The heir and de facto leader of the Samsung group received a presidential pardon Friday, continuing South Korea’s long tradition of freeing business leaders convicted of corruption on economic grounds.
Billionaire Lee Jae-yong, convicted of bribery and embezzlement in January last year, will be “reinstated” to give him a chance to “contribute to overcoming the economic crisis” of the country, justice minister Han Dong-hoon said.
Friday’s pardon will allow him to fully return to work by lifting a post-prison employment restriction that had been set for five years.
The pardon was given so that Lee — as well as other high-level executives receiving pardons Friday — could “lead the country’s continuous growth engine through active investment in technology and job creation,” it added.
A total of 1,693 people — including prisoners with terminal illnesses and those near the end of their terms — were on the pardon list, the ministry said, ahead of the annual Liberation Day anniversary Monday.
Lee, 54, issued a statement after the pardon was announced saying he aimed to “contribute to the economy through continuous investment and job creation for young people.”
Lee is the vice-chairman of Samsung Electronics, the world’s biggest smartphone maker. The conglomerate’s overall turnover is equivalent to about one-fifth of South Korea’s gross domestic product.
There is a long history of South Korean tycoons being charged with bribery, embezzlement, tax evasion or other offenses.
The giant Samsung group is by far the largest of the family-controlled empires known as chaebol that dominate business in South Korea.
But analysts said they simply allowed major businessmen to feel they were not “constrained by any legal norms”, Vladimir Tikhonov, professor of Korean studies at the University of Oslo, told AFP.
Justice minister Han said all politicians were excluded this time as the economy is the most “urgent and important” issue.
– More legal woes –
In May, he was excused from a hearing in that trial to host US President Joe Biden when he kicked off a tour of South Korea by visiting Samsung’s chip plant, alongside President Yoon.
But Lee’s imprisonment has been no barrier to the firm’s performance — it announced a surge of more than 70 percent in second-quarter profits in July last year, with a coronavirus-driven shift to remote work boosting demand for devices using its memory chips.
“The pardon weakens the rule of law, which potentially is, in fact, more detrimental than advantageous.”
President Biden’s top spokesperson was accused of lying on Wednesday in a tweet touting “0% inflation in July” — even as federal data indicated that the consumer price index rose by 8.5% year over year.
“We just received news that our economy had 0% inflation in July,” White House press secretary Karine Jean-Pierre tweeted on Wednesday.
“While the price of some things went up, the price of others, like gas, clothing, and more, dropped.”
Jean-Pierre also hailed the dip in gasoline prices, which she called “the fastest in a decade” which was “saving American families with two cars $106 per month on average.”
In the same tweet thread, Jean-Pierre wrote that “real wages went up for the first time in almost a year.” She also urged the House to pass the Inflation Reduction Act “as soon as possible” in order to “lower health care, prescription drug, and energy costs.”
But Twitter users pushed back against Jean-Pierre’s claims.
White House press secretary Karine Jean-Pierre toed the administration line that the country saw “0% inflation in July.”REUTERSTwitter users pushed back on Jean-Pierre’s tweets on Wednesday.
“Great. No need for the ‘Inflation Reduction Act’ anymore…” tweeted Yossi Gestetner.
Another Twitter user, Kevin Dalton, posted a link to a news article indicating that inflation was 8.5% in July, writing: “Other than the complete lie you just told, I totally believe you…”
Joel Griffith, a research fellow at the Heritage Foundation, posted a tweet showing the increased prices of key goods.
“Inflation this past year of 8.5% is near a 40-yr high,” he noted.
The rate of inflation was 8.5% in July — hovering around record levels not seen in four decades.
Supporters of the administration, however, tried to clarify Jean-Pierre’s tweet. One noted that the press secretary meant that “inflation over the last month has been 0%” and that it “hasn’t increased in the past month.”
But another Twitter user responded: “You don’t compare inflation month to month. It is compared year to year. But you wouldn’t know that.”
Last month, Jean-Pierre was widely mocked for claiming that “we are stronger economically than we have been in history.”
Americans continue to be saddled with higher-than-usual food prices.Levine-Roberts/Sipa USA
She cited low unemployment as well as “more than 8.7 million new jobs created” — though critics noted that it was due to the end of pandemic-related lockdown measures and Americans returning en masse to the workforce after the vaccination drive.
The 8.5% rise in inflation last month was lower than the sharp, 9.1% increase in June, but still hovering at a high not seen since four decades ago.
Core inflation, which excludes food and gas prices, rose by 5.9% annually and by 0.3% compared to June.
Analysts said that a drop in demand has led to falling gas and energy prices, though that trend can easily reverse itself given volatile geopolitical conditions, including the ongoing Russian invasion of Ukraine, as well as possible hurricanes in the US.
The head of the Internal Revenue Service said that the tax collecting agency will “absolutely not” use $80 billion in new funding to step up audits of low- and middle-income Americans.
IRS Commissioner Charles Rettig tried to reassure the US Senate in a recent letter about the 87,000 new agents who will be hired as part of the so-called Inflation Reduction Act.
The legislation includes $45.6 billion for “enforcement-related funds”, which makes up more than half of the appropriations.
Nonpartisan tax observers say that most of the funds that the IRS will collect will come from small and medium-size businesses.Newsday via Getty Images
“The resources in the reconciliation package will get us back to historical norms in areas of challenge for the agency — large corporate and global high-net-worth taxpayers — as well as new areas like pass-through entities and multinational taxpayers with international tax issues. , where we need sophisticated, specialized teams in place that are able to unpack complex structures and identify noncompliance,” Rettig wrote in the letter.
The letter was first reported by CNBC.
The IRS will likely receive $80 billion in funding after Senate Democrats passed the Inflation Reduction Act over the weekend.AP
Rettig then added: “These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans.”
He wrote that “our investment of these resources is designed about the Department of the Treasury’s directive that audit rates will not rise relative to recent years for households making under $400,000.”
Last week, the nonpartisan watchdog Joint Committee on Taxation said it anticipates that between 78% and 90% of the estimated $200 billion that the IRS will collect as a result of the bolstered workforce will come from small businesses.
President Biden and the Democratic Party have insisted that Americans earning less than $400,000 annually would not have to pay a cent more in taxes.
But the Joint Committee on Taxation disputes this, saying that between 4% and 9% of the money collected will come from businesses that earn above $500,000 a year.
“The IRS will have to target small and medium businesses because they won’t fight back,” Joe Hinchman, executive vice president at the National Taxpayers Union Foundation, told The Post.
“We’ve seen this play out before … the IRS says ‘We’re going after the rich’ but when you’re trying to raise that much money, the rich can only get you so far.”
Hinchman told The Post that it is easier for the IRS to collect from small- and mid-size businesses since they are less likely to incur legal expenses in order to fight the agency — whereas larger and wealthier companies are much better equipped to do battle.
“The approach here is to double the IRS workforce, take the leash off, and see how much they can collect,” Hinchman adds. “I think they’ll collect it but it will be quite painful.”
United States federal scrutiny of Google’s digital advertising operations can be traced back to the Trump administration.
By Leah Nylen and Gerry SmithBloomberg
Published On 9 Aug 2022Aug 9, 2022
The US Justice Department is preparing to sue Google as soon as next month, according to people familiar with the matter, capping years of work to build a case that the Alphabet Inc. unit illegally dominates the digital advertising market.
Lawyers with the DOJ’s antitrust division are questioning publishers in another round of interviews to refresh facts and glean additional details for the complaint, said three people familiar with the conversations who asked not to be named discussing an ongoing investigation.
Some of the interviews have already taken place and others are scheduled in the coming weeks, two of the people said. They build on previous interrogations conducted during an earlier stage of the long-running investigation, the people said.
An ad tech complaint, which Bloomberg had reported was in the works last year, would mark the DOJ’s second case against Google following the government’s 2020 lawsuit alleging the tech titan dominates the online search market in violation of antitrust laws.
Still undecided is whether prosecutors will file the case in federal court in Washington, where the search case is pending, or in New York, where state attorneys general have their own antitrust case related to Google’s ad tech business, the people said.
The Justice Department declined to comment.
“Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world,” said Google spokesperson Peter Schottenfels. “The enormous competition in online advertising has made online ads more relevant, reduced ad tech fees, and expanded options for publishers and advertisers.”
The DOJ’s ad tech probe is an example of the federal government’s push to rein in the largest US technology platforms after nearly a decade during which regulators took little to no action. The Federal Trade Commission has sold Meta Platforms Inc. seeking to force it to sell off Instagram and WhatsApp and is investigating Amazon.com Inc. over its control of online retail.
Apple Inc. is also under investigation by the Justice Department related to its tight control over the App Store. These types of probes are difficult, taking years to prepare and resolve as they wend their way from investigation to litigation and appeals.
Federal scrutiny of Google’s digital advertising operations goes back to the Trump administration. Then-Attorney General William Barr sued the Mountain View, California-based company over its search business instead, alleging the company used exclusive distribution deals with wireless carriers and phone makers to lock out competition.
In December 2020, attorneys general for 16 states and Puerto Rico also sued Google for allegedly monopolizing the online digital advertising market. The suit alleges Google reached an illegal deal with Meta to manipulate the online auctions where advertisers and website publishers buy and sell ad space. Meta isn’t accused of wrongdoing in the states’ lawsuit, though regulators in the UK and Europe have opened a probe into both companies over the agreement, nicknamed Jedi Blue.
Google denies the allegations and has asked a federal judge to dismiss the states’ complaint. A hearing on that request is scheduled for later this month.
The search giant is the biggest player in the market for online display ads, which help fund news, sports and entertainment websites. The company owns tools that help websites sell ads, others that help advertisers buy space and the most widely used platform where online ad auctions take place.
Google controlled about 28.6% of the $211.2 billion in US digital ad spending last year, according to eMarketer, while Facebook made up 23.8% and Amazon 11.6%.
President Biden tried to claim Wednesday that the US had “zero inflation” in July hours after federal Consumer Price Index data showed annual inflation dipping only slightly to 8.5%, which outraged Republicans and other critics who pointed out it’s still near a four-decade high .
The latest figures reflected a demand-driven decline in fuel prices — including gasoline, which hit a record national average of $5 per gallon in mid-June before sliding to a still-high $4 average today — that offset increases in the cost of food, rent and other goods and services.
“I just want to say a number: zero,” Biden said in the White House East Room before signing legislation granting greater medical and disability benefits to veterans suffering illnesses linked to inhaling toxic smoke.
“Today, we received news that our economy had 0% inflation in the month of July — 0%,” Biden said. “Here’s what that means: while the price of some things went up — went up last month, the price of other things went down by the same amount. The result? Zero inflation last month.
President Joe Biden insists the US is undergoing “zero inflation” in spite of federal data showing its more than eight percent.REUTERS/Kevin Lamarques
“But people are still hurting,” the president went on, before repeating: “But 0% inflation last month.”
Biden then proceeded to accidentally step on his own message by urging Congress to pass the Senate-approved Inflation Reduction Act, which he said would keep inflation “from getting better,” a view advanced by Republicans, before correcting himself to say “from getting worse.” .”
Biden’s rosy spin on the latest inflation report was quickly called out as misleading by critics, especially after White House press secretary Karine Jean-Pierre tweeted: “We just received news that our economy had 0% inflation in July. While the price of some things went up, the price of others, like gas, clothing, and more, dropped.”
“The Biden Administration has a tortured relationship with math,” joked Rep. Virginia Foxx (R-NC) on Twitter.
The Labor Department’s Consumer Price Index shows inflation remains at a four-decade high at 8.5 percent.New York Post Illustration
“Ridiculous BS from the White House,” tweeted Sen. Ted Cruz (R-Texas). “There’s 8.5% inflation and basically everything anyone ever buys went up in price. This is just cruel gaslighting from the Biden admin.”
“Either the White House doesn’t understand what inflation is or they just don’t care,” said Rep. Kevin Hern (R-Okla.). “That doesn’t change the pain and hardship that Americans are enduring because of their failed policies.”
“It’s a bogus math trick. This is the overall one-month index change. Overall that means that the big drop in fuel oil and gas (following previous massive monthly increases) swamped the huge increases everywhere else,” tweeted Jeffrey Tucker, president of the Brownstone Institute think tank.
“Using the same tactic, you could also observe a one-month 19.2% increase in electricity! But of course we would not do that because that’s dumb,” Tucker added. “The actual increase is 15.2% which we get from calculating year over year.”
John Cooper, director of media and public relations at the conservative Heritage Foundation, tweeted, “Joe Biden claims, multiple times, that there was ‘zero inflation’ in July. Absolutely false. Year-over-year inflation was 8.5% in July.”
The Bureau of Labor statistics laid the data out in black and white — reporting the highest annual jump in food prices since the 1970s, with a 1.3% bump in at-home food costs from June to July and a 10.9% food-cost jump in the past year.
“The all items less food and energy index rose 5.9 percent over the last 12 months,” the official report said, referring to so-called “core inflation.” “The energy index increased 32.9 percent for the 12 months ending July, a smaller increase than the 41.6-percent increase for the period ending June. The food index increased 10.9 percent over the last year, the largest 12-month increase since the period ending May 1979.”
National gas prices still remain at $4 a gallon or more.AP Photo/Marta Lavandier, File
Overall annual inflation was 9.1% in June, the highest rate since 1981. Critics blame Biden’s policies, including large spending bills, while the White House has blamed an array of other factors — including COVID-19, supply chain bottlenecks and the Russian invasion of Ukraine.
The Federal Reserve has a target of about 2% annual inflation and has been increasing interest rates this year in an attempt to tamp down price increases.
The pending Inflation Reduction Act, which the House is expected to pass as early as Friday, provides nearly $400 billion for environmental programs, including tax credits of up to $7,000 to buy electric vehicles, and roughly $64 billion to extend more generous COVID-19- it was Obamacare subsidies.
Sen. Ted Cruz accused the White House of “cruel gaslighting” on Americans.Lev Radin/Pacific Press/Shutterstock
The new spending is offset by new taxes on corporations, including a new 15% corporate minimum tax, increased IRS enforcement and by allowing Medicare to directly negotiate drug prices.
Republicans argue new taxes may result in higher consumer costs and point to independent analysis that says the bill won’t reduce inflation.
“The Orwellian named ‘Inflation Reduction Act’ will do no such thing, as a number of prominent experts and economic policy groups have indicated,” Sen. Ron Johnson (R-Wis.) said after the bill passed the Senate. “The Penn Wharton Budget Model, the Tax Foundation, and the Congressional Budget Office all found the bill won’t lower inflation and may make it worse. The IRS would more than double in size, unleashing 87,000 new enforcement agents on American families… [and the] nonpartisan Joint Committee on Taxation says that 78% to 90% of the revenue raised from misreported income would likely come from those making under $200,000.”
The federal Liberals have rejected an invitation to attend a national jobs summit next month, labeling it a stunt.
Key points:
The opposition has ruled out any of its MPs attending next month’s jobs summit
The federal government is agreeing to a summit with the hopes it will prompt wages and productivity growth
Peter Dutton says the summit is a “stunt” with the unions
The federal government is preparing to agree to a summit for the first week of September that it hopes will be a keystone for its economic policy in the term ahead that will unify business, government and unions.
Government ministers had expressed hesitation over inviting the opposition, saying it would only be invited if it was prepared to be constructive.
On Tuesday Treasurer Jim Chalmers wrote to Opposition Leader Peter Dutton, extending an invitation for him or another Coalition MP to attend.
But Mr Dutton has rejected the invitation.
“It’s a stunt with the unions,” Mr Dutton said.
“We’ll support all sorts of good policies from the government … but we’re not going to support stunts.
“The fact that Jim Chalmers wrote to me and then within a couple of hours dropped it to The Australian newspaper demonstrates it is nothing more than a stunt.”
Unions lay down reform agenda ahead of summit
Overnight, the peak union body outlined its goals for the upcoming jobs summit, with “full and secure” employment being its first priority.
The Australian Council of Trade Unions said despite unemployment being at a historic low, real wages were declining and insecure work was “rife”.
The ACTU said the federal government should implement an excess-profits levy on companies “enjoying windfall profits as a result of current inflation”, cancel planned tax cuts for high-income earners and regulate labor markets to ensure wages rose in line with productivity.
The unions have already flagged they want enterprise bargaining rules overhauled, something the government has indicated it will pursue despite resistance from business groups.
ACTU secretary Sally McManus said for workers to benefit, the government must do more than fiddle around the edges on workplace reforms.
“It requires new ways of thinking about how our system is managed, who benefits from it, and how to change it for the better,” Ms McManus said.
Shadow Finance Minister Jane Hume said despite her party’s refusal to attend, the jobs summit would be an important chance to set the policy agenda for the coming term of government.
“The jobs summit that’s coming up will be a very important event in which a lot of these demands get aired,” Senator Hume told Sky News.
“The real test, of course, will be when Labor starts ruling out some of these demands from their union masters.
“I think this is an important opportunity for the Australian public to really hear what it was they voted on.”
US President Joe Biden talks to reporters while boarding Air Force One on travel to Eastern Kentucky to visit families affected by devastation from recent flooding, as he departs from Delaware Air National Guard Base in New Castle, Delaware, US, August 8, 2022.
Kevin Lamarques | Reuters
WASHINGTON — President Joe Biden said Monday he is “not worried” about China’s military exercises around Taiwan, adding that while he is “concerned that they’re moving as much as they are,” he does not think they’re going to continue to increase the pressure.
The remarks came one day after Beijing concluded 72 hours of intense maneuvers and missile tests over and around Taiwan. The exercises involved dozens of Chinese fighter jets and warships to mimic a military blockade of the self-governing island that Beijing considers a province.
Biden’s relative calm reflected the deliberate American strategy of not responding to Chinese bellicosity with equally hot saber-rattling.
It also reflects a broader opinion within the Biden administration that Beijing does not intend to make good on its implicit threat to invade Taiwan, at least not in the near term.
Given this assessment, the United States has adopted an approach, for now, of heightened vigilance, but steadfastly refused to be drawn into a military game of chicken in the Pacific.
Last Thursday, the White House announced that Biden would keep a US naval aircraft carrier strike group in the South China Sea longer than originally planned, in response to Beijing’s increased aggression toward Taiwan.
At the same time, a Biden spokesman said the United States would postpone a previously scheduled intercontinental ballistic missile, or ICBM, test.
The decisions signaled Washington’s desire to maintain American military alertness in the region, while also denying Beijing the opportunity to point to the long-planned US missile test as evidence that America was responding to China’s own missile launches near Taiwan with military preparations of its own.
Beijing claimed its military exercises were conducted in retaliation for US House Speaker Nancy Pelosi’s visit to Taiwan last week.
The visit by the California Democrat, which the Biden White House publicly defended but privately opposed, marked the first time in 25 years that an American House speaker, a position second in line to the presidency, had visited Taiwan.
Asked Monday whether it was wise for Pelosi to have traveled to Taiwan given the tense US-China relationship, Biden gave the standard response his administration has used for weeks.
“That was her decision,” he said, before boarding Air Force One en route to Kentucky, where Biden and first lady Jill Biden will visit communities impacted by catastrophic flooding last week.
Reserve Bank of Australia says year-long trial will explore “innovative use cases and business models” for currency.
Australia’s central bank has unveiled plans to examine the potential economic benefits of introducing a central bank digital currency (CBDC).
The Reserve Bank of Australia (RBA) said in a statement on Tuesday it would carry out a year-long pilot project to explore “innovative use cases and business models” for a CBDC and gain a better understanding of technological, legal and regulatory considerations.
The RBA will partner with the Digital Finance Cooperative Research Center (DFCRC), a government-backed industry group, for the project, which will invite industry players to develop “specific use cases” that demonstrate how a CBDC could provide innovative payment and settlement services to households and businesses.
The result of the pilot will inform ongoing research into the desirability and feasibility of a CBDC in Australia, the RBA said.
“This project is an important next step in our research on CBDC,” RBA Deputy Governor Michele Bullock said in a statement. “We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia.”
About 100 countries are considering rolling out CBDCs, according to the International Monetary Fund, with a number of jurisdictions including China and the Bahamas already distributing their digital currencies among the public.
CBDC proponents say the nascent technology will allow for faster and cheaper transactions, promote financial inclusion, and give central banks greater flexibility in monetary policy.
While sharing some similarities with cryptocurrencies, CBDCs differ from digital tokens like Bitcoin as they are controlled by a central authority.
Cryptocurrencies operate on peer-to-peer networks known as blockchains, which are decentralized so that no single person or group exerts control.
Washington— The Senate on Sunday passed Democrats’ sweeping economy package designed to combat climate change, address health care costs and raise taxes on large corporations, marking a crucial achievement for President Biden and his party as they look to maintain their hold on Congress in the November midterm elections.
The plan, called the Inflation Reduction Act, cleared the upper chamber by a vote of 51 to 50 along party lines, with Vice President Kamala Harris providing the tie-breaking vote in the evenly divided Senate.Democrats used a fast-track legislative process known as reconciliation to pass the measure in the face of unanimous opposition from Republicans.
“It’s been a long, tough and winding road but at last, at last, we have arrived,” Senate Majority Leader Chuck Schumer said in remarks on the Senate floor as members prepared to vote for final passage. “Today, after more than a year of hard work, the Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative feats of the 21st century.”
The vote came after a marathon session that lasted through the night and into Sunday afternoon, with Democrats breaking into applause as members cast their final votes. In a process known as a “vote-a-rama,” Republicans offered a slew of amendments that Democrats successfully swatted down over nearly 16 hours of debate.
GOP senators did manage to block a provision that would have capped the price of insulin at $35 a month for those covered under private health care plans. Democrats needed 60 votes to waive reconciliation rules and keep that part of the bill, but it failed 57 to 43, with seven Republicans joining Democrats in support of the measure.
House Democratic leaders announced last week the lower chamber will return from its month-long recess on Friday to take up the legislation, which is expected to pass.
Mr. Biden praised Senate Democrats for passing the plan and acknowledged it required “many compromises.” He urged the House to swiftly approve the bill.
“Today, Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share,” the president said in to statement. “I ran for president promising to make government work for working families again, and that is what this bill does — period.”
The package is the culmination of months of negotiations over Mr. Biden’s domestic policy agenda, which at times appeared to be on life support but was revived late last month with the surprise announcement of an agreement between Schumer and Sen. Joe Manchin, a moderate Democrat from West Virginia.
Sen. Joe Manchin chats with his staffers on Capitol Hill in Washington on Aug. 6, 2022.
Shuran Huang for The Washington Post via Getty Images
While the legislation is much more narrow than the sprawling $3.5 trillion proposal put forth by Mr. Biden last year, the tailored package had the backing of Manchin and Sen. Kyrsten Sinema, a Democrat from Arizona whose support was crucial.
Still, Democrats praise the plan as their answer to addressing rising consumer prices and for its nearly $400 billion investment in fighting climate change, the largest ever. The package allows Medicare to negotiate prescription drug prices, a key Democratic priority that is expected to save hundreds of billions of dollars over the next 10 years. It also extends enhanced health insurance subsidies that were set to expire at the end of the year, and imposes a 15% minimum tax on most corporations that make more than $1 billion each year.
The corporate tax provision emerged as a point of contention as senators neared a final vote on Sunday. Seven Democratic senators — Sinema, Jon Ossoff, Raphael Warnock, Catherine Cortez Masto, Maggie Hassan, Mark Kelly and Jacky Rosen — joined Republicans in backing an amendment put forward by GOP Sen. John Thune of South Dakota exempts some firms with private equity backing from the 15% minimum corporate tax rate. That amendment passed 57 to 43.
To boost clean energy, the measure includes tax credits for buying electric vehicles and manufacturing solar panels and wind turbines. It also provides rebates for consumers who buy energy efficient appliances and provides $4 billion for drought relief.
Schumer lauded the bill as the “boldest climate package” in US history, and called it a “game-changer” and “turning point.”
“It’s been a long time coming,” he said.
One piece of Democrats’ drug-pricing plan — imposing penalties on drug manufacturers that raised prices beyond inflation on private insurers — was removed after it was reviewed by Senate parliamentarian Elizbeth MacDonough. Her approval of the rest of the package, however, cleared the way for the upper chamber to move forward with its consideration of the bill.
The Congressional Budget Office estimates the legislation will cut the deficit by $102 billion over the next 10 years. Republicans, though, argued the plan will have little impact on inflation and instead raise taxes while leading to job losses.
in an interview with “Face the Nation” on Sunday, Sen. Rick Scott, a Republican from Florida, claimed Democrats’ drug pricing plan will harm seniors, while the tax component will increase taxes on Americans.
“Why would you be increasing the cost of government? We’re increasing taxes,” he said.
A trader works on the floor at the New York Stock Exchange (NYSE), New York, August 3, 2022.
Andrew Kelly | Reuters
Here are the most important news items that investors need to start their trading day:
1. Stocks look for momentum
US equities markets were on track to open higher Monday morning after three straight winning weeks for the S&P 500, which is recovering from its worst first half in more than 50 years. The Nasdaq also posted a winning week as investors digested the latest jobs report, which was much stronger than expected, as well as chances for future rate hikes from the Federal Reserve, which is in inflation-fighting mode. Markets will also get a fresh read on inflation this week: The latest consumer price index is slated to be released Wednesday, and economists expect it to show a slight slowdown in the red-hot rate of inflation. Follow live stock market updates here.
2. Senate passes climate and health-care package
US Vice President Kamala Harris smiles during her speech at the NAACP National Convention in Atlantic City, New Jersey, US July 18, 2022.
Hannah Beer | Reuters
Senate Democrats, relying on Vice President Kamala Harris’ tiebreaking vote amid unanimous Republican opposition, finally passed a reconciliation package including provisions to battle climate change and bolster health care. The $430 billion bill ended up much smaller than what President Joe Biden and Democratic leaders were looking for, but the party is touting it as a huge victory ahead of the midterm elections this fall. The party in power tends to lose seats in Congress during a president’s first term, and with inflation raging and Biden’s approval ratings in the gutter, Democrats are in danger of ceding control of both chambers. The House is slated to vote on legislation and send it to Biden later this week. Read NBC News’ report here.
3. Fed governor sees more big rate hikes
Federal Reserve Bank Governor Michelle Bowman gives her first public remarks as a Federal policymaker at an American Bankers Association conference In San Diego, California, February 11 2019.
Ann Saphir | Reuters
The Fed is relatively fresh off its second consecutive three-quarter point rate hike, but expect more to come, according to Fed Governor Michelle Bowman. “My view is that similarly sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way,” She said in remarks over the weekend. Bowman, a voting member of the central bank’s rate-setting Federal Open Market Committee, said high inflation is a bigger threat to the economy than slowing growth. If prices continue to surge like they’ve been doing over the past few months, she said, it “could lead to a further economic softening, risking a prolonged period of economic weakness coupled with high inflation, like we experienced in the 1970s.”
4. Huge loss for SoftBank
SoftBank Founder Masayoshi Son said there is “confusion in the world” and in the markets due to a number of factors including Russia’s invasion of Ukraine, high inflation and central bank moves to raise interest rates. These factors have contributed to a record annual loss at SoftBank’s Vision Fund.
Kentaro Takahashi | Bloomberg | Getty Images
High interest rates have taken a toll on risky tech stocks this year, and SoftBank’s tech-focused Vision Fund is feeling the pinch. The Japanese conglomerate said Monday that the Vision Fund posted a loss of 2.93 trillion yen ($21.68 billion) in the most recent quarter – the second-largest quarterly loss for the fund. Overall, the company reported a record quarterly loss after delivering a profit during the same quarter a year earlier. SoftBank founder Masayoshi Son had already warned during the spring that the company would be more “conservative” with its investments after a massive loss during its previous fiscal year.
5. China sets new military drills near Taiwan
Video screenshot shows a missile launched by the rocket force of the Eastern Theater Command of the Chinese People’s Liberation Army PLA, targeting designated maritime areas to the east of the Taiwan Island, Aug. 4, 2022.
China isn’t done with its aggressive drills near Taiwan. The Chinese military said Monday it would conduct new actions in the air and sea near the self-ruled island, which China claims as its own. China’s military had just wrapped up several days’ worth of exercises – its largest ever, according to Reuters – protesting House Speaker Nancy Pelosi’s visit to Taiwan. The drills included the firing of 11 short-range ballistic missiles, while warships, fighter jets and drones made several maneuvers around the island.
– CNBC’s Yun Li, Jeff Cox and Arjun Khrapal contributed to this report.
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