FT News Briefing Biden’s economic rescue plan, US banks report earnings, and the election for Merkel’s successor
Jan 15, 2021
President Biden is pushing for a massive $1.9 trillion economic rescue plan to support a recovering U.S. economy. Federal Reserve Chairman Jay Powell reassures markets by committing to ongoing asset purchases. Meanwhile, major U.S. banks report significant earnings, with plans for buybacks on the horizon. In Germany, the race to succeed Angela Merkel intensifies, showcasing a clash between conservative and moderate factions within the Christian Democratic Union. Rising star Markus Söder adds to the uncertainty in the leadership contest.
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US Economic Struggles
- The US economy continues to struggle due to the pandemic, with nearly 1 million unemployment claims last week.
- President-elect Biden has prepared a $2 trillion stimulus plan to address this and other economic challenges.
Fed Intervention and Market Reaction
- The Federal Reserve, under Chairman Jerome Powell, reassured markets they will maintain asset purchases.
- This aims to support the economy, but the market reaction was a further sell-off in Treasuries.
Bank Share Buybacks
- US banks are set to resume share buybacks after the Fed eased restrictions.
- They halted buybacks in March 2020 and were banned in June due to recession fears, but now they've recovered.