Day 512: "Substantial."
1/ The Federal Reserve raised interest rates by 75 basis points – the biggest increase since 1994 – to tackle the fastest inflation in four decades. Chairman Jerome Powell called the move “an unusually large one,” adding that he expects either a 50 basis point or 75 basis point increase at the Fed’s July meeting. Economic data showed that inflation unexpectedly rose to 8.6% in May. The Fed now expect prices to increase 5.2% in 2022, compared to an earlier forecast for 4.3%, with inflation dropping to 2.6% in 2023 – still above its 2% target rate. On average, Fed policymakers expect interest rates to rise to 3.4% by December, and 3.8% by the end of 2023 – up from the 1.9% they projected in March. And, as a result of its policies, the Fed now expects the unemployment rate to increase to 3.7% this year and to 4.1% by 2024. “We’re not trying to induce a recession now,” Powell said. “Let’s be clear about that. We’re trying to achieve 2% inflation.” (Wall Street Journal / New York Times / NPR / Associated Press / Bloomberg / Washington Post / CBS News / Politico)
- 🤓 WTF is inflation, the Fed, and interest rates: A normal person’s guide. The Federal Reserve’s goal is to keep prices stable and unemployment low. Inflation, however, has pushed prices up 8.6% in the past year. In response, the Fed is raising the federal funds rate to make borrowing money more expensive, which directly impacts things like credit card interest rates, new car loans, and mortgages. By raising rates, the Fed discourages consumer spending, which lowers demand, and allows prices to come down and stabilize over time. However, raising rates too high or too quickly could slow the economy too much, which could cause a recession and lead to layoffs. Fun times. (Washington Post)
2/ The FDA’s independent vaccine advisers voted unanimously to recommend the authorization of two Covid-19 vaccines for children as young as 6 months old. The FDA is expected to authorize the shots within days, with vaccinations beginning as early as June 21. Pfizer’s three-dose vaccine would cover children 6 months through 4 years old, while Moderna’s two-dose vaccine would cover children 6 months through 5 years old. Meanwhile, every state but Florida has pre-ordered Covid-19 vaccine doses for children under 5. Florida missed yesterday’s deadline to pre-order, guaranteeing a delay in access for parents in the state. (Politico / New York Times / McClatchy DC / Associated Press / Wall Street Journal / ABC News)
3/ The U.S. will send an additional $1 billion in military aid to Ukraine. The military equipment will include anti-ship missile launchers, 18 more long-range M777 howitzers, and more rounds for the High Mobility Artillery Rocket Systems. The package represents the largest single tranche of weapons and equipment since the war began. Overall, the U.S. has committed about $5.6 billion in security assistance to Ukraine, including this latest package, since February. (Associated Press / New York Times)
4/ Trump, Trump Jr., and Ivanka Trump must answer questions under oath in New York state’s civil investigation into their business practices. The New York Court of Appeals declined to take up their appeal, saying there was no “substantial constitutional question” that would warrant its intervention. Two lower courts have already rejected the claim that the probe by New York Attorney General Letitia James is politically motivated. Depositions are set to begin July 15. (Bloomberg / ABC News)
5/ A federal judge rejected Steve Bannon’s motion to dismiss the criminal contempt charge against him for defying a subpoena from the Jan. 6 committee. Judge Carl Nichols rebuffed Bannon’s arguments that the Jan. 6 committee’s subpoenas were illegal and that Trump had asserted executive privilege to block his testimony. Bannon’s trial will start July 18. If convicted, Bannon could face up to a year behind bars and a fine of up to $100,000. A conviction, however, would not require him to comply with the subpoena. (Politico / CNBC / CNN)
6/ A Republican member of Congress led an unofficial tour through the Capitol complex on Jan. 5, which included at least one person who marched to the Capitol the following day. The people who joined Barry Loudermilk for a Capitol tour – which lasted several hours, despite the complex being closed to the public at the time – on Jan. 5 photographed and recorded areas “not typically of interest to tourists, including hallways, staircases, and security checkpoints,” according to the Jan. 6 committee. The tour included a man who later recorded a video threatening members of Congress while marching on the Capitol the following day. “There’s no escape Pelosi, Schumer, Nadler,” the man said in the video. “They’re coming in, coming in like white on rice for Pelosi, Nadler, even you, AOC. We’re coming to take you out and pull you out by your hairs.” (Politico / New York Times / The Guardian)
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