The Hill’s Morning Report — Fed chairman: Job losses ‘very likely’

by Alexis Simendinger and Kristina Karisch - 03/08/23 6:25 AM ET

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Financial markets didn’t want to hear it. Sen. Elizabeth Warren (D-Mass.), armed with data, objected. And some Republican senators, worried that the doctor caused the illness, described themselves as skeptics.

A hawkish Federal Reserve Chairman Jerome Powell, testifying to a Senate panel on Tuesday, said the central bank may need to raise interest rates higher than expected and for longer to slay inflation. The Fed “still has work to do,” he said.

The chairman will reprise his dour testimony to members of the House Financial Services Committee today. The next meeting of the Federal Open Market Committee is in two weeks.

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell told the Senate Banking Committee. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”

▪ The Washington Post: Fed may need more aggressive interest rate hikes, Powell says.

▪ The Hill: Powell faces Senate heat as Fed ramps up inflation fight.

▪ The Wall Street Journal: Time to get used to higher rates, which could stay elevated in a way not seen since before the financial crisis.

The Fed chairman and Warren sparred when she repeated her criticism that rate hikes, meant to grind inflation down to the central bank’s 2 percent target by slowing the economy, translate into a potential 2 million to 3.5 million people who could lose their jobs in a single year. Warren, who fears the central bank has an abysmal record of avoiding recession, told Powell the Fed “has no plan” should climbing job losses “become a runaway train” with painful repercussions for families.

The Fed chairman responded that all Americans are harmed by rising inflation, not just those who potentially lose jobs as the economy slows. Job losses are “very likely,” he conceded. He noted that the unemployment rate of 3.4 percent is the lowest in 54 years, adding that if the jobless rate rose to 4.5 percent this year, it would still be below historic norms.

Powell’s testimony showed that while the Fed raised interest rates last year at the fastest pace since the 1980s, pushing borrowing costs above 4.5 percent from near zero, consumer and business demand have not slowed this year to the extent that the central bank had anticipated. The Fed repeatedly raised rates by three-quarters of a point in 2022, but slowed to a raise of half a point in December and a quarter point in early February (The New York Times).

The labor picture is “extremely tight” and “probably” contributing to inflation but is not a primary cause, Powell added during later questioning.

Before the chairman’s remarks, financial markets had been expecting a quarter-point move at the Fed’s March 21-22 meeting. After his opening testimony, a half-point move emerged as the newest bet and stock prices lurched lower. A closely watched Wall Street recession indicator pointed to a greater chance of a downturn. It’s worrisome news for workers and the economy, and for President Biden, who may soon formally ask Americans to stay on the job.

The S&P 500 ended the day down about 1.5 percent, the Times reported.

Related Articles

▪ Bloomberg News: The debt ceiling is the risk Wall Street doesn’t want to think about. Investors just assume a deal will happen.

▪ The Wall Street Journal: Hot dogs can explain how our view of inflation and employment changes with the seasons.

▪ Bloomberg News: Global investors contemplate the fallout from U.S. rates reaching 6 percent.

LEADING THE DAY

➤ POLITICS

Chatter is growing around Virginia Gov. Glenn Youngkin (R) as he seeks to bolster his national profile amid speculation he is exploring a 2024 presidential bid, writes The Hill’s Julia Manchester. Youngkin has inserted himself into the national spotlight in recent weeks as other potential GOP contenders — including a fellow governor in Florida’s Ron DeSantis — journey outside of their states to test the presidential waters. Last week, Youngkin made an appearance on CNBC’s morning show “Squawk Box” and will participate in a live town hall on CNN on education, a hot-button issue for the GOP primary base. The governor also met with donors in New York.

The visits come after recent polling showed good news for Youngkin on the presidential front; a Roanoke College poll released last week showed Youngkin with a 57 percent approval rating, while Biden’s approval sits at 38 percent. Among independent voters, the governor beats the president 54 percent to 35 percent.

Fox News host Tucker Carlson whipped up a firestorm on Capitol Hill Tuesday, sparking bipartisan backlash and igniting tensions with Capitol Police by downplaying the Jan. 6 Capitol riot on his prime-time program as “mostly peaceful chaos.” His use of security footage granted to him by House Speaker Kevin McCarthy (R-Calif.) prompted outrage from Democrats and some Republicans in Congress. As The Hill’s Emily Brooks, Rebecca Beitsch and Dominick Mastrangelo report, Senate Majority Leader Chuck Schumer (D-N.Y.) on Tuesday called Carlson’s show “one of the most shameful hours we’ve seen on cable television,” on the Senate floor, saying he was “furious” with both Carlson and McCarthy.

Sen. Kevin Cramer (R-N.D.), meanwhile, told CNN that “to somehow put [Jan. 6] in the same category as a permitted peaceful protest is just a lie.”

But other Republicans who have also criticized and downplayed the attack sided with Carlson’s interpretation of events. “When will judges begin applying justice equally? Doesn’t look like ‘thousands of armed insurrectionists’ to me,” Sen. Ron Johnson (R-Wis.) said in a tweet after thanking McCarthy and Carlson for showing the footage.

Carlson on Tuesday night mocked criticism of the footage, including from Schumer and Senate Minority Leader Mitch McConnell (R-Ky.), during the second night of his prime-time show focusing on the Jan. 6 breach (The Hill).

“They’re all on the same side,” Carlson said. “So it’s actually not about left and right. It’s not about Republicans and Democrats. Here, you have people with shared interests….The people who, underneath it all, have everything in common are all aligned against everyone else.”

McCarthy, meanwhile, said he does not regret sharing footage from the Jan. 6 attack with Carlson despite receiving bipartisan blowback, arguing that the decision was made for transparency (The Hill).

▪ The Washington Post: Capitol Police chief blasts Carlson over “misleading” Jan. 6 footage.

▪ Axios: Senate Republicans condemn Carlson’s portrayal of the Jan. 6. attack.

▪ Rolling Stone: Even Republicans are bashing Carlson for lying about the Jan. 6 violence.

▪ The Atlantic: Carlson and the new narrative of Jan. 6.

▪ The Washington Post: Former President Trump spurred “existential crisis” at Fox News, lawsuit exhibits show.

The Biden administration is ping-ponging among a series of Trump-era immigration proposals as officials fret over the end of Title 42 — an immigration policy activated during the coronavirus pandemic that has been central to the administration’s management of the border, but is due to end in May, along with other pandemic emergency measures. Apart from defending the use of Title 42, the White House has carried out a program of extensive deportations to Haiti, proposed a rule that would severely limit who could request asylum in the United States and — according to reports — is considering reinstating family detention at the border, write The Hill’s Rebecca Beitsch and Rafael Berrnal. The specter of the family detention policy threatens to implode the already-strained relationship between the White House and immigration advocates.

“The Biden administration has been rolling out Trump 2.0 policies for many months now,” National Immigrant Justice Center Executive Director Mary Meg McCarthy said in a statement. “These cruel and inhumane policies are becoming this administration’s legacy. President Biden has a choice to make: he can either continue to outdo his predecessor or respect the human rights of immigrants and asylum-seekers.”

▪ The Hill: Progressives appalled that Biden could return to holding migrant families in detention.

▪ The Washington Post: Squeezed at border, Biden team weighs family detention restart.

▪ The Hill: Sen. Lindsey Graham (R-S.C.) says he will introduce bill to “set the stage” for the U.S. to use military force in Mexico,

Meanwhile, a new poll by The Associated Press-NORC Center for Public Affairs Research shows some support for changing the number of immigrants and asylum-seekers allowed into the country. About 4 in 10 U.S. adults say the level of immigration and asylum-seekers should be lowered, while about 2 in 10 say they should be higher. About a third want the numbers to remain the same.

➤ ADMINISTRATION

The Justice Department on Tuesday filed an antitrust suit to prevent a proposed $3.8 billion purchase of discount carrier Spirit Airlines by JetBlue. It’s the first time in more than two decades that the government has sought to block a U.S. airline merger. The lawsuit is not a surprise, as the Biden administration has argued often that there needs to be greater competition between businesses, especially in the airline industry, to lower costs for consumers (CNN).

“If not blocked, the merger of JetBlue and Spirit would result in higher fares and fewer choices for tens of millions of travelers across the country. The Justice Department is suing to prevent that from happening,” Attorney General Merrick Garland said on Tuesday. “Companies in every industry should understand by now that this Justice Department will not hesitate to enforce antitrust laws and protect American consumers.”

Biden fired the opening shots of the battle over spending and taxes that will consume Capitol Hill this year on Tuesday, writes The Hill’s Alexander Bolton. He proposed a 5 percent Medicare surtax on people who earn more than $400,000 a year, which the White House is hailing as something that will extend Medicare’s solvency by 25 years.

Republicans, meanwhile, are slamming it as a “massive” tax hike, and key Democrats are ducking for cover, declining to say whether they will back it. Back in the Obama administration, the 3.8 percent Medicare surtax, a reform in the 2009 Affordable Care Act, contributed to controversy ahead of the 2010 midterm election. With Biden’s proposal reopening the fierce political battle that wracked Capitol Hill more than a decade ago, lawmakers are girding for another intense fight over the Medicare tax plan and other proposed hikes in the White House budget, expected to be released Thursday.

As The Hill’s Niall Stanage writes in The Memo, Biden is seeking to tag the GOP as would-be destroyers of Medicare and Social Security, and laying out a broader political argument that Republicans would cut holes in the social safety net. He’s betting his approach will resonate with voters, even though the subject doesn’t always command the same fiery headlines or social media chatter as other hot-button issues.

The New York Times: Biden is set to detail at least $2 trillion in measures to reduce deficits.

The Consumer Financial Protection Bureau, the Obama-era consumer watchdog born from the 2008 financial crisis, finds itself facing another existential threat in a case scrutinizing its constitutionality, when the Supreme Court recently agreed to take up a ruling from the ultra-conservative 5th Circuit Court of Appeals finding that the CFPB’s funding mechanism is unconstitutional. The Hill’s Aris Folley and Karl Evers-Hillstrom rounded up what experts say is at stake.

➤ CONGRESS

Schumer will vote today for the GOP-led resolution blocking the District of Columbia’s criminal code update, he told reporters Monday.

“I’m going to vote ‘yes,’” Schumer said. “It was a close question, but on balance I’m voting ‘yes.’”

The Washington, D.C., crime bill received heavy criticism from Republicans and some Democrats for a number of provisions, including the lessening of penalties for violent crimes, such as robberies and carjackings. Democratic support for the bill has risen substantially in recent days after Biden revealed that he would not veto the resolution, opening the door to scores of other members of his party to do so (The Hill).

▪ Bloomberg News: Sen. Dianne Feinstein (D-Calif.), 89, was released from a San Francisco hospital after treatment for shingles and is recovering at home.

▪ Politico: New York Republicans go to all-out war against embattled Rep. George Santos (R-N.Y.).

▪ Roll Call: Rep. Jennifer McClellan (D-Va.) sworn in as Virginia’s first Black woman member of Congress.

IN FOCUS/SHARP TAKES

➤ INTERNATIONAL

Two of four Americans who were kidnapped in a Mexican border city last week were found dead, Mexican officials said Tuesday. The other two, Eric James Williams and Latavia “Tay” McGee, have returned to the U.S., their families said. Williams has a gunshot wound to his leg, said the governor of Tamaulipas, Américo Villarreal (ABC News with photos).

The Americans were found in the village of Tecolote, about 15 miles from the border city of Matamoros, the site of the kidnapping on Friday. The attorney general of Tamaulipas, Irving Barrios Mojica, said they were found during a “joint search,” and Mexican officials said the United States had provided intelligence. The Americans were described by family members as three friends who were accompanying a fourth who planned to undergo a medical procedure in Mexico. Mexican security secretary Rosa Icela Rodríguez said Tuesday a suspect had been detained (The Washington Post).

“During this difficult time, I want to offer my deepest sympathies to the families of the Americans who were attacked and kidnapped,” Attorney General Garland said on Tuesday, speaking to reporters at the Justice Department (NPR).

The kidnapping has renewed the focus on the politically charged issue of border security and prompted calls from some lawmakers for the Biden administration to more seriously crack down on cartels, writes The Hill’s Brett Samuels. Biden administration officials called the killings “unacceptable.” Mexican authorities suggest the kidnappers may have wrongly believed the Americans were rival human traffickers, a source close to the investigation told ABC News.

New intelligence suggests that a pro-Ukrainian group carried out the attack on the Nord Stream pipelines last year, marking a new step toward assigning responsibility for an act of sabotage that has confounded investigators for months. U.S. officials said that they had no evidence that Ukrainian President Volodymyr Zelensky or his top lieutenants were involved in the operation, or that the perpetrators were acting at the direction of any officials in Kyiv. The attack on the natural gas pipelines, which link Russia to Western Europe, fueled public speculation about who was to blame and has remained one of the most consequential unsolved mysteries of the war in Ukraine (The New York Times).

The head of Russia’s Wagner mercenary group said on Wednesday that his forces took full control of the eastern part of Bakhmut, scene of one of the bloodiest battles of the year-long war. If true, it would mean Russian forces now control nearly half the city in their costly push to secure their first big victory in several months. Ukrainian defenders remained defiant, however, seeing an opportunity despite heavy casualties to exhaust Wagner’s nearly suicidal prisoner assaults, which Ukraine’s commanders regard as one of Russia’s most effective tactics (Reuters and The New York Times).

▪ CNN: Zelensky warns of “open road” through Ukraine’s east if Russia captures Bakhmut, as he resists calls to retreat.

▪ The Washington Post: Why Russia and Ukraine are fighting over Bakhmut.

▪ Reuters: More Ukrainian units claim raids on Russian soil; Kyiv disavows them.

▪ The Wall Street Journal: How Russia lost dozens of tanks in a costly battle in eastern Ukraine.

China’s foreign minister warned that the U.S. strategy toward Beijing risked plunging the countries into a conflict. The comments came at a Tuesday news conference on the sidelines of China’s annual gathering of its National People’s Congress, a day after Chinese leader Xi Jinping similarly criticized Washington, signaling a deepening rift between the world’s two largest economies.

Foreign Minister Qin Gang said the Biden administration was insincere in saying it wanted to preserve relations between Washington and Beijing, and warned the U.S. against engaging in what he called new McCarthyism (The Wall Street Journal and Reuters).

▪ Politico EU: European Union reforms travel rules after transport chief’s free flights to Qatar.

▪ France 24: French strikes against pension reform to continue as unions intensify fight.

➤ STATE WATCH

A Norfolk Southern train conductor was killed Tuesday after being struck by a dump truck at a facility in Cleveland, Ohio, marking the third incident involving the railroad in the state in a little more than a month. The conductor’s death comes as Norfolk Southern faces criticism for two recent derailments in Ohio, including one in East Palestine last month that resulted in the release and burning of toxic chemicals

As the railroad works with the Environmental Protection Agency to clean up the site, it announced a new six-point safety plan Monday designed to help prevent similar derailments in the future (CNN and Forbes).

▪ The Hill: Norfolk Southern to provide financing for temporary relocation during soil cleanup.

▪ Bloomberg News: Norfolk Southern disregarded safety rules in Ohio; union workers warned federal regulators in 2022.

▪ ABC News: National Transportation Safety Board to open special investigation into Norfolk Southern following recent derailments.

▪ The Wall Street Journal: Supreme Court’s “dark money” rulings anchor defense in Ohio political corruption trial.

House lawmakers in Tennessee have advanced a second bill targeting drag shows in the state, seeking to expand a first-of-its kind law passed last week that criminalizes certain drag performances. Tennessee House Bill 30, introduced in January by state Republican Rep. Clay Doggett, would amend state law to prohibit minors from attending performances that feature “adult cabaret” entertainment, which the state defines as including performances by “male or female impersonators.” The measure passed Monday on a 72-24 vote along party lines. It now heads to the GOP-controlled state Senate for consideration, where it is expected to pass.

“Adult cabaret” entertainers under Doggett’s bill would also need to obtain a state-issued permit if they want to be paid for their work — a provision that has sparked concern within the LGBTQ community that the measure would force performers to submit to being surveilled. “This essentially allows the government to maintain a list of drag and trans performers,” Allison Chapman, an independent legislative researcher and LGBTQ activist, wrote Tuesday on Twitter (The Hill).

Five women who say they were denied abortions despite risks to their lives or their fetuses sued the state of Texas on Monday, apparently the first time that pregnant complainants have taken legal action against the abortion bans across the country following the Supreme Court’s ruling to overturn Roe v. Wade. The women asked a judge to clarify exceptions to the laws (NPR and The New York Times).

“Just because Roe v. Wade is no longer the law of the land does not mean that women and pregnant people are without constitutional and basic human rights,” said Molly Duane, senior staff attorney with the Center for Reproductive Rights, which filed the suit on behalf of the women and two doctors. “We’re talking about people who are in medical emergencies, who need urgent medical care and whose physicians are too scared to provide that care because of the state’s laws and because of the state’s failure to provide any clarification around what its law means.”

The Hill: Florida GOP lawmakers introduce a six-week abortion ban bill.

Oklahoma voters on Tuesday rejected a measure to legalize the recreational use of marijuana, a defeat that marks a significant setback for the cannabis legalization movement. The no vote came five years after voters approved the drug for medical purposes. Conservative-leaning Oklahoma would have been the 22nd state to allow recreational use of marijuana (The Washington Post).

KFOR: Recreational marijuana failed — now what?

Americans now favor legal cannabis over legal tobacco, polls suggest. The Hill’s Daniel de Visé reports on a sharp societal shift from an era when cigarette-smoking was legal pretty much everywhere and pot-smoking was legal exactly nowhere.

OPINION

■ My Plan to extend Medicare for another generation, by President Biden, guest essayist, The New York Times. https://nyti.ms/3ZN4495

■ It’s up to Biden to stop a climate and environmental disaster in Alaska, by Ben Jealous, opinion contributor, The Hill. https://bit.ly/3msrEtn

WHERE AND WHEN

📲 Ask The Hill: Share a news query tied to an expert journalist’s insights: The Hill launched something new and (we hope) engaging via text with Editor-in-Chief Bob Cusack. Learn more and sign up HERE.

The House will convene at 10 a.m. The House Select Subcommittee on the Coronavirus Pandemic will hold a hearing at 9 a.m. on the origins of COVID-19.

The Senate meets at 10 a.m. to resume consideration of Patrice Kunesh to be commissioner of the Health and Human Services Department’s Administration for Native Americans. The Senate Select Committee on Intelligence will hold its annual open hearing at 10 a.m. on worldwide threats to the United States, including testimony from the heads of U.S. intelligence agencies.

The president will receive the President’s Daily Brief at 9:30 a.m. Biden has no public events on his schedule.

Vice President Harris will travel to Miami Beach, Fla., to be the headline speaker at 4:15 p.m. at a Democratic political fundraiser. She will join an Aspen Institute Ideas moderated conversation about climate change at 6:05 p.m. at the New World Symphony Auditorium (information HERE). The vice president will return to Washington tonight.

Defense Secretary Lloyd Austin travels from Iraq, where he made an unannounced visit on Tuesday for meetings and spoke with the press, to Israel for a two-day visit that begins today (Times of Israel). He will end his Middle East itinerary in Egypt this week.

Fed Chair Powell will testify at 10 a.m. to the House Financial Services Committee about the economy and monetary policy.

First lady Jill Biden at 2 p.m. will host the 17th annual International Women of Courage Award Ceremony, this year held at the White House, accompanied by Secretary of State Antony Blinken.

The White House daily press briefing is scheduled at 12:30 p.m.

ELSEWHERE

➤ PANDEMIC & HEALTH

Walgreens finds itself at the center of a clash between red and blue states over prescription sales of the abortion pill known as mifepristone. The governors of California and Illinois this week vowed to push back in reaction to Walgreens’ corporate decision to cease distribution of abortion pills in 20 Republican-led states. Walgreens maintains that its policy is to sell mifepristone in states where it is legal, but abortion medication is legal in some of the GOP states now cut off by the company. The chain is facing backlash from abortion rights activists and Democrats who say the company bowed to conservative political pressure. Walgreens in previous years made headlines after some of its employees refused to sell birth control to customers based on the employees’ personal beliefs (The Washington Post).

California Gov. Gavin Newsom (D) on Monday announced his state will nix business with Walgreens over its abortion pill stance. A spokesperson for Newsom, Brandon Richards, said in a statement that “California is reviewing all relationships between Walgreens and the state.” Richards declined to clarify exactly how California would spurn Walgreens (NBC News).

Illinois Gov. J.B. Pritzker (D) on Tuesday met with Walgreens CEO Roz Brewer, condemning the chain’s decision. Meanwhile, protesters gathered outside the company’s Chicago offices, accusing Walgreens of surrendering “to the demands of the right-wing Christian fascist attorneys general” (Chicago Sun-Times).

Digestive problems? Guess what: symptoms frequently reported by people with long COVID-19 frequently include stomach pain, constipation, diarrhea, vomiting and bloating. Now, a large new study published on Tuesday in the journal Nature Communications reports that COVID-19 patients were significantly more likely to experience gastrointestinal problems a year after infection than people who were not infected.

Ziyad Al-Aly, chief of research and development at the Veterans Affairs Department St. Louis Health Care System, clinical epidemiologist and the chief author of the study, said most long COVID-19 patients had other symptoms besides gastrointestinal problems, suggesting that the condition was “too complex to have just one mechanism that explains all of it” (The New York Times).

▪ The Hill: A quarter of parents lied about their children’s COVID-19 status, they said in December 2021, according to a new study.

▪ The New York Times: Could the next blockbuster drug be lab-rat free? Alternatives to animal testing are gaining momentum.

Information about the availability of COVID-19 vaccine and booster shots can be found at Vaccines.gov.

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,122,264. Current U.S. COVID-19 deaths are 2,290 for the week, according to the Centers for Disease Control and Prevention. (The CDC shifted its tally of available data from daily to weekly, now reported on Fridays.)

THE CLOSER

And finally … March is Women’s History Month, and today is International Women’s Day. You guessed it: Celebrating women’s rights and achievements around the world has its own day — and a century of history.

“The vote is permissive, a liberty extended. It is never a burden laid upon the individual, since there is no obligation to exercise the right. On the other hand, the refusal to permit those who want the vote to have and to use it is oppression, tyranny — and no other words describe the condition.” — National American Woman Suffrage Association President Carrie Chapman Catt, during a 1917 address to Congress.

Women have long fought for better working conditions and the right to vote, stretching back beyond the first International Women’s Day event in 1911, when more than a million people rallied in Austria, Denmark, Germany and Switzerland (Reuters). The idea began with female socialists considered radical at the time for agitating for equality (National Geographic).

In this country on March 8, 1908, female workers in the needle trades marched through New York City’s Lower East Side to protest child labor, sweatshop working conditions and to demonstrate for women’s suffrage. The first National Woman’s Day in the U.S. took place on Feb. 28, 1909.

The United Nations, which initially recognized International Women’s Day in 1977, settled on a tech-focused theme this year: “DigitALL: Innovation and technology for gender equality.” The U.N. says 259 million fewer women have access to the internet than men, and women are largely underrepresented in science, technology, engineering and mathematics (STEM) careers. A growing digital gender gap impacts women’s lives, from job opportunities to safety online, at a time when technology globally is crucial to advancing equality and human rights.

The Washington Post: It’s International Women’s Day. How did women’s rights fare this year?

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