“Try to get a little smarter every day and read as much as humanly possible. An investment in knowledge pays the best dividends” — Doug Kass

1. Fully Vaccinated Americans Will Be Able to Visit the European Union This Summer — European Commission President Ursula von der Leyen told the New York Times that “all 27 member states will accept, unconditionally, all those who are vaccinated with vaccines that are approved by E.M.A.” The European Medicines Agency has approved all three of the vaccines currently being given in the U.S. She didn’t provide a timeline or details on how travel would reopen, but said the United States was making “huge progress” toward reaching herd immunity of vaccinating at least 70% of its adult population by mid-June.
2. Fed Holds Steady on Interest Rates — the Federal Reserve held its key interest rate near zero and said it plans to continue supporting the economic recovery, while acknowledging recent progress in growth and employment. The Fed has held overnight interest rates near zero since March 2020, when the Covid-19 pandemic and related restrictions delivered a severe blow to the economy. Since June, the central bank has also been purchasing at least $80 billion of Treasury bonds and at least $40 billion of mortgage-backed securities to hold down longer-term borrowing costs for consumers and businesses.
Fed officials have said they would hold rates steady until the labor market is back to full strength and inflation has reached the central bank’s goal of averaging 2%. Chairman Jerome Powell has said those conditions are unlikely to materialize this year, and most Fed officials indicated last month that they expect to hold off on raising rates until 2024 at the earliest.
3. U.S. Recovery Gains Steam as Spending Fuels 6.4% GDP Growth — Gross domestic product expanded at a 6.4% annualized rate following a softer 4.3% pace in the fourth quarter, the Commerce Department’s preliminary estimate showed. Personal consumption, the biggest part of the economy, surged an annualized 10.7%, the second-fastest since the 1960s. The inflation-adjusted value of domestically produced goods and services climbed to an annualized $19.1 trillion, indicating GDP will soon eclipse the pre-pandemic peak of nearly $19.3 trillion.
4. Biden Tax Proposal Would Kick In at Over $500,000 for Couples — the new top 39.6% tax bracket, proposed in Biden’s “American Families Plan” on Wednesday, would encompass less than 1% of taxpayers, the official said, asking not to be named to speak in more detail beyond the White House’s outline. The official’s comment suggested that the new rate, up from the current 37%, would be applied from 2022. For Biden’s separate proposed increase in the capital gains tax rate to 39.6% from 20%, the administration said earlier this week that will apply to both singles and joint filers who make $1 million or more.

The week ahead — Economic data from Econoday.com:

This entry was posted on Monday, May 3rd, 2021 at 4:25 pm and is filed under Weekly Summary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.