FirstFT: Today’s top stories
Federal Reserve officials signalled they expect to keep interest rates close to zero until at least 2024, even as they sharply upgraded their US growth forecasts linked to President Joe Biden’s massive fiscal stimulus and an accelerating vaccine rollout.
The Fed cautioned, however, that a full recovery remained distant, the path ahead was uncertain and the economy still required ultra-easy monetary policy.
“While we welcome these positive developments, no one should be complacent,” Jay Powell, the Fed chair, said during a post-meeting press conference following the policymakers’ decision to keep US interest rates at historically low levels. The US central bank also reiterated that it would continue to buy bonds at a rate of $120bn per month.
But the upgrades to the growth forecasts were significant: whereas in December Fed officials predicted 4.2 per cent growth this year, that estimate was bumped up to 6.5 per cent, which would be the fastest economic expansion since 1984.
The unemployment rate is now forecast to fall to 4.5 per cent by the end of the year instead of 5 per cent. Core personal consumption expenditure inflation, the Fed’s preferred measure, is expected to rise to 2.2 per cent and above the central bank’s 2 per cent target, compared with the smaller rise to 1.8 per cent predicted in December.
The 10-year Treasury yield, a key benchmark for borrowing costs across global financial markets, rose as much as 0.096 percentage points to 1.738 per cent in European trading on Thursday. It has not held above 1.7 per cent since January 2020, before the market ructions triggered by the coronavirus crisis.
The S&P 500 closed up 0.3 per cent on Wednesday after paring losses. The tech-heavy Nasdaq Composite rose 0.4 per cent. (FT)
The number of deaths and hospital admissions are falling more quickly among older people in the US than in the wider population, according to a Financial Times analysis of official data, suggesting the rapid rollout of Covid-19 vaccines is beginning to work.
Ursula von der Leyen, European Commission president, has warned that the EU is ready to introduce emergency controls on vaccine production and distribution if needed. Australia has urged the EU to allow the export of 1m doses of the Oxford/AstraZeneca jab to Papua New Guinea.
The United Arab Emirates is offering people who have shown weak immunity after two doses of the Sinopharm vaccine a third shot of the Chinese jab.
Vaccine nationalism has underscored a decade-long retreat from the shared assumptions about the benefits of borderless supply chains, writes Philip Stephens. Meanwhile, Simon Kuper says the truth is that many of us have had a good pandemic. (FT)
In the news
Concerns raised over hate crimes against Asian Americans Washington lawmakers decried violence against Asian Americans on Wednesday after at least eight people were killed in shootings in Atlanta that have amplified concerns about a surge in hate crimes. The House judiciary committee will on Thursday hold a hearing on violence against Asian Americans. (FT)
Spac boom eclipses 2020 fundraising record in single quarter Blank-cheque companies have already surpassed last year’s fundraising record in the first quarter of 2021, reflecting the insatiable appetite for special purpose acquisition companies among both institutional and retail investors. (FT)
Credit Suisse overhauls unit and suspends bonuses over Greensill scandal Swiss lender Credit Suisse is to overhaul its asset management business and suspend bonuses for some senior executives, as the bank races to contain the damage from the collapse of supply chain finance company Greensill Capital. (FT)
Russia recalls ambassador to US amid deteriorating relations In a move that highlights the growing tension between Moscow and Washington, Russia has recalled its ambassador to the US for consultations. Russia blamed Joe Biden for leading relations between the two countries down a “blind alley” during his first weeks in office. (FT)
US warns China it will enforce sanctions on Iran oil shipments The Biden administration has told Beijing it will enforce Trump-era sanctions against Iranian oil as shipments from the Islamic regime to China have soared. (FT)
Irish PM Martin: UK and EU must ‘stand by’ Brexit trade rules Micheál Martin told Joe Biden at the annual St Patrick’s day bilateral meeting that London and Brussels must “move forward with a positive relationship” on the Northern Ireland protocol, designed to prevent a hard trade border on the island of Ireland following the UK’s departure from the EU. (FT)
The day ahead
US-China meeting in Alaska Jake Sullivan, the US national security adviser, and secretary of state Antony Blinken are set to meet their Chinese counterparts on Thursday. One expert said there was a “significant mismatch” between the two sides ahead of the talks in Alaska. (FT)
Initial jobless claims New unemployment filings fell to their lowest level since November last week. Today the US Department of Labor releases data for the week ending March 12. (FT, WSJ)
Interest rate decisions The Bank of England will make its latest interest rate decision on Thursday. Norway, Turkey and Egypt also have rate decisions today.
EMA issues Oxford/AstraZeneca vaccine review The European Medicines Agency is due to issue a review of the Oxford/AstraZeneca Covid-19 vaccine after several European nations suspended shots citing concerns over side-effects. AstraZeneca and one of its key European suppliers defended their production process ahead of the review’s release. (FT)
What else we’re reading
What is a fair deal for New York’s cabbies? A few decades ago, driving a taxi in New York seemed like a reliable way to get a foothold on the American dream. Today’s drivers find themselves saddled with debt and are calling on mayor Bill de Blasio for relief. The lessons from this local tussle, though, extend well beyond the Big Apple, writes Gillian Tett.
NFTs: latest get-rich-quick scheme for ‘cryptosphere’ We are in the midst of a new mania. A species of digital asset as unsexy-sounding as the “non-fungible token” — or the only marginally sexier “NFT” — is taking over the front pages and social media, writes Jemima Kelly. But the bubble-mania will eventually burst. (FT)
Beijing’s war on the credit boom A campaign led by vice-premier Liu He to reduce the danger of uncontrolled lending in China’s once rampant shadow banking sector threatens to strangle the private sector. Some warn that curbing the excesses of the past decade risks an overcorrection that could stifle innovative areas of financial activity. (FT)
Italian politics begins to learn to love Europe again The fractious world of Italian politics is experiencing an uneasy ceasefire as populist parties reconsider their anti-Brussels stance in the wake of Mario Draghi’s appointment as prime minister. (FT)
Hiring quotas the latest headache for companies investing in India The state government of Haryana — run by Prime Minister Narendra Modi’s Bharatiya Janata party — has joined a trend in forcing businesses to reserve jobs for state’s residents to tackle youth unemployment. The restrictions reflect the new parochialism spreading across India, writes Amy Kazmin. (FT)
Boris Johnson must prioritise the security of women Too often violence and harassment of women are seen as a series of separate criminal justice issues rather than part of a bigger picture, writes Robert Shrimsley. This is one woman’s experience of a random and violent attack. (FT)
Podcast of the day
Spying in the digital age How should we respond to the SolarWinds and Microsoft hacks? Helen Warrell, defence and security editor, talks to cyber security expert Dmitri Alperovitch about how the west responds to such attacks. (FT)