India. The new restrictions could hamper the company’s expansion in the country.Credit…Arun Sankar/Agence France-Presse – Getty Images

NEW DELHI – India on Wednesday banned Mastercard from acquiring new customers in the country for allegedly violating data retention laws, a blow to the company in a market in which it has invested heavily to grow.

The Reserve Bank of India said Mastercard did not comply with the 2018 directive to store local transaction data only in India, although it had ample time and capacity to do so. The ban on issuing cards to new customers will be lifted on December 22, the central bank said in a statement.

Mastercard said in a statement that it was disappointed by the government’s restriction, but that the measure would not affect its operations. The company added that it has been working closely with the authorities to ensure compliance with the 2018 directive. A spokesman for the company declined to give details of the bank’s decision.

Mastercard is fully complying with its legal and regulatory obligations in the markets where it operates, the company said in a statement. We will continue to work with them and provide any additional information necessary to address their concerns.

American Express and Diners Club also faced similar restrictions this spring, but they are much smaller players in the Indian market.

Mastercard accounts for 33% of card payments in India, just after Visa, which accounts for 45%. That’s according to a 2020 survey by PPRO, a London-based payments company.Mastercard announced in 2019 that it would invest $1 billion over five years to expand its presence in India, on top of the $1 billion it had already invested between 2014 and 2019.

As part of India’s push for better data protection, the requirement to store end-to-end transaction data only in India has created difficulties for international payment processors. However, India has resisted lobbying from financial firms who argued that the introduction of local data processing would significantly increase costs and could set a precedent for other countries, which could impact their fraud surveillance.

I don’t think they’re saying they’re not going to do it – there may be delays and they may be busy, said A.P. Hota, an online payments analyst who previously headed the National Payments Corporation of India, about Mastercard’s latest restriction.

Hota said all India’s 50 largest banks have a relationship with Mastercard, as well as Visa and Rupay, the local payment processor. Mastercard can limit the damage if the ban is short-lived, but the consequences of extending the restrictions could be severe in a market in which Mastercard is heavily invested.

The consequences will be significant, he said. Banks that have significant agreements with Mastercard will need to consider alternatives.

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  • Initial applications for unemployment benefits were little changed last week, the Labor Department said Thursday.
  • The weekly seasonally adjusted figure was 383,000, virtually unchanged. The number of new applications for pandemic unemployment benefits, the federal program for the self-employed, small business owners and others not normally eligible for government benefits, was 96,000, about 4,000 fewer than a week earlier. The data are not seasonally adjusted. (Seasonally adjusted state claims were 360,000, down 26,000 and the lowest number since the pandemic began in March 2020.)
  • The number of new registrations from Member States remains high by historical standards, but is only a third of the level at the beginning of January. Applications, a kind of layoff indicator, have fallen as businesses regain full employment, particularly in the hardest hit sectors such as leisure and hospitality.
  • More than 20 states recently stopped paying some or all federal benefits to the unemployed – including a $300 supplement to other benefits – because of the pandemic, although they are funded through September. Officials in those states said the payments would discourage people from looking for work. However, judges in Maryland and Indiana blocked the early termination of the payments, while legal appeals are pending in three other states.
  • A survey of 5,000 adults conducted by Morning Consult from September 22 to 25 found that the number of adults in the country was low. In June, it became clear that people whose unemployment benefits are coming to an end are under more pressure to find a job. But of all those who received unemployment benefits, relatively few – 20% of those working full-time and 28% of those working part-time – said the benefits were better than their previous income in terms of covering basic expenses.
  • The Labor Department’s employment report for June showed there were 6.8 million fewer jobs in the economy than before the pandemic. According to another report, there were 9.2 million job openings at the end of May, as companies that had closed or reduced their workforces during the pandemic rushed to hire new workers to meet the rebounding demand.
  • However, employee turnover is significant, with many more people being laid off than losing their jobs, indicating that many are moving to jobs that pay even slightly better.
  • China announced Thursday that its economy grew 7.9% year-on-year from April to June. This rate is still higher than in many other countries, but it is considerably slower than the 18.3% jump in the economy in the first three months of the year and is lower than expected. Rising raw material costs are squeezing the profits of factories and retailers. People are reluctant to spend money because small outbreaks of the coronavirus remind them that the pandemic is not over.
  • The Hollywood Foreign Press Association, the embattled nonprofit behind the expensive Golden Globe Awards, is reportedly considering a new reform plan after entertainment industry representatives deemed the changes proposed by the association’s board of directors inadequate. The new proposal includes the rapid addition of 50 selected journalists, with an emphasis on diversity, to the current group of about 80 members, none of whom are black; the creation of a separate for-profit corporation for the Golden Globes, headed by a 15-member board of directors; and stricter and more transparent requirements for re-accreditation as a member of the H.F.P.A., which will take place annually. The H.F.P.A. is expected to vote on several reform proposals over the summer. A two-thirds majority is required to amend an organization’s bylaws.

U.S. stocks fell Thursday as investors watched the second day of Federal Reserve Chairman Jerome H. Powell’s hearing in Congress. Powell.

In his speech to the Senate Banking Committee, Mr. Powell acknowledged that inflation had reached uncomfortably high levels and said he and his colleagues would keep a close eye on rising prices. However, he argues that the recent rise is linked to the country’s recovery from the pandemic and points out that overreacting to temporary inflation at a time when millions are unemployed has a high cost.

On Thursday, the Labor Department reported that initial applications for unemployment benefits fell to 360,000 last week, 26,000 fewer than the week before.

  • The S&P 500 index fell 0.4% and the Stoxx Europe 600 index fell 1%.
  • Sterling and government bond yields rose after Michael Saunders, one of the Bank of England’s governors, said he might do well to withdraw some of the current monetary stimulus fairly quickly to bring inflation back to the 2% target. Annual inflation came in at 2.5% in June, data released Wednesday showed. One option for the central bank would be to end the bond-buying program early, Saunders said Thursday.

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