Chairman Jerome Powell testified before the Senate Banking Committee on Tuesday, warning that the process of getting inflation back down to the central bank's target of 2% could be bumpy. He noted that the Federal Reserve may have to speed up their interest rate hikes to tame high inflation and that it may take time for Americans to see further relief. Investors are waiting to see how the Fed will respond to the current economic climate and are hoping for more clarity on the matter.
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The US Justice Department has announced it will be filing a lawsuit to block JetBlue Airways' proposed $3.8 billion acquisition of Spirit Airlines, citing concerns that it would reduce competition and lead to higher prices for consumers. The Biden administration has been vocal in its stance that there needs to be greater competition between businesses, especially in the airline industry, to lower costs for consumers. The lawsuit is the first time in more than 20 years that the government has sought to block a US airline merger.
This article discusses the U.S. Department of Justice's decision to file a lawsuit to block JetBlue's proposed $3.8 billion acquisition of Spirit Airlines, a move that would create the fifth-largest carrier in the U.S. The lawsuit is seen as a test of President Joe Biden's aggressive antitrust strategy, and the Transportation Department is also expected to deny a transfer of Spirit's airline certificate. JetBlue CEO Robin Hayes expressed disappointment but not surprise at the government's determination.
Jerome Powell, Federal Reserve Chair, is set to testify before Congress on Tuesday and investors are watching closely for signs of future rate hikes. The Fed has raised its benchmark interest rate to 4.6%, its highest level in 15 years, making mortgages, auto loans, credit card rates and business lending more expensive. Powell will have to convince lawmakers that the central bank is capable of bringing down inflation without crashing the US economy in its wake.
Danielle Miller, a 32-year-old Miami social media influencer, has pleaded guilty to five federal charges related to a $1.5 million COVID relief fraud scheme. She used stolen identities and fake business names to access pandemic-related financial assistance, which she then used to fund her own personal expenses. Miller faces up to 20 years in prison and a fine of up to $250,000, as well as restitution to the victims.
The Biden Administration and the USDOT are working to crack down on "junk fees" by pushing airlines to improve customer service. American, Alaska, and Frontier Airlines have committed to guaranteeing that parents can sit with their children without paying extra fees. The USDOT has created a dashboard to help families determine which airlines offer this guarantee and which ones could charge extra.
Mortgage applications have dropped to a 28-year low as mortgage rates continue to rise, according to the Mortgage Bankers Association. Refinances are more than 70% down from last year, and the housing market is still trying to adjust to the pandemic's impact on the economy. Joel Kan, MBA’s associate vice president of economic and industry forecasting, noted that the increase in mortgage rates has caused some buyers to pull back.
US economic strength was demonstrated in January, as the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 5.4% from a year earlier and 0.6% from December to January. Consumer spending also increased 1.8% from December, though goods prices declined 0.7%. The Core PCE index rose 0.2% from December to January, indicating that inflation remains entrenched in the US economy and the Fed is likely to keep raising interest rates.