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Economy

Biden pick for Fed chair expected soon, Yellen says

By Andrea Shalal

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Biden pick for Fed chair expected soon, Yellen says
© Reuters. FILE PHOTO: U.S. Treasury Secretary Janet Yellen answers questions during the Senate Appropriations Subcommittee hearing on Capitol Hill in Washington, D.C., U.S., June 23, 2021. Greg Nash/Pool via REUTERS

By Andrea Shalal

DUBLIN (Reuters) – U.S. Treasury Secretary Janet Yellen said President Joe Biden should pick an “experienced and credible” person as Federal Reserve chair to reassure markets, and while current chair Jerome Powell fit the bill, others would too.

Powell, a Republican placed in the job by former President Donald Trump, is widely favored to win reappointment to another term, and some economists and investors have fretted that financial markets could see turbulence if Biden picks another candidate.

Yellen, who has not publicly endorsed a candidate, told Reuters she gave her advice to the president and it was his decision to make. She declined to say if she supported Powell, as some media have reported.

Asked whether market concerns should factor into Biden’s decision, Yellen said Biden should pick someone seen as a credible and capable policymaker.

“I think Powell has acquired that reputation, but there are other candidates too, who I think would be similarly perceived,” she said aboard a government plane en route to Dublin after Group of 20 meetings in Rome.

“If the markets are upset because they think the person isn’t credible, then that’s a person who shouldn’t be appointed. The president should appoint someone who is experienced and credible.”

Yellen was the first woman to head the U.S. central bank, nominated by former President Barack Obama, and is now the country’s first female Treasury Secretary. All recent picks for the job have come in October or early November.

Powell’s odds in betting markets have declined from early September following sharp criticism of his performance by progressive Democrats and a securities trading scandal involving Fed officials. Still, on the online political wagering site PredictIt.org, Powell remained the odds-on favorite at 70%.

As an alternate, many progressives favor Fed Governor Lael Brainard, who served as a senior Treasury official in the Obama administration and was nominated by him to the Fed board in 2014.

Brainard is seen as somewhat more dovish than Powell in part because of her push to retain super-easy monetary policy until there is more progress on a recovery in employment following the downturn from COVID-19. Powell, though, also has signaled he would prefer to be patient in the face of recent high inflation to allow a firmer job market recovery to take hold.

Nonetheless, Fed policymakers are this week expected to announce plans to start reducing their pandemic-era accommodation, with a first step being a pull back in the volume of bonds they buy each month. Any increase in interest rates is still some months away.

Yellen said she hoped and expected Biden to make a decision “reasonably soon,” but said she could give no specific timeline.

Democratic Senator Sherrod Brown last week said Biden would probably advance a “whole slate” of nominees to the Fed Board, which may or may not include Powell, and ensure a greater emphasis on workers.

The Senate Banking Committee, which he chairs, oversees the Fed and must sign off on Fed nominees before they can be considered for approval by the Senate as a whole.

Powell’s term as Fed chair expires in February; the seven-member Fed Board also has one vacant seat and at least one and potentially two other seats that will open up in coming months.

Economy

Costs of electricity in Italy rose by more than 76% in August

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cost of electricity in Italy

Costs of electricity in Italy rose by 76.4% in August, compared with an average of 51.9% in the euro area. La Repubblica writes about it, citing the estimates of Italy’s Confartigianato, an association of small and medium-sized businesses.

“Italy has structural problems. Here the cost of gas and electricity has always been very high because of the nature of production and the fact that there has never been an appropriate energy plan. Therefore, the average electricity bill in Italy will continue to rise,” said the head of Confartigianato, Bruno Pannier.

According to him, now Italy can concentrate on the production of energy from renewable sources. In this matter, the country is in a better position than other countries of the European Union, in particular due to the climate.

The newspaper said that in July electricity and gas prices in France jumped by 23.8%; in Germany – by 46% and in Spain – 54.3%, while in Italy the increase was 59.1%.

Earlier we reported that Nord Streams was almost completely out of service due to malfunctions.

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Economy

The situation in Europe is worsening. Rising food and energy prices are becoming a growing problem

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rising food and energy prices

The situation with rising food and energy prices in the EU soon will only get worse. This follows from the statement of the head of the European Central Bank Christine Lagarde.

British residents have already spent more than half of their savings. According to The Times, monthly expenditures on British energy prices are growing by a record £145. The pound itself reached a historic low against the dollar and almost equaled it. The sharp decline occurred after the decision of the British government to reduce taxes in the country.

Against this backdrop, Parliament began to prepare a vote of no confidence in the new Prime Minister, Liz Truss, who proposed new economic measures. The situation in Germany is also difficult. As German Finance Minister Christian Lindner admitted, he does not yet know how to fight gas prices.

“We are working in parallel with the commission on gas prices, which was created by the federal government. And so we will be looking for ways in which we can put price control into practice. I have an idea of what direction to think, but I don’t really want to go into all the details,” Ridus said.

Earlier, we reported that cryptocurrencies and the dollar began a showdown for the title of most profitable asset.

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Economy

Nord stream sabotage? “Nord Streams” is almost completely out of order due to malfunctions

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nord stream sabotage

The Nord Stream and Nord Stream 2 gas pipelines are almost completely out of service due to various faults. Many are voicing opinions about sabotage on Nord Stream.

Both gas supply routes to Europe via the Baltic Sea bed are out of service. First there was the Nord Stream 2 accident, where the pressure on one of the lines dropped drastically. The cause of the leakage is currently being investigated. Then pressure dropped in both strings of Nord Stream, but the reason for the drop in pressure is still unknown. There are serious reasons to assume a Nord Stream attack.

The publication noted that the German authorities have already started working with the Danish authorities and local law enforcement agencies to find out the reason for the pressure drop in Nord Stream-2. However, it is not clear how the pipeline will be repaired, as it is under U.S. sanctions and bankruptcy proceedings, although it has been postponed until January 2023.

At the moment it is impossible to name the exact cause of the malfunctions that have occurred. However, the sudden drop in pressure may indicate not just a leak, but a much more serious problem. Also, this accident could have certain consequences for the entire gas market, and repairs could take quite a long time.

Earlier we reported that British banks had begun stopping some mortgage deals because of the pound falling against the dollar.

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