Both houses of Congress have approved the Inflation Reduction Act of 2022, which also entails an allocation of nearly $370 billion to climate programs. Fighting climate change was one of Biden’s promises when he took office
The U.S. House of Representatives passed a sweeping bill that would earmark $430 billion for health care, climate change and reducing inflation, reports CNBC.
The bill, called the Inflation Reduction Act, had 220 votes in favor and 207 members of congress opposed it, with all Democrats supporting it and all Republicans opposing it. The Senate approved the initiative last week, and now President Joe Biden must sign the bill.
How can inflation be reduced?
The passage of the document by Congress less than three months before the midterm elections, which will be held in November, is considered a victory for Joe Biden and the Democrats, who expect to maintain a majority in the Senate and the House of Representatives, notes CNBC.
The document has been worked on for more than a year and a half, writes Business Insider. According to the bill, about $370 billion will be spent on energy security and climate change programs. They include the expansion of renewable energy sources (solar and wind); the transition to “cleaner” fuel, and the introduction of tax incentives designed to encourage Americans to use electric cars.
Experts predict that these and other measures in the bill will help the U.S. reduce carbon emissions by about 40 percent by 2030. Energy Innovation analysts believe that 1.5 million new jobs will appear in the country by that time.
Stepping up the fight against climate change and harmful emissions was one of Biden’s first promises as president. Shortly after taking office, he returned the U.S. to the Paris Agreement, from which the country withdrew under his predecessor, Donald Trump.
Earlier, we reported that RCB Bank Cyprus will stop providing banking services to its clients from October 8.
EU plans to agree on new sanctions on Russia before next week’s summit
The European Union expects to find agreement on a package of new sanctions on Russia, or at least on its main parts, before the bloc’s summit next week, Reuters reported.
“We expect an agreement on new economic sanctions on Russia or at least on its main parts before next week’s EU summit,” a European official said.
According to the agency’s interlocutor, EU leaders are going to discuss different ideas on the energy price ceiling. He stressed that the upcoming meeting should be tense, as “difficult times” are coming.
Earlier it was reported that new EU proposals on economic sanctions against Russia will affect diamond miner Alrosa and some other Russian companies.
The EU Commission and Foreign Affairs Service put forward the ideas on September 27th against the background of the referendums.
Earlier, we reported that the Fed had lost its credibility.
Market decline triggers a wave of foreign currency intervention in Asian countries
After the start of the fight against inflation in the U.S. six months ago, when the Federal Reserve began raising the cost of borrowing, authorities in many Asian countries were also forced to carry out foreign currency intervention and increase their efforts to prevent their own currencies from falling, Bloomberg wrote.
One of the first such countries in Asia was South Korea, whose central bank spent currency intervention, saying it will buy sovereign debt of up to $2.1 billion.
Taiwan officials also took their own measures, introducing a countervailing currency intervention and declaring their readiness to ban short sales of stocks. China instructed a lot of funds to refrain from large sales of shares, and banks – to make sure the “observance” of the daily yuan rate in the market. Thus, the Japanese yen remains close to 145 per $1, and the yuan has reached its lowest level since 2008.
The rapid growth of the dollar to the detriment of all other assets is particularly acute in the Asian market. Central banks in Indonesia, Japan and India have also undertaken countervailing currency interventions to support their currencies, but their efforts seem insufficient.
“Foreign currency intervention will only help slow the decline in Asian assets, not stop it,” said Mitul Kotecha, head of emerging markets strategy at TD Securities in Singapore. – U.S. rate hikes, a stronger dollar and relatively low real rates in the region suggest the pressure will continue in the coming weeks.”
Some exception to the rule was South Korea, where the authorities’ intervention was relatively more successful as 3-year bonds rose after the central bank said it would buy government debt.
Earlier, we reported that the number of detected COVID-19 cases in the world exceeded 616.6 million.
The Fed has lost its credibility. What is the Fed doing right now?
According to Mohamed El-Erian, the sell-off in the stock market after the Fed’s recent interest rate hike indicates a loss of confidence in the Fed, which increases the risk of economic problems as Fed policy tightening continues, writes Business Insider. What is the Fed doing right now?
The economist now expects that the Fed’s policies will cause additional collateral damage in an attempt to meet its inflation target.
What is the Fed doing with interest rates?
El-Erian voiced his views Wednesday, warning that the Fed’s failure to raise inflation to the target this year would signal a loss of market confidence and a growing market belief that a U.S. recession could not be avoided at the price of “little blood.
The Fed chief warned that fighting rising prices would “bring some pain” to Americans by slowing down hiring and making mortgages and credit cards more expensive. After his press conference, the S&P 500 stock index fell 3.8 percent over the past 7 days.
The Fed was late in raising interest rates in an attempt to tame skyrocketing prices, El-Erian believes, for it initially fueled the 2021 bubble by keeping rates low even as inflation began to rise steadily.
Earlier we reported that the U.S. president’s administration is concerned about the tax cuts in the U.K.
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