Happy Wednesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
THE BIG DEAL-Fed officials saw recovery slowing, virus threat growing in July meeting: Federal Reserve officials expressed deep concerns that the steady spread of the coronavirus would continue to slow the pace of economic recovery and drive the U.S. into a much sharper downturn later this year, according to minutes from its July policy meeting released Wednesday.
During the July 28-29 meeting of the Federal Open Market Committee (FOMC) – the Fed’s policymaking arm – central bank officials anguished over signs that the U.S was losing ground in its fight against the pandemic and the recession it spurred.
“The path of the economy would depend significantly on the course of the virus and that the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and posed considerable risks to the economic outlook over the medium term,” the minutes read. I have more here.
The background: The new readout from the Fed’s July meeting is the latest window into the growing concern over the economic impact of the pandemic among central bank officials.
- Fed Chairman Jerome Powell and several reserve bank presidents have issued increasingly direct calls for social distancing measures, widespread mask-wearing, and other practices proven to curb the spread of the novel coronavirus.
- “Social distancing measures and a fast reopening of the economy – they actually go together. They’re not in competition with each other,” Powell said in a press conference following the conclusion of the July meeting.
- Powell also emphasized the focus among Fed officials on the inextricable links between defeating the pandemic and repairing the economy.
LEADING THE DAY
Trump urges boycott of Goodyear tires over MAGA attire policy: President Trump on Wednesday discouraged Americans from purchasing Goodyear tires after it was reported that company employees in Kansas were told not to wear “Make America Great Again” attire or other politically affiliated gear.
“Don’t buy GOODYEAR TIRES – They announced a BAN ON MAGA HATS. Get better tires for far less!” Trump tweeted Wednesday morning, adding in parentheses, “This is what the Radical Left Democrats do. Two can play the same game, and we have to start playing it now!”
- An NBC News affiliate reported that employees at a Topeka, Kan., plant were instructed not to wear attire with any political slogans, including “Make America Great Again.”
- The employees were reportedly told that attire with Black Lives Matter or pro-LGBTQ slogans is acceptable.
The explanation from Goodyear: Goodyear disavowed the image from a diversity training session reported by NBC in a Wednesday statement, explaining that the company asks employees to “refrain from workplace expressions in support of political campaigning for any candidate or political party, as well as similar forms of advocacy that fall outside the scope of racial justice and equity issues.”
- “Goodyear employs thousands of American workers, including in Ohio where it is headquartered. To President Trump, those workers and their jobs aren’t a source of pride, just collateral damage in yet another one of his political attacks.” – Democratic presidential nominee Joe Biden
- “It’s absolutely despicable that the President would call for a boycott of an American company, based in Akron, that employs thousands of U.S. workers.” – Sen. Sherrod Brown (D-Ohio).
- “This is an iconic American company in a swing state … It’s really, really dumb politically. But it shows the problem that he has – that it’s more about him than it is about other people.” – Rep. Tim Ryan (D-Ohio).
- Akron Mayor Dan Horrigan (D) praised Goodyear for “[believing] in this community for generations, investing in the power, tenacity and honest people of the heartland, which is more than we can say for this president.”
The weirdest part: Goodyear was founded in Akron in 1898 and is one of the few major companies that make tires in the U.S., making it a curious target for a president who has pledged to revive American manufacturing across the midwest.
Monopoly power to blame for inequality: Fed paper: An increase in monopoly power over time can explain a slew of economic ills, including income and wealth inequality, the declining share of returns that go to workers and the increase in profits, according to a Federal Reserve research paper.
The paper, by Isabel Cairo and Jae Sim, says that for four decades, these trends have grown alongside financial instability and several other concerning trends.
“The fact that the six secular trends have realized over a time period in which the investment-to-output ratio has steadily declined suggests that the rise of market power of the firms may have been the driving force of the six secular trends,” the authors find.
The Hill’s Niv Elis has more here.
GOOD TO KNOW
- President Trump announced Wednesday evening that his administration would notify the United Nations of plans to restore “virtually” all sanctions on Iran.
- Airbnb announced on Wednesday that it has filed a draft registration to the Securities and Exchange Commission for an initial public offering.
- Maine’s congressional delegation is concerned President Trump won’t deliver promised aid to lobstermen amid a looming deadline to start such a program.
- A bipartisan group of 20 House lawmakers are calling on congressional leaders to improve the diversity of a coronavirus relief oversight panel to address the recession’s unique toll on minorities and women.
- President Trump on Tuesday voiced support for a potential acquisition of TikTok’s American operations by Oracle, adding to the existing uncertainty over the sale of the Chinese owned short-form video app.