Daily Updates | Wednesday, March 24, 2021 Headlines

Yellen and Powell Answered the Questions of Interest
Elon Musk Announces: Tesla can Now be Bought with Bitcoin
Europe is Hit by Third Covid Wave: Lockdowns Introduced, Vaccinations Remain a Concern

Yellen and Powell Answered the Questions of Interest

Republican Congressmen in the House of Representatives Financial Services Commission raised questions to US Finance Secretary Janet Yellen and Federal Reserve (FED) Chairman Jerome Powell.

According to the news on the website of Voice of America, Republicans questioned Yellen’s claim that the US economy is still in crisis, and also her defense of the tax increase. Yellen said that the current deficit in the economy and the problem of job loss caused by the epidemic is a lot, but noted that when the economy regains strength, President Joe Biden can propose long-term plans that can close investment gaps for infrastructure, combating climate change, research and development and production. Yellen noted that one of the options would be to raise the corporate tax back to 28%.

FED President Jerome Powell also tried to dispel Congressmen over inflation that could increase as a result of the combination of the FED’s loose monetary policy with the economic opening.

“We expect inflation to increase later in the year,” Powell said, “but this increase will neither be too much nor permanent. “If it becomes a problem, we have the tools to combat it,” he said.

But officials, including Fed President Powell, expect an increase in employment in the coming months as life returns to normal and businesses such as restaurants and amusement parks begin to open.

Pointing out that they expect inflation to rise this year due to the base effect, Powell said that as economic activity returns to normal, there may be an increase in spending and some upward pressure on prices may be seen.

Yellen was also optimistic that the Biden administration’s $1.9 trillion stimulus package could raise the employment rate to pre-pandemic levels by next year. Yellen, who is the first woman to serve as Fed chair as well as the first female Treasury secretary, urged lawmakers to do even more.

“We are meeting at a hopeful moment for the economy — but still a daunting one. While we’re seeing signs of recovery, we should be clear-eyed about the hole we’re digging out of,” Yellen told Congress, according to her prepared remarks.

The Fed’s balance sheet, which had decreased to under $4 trillion as recently as summer 2019, has ballooned to nearly $7.7 trillion, according to the central bank’s website.

Investors say the Fed’s ability to broadcast and only gradually make adjustments to asset purchases will be crucial as the US economy shows signs of recovery in the form of improving employment data, expectations for sharp GDP growth, and forecasts for rising inflation.

“In terms of moving forward, we’ve said that we would start to taper our asset purchases when we’ve seen substantial further progress toward our goals” of full employment and inflation close to the Fed’s 2% target, Powell said. “When that comes, we’ll communicate well in advance of the time of actually tapering.”

Elon Musk Announces: Tesla can Now be Bought with Bitcoin

Tesla Inc chief Elon Musk said on Wednesday the company’s electric vehicles can now be bought using bitcoin and the option will be available outside the United States later this year.

In a statement on Twitter, Musk said, “You can now buy Tesla with Bitcoin. “Bitcoin used in Tesla payments will not be converted into another currency, it will be used as Bitcoin,” he said.

Last month, Tesla announced that it had received $1.5 billion worth of bitcoins and would soon accept payments in bitcoins. Following this announcement, Bitcoin had risen sharply.

In order to accept the payment, Musk said Tesla is using “internal” and “open source software.”

He added that Tesla “operates bitcoin nodes directly.” Nodes are computers on bitcoin’s network that work to verify transactions and avoid the cryptocurrency from being spent twice.

The Bitcoin application, which is currently limited to the USA, is planned to expand to other countries in the future. Tesla’s shares were up around 0.6% in after hours trading Tuesday, after closing at $662.16. The price of bitcoin is at $55,444.93.

Musk, who encourages cryptocurrencies on Twitter, chastised conventional cash last month, saying that when it “has negative real interest, only a fool wouldn’t look elsewhere.” He had said that the disparity between cryptocurrency and cash made it “adventurous enough” for the S&P 500 business to retain it.

In addition, Musk frequently tweets about cryptocurrency, particularly Dogecoin (DOGE). This month “Shark Tank” billionaire Mark Cuban said his basketball team — The Mavericks — began accepting DOGE as payment.

Following Tesla’s bitcoin investment, a number of firms, including Uber Technologies Inc and Twitter Inc, have expressed their opinions on the digital currency. Dara Khosrowshahi, Uber’s CEO, said the ride-hailing company discussed and “quickly rejected” the possibility of investing in bitcoin. However, he added that Uber might recognize cryptocurrency as payment in the future. Twitter had said earlier it was still undecided in holding bitcoin, while General Motors Co said it will evaluate whether bitcoin can be accepted as payment for its vehicles.

Tesla recently added “Technoking of Tesla” to Musk’s list of official titles.

Europe is Hit by Third Covid Wave: Lockdowns Introduced, Vaccinations Remain a Concern

More than a year after the coronavirus epidemic was declared a pandemic, Europe is still fighting the virus, with a third wave of infections and lockdown measures being implemented.

At the same time, the bloc’s vaccination rollout has been slowed by manufacturing and supply problems, to the point that European Union leaders are meeting this week to consider reintroducing potential vaccine export bans.

In the Netherlands, the government announced that the curfew restriction, which entered into force on January 23, was extended to April 20, as part of the measures to combat the epidemic.

While the restrictions were expected to be eased in Germany and the UK due to the Easter holiday, as in other European countries, the opposite happened. The measures were further increased and the duration of the restrictions was extended.

Due to the increasing coronavirus cases in Germany, the restrictions that were expected to be eased on Easter were hardened and extended until April 18.

At the corona summit held by Chancellor Angela Merkel with state prime ministers in Germany, it was decided to especially harden the pandemic measures during the Easter period between April 1-5.

“We have not yet overcome the virus, it does not allow relaxation,” Merkel said in a statement.

On all flights from abroad to Germany, it was imposed to have a test 48 hours before the trip at most. Previously, this practice was limited to places where the number of cases was high and that was declared a “risk zone” by the Robert Koch Institute (RKI).

All shops and restaurants will remain closed during the five-day period. Only on Saturday, April 3, food was allowed to be sold in markets.

During the Easter period, a maximum of 5 people from two different households will be able to come together.

Churches and religious communities were also asked to serve online exclusively during Easter. Vaccine and test centers will remain open within five days.

In addition, England, like Germany, toughened the measures and extended the restriction period.

The government banned those without a valid reason from leaving the country until the end of June. Those who do not follow the rule will face fines of up to 5,000 pound. It is stated that Britain’s restrictions may be extended until the end of August or September.

Shares in airlines and travel companies fell again today as rising Covid-19 cases in Europe and tighter restrictions threatened to disrupt the summer holiday season.

Oil prices fell sharply, on forecasts of weaker demand, with Brent crude dropping over 4% to $61.90 per barrel.

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