ANOTHER BIG RATE HIKE FROM THE FED IN INFLATION FIGHT: The Federal Reserve raised its benchmark interest rate by a big three-quarters of a point yesterday (July 27th) for a second straight time as it continues its fight against high inflation. The rate hike will raise its key interest rate, which affects many consumer and business loans, to a range of 2.25 percent to 2.5 percent, its highest level since 2018. Fed Chair Jerome Powell said at a news conference that the Fed remains committed to reducing inflation, but also held out the possibilty that it may soon shift to smaller rate increases. The newest rate hike comes after inflation increased to 9.1 percent, the fastest annual rate in 41 years.
MANCHIN, SCHUMER REACH SURPRISE DEAL ON HEALTH CARE, CLIMATE, TEXAS, DEBT: Senate Majority Leader Chuck Schumer and Democratic Senator Joe Manchin announced a surprise agreement yesterday (July 26th) after months of negotiation that will address health care, climate change, raising taxes on large corporations and high earners, and reducing the federal debt. Schumer and Manchin said the measure would reduce carbon emissions by around 40 percent by 2030. Until the unexpected announcement, it had been expected that there would be a much narrower package on just reducing drug prices and extending health care subsidies, because of Manchin’s opposition to anything larger due to inflation concerns. There wasn’t an immediate explanation for Machin’s abrupt reversal to back a broader package, but it does include provisions aimed at helping Americans deal with higher prices and is called “The Inflation Reduction Act of 2022.” A vote is expected next week, which under the process the Democrats are using will only require 50 votes, not 60 to defeat what would otherwise be an assured Republican filibuster.
BIDEN ENDS COVID ISOLATION AFTER TESTING NEGATIVE: President Biden ended his Covid-19 isolation Wednesday (July 27th) after he tested negative for the virus both in the morning and Tuesday night, and appeared in the Rose Garden, his first time in public since testing positive last Thursday. Biden, who is fully vaccinated and had two boosters, had five days of treatment with the anti-viral Paxlovid, and had mild symptoms during his illness. Biden pointed to his own experience in saying that Americans can, quote, “live without fear” of the pandemic if they take advantage of what’s available to them by getting booster shots, taking home tests, and using Paxlovid if they do get infected. He siad, “You don’t need to be president to get these tools to be used for your defense. In fact, the same booster shots, the same at-home test, the same treatment that I got is available to you.”
SENATE PASSES BILL TO INCREASE COMPUTER CHIP PRODUCTION IN U.S.: The Senate passed legislation yesterday (July 27th) that’s intended to encourage semiconductor companies to build plants to make more computer chips in the U.S. The measure, which passed on a bipartisan 64-33 vote, includes federal grants and tax breaks for companies that build their chip facilities in the U.S., and also directs Congress to significantly increase spending on high-tech research programs that will help the country stay economically competitive. Backers of the legislation say the U.S. must move to make computer chips in the U.S. to avoid the risk of losing a secure supply of the semiconductors that power automobiles, computers, appliances and some of the military’s most advanced weapons systems. The House is expected to vote on the measure late this week.
TWO EX-MINNEAPOLIS COPS SENTENCED FOR VIOLATING GEORGE FLOYD’S CIVIL RIGHTS: Two former Minneapolis police officers, J. Alexander Keung and Tou Thao, were sentenced yesterday (July 27th) after being convicted on federal charges of violating George Floyd’s civil rights. U.S. District Judge Paul Magnuson sentenced the two to lighter terms than is in the sentencing guidelines, givng Keung a three-year sentence and Thao three-and-a-half years. Kueng pinned Floyd’s back and Thao held back concerned bystanders while then-Officer Derek Chauvin kneeled on Floyd’s neck for more than nine minutes, leading to his death, in May 2020. A fourth officer, Thomas Lane, held Floyd’s feet, and he was sentenced last week to two years, also below guidelines. Chauvin was sentenced earlier to 21 years, which he’s serving concurrently with his 22 1/2-year state sentence.