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The Fed’s vice chair issues a warning over premature rate cuts. Amazon’s latest move could be a game-changer for crypto. The Senate is weighing limiting investments in Chinese high-tech, while NY bans gas vehicles, and more financial news.
Federal Reserve Vice Chair Lael Brainard issued a warning on Friday against the central bank prematurely reducing interest rates in the face of high inflation.
Brainard said higher interest rates will need to be maintained for some time, US News reported.
“Monetary policy is focused on restoring price stability in a high-inflation environment,” Brainard said in prepared remarks. “It will take time for the full effect of tighter financial conditions” caused by rate rises to work its way through the economy and lower price pressures.
“Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back to target,” Brainard added. “For these reasons, we are committed to avoiding pulling back prematurely.”
Amazon is among five companies that are involved in a trial by the European Central Bank (ECB) of its new central-bank digital currency. However, the involvement of Amazon suggests that e-commerce itself is one of the focal points of the ECB trial. As a result, some see this development as a sign that cryptocurrencies, such as Bitcoin, could play a bigger role in e-commerce, the Motley Fool reported.
The Banking Committee of the Senate held a hearing, saying on Thursday that they are considering new rules to block US investments in the high-tech sectors of China. The committee said such a move is needed to stop American money from financing Beijing’s efforts to out-compete Washington, the South China Morning Post reported. However, the committee members differed on what forms such rules should take.
“We know that our adversaries will use any means they can to close the gaps between our technological capabilities and theirs, without much care to how legal their tactics actually are,” said committee chair Sen. Sherrod Brown (D-OH). “What we don’t know is to what degree US investments are helping them close those gaps.”
Following California’s footsteps, New York Gov. Kathy Hochul (D) announced on Thursday that all new vehicles in the state will need to be zero-emission models beginning in the year 2035, The Hill reported.
To reach the target, Hochul said that 35 percent of new cars will need to be zero-emission by 2026, an increase to 68 percent by 2030. Additionally, all school buses purchased will have to be zero-emission by 2027, with the entire bus fleet reaching the standard by 2035.
