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VideoThe former Federal Reserve chair Janet Yellen testifies at the Senate Finance Committee hearing on her nomination to be Treasury secretary.CreditCredit…Kriston Jae Bethel for The New York Times
Janet Yellen, nominated to be the next Treasury secretary, is one of a handful of nominees of President-elect Joseph R. Biden Jr. who are testifying before senators on Tuesday.
Ms. Yellen’s opening remarks to the Senate Finance Committee, reviewed by The New York Times, showed she will push for a robust fiscal stimulus program to get the pandemic-stricken economy back on track and that now is not the time to worry about the nation’s mounting debt burden.
The confirmation process for Ms. Yellen, a seasoned economist and central banker who served as chair of the Federal Reserve from 2014 to 2018, is expected to be a relatively smooth one.
“This is the worst economic crisis in 100 years, and nobody is better qualified than Secretary-designate Yellen to lead an economic recovery,” said Senator Ron Wyden of Oregon, who will become the Finance Committee chairman when Democrats take control of the Senate.
And Senator Charles E. Grassley of Iowa, currently Republican chairman of the Finance Committee, has spoken positively of Ms. Yellen since Mr. Biden picked her for the job.
Ms. Yellen, who was confirmed to be Fed chair by a Senate vote of 56 to 26, is likely to face questions about the country’s economic relationship with China, her position on sanctions policy as it relates to Iran and her thoughts on tax policy.
Helping to craft and oversee the Biden administration’s economic relief efforts will initially be her top priority, but Ms. Yellen will also steer the government’s sprawling regulatory power over banks and the financial sector. At the hearing, she will be under pressure to show Democrats and progressive groups that she is ready to end what they view as the coddling of Wall Street by Steven Mnuchin, the outgoing Treasury secretary.
Credit…Win Mcnamee/Getty Images
Janet L. Yellen won the endorsement on Tuesday of eight living former Treasury secretaries, who called for her speedy Senate confirmation so that she can assume the job under President-elect Joseph R. Biden Jr.
The letter of support was released shortly ahead of Ms. Yellen’s testimony at her confirmation hearing before the Senate Finance Committee. The group said that any delay would pose an unnecessary risk to the economy at a critical time.
“With millions of Americans out of work, long-term unemployment rising, and activity stalled in large sectors of the economy, daunting challenges will face the incoming administration. Addressing these pressing issues will require thoughtful engagement by the Department of the Treasury,” they wrote. “Any gap in its leadership would risk setting back recovery efforts.”
They added that a delay in confirming Ms. Yellen would also sow confusion among American allies, who traditionally rely on the United States for global economic leadership in times of crisis.
The letter was signed by George P. Shultz, James A. Baker III, Robert E. Rubin, Lawrence H. Summers, John W. Snow, Henry M. Paulson, Jr., Timothy F. Geithner and Jacob J. Lew. That all-male crew reflects the significance of Ms. Yellen’s nomination — if confirmed, she would be the first woman to lead the Treasury in its 231-year history.
The former secretaries said that Ms. Yellen, a former Federal Reserve chair, was uniquely qualified for the job because of her experience and knowledge.
Ms. Yellen is expected to have a smooth path to confirmation. An acting Treasury secretary is expected to fill the void at the Department between when Treasury Secretary Steven Mnuchin departs on Wednesday at noon and when Ms. Yellen is confirmed.
Credit…Erin Schaff/The New York Times
In the past, lawmakers tended to preach allegiance to full employment — the lowest jobless rate an economy can sustain without stoking high inflation or other instabilities — while pulling back fiscal and monetary support before hitting that target as they worried that a more patient approach would cause price spikes and other problems.
That timidity appears less likely to rear its head this time around, reports The New York Times’s Jeanna Smialek.
President-elect Joseph R. Biden is set to take office as Democrats control the House and Senate and at a time when many politicians have become less worried about the government taking on debt thanks to historically low borrowing costs.
And the Federal Reserve, which has a track record of lifting interest rates as unemployment falls and as Congress spends more than it collects in taxes, has committed to greater patience this time around.
In the mid-to-late 1960s, Fed officials were tightly focused on chasing full employment. As they tested how far they could push the job market, they did not try to head inflation off as it crept up and saw higher prices as a trade off for lower joblessness. When America took its final steps away from the gold standard and an oil price shock hit in the early 1970s, price gains took off — and it took massive monetary belt-tightening by the Fed and years of serious economic pain to tame them.
There are reasons to believe that this time is different. Inflation has been low for decades and remains contained across the world. The link between unemployment and wages, and wages and prices, has been more tenuous than in decades past. From Japan to Europe, the problem of the era is weak price gains that trap economies in cycles of stagnation by eroding room to cut interest rates during time of trouble, not excessively fast inflation.
Credit…Paul Sancya/Associated Press
Microsoft has agreed to invest in the autonomous vehicle division of General Motors called Cruise in a bid to become a supplier of technology for self-driving cars.
The software giant is participating in an investment round that will inject $2 billion into Cruise. G.M. and Honda are also participating in this round, which values the business at $30 billion.
“Microsoft, as the gold standard in the trustworthy democratization of technology, will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles,” Cruise’s chief executive, Dan Ammann, said in a statement.
As part of the partnership, G.M. has agreed to use Microsoft’s Azure cloud-computing service to manage and provide data services related to autonomous cars.
Cruise is developing vehicles that G.M. hopes to use in driverless taxi and delivery services, though it is not clear how soon the company will begin such services. The automaker, Tesla and other companies have fallen behind the schedules they once offered for having large commercial fleets of autonomous cars on the road picking up passengers and delivering goods.
Credit…Gian Ehrenzeller/EPA, via Shutterstock
The global pandemic ravaging American businesses and low-wage employees has barely lapped at the revenues and profits of the country’s biggest banks. Now, banks are saying that the worst of the pandemic’s potential to do them harm has passed.
Bank of America revealed on Tuesday that it had adjusted its calculations for how much cash it needed to set aside for a disaster, joining other large American banks in releasing some rainy-day funds based on an improved economic forecast. Goldman Sachs also said on Tuesday that it had adjusted its reserves, lowering them for some of its businesses while raising them slightly for its new consumer credit card division.
The banks can now use their freed-up cash to do things they avoided last year, like making new loans. They are also preparing to start distributing money to shareholders again after the Federal Reserve lifted temporary restrictions on share buybacks and dividend payments late last year.
“We continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers and strong markets and investing activity,” Bank of America’s chief executive, Brian Moynihan, said in a statement accompanying the bank’s earnings report.
The bank released $828 million, less than its counterparts Citigroup and JPMorgan Chase each shed. But the move reflected similar changes to expectations of how the economy would perform this year, now that a vaccine for the coronavirus has begun to be distributed and Congress has passed another economic stimulus package.
In the fourth quarter of 2020, Bank of America earned $5.5 billion after taking in revenue of just over $20 billion. The numbers were not record-setting — in the same period in 2019, earnings were $7 billion and revenue was $22.3 billion — but they signaled that the bank was handily weathering the economic conditions caused by the pandemic. Revenue and income in its giant consumer business was down compared with the previous year, but business in its Wall Street division was better.
In the last three months of 2020, the bank took in $3.9 billion in revenue from trading in the financial markets and other related activities, a 14 percent increase from the same period a year earlier. The division earned $834 million for the quarter, compared with $638 million during the same period in 2019.
Goldman Sachs earned just over $4.5 billion in the final quarter of 2020 on revenue of $11.7 billion, which was 18 percent higher than the same quarter of 2019 thanks to a jump in its Wall Street trading and investment banking businesses. It pared down the amount of money it was setting aside to deal with losses in wholesale loans, but added more for its consumer credit card business, which it started in the spring of 2019.
Credit…Erik S Lesser/EPA, via Shutterstock
As Washington girds itself for President-elect Joseph R. Biden Jr.’s inauguration on Wednesday, lawmakers have asked transportation and hospitality companies for help “identifying and preventing the ongoing and extreme threat of further violent attacks.” Here’s how companies are responding:
Airlines: American, Delta, Southwest and United have imposed bans on firearms in checked luggage on flights to the Washington area. American has also suspended alcohol service, and Alaska Air has limited the number of tickets available for flights to and from Washington.
Hotels and hospitality: Airbnb has canceled reservations in Washington for this week. Expedia’s Vrbo is still accepting bookings, but rolled out new procedures on Monday that include screening guests against federal threat lists. A spokesman for Hyatt said the chain had increased security personnel and was limiting hotel access to registered guests. A representative for Hilton declined to discuss security measures but said it was “well-informed and mindful of current events.”
Other travel companies: To “avoid any disruptions” in Washington, the bus operator Vamoose canceled service Tuesday through Thursday. And the electric scooter companies Lime, Lyft, Spin and Helbiz are disabling service downtown.
Stocks climbed on Tuesday, with Wall Street rebounding from a small decline the week before, ahead of a Senate hearing where Janet Yellen, the incoming Biden administration’s pick for Treasury secretary, will promote a vigorous fiscal response to the pandemic.
The S&P 500 rose about half a percent in early trading, following mixed trading in Europe and a rally in Asia.
Ms. Yellen, the former chair of the Federal Reserve, will tell senators at her confirmation hearing on Tuesday morning that the United States needed a robust fiscal stimulus package. “Right now, with interest rates at historic lows, the smartest thing we can do is act big,” Ms. Yellen will say, according to a copy of her opening remarks.
U.S. government bond prices fell on Tuesday. The yield on 10-year notes rose three basis points, or 0.03 percentage points, to 1.11 percent. Though Treasury yields remain extremely low by historical standards, they have risen this month in anticipation of a Democratic-held White House and Congress pursuing a large spending plan. President-elect Joseph R. Biden Jr. proposed a $1.9 trillion relief package last week.
Oil prices rose. Futures of Brent, Europe’s benchmark, rose 1.2 percent to $55.38 a barrel. Futures of West Texas Intermediate rose to $52.54 a barrel. The International Energy Agency cut its estimates for oil demand for 2021 because of lockdowns to curb the spread of the coronavirus. But oil prices have recovered in recent months after Saudi Arabia and some other nations cut production.
The Senate confirmation hearing of Janet Yellen as Treasury secretary begins on Tuesday, with a focus on reviving the pandemic-stricken economy, recovering lost jobs and regulating Wall Street. On economic stimulus, “right now, with interest rates at historic lows, the smartest thing we can do is act big,” Ms. Yellen is set to say in her opening remarks.
Corporate earnings season is ramping up, with more of America’s big banks releasing fourth-quarter earnings. Bank of America and Goldman Sachs reported on Tuesday, while Morgan Stanley steps up on Wednesday.
Netflix also reports its latest earnings on Tuesday, followed by Procter & Gamble and United Airlines on Wednesday, and IBM and Intel on Thursday.
Joseph R. Biden Jr. is expected to issue dozens of executive orders on Thursday, his first full day in office as president. He will also present legislative proposals for a $1.9 trillion stimulus bill, changes to immigration laws and other priorities of his administration.
If you’re in the market for sports memorabilia, you might want to head to Costco. Yes, Costco.
The membership-only wholesale retailer, known for its bargains on bulk food and cleaning supplies, is selling a baseball autographed by Babe Ruth on its website for $64,000.
Costco describes it as “one of the nicest signed Babe Ruth Home Run Special Balls ever made available to the public, and is over all one of the nicest signed Babe Ruth balls known to be in existence.” Costco listed another ball signed by the Sultan of Swat in May for $30,000.
The concept might seem like a departure from Costco’s brand, offering customers staples on the cheap. Not so, said Andrew Lipsman, an analyst at the research firm eMarketer.
“It’s not totally out of character for Costco to sell high-ticket items,” he said, noting that the company has sold furniture and engagement rings, sometimes for hundreds of thousands of dollars. “My sense is that this is some sort of experiment in high-ticket items and seeing what will sell.”
Mr. Lipsman added that it might be a sign that the company was aligning around a growing market. “Sports memorabilia has been skyrocketing over the past year,” he said.
Indeed, the PWCC 500, an index of the top 500 trading cards, reached a record high in June, and has continued climbing. Experts attribute this to the spending power of baby boomers, millennials entering the market and increasing interest from foreigners, The Wall Street Journal reported.
Costco declined to comment for this article.
Baseball collectors’ items often fetch the highest prices. A Ruth jersey sold for $5.67 million at an auction in 2019.
Along with 27 other items on the “sports memorabilia” section of its website, Costco is also selling a bat signed by Ty Cobb. The bat, which Costco describes as “ultra rare and highly valuable,” is inscribed with the phrase “With Best Wishes Sincerely” and dated “3/14/49.” It is priced at $160,000.
Both sales end on Jan. 31.