US President Biden called for the suspension of gasoline tax, and the international oil price fell sharply, which caused the energy sector to suffer setbacks. Wind market data shows that NYMEX crude oil once plunged more than 7% and closed down 4.77%. Ice cloth oil once fell more than 6%, closing down 4.03%.
When attending the hearing, Federal Reserve Chairman Bauer said that the Federal Reserve has resolutely taken measures to maintain price stability, and the US economy is still strong, but there is a possibility of recession.
Powell acknowledged the possibility of economic recession.
On the same day, Federal Reserve Chairman Bauer said at the hearing held by the US Congress that the Fed pays close attention to the inflation risk, is firmly committed to the goal of reducing the inflation rate to 2%, and resolutely takes measures to maintain price stability.
On June 15, the Federal Reserve decided to raise interest rates by 75 basis points, the largest single rate hike since June 1994. In the past three meetings of the Federal Open Market Committee (FOMC), the Fed has raised interest rates 150 basis points for three consecutive times. Powell pointed out that tightening monetary policy will be an effective tool to fight inflation, and interest rate hikes will continue. The pace of raising interest rates should be judged according to economic data and expectations. Before withdrawing from the austerity policy, the Fed needs to see conclusive evidence of slowing inflation. The American economy is strong enough to cope with tight monetary policy.
According to the consumer price index (CPI) data released by the Bureau of Labor Statistics (BLS) earlier, prices rose by 8.6% year-on-year in May, the highest level in 40 years. In addition, prices rose faster in May than in April, indicating that the peak of inflation has not yet arrived.
Senator Elizabeth elizabeth warren, a Democrat, warned that continuing to raise interest rates may not control inflation, but will lead to economic recession. "Worse than high inflation and low unemployment, millions of people have lost their jobs, but inflation remains high. I hope you can reconsider before pushing the economy off the cliff. "
Warren once criticized Powell as a "dangerous man" leading the Federal Reserve, and he was weak in banking supervision, which he thought was the reason why he was not qualified to be the chairman of the Federal Reserve. When the Senate approved Powell's re-election as chairman of the Federal Reserve last month, the voting result was 80 votes in favor and 19 votes against. Among them, only two Democrats voted against it, Warren being one of them.
For the economic recession that the market is worried about, Powell bluntly said that it is indeed possible. Powell said: "recession is not what we want to see, but it is possible." Frankly speaking, the events around the world in the past few months have made it more difficult for us to achieve the goal of reducing inflation to 2% and maintaining a strong labor market. He also said that if the tightening of monetary policy does not lead to recession, it will be difficult to achieve a "soft landing" of the economy.
Us stocks closed slightly lower, and popular Chinese stocks were under pressure.
The three major US stock indexes opened lower and went higher. After the intraday rebound, the gains were weak, and the group turned down in the late session. At the close, the Dow fell 0.15%; The Nasdaq fell by 0. 15%, and once rose by more than1%in intraday trading; The S&P 500 index fell by 0. 13%, and once rose by nearly 1%.
Large-scale technology stocks were mixed, with NVIDIA down more than 65,438+0%, Facebook parent company Meta down 0.76%, Apple and Microsoft recorded a slight decline, and Google and Amazon -C closed slightly higher. Amazon once rose more than 3% in intraday trading. According to market news, the company is going to Alexa (Alexa voice assistant simulate anyone's voice. This function has been demonstrated. It is reported that Amazon is developing a system. After the launch of the new system, Alexa can simulate the sound inside as long as it takes less than a minute to listen to the recording.
Most popular Chinese stocks fell, with Pinduoduo down 4.27%, Shell down more than 3%, Baidu down more than 2%, Alibaba down 1. 17%, Xpeng Motors up 1.63% and Li up 2.94%.
"Inflation is still the biggest risk facing financial assets, and Powell has made his position very clear." Robert Shain, chief investment officer of BlankeSchein, believes that the Fed will raise interest rates unless inflation starts to fall. "Until then, it's hard to see risky assets rising continuously." Shane said that the tightening of monetary policy will continue to affect financial markets until the Fed gives the green light.
The report issued by Citigroup raised the forecast of recession, and the possibility of the world economy falling into recession was close to 50%, and consumers began to cut back on spending. Historical experience shows that the decline of inflation is often accompanied by costly economic growth.
The energy sector led the decline, and Biden called for a suspension of gasoline taxes.
On the same day, international oil prices fell sharply. The futures price of light crude oil for August delivery in the New York Mercantile Exchange decreased by 3.33 USD to close at 106. 19 USD per barrel, with a decrease of 3.04%. London Brent crude oil futures for August delivery fell by 2.965438 USD +0 to close at 65438 USD +065438 USD +065438 USD +0.74 USD per barrel, a decrease of 2.54%.
Affected by this, the US energy sector led the decline, Chevron fell more than 4%, ExxonMobil, Shell and BP fell more than 3%.
US President Biden called on Congress to suspend the federal gasoline and diesel taxes for three months in the summer when travel demand is strong, in order to cope with the soaring energy prices.
Biden said in his speech that day that he proposed to implement a "gasoline tax holiday" at the federal and state levels to provide relief to consumers. This so-called "gasoline tax holiday" will include the abolition of the federal tax of 0/8 cents per gallon of gasoline and 24 cents per gallon of diesel. These taxes have been collected for about 90 years. Biden also said that reducing oil prices requires cooperation between oil companies and gas station operators.
According to Biden, the total cost of the above measures is estimated to be about $654.38+000 billion, which will not affect the highway trust funds funded by these taxes. He asked Congress to supplement the highway trust fund by increasing other income. Biden said that this year's tax revenue has increased, and the fiscal deficit has dropped by more than 65,438 US dollars +0.6 trillion. "We can maintain highways and reduce oil prices."
It may be a difficult process to get the approval of Congress for the gasoline tax exemption period. Nancy Nancy Pelosi, Speaker of the House of Representatives, and McConnell, Minority Leader of the Senate, used to be skeptical about this move, fearing that the policy impact would be limited and that oil companies and retailers would take these extra profits.
Earlier, the White House said in a briefing that Biden understood that the "gasoline tax holiday" alone could not alleviate the rising costs, but he believed that Congress should do its utmost to provide breathing space for working families at this special moment.
With the sharp rise in energy prices, the Global Energy Investment Report 2022 released by the International Energy Agency on Wednesday shows that global energy investment is expected to increase by 8% in 2022, reaching 2.4 trillion US dollars, mainly due to the energy sector's investment in clean energy and power grids and global investment in improving energy efficiency.
The agency predicts that global clean energy investment will reach 1.4 trillion US dollars in 2022, accounting for three quarters of the total growth. From 20 15 to 2020, global clean energy investment will only increase by 2% every year, but from 2020, global clean energy investment will increase by 12% every year. Among them, the EU's investment in clean energy in 20021year was $260 billion, and that in the United States was $21500 million.
The International Energy Agency also warned that despite the substantial increase in global investment in clean energy, the current global investment is still insufficient to achieve climate change goals. This is mainly due to the rising global energy prices caused by the Russian-Ukrainian conflict and the reinvestment in coal supply.
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