- Fed Holds Steady as the Economy Strengthens
- US Technology Giants Increased Their Revenues in the First Quarter
- Biden Unveils the Family aid Plan in His Congress Speech
Fed Holds Steady as the Economy Strengthens
On Wednesday, the US Federal Reserve kept its benchmark interest rate unchanged between the 0.00% – 0.25% range during a two-day meeting. The Fed also noted it would continue its asset purchase program to relieve the world’s largest economy, in which the central bank buys at least $120 billion of bonds every month.
In the written statement, it was stated that “While the recovery and vaccination campaigns and strong policy support continue, the indicators regarding economic activity and employment have also strengthened.”
In the rest of the statement, the following expressions were used: “However, the pathway for recovery will still depend largely on the course of the virus and improvements in vaccination.”
The Fed has not changed its discourse on what conditions should be created to withdraw the emergency support it has been putting into action due to the pandemic since December: “There will be no reduction in monthly bond purchases without significant progress towards inflation and employment targets.”
“We will continue to acquire assets at its current pace until we see significant progress in line with our goals,” Powell said.
More than 8 million jobs still need to be created to reach the full employment target in the US. The inflation target of 2% is a level that can be exceeded for a while, as Powell has stated in his previous statements.
Jerome Powell noted that inflation readings have increased and will likely increase slightly, adding that 12-month personal consumption expenditure (PCE) inflation measures are expected to exceed 2% in the short term.
“However, these one-off increases in prices are likely to have only temporary effects on inflation,” Powell said.
US Technology Giants Increased Their Revenues in the First Quarter
Apple and Facebook announced their balance sheets for the January-March period of 2021.
According to the statement made by Apple, the company’s revenue, which considered the January-March period of this year as the second quarter of the fiscal year 2021 in its balance sheet, reached $89.6 billion, increasing by 54% compared to the same period last year. The company had revenue of $58.3 billion in the January-March period of 2020.
Apple’s net profit also increased by 110.1% year-on-year to $23.6 billion in the same period. The company’s earnings per share also increased from $0.64 to $1.40 during this period.
As usual, the main driver of Apple’s success was the iPhone. Apple said iPhone sales rose by 66% to $47.9 billion, its steepest increase in years. In the same period, iPad sales increased 78.7% to $7.8 billion, and Mac sales increased by 70.1% to $9.1 billion.
“This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers, seem to feel about better days ahead for all of us,” said chief executive Tim Cook.
Besides, Facebook, one of the largest social networking sites in the world, also increased its revenue and profit in the first quarter of this year.
According to a Facebook statement, the company’s first-quarter revenue increased by 48% compared to the same period last year, reaching $26.2 billion. Facebook earned $17.7 billion in revenue in the same period of 2020.
Facebook’s net profit also increased by 94% in the first quarter to $9.5 billion. The company had a net profit of $4.9 billion in the January-March period of 2020.
Facebook’s earnings per share, which was $1.71 in the first quarter of 2020, rose to $3.30 in the same period this year.
Facebook, Google, Amazon, and Apple are among the tech titans that have thrived as the pandemic accelerated a shift to working, learning, shopping, and socializing online.
“The large tech companies are in the right place at the right time,” said Darrell West, a fellow at the Brookings Institution’s Center for Technology Innovation.
Biden Unveils the Family aid Plan in his Congress Speech
On Wednesday night, President Biden assured Congress that “America is on the move again,” praising his administration’s efforts to end the coronavirus epidemic and urging lawmakers to work together to demonstrate “that our government still works — and can deliver” for the American people.
In his speech, Biden touched on many important issues from the fight against the epidemic to foreign policy and gave details about the rich’s tax and family aid plan.
The American Families Plan (AFP), the latest addition to the president’s economic recovery pitch, would dedicate $1.8 trillion to family care and education.
Emphasizing the need to invest in families and children for the future, Biden said, “This is why I present the American Families Plan, which addresses the four biggest problems facing American families today.”
Stating that the $1.8 trillion American Families Plan will enable access to good education, Biden noted that the plan would also provide access to quality and affordable childcare.
“We guarantee that low- to middle-income families will pay no more than 7% of their income for high-quality care for children up to the age of 5. The most hard-pressed working families won’t have to spend a dime,” Biden said, touting the AFP, which would also provide up to 12 weeks of paid family and medical leave.
“No one should have to choose between a job and paycheck or taking care of themselves and a loved one – a parent, spouse, or child,” Biden said in his speech before a joint session in the House chamber.
The national paid family and medical leave program would cost around $225 billion over a decade, and the White House says it would be mostly paid for by upping taxes on the wealthy.
Mentioning how these plans will be financed, Biden noted that this could be done without increasing budget deficits. Biden said this plan would be funded by raising taxes on the nation’s top earners, who he said do not contribute a fair share of their earnings as compared to working-class families.