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Federal Reserve Chair Jerome Powell told the Senate Banking Committee that a recession is “certainly a possibility” following the central bank’s move to raise interest rates, adding that inflation could continue to surprise policymakers and that Fed officials will be on the lookout for “compelling evidence” of a turnaround in consumer prices. When asked by Sen. Elizabeth Warren (D-Mass.) if higher interest rates would bring down gas or food prices, Powell said he didn’t think so. (The Washington Post)
Under a proposed class-action settlement agreement filed in federal court, the Biden administration agreed to cancel federal student loan debt for approximately 200,000 borrowers who said they were defrauded by their colleges, but whose applications for relief went without review by the Education Department for years. The move could erase at least $6 billion in student loan debt. (Politico)
JPMorgan Chase & Co. will lay off or transfer more than 1,000 workers in its home-lending divisions, according to people familiar with the matter. About half of those will be let go, and half moved to other divisions, the people said, as rising mortgage rates dampen loan demand. (Bloomberg)
Consumer Financial Protection Bureau Director Rohit Chopra said the agency will be proposing rules in the coming months to reduce the amount banks are able to charge for late fees on credit card payments, which currently account for billions of dollars in industry earnings. A 2009 federal law that allows banks to raise late fees at the rate of inflation has caused concern among regulators as the country sees record increases in prices. (The Wall Street Journal)
Democratic senators led by Bob Menendez urged the Federal Reserve to take a more active role in the selection process of the heads of its regional banks so that more diverse candidates would be considered.
More than 21 million paper tax returns are still waiting for processing by the Internal Revenue Service, as the tax agency struggles to swiftly disburse refunds to American households, according to a watchdog report released Wednesday.
President Biden called for a three-month suspension of federal gasoline and diesel taxes—a move that is unlikely to have the support needed to pass in Congress and one economists and business leaders say would do little to address record-high gas prices.
A top White House adviser on Wednesday said the Biden administration’s proposal to suspend the federal gas tax was not a “silver bullet” but stressed it was a temporary solution along with other measures to help Americans’ wallets.
President Biden is set to call for a three-month suspension of the federal gasoline tax on Wednesday, but Harvard economists, including Jason Furman, are warning the results might not be what he’s looking for.
A bipartisan group of lawmakers said it hopes to complete legislation to curb tax breaks for land-rights deals this year, but as the bill advanced Wednesday, lawmakers relinquished a crucial element—a provision that would deny deductions back to December 2016.
The U.S. economy faces elevated risks of a recession over the next one to two years due to rising imbalances in markets for goods and services, including labor, according to a new research paper from a Federal Reserve economist.
Lawmakers on the House Financial Services Committee clashed over the role of government investment in down-payment assistance and other housing programs on Wednesday with Republicans signaling a deep resistance to new spending programs until inflation recedes.
Big property investors turned into homebodies during the pandemic. Rising interest rates will make it harder for them to keep sheltering in housing. Just as some home buyers are still willing to pay record prices, investors continue to plow large sums into residential property.
The NYC Rent Guidelines Board (RGB) has given the green light to allow landlords in New York City to hike rents on more than one million rent stabilized apartments. The move comes as rents in New York City hit a record high in May for the fourth consecutive month.
Cryptocurrency exchange Binance.US said it is eliminating fees on spot bitcoin trading for all customers. The move announced Wednesday by Binance.US, the U.S. affiliate of the world’s largest crypto exchange, effectively allows customers to trade spot bitcoin for the U.S. dollar, tether, USD Coin and Binance USD—or vice versa—without paying spot trading fees.
Alexander Osipovich and Jiyoung Sohn, The Wall Street Journal
Do Kwon used swagger and a cultlike Twitter following to build a cryptocurrency empire that collapsed last month in a $40 billion crash. Now, despite angry investors, government investigations and a crypto-market downturn, the South Korean entrepreneur is attempting a comeback.
David R. Henderson and Casey B. Mulligan, The Wall Street Journal
Most discussion about the possibility of recession focuses on the Federal Reserve’s monetary policies. But there are also factors on the supply side of the economy that may tip the U.S. economy into a recession. Among them are the tax and regulatory policies of the Biden administration.