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Fed Chair Jerome Powell is officially confirmed for another term leading the central bank. That was the easy part.
We’ll also look at rising prices for producers, the economic impact of Roe v. Wade falling and big labor endorsement for student loan relief.
But first, guess which senator is holding up $40 billion in Ukraine aid.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Senate confirms Powell for new term as Fed chief
The Senate on Thursday voted to confirm Federal Reserve Chairman Jerome Powell for a second term leading the central bank’s board of governors as the Fed scrambles to get ahead of high inflation.
Senators voted 80-19 to approve Powell for another four-year stint chairing the Fed board, a position he was first appointed to by former President Trump.
Sens. John Boozman (R-Ark.), Mike Braun (R-Ind.), Tom Cotton (R-Ark.), Ted Cruz (R-Texas), Josh Hawley (R-Mo.), Ron Johnson (R-Wis.), Mike Lee (R-Utah), Ed Markey (D-Mass.), Bob Menendez (D-N.J.), Jeff Merkley (D-Ore.), Jon Ossoff (D-Ga.), Rand Paul (R-Ky.), Marco Rubio (R-Fla.), Bernie Sanders (I-Vt.), Rick Scott (R-Fla.), Richard Shelby (R-Ala.), Dan Sullivan (R-Alaska), Elizabeth Warren (D-Mass.) and Roger Wicker (R-Miss.) voted against Powell. Sen. Pat Toomey (R-Pa.) did not vote.
The background: Powell, a Republican, joined the Fed board in 2012 on the appointment of former President Obama and was picked by Trump in 2017 to succeed now-Treasury Secretary Janet Yellen.
He won broad bipartisan support over his first term for resisting Trump’s pressure to slash interest rates while the economy was strong and for the Fed’s largely successful response to stabilize financial markets during the outbreak of the COVID-19 pandemic. Despite pressure from his left flank to replace Powell with a bona fide liberal who would tighten bank rules, President Biden said in November it was essential to preserve “stability and independence” on the Fed board as inflation rose far faster than most economists expected.
Both Powell and Biden, however, are facing intense pressure to curb inflation after it continued to surge to four-decade highs — driven in part by the fiscal and monetary stimulus they deployed to bolster the economy.
Sylvan explains here.
Inflation stays hot as wholesale prices jump 11 percent in April
Wholesale prices in April were up 11 percent on the year and 0.5 percent since last month, the Labor Department reported Thursday, as an overheated economy continues to suffer from inflation.
The jump in the annual producer price index (PPI), which measures the prices of goods and services that businesses pay to each other, was down just slightly from its spike in March of 11.5 percent, following a similarly shallow dip in the consumer price index (CPI) that came in on Wednesday.
Indices for energy rose 1.7 percent month-on-month and indices for food rose 1.5 percent. While the index for processed goods rose 2.2 percent, unprocessed goods rose 5.3 percent, showing continued stress on core commodities. PPI is a closer measure of the inflation experienced by businesses and retailers, which are affected more closely by the supply chain disruptions that economists say are the root cause of inflation.
The Hill’s Tobias Burns has more here.
Experts warn overturning Roe would hit poor people hardest
Experts say overturning Roe v. Wade would likely have a disproportionate impact on lower-income households and people of color, warning the most vulnerable Americans stand to bear outsized costs from added barriers to abortion access.
Policymakers in Washington are also sounding the alarm.
“I believe that eliminating the right of women to make decisions about when and whether to have children would have very damaging effects on the economy and would set women back decades,” Treasury Secretary Janet Yellen said in testimony before the Senate Banking Committee on Tuesday.
A study released by the Brookings Institution in 2015 found that low-income people were more than five times as likely to have an unintended birth as affluent people. Some economists additionally pointed to years of research documenting the effects childbirth can have on a person’s labor force participation, income and education.
Aris has more here.
LABOR WEIGHS IN
AFL-CIO presses Biden to cancel student debt
The AFL-CIO on Thursday urged President Biden to forgive student loans, putting additional pressure on the White House to cancel at least some of the nation’s $1.6 trillion in student loan debt.
“The Biden administration’s decision to continue to pause student debt has made a tremendous difference in the lives of so many borrowers, but these borrowers still live with the uncertainty of not knowing when they will need to drastically alter their finances in order to begin repaying their loans,” AFL-CIO President Liz Shuler said in a statement.
“Now is the time to cancel, not collect, student debt.”
Biden, who pledged to be the most pro-union president in history, has close ties with the AFL-CIO, the nation’s largest labor federation that represents 12.5 million union workers. The White House is considering expunging at least $10,000 in student debt per borrower, a move that would fulfill a key Biden campaign promise.
Karl has more here.
Good to Know
President Biden was scheduled to speak with retailers and manufacturers Thursday about the ongoing efforts to resolve an infant formula supply shortage, a White House official said.
The White House is also planning to announce “additional actions” the Biden administration is taking to address the shortage on Thursday, the official said.
Here’s what else we have our eye on:
The number of new applications for jobless aid budged little during the first week of May, according to data released Thursday by the Labor Department. A joint effort by Republicans and Democrats to append tax credits onto an economic bill focused on competition with China is underway in the Senate as the bill entered conference negotiations on Thursday. More than 20 senators have signed on to a growing bipartisan push to include marijuana banking legislation in a larger package aimed at boosting U.S. competitiveness with China, despite previous resistance from leadership on both sides of the aisle.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.
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