(NEW YORK) — A storm system is impacting the Midwest and 29 states are on alert for damaging winds, heavy snow and avalanches.
A tornado threat was issued for Iowa, Minnesota and Wisconsin, with a tornado touching down in Plainview, Minnesota, just outside Rochester, on Wednesday night, according to the National Weather Service. This was the first time Minnesota has recorded a tornado in December.
There is already snow on the ground in parts of Minnesota where more tornadoes could occur Wednesday into Thursday.
Heavy rain is expected for Kentucky, Tennessee and Arkansas on Thursday and Friday. There could be between 2 to 4 inches of rain in the area, which was severely impacted by the deadly storms last weekend.
Forty-four deadly tornadoes tore through nine states last weekend, killing at least 88 people. Kentucky was by far the hardest hit.
Severe storms were impacting Nebraska, Iowa, Minnesota and Wisconsin Wednesday afternoon and into the evening across the Mid-Missouri Valley to the Upper Mississippi Valley.
“Widespread severe wind gusts of 60-75 mph along with at least a few tornadoes are likely from late afternoon through this evening,” according to the National Oceanic and Atmospheric Administration.
Embedded gusts of 80 to 100 miles per hour and a strong tornado or two are also possible, particularly across western to northern Iowa and southeast Minnesota.
Hundreds of thousands of customers in the area — from Colorado to Kansas and Minnesota — were without power at 9:30 p.m. on Wednesday.
Areas from Texas to New York could see very strong winds ahead of the storm. Wind gusts could be between 40 to 70 mph.
There is an avalanche warning in place for the West, where 5 feet of snow was reported in the mountains. More snow is still expected.
This storm system has already brought more than 8 inches of rainfall in Southern California. The state also saw mudslides and debris flow, forcing some people to be rescued. There is also an avalanche warning issued for California’s Sierra Nevada Mountains.
Whiteout weather conditions shut down Interstate 90 from California to Nevada Monday night. Parts of Northern California saw rockslides and mudslides.
(WASHINGTON) — A group of 100 or so potential scholars in the State Department’s prestigious Fulbright Foreign Student Program will have to continue waiting for a final answer on whether their cohort — not shielded from disruption following the Taliban takeover in Afghanistan and withdrawal of an American presence there four months ago — will continue.
Maryam Jami, 23, an attorney in Herat who called the program the “venue to her dreams” of earning her Masters of Law in the U.S. next year before returning to help refugees in her native Afghanistan, opened an email update expected from the State Department early Wednesday morning.
Jami says she rose from her bed to read the message on her phone, before sharing it with her three sisters, who were standing by to comfort her.
“We continue to explore options for proceeding with the Program, but we have not yet identified a safe and viable way forward,” the email signed by a State Department official read. “We recognize the impact of this uncertainty about the future of the Program, and we are continuing our efforts to look for pathways forward. By January 31, 2022, we will provide further communication regarding if we are able to proceed with the selection process, including interviews.”
The note went on to remind that not all semifinalists would be finalists chosen for the program, was it to continue, and suggested hopeful scholars consider other evacuation routes and opportunities.
“The safety and well-being of you and your family will always be our highest priority, and our decision-framework is guided by this steadfast principle. Due to the uncertainty of the process and the limited number of semi-finalists who become recipients if the program continues, we recommend that you carefully considering all options and opportunities available to you on a continuing basis, keeping safety as the paramount consideration,” it continued.
“We know the challenging situation you are facing and the fortitude you have shown, and we reiterate our commitment to the future of the Afghan people,” the email said in closing.
The update from the State Department to the potential 2022 cohort, which has seen its in-person interviews delayed twice this year, came two months after the last update on Oct. 18, which some semifinalists believe their email and social media campaign — #SupportAfgFulbrightSemiFinalists2022 — targetting officials in the wake of the U.S. withdrawal triggered.
Jami says she brushed off her sisters’ efforts to comfort her, telling them she was fine, closed her phone went back to bed.
“After seeing that email, I didn’t really feel anything,” Jami recalled in a phone call with ABC News from her home in Herat on Wednesday evening. “Nowadays, we Afghans, any door that we are running to closes to our faces. So this is the story of our life. It’s just something we have just gotten used to.”
After having left a WhatsApp group with other potential scholars, Jami said some friends asked her and others who had left to rejoin it on Wednesday, as the emails from the U.S. official trickled into their phones and computers. Though Jami said some in the group of 63 and counting believe they should now ramp up their efforts, Jami said she’s looking at other options.
“I have given up because I no longer have hope,” she said. “Because they indirectly have told us in this email that we should look for other opportunities. They also say that they couldn’t figure out or find any other way to continue with this — but I’m sure if the U.S. really wants to grant us this opportunity, there are ways.”
She also advised other semifinalists to follow her lead, saying she’s “80% sure” the program will cease for them.
“Everyone should think on other opportunities as well because they indirectly have told us that they are they are not actually willing to continue this program for us,” she said. “It will determine our future if we keep waiting for something which is uncertain and most likely will not happen. It will devastate our futures. It will devastate the future of our communities which we are working for.”
The program, established by Congress in 1946 with a goal of international relationship building by offering both grants to U.S. citizens to study or teach abroad and to non-U.S. citizens to study in the states, of which Secretary of State Antony Blinken is an alum, was disrupted for Jami’s cohort — a group hoping to gain their master’s degrees in the U.S. — first by COVID-19 and then, again, with the end of America’s longest war and diplomatic presence in the country now on the brink of economic collapse and famine.
Still, some of the group, Jami says, are pushing for the State Department to have their interviews proceed virtually instead of at the U.S. Embassy in Kabul — where applicants were to report for the interviews over the summer before the delays — which was evacuated in the middle of August.
“We are reviewing the significant safety, logistical, and programmatic constraints which must be overcome to successfully implement the 2022-23 Fulbright Program,” a State Department spokesperson told ABC News last week. “We are committed to remaining in communication with the semifinalist group about the status of the program, understanding they must pursue the choices that make the most sense for themselves and their families.”
Although Jami gushed earlier this month about how the prestigious program was a “venue to her dreams,” she said she won’t allow its potential suspension, as well as the thought that her test scores will soon expire, to stop her from the real work of helping her people.
“Of course, I had chosen the Fulbright Program as my future path, but my biggest dreams were not just conditioned to the Fulbright Program,” she said. “I will still continue my efforts for Afghanistan.”
“At the end of the day, we are trying to be what we always dreamt of being — not just being a Fulbright Scholar or just studying in the U.S. — but what we expected to do after when we return to our country,” added Jami, who hopes to work for the United Nations or Afghanistan government one day. “This is what really matters.”
ABC News’ Conor Finnegan contributed to this report.
(MAYFIELD, Ky.) — President Joe Biden on Wednesday surveyed damage in Kentucky he described as “beyond belief” and met with families in neighborhoods ravaged by deadly tornadoes last weekend.
After Biden surveyed the destruction in Mayfield by air and then on the ground, Kentucky Gov. Andy Beshear later choked up when thanking Biden publicly and introducing him in Dawson Springs, where Biden had stopped and talked to families whose homes were destroyed, including a 12-year-old girl carrying an American flag in a neighborhood where nearly every tree had been uprooted.
Biden opened his remarks by reminding people used to travel to Dawson Springs for the city’s healing waters, but, Biden said, “Now it’s our turn to help the entire town to heal.”
“I intend to do whatever it takes, as long as it takes to support your state and local leaders, and as you recover and rebuild because you will recover and you will rebuild,” Biden said, surrounded by storm damage. “The scope and scale of this destruction is almost beyond belief. When you look around here, it’s almost beyond belief. These tornadoes devoured everything in their path.”
He also offered condolences for those who lost someone and insisted “something good must happen” from the tragedy.
“I met one couple on the way up, said they’re still looking for four of their friends. They don’t know where they are. And those who have lost someone, there’s no words for the pain of losing someone. A lot of us know it.” Biden said.
“Keep the faith,” Biden added. “No one is walking away. We are in this for the long haul.”
Ahead of his remarks, Biden updated a presidential disaster declaration to boost federal disaster funds from 75% to 100% coverage for debris removal and emergency protective measures in Kentucky for a 30-day period.
Earlier, before receiving a briefing from state and local officials in Kentucky “on the impacts of the tornadoes and extreme weather,” according to the White House, Biden vowed all the federal support he can provide to the area, both now and in the months to come.
“Immediately after a disaster is a time when people are really, really moving, and trying to help each other and trying to get things done. But after a month, after six weeks, after two months, people can get themselves to a point where they get fairly depressed about what’s going on, particularly young kids, particularly people who’ve lost somebody. And so I just want you to know, the help that we’re able to offer at the federal level, is not just now,” Biden said.
“I’ve instructed my team to make you all aware of everything that is available from a federal level,” Biden added later on. “And some of it has to do outside of FEMA, outside of Homeland Security, there’s other programs, including education, there’s a whole range of things, but I’m here to listen.”
The president seemed struck by the scale of the damage he saw on his aerial tour.
“As you fly over here, as I’ve done in the past, I’ve not seen this tornado, this much damage from a tornado. You know, you think, but for the grace of God, why was I not 100 yards outside that line? Which makes it so different,” he noted.
Biden was joined for the visit by Department of Homeland Security Secretary Alejandro Mayorkas and FEMA Administrator Deanne Criswell, who were on the ground there on Sunday.
At least 88 people have been confirmed dead across five states, 74 in western Kentucky alone, and the death toll could rise “significantly,” Beshear said on Tuesday.
(NEW YORK) — The nation’s top health officials warned Wednesday that the fast-rising omicron variant “undoubtedly” compromises the protection of two doses of Pfizer and Moderna vaccines, putting the U.S. at risk of a tidal wave of fresh COVID cases in the next month if more people don’t get vaccinated and sign up for booster shots.
The good news, though, is that booster shots mostly reconstitute protection, reducing the need for the U.S. to roll out an entirely new vaccine formula specific to omicron.
“Booster vaccine regimens work against omicron,” said Dr. Anthony Fauci, the president’s chief medical adviser.
The speculation about what happens next has rattled many Americans as they prepare to travel for the holidays. Cases of the new variant have been doubling every two days, with a sevenfold increase in the prevalence of the omicron variant in the last week– proving itself to be even more transmissible than the delta variant.
“We expect to see the proportion of omicron cases here in the United States continue to grow in the coming weeks,” said Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention.
Health officials said the best bet is wearing a mask indoors and improving ventilation, in addition to vaccinations and boosters.
“Those are the tools we have. If we didn’t have these tools, I would be telling you to really, really be worried. But we have tools. So, get vaccinated, get boosted,” Fauci said.
The White House on Wednesday sought to tamp down any speculation of lockdowns. Jeff Zients, Biden’s chief coordinator on the COVID response, said they weren’t necessary.
“We know how to keep our kids in school and our businesses open and we’re not going to shut down our economy in any way,” he told reporters on Wednesday. “We’re going to keep our schools and our businesses open.”
Still, whether the U.S. faces shutdowns again is largely in the hands of state and local officials who typically have splintered ideas on how to handle surges.
In New York, a statewide mask mandate for all indoor public places was to take effect Jan. 15 unless businesses already have a vaccine requirement in place. In Texas, the governor has tried to ban mask mandates and is fighting a federal mandate that large businesses either require vaccines or weekly testing.
New York University and Princeton University joined Cornell University this week in canceling events and moving winter exams online. Cornell declared “alert level red” after finding 900 cases, including a “significant number” of students infected with the omicron variant.
The omicron variant was believed to have originated in southern Africa, whose lower-income countries have struggled to obtain and distribute vaccines needed to tamp down outbreaks. In recent weeks, scientists have been collecting real-world data while conducting lab studies on how the virus responds to antibodies induced by the vaccine.
The latest research found that booster shots significantly improved protection against disease. Yet only 55 million Americans have received boosters, making many Americans vulnerable.
“The omicron variant undoubtedly compromises the effects of a two-dose mRNA vaccine induced antibodies and reduces the overall protection,” Fauci said. But early studies “indicate that boosters reconstitute the antibody titers (numbers) and enhance the vaccine protection against omicron,” he added.
In one study cited by the CDC, nursing home residents with a booster have 10 times lower rates of getting COVID compared to people who are unvaccinated or vaccinated but without a booster.
The CDC has been looking at various scenarios involving a triple whammy this winter – COVID-related hospitalizations stemming from omicron or delta, along with cases of seasonal flu. The worst case scenario is a peak in January with cases slowly trending downward by March, though the data informing the forecast is still sparse.
The dreary possibility was discussed in a phone call on Tuesday with public health organizations, which said the message from the CDC was to take steps now to blunt the impact.
Chrissie Juliano, executive director of Big Cities Health Coalition who participated in the call, said her takeaway from the discussion was that there are a lot of unknowns with omicron.
But it’s also clear what has worked against every variant so far — masks in public indoor settings, vaccines, and now, boosters for everyone eligible.
“We do have tools in place and we do know what to do. But we need to make sure that those things happen,” Juliano said.
ABC News producer Arielle Mitropoulos contributed to this report.
(WASHINGTON) — Major U.S. airline CEOs were in the hot seat on Capitol Hill Wednesday afternoon, questioned by lawmakers on whether they appropriately spent billions in taxpayer dollars.
The airline industry received a bailout of $54 billion at the height of the pandemic when air travel came to a screeching halt. The goal was to preserve airline jobs, and in return airlines agreed to place limits on executive compensation, eliminate stock buybacks and dividends and not involuntary furlough employees.
Even with the aid, however, airlines said they had no choice but to shrink. They incentivized thousands of employees to accept early retirement offers, buyouts and take unpaid leave.
The moves left them with few resources when air travel came roaring back. During the summer and fall, taxpayers bore the brunt of the cuts — facing daylong cancellations, delays, lines and hold times.
“The return of demand for air travel has been intense,” American CEO Doug Parker wrote in his opening statement. “Like other airlines, we have experienced some operational challenges in recent months, which we have worked to manage as deftly as possible.”
Lawmakers questioned the CEOs on whether airlines have held up their end of the bargain since the goal of the aid was to preserve staff for the eventual travel rebound.
“We end[ed] up with airplanes in the wrong place, people in the wrong place,” Parker said regarding the airline’s mass flight cancellations in October. “So that was the driver of the vast majority of cancellations, but … it gets unfortunately mischaracterized as we don’t have enough people.”
Parker explained they actually have more pilots and flight attendants for shifts than they’ve had in the past, but that employees pre-pandemic were more willing to pick up extra trips, which fueled some of their operational challenges.
Southwest Airlines CEO Gary Kelly admitted to some scheduling mistakes over the past year.
“We just need to make sure that we don’t overschedule the airline relative to the people resources that we have,” he said, “and we’ve made a number of adjustments in that regard.”
And United revealed they are struggling with a regional pilot shortage.
“All of us, particularly our regional partners, simply don’t have enough airplanes to fly,” United CEO Scott Kirby told lawmakers. “We have almost 100 airplanes effectively grounded right now, regional aircraft, because there’s not enough pilots flying, which means we just can’t at the moment fly to all the small communities that we would like to.”
But the executives were in agreement that the road to recovery would have been worse if it weren’t for the payroll support program. PSP saved nearly 400,000 direct passenger airline jobs, according to data from the airlines.
“It’s not an exaggeration to say the program saved the airline industry,” Parker added.
Executives addressed worker shortage concerns by detailing their aggressive hiring initiatives. In all, the major U.S. airlines plan to hire around 30,000 new workers in 2022.
U.S. airlines handled the recent Thanksgiving travel rush without a major hiccup, but they fear the emerging variant could pose another potential setback.
“The omicron variant has created further uncertainty,” Delta COO John Laughter told lawmakers, “and there is no clear consensus on when business and international travel will return.”
(BENTON, Mich.) — After seeing elevated levels of lead in its drinking water for three years, the city of Benton Harbor, Michigan, a majority Black community, is finally seeing decreasing numbers, according to a recent report.
The six-month sample results released Wednesday showed that for the first time since 2018, Benton Harbor reports lead levels within federal limits.
“This is encouraging news, an indication that corrosion control treatment is taking hold and reducing the amount of lead getting into the water,” Eric Oswald, director of Michigan’s Drinking Water and Environmental Health Division,said in a release, adding that the news “does not lesson the urgency” to reduce lead exposure in the city.
Residents of Benton Harbor have been forced to use bottled water provided by the state for years due to lead contamination. The lead contamination issues in Benton Harbor echo similar water crises in poorer, majority nonwhite cities.
Environmental Protection Agency data shows that 1 in 6 majority nonwhite ZIP codes has at least one water district with excessive lead contamination, compared to 1 in 8 majority white ZIP codes, according to ABC News analysis of the data in October.
From the same data, 1 in 4 of America’s poorest ZIP codes, where median household income is less than $35,000, has at least one water district with excessive lead contamination.
Over 90% of residents in Benton Harbor are nonwhite and the median household income is only $21,916, according to 2019 Census data.
In early September, a coalition of environmental and community organizations demanded the removal of lead service lines in Benton Harbor. Soon after, Michigan Gov. Gretchen Whitmer announced a commitment to remove all of the lead service lines within 18 months, a project that will cost approximately $30 million.
Construction began in November to replace the city’s service lines that had been poisoning the water supply for years.
Despite decreased levels of lead, state and city officials emphasized that they are not changing guidance and urged residents to continue to use bottled water for cooking, drinking and brushing teeth.
ABC News’ Catherine Thorbecke, Briana Stewart and Will McDuffie contributed to this report.
(WASHINGTON) — It’s been hard for Americans to avoid headlines and statements about “tapering” in recent months, as economists and policymakers debate how to best support the economy while the pandemic ebbs in the U.S.
The Federal Reserve said in a policy statement Wednesday that it was greatly reducing its massive bond-buying program, a pandemic-era initiative that flushed cash into financial markets and aimed to buoy the economy during the health crisis.
In the context of current economic policies, this ongoing process of slowing down asset purchases by the Fed is referred to as “tapering.” Simplistically, it refers to the gradual slowdown of the economic stimulus policy that was initiated at the height of the pandemic, when businesses shuttered and unemployment skyrocketed.
“The Fed has been buying up bonds since March of 2020 — bonds and mortgage-backed securities — at a certain rate, and they’re going to slow the rate at which they’re buying up these assets until they’re not buying them anymore,” Megan Greene, global chief economist at the advisory firm Kroll Institute and a senior fellow at the Harvard Kennedy School, told ABC News.
On Wednesday, Federal Reserve Chair Jerome Powell said during his post Fed-meeting news conference, “We’re basically two meetings away now from from finishing the taper.”
The move to speed up tapering comes as inflation has thrown a new wrench in the Fed’s ability to use its tools to support the economy. Economists have attributed the rising inflation to pandemic-related imbalances as global supply chain snags and labor shortages hobble the ability of supply to keep up with surging demand, pushing up prices.
The Fed’s pandemic policies helped stimulate the economy and consumer demand during the height of the crisis, but the U.S. central bank does not have monetary tools to ease the supply constraints.
“We are phasing out our purchases more rapidly because with elevated inflation pressures and a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support,” Powell said Wednesday. “In addition, a quicker conclusion of our asset purchases will better position policy to address the full range of plausible economic outcomes.”
In addition to doubling the pace of its tapering, the Fed also signaled that it could hike interest rates up to three times in 2022.
(MAYFIELD, Ky.) — President Joe Biden on Wednesday surveyed storm damage and met with families in neighborhoods ravaged by the deadly tornadoes .
Biden viewed damage in Mayfield before heading to Dawson Springs and also make remarks on the federal response and “extreme weather,” according to the White House.
Shortly before noon, Marine One landed in Mayfield, and Biden was greeted on the tarmac in Fort Campbell by Kentucky Gov. Andy Beshear, stopping for a five-minute conversation.
Deputy principal press secretary Karine Jean-Pierre said Biden’s message on Wednesday “is that he and the federal government intend to do whatever it takes, for as long as it takes, by providing any support that is needed to aid recovery efforts and support the people of Kentucky — and of other impacted states as they rebuild.”
“It is going to be a very long, long road ahead. And so that’s the president’s focus right now is to talk, specifically to hear from the elected officials on the ground,” she told reporters earlier on Air Force One.
Before receiving a briefing from state and local officials in Kentucky, Biden vowed all the federal support he can provide to the area, both now and in the months to come.
“Immediately after a disaster is a time when people are really, really moving, and trying to help each other and trying to get things done. But after a month, after six weeks, after two months, people can get themselves to a point where they get fairly depressed about what’s going on, particularly young kids, particularly people who’ve lost somebody. And so I just want you to know, the help that we’re able to offer at the federal level, is not just now,” Biden said.
“I’ve instructed my team to make you all aware of everything that is available from a federal level,” Biden added later on. “And some of it has to do outside of FEMA, outside of Homeland Security, there’s other programs, including education, there’s a whole range of things, but I’m here to listen.”
The president seemed struck by the scale of the damage he saw on his aerial tour.
“As you fly over here, as I’ve done in the past, I’ve not seen this tornado, this much damage from a tornado. You know, you think, but for the grace of God, why was I not 100 yards outside that line? Which makes it so different,” he noted.
After a briefing in Mayfield by local leaders “on the impacts of the tornadoes and extreme weather,” according to the White House, Biden will then continue on to Dawson Springs and that tour will culminate in remarks at 4 p.m. EST.
White House press secretary Jen Psaki earlier this week said Biden will not be delivering a “major speech” there but rather will be “trying to be a source of comfort to people who have gone through a devastating couple of days in their communities.”
“I would expect while he’s there, he will receive an update from local authorities on what their needs are, see local elected officials and discuss in person with them and make sure they’re getting what they need from the federal government,” Psaki said.
“He also wants to hear directly from people, and he wants to offer his support directly to them,” Psaki added. “People who have gone through over the last couple of days, really incredible challenges losing their homes, losing loved ones, losing parts of their community that they’ve grown up with and I think he wants to offer his support directly to them as well.”
Biden was joined for the visit by Department of Homeland Security Secretary Alejandro Mayorkas and FEMA Administrator Deanne Criswell, who were on the ground there on Sunday.
(WASHINGTON) — Federal Reserve officials announced Wednesday that they intend to more rapidly end pandemic-era monetary policies meant to support the economy as surging inflation casts a new shadow over the recovery.
The U.S. central bank announced it would accelerate the tapering of its bond-buying program that flushed financial markets with liquidity during the coronavirus-induced downturn. Fed officials voted to keep interest rates near-zero currently, but indicated that they anticipated as many as three interest rate hikes starting in 2022.
“The path of the economy continues to depend on the course of the virus,” the Fed officials said in a policy statement Wednesday. “Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus.”
The policy shift comes on the heels of the Federal Reserve’s final meeting of the year, which ended Wednesday afternoon.
The committee decided during the meeting to “double the pace of reductions in its asset purchases,” Federal Reserve Chair Jerome Powell said in a post-meeting news conference, signaling the pandemic-era program could be halted completely by March.
“Beginning in mid-January, we will reduce the monthly pace of our net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities,” Powell said. “If the economy evolves broadly as expected, similar reductions in the pace of that asset purchases will likely be appropriate each month, implying that increases in our securities holdings would cease by mid-March, a few months sooner than we anticipated in early November.”
He added that they are phasing out purchases more rapidly because, “with elevated inflation pressures and a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support.”
Powell also said supply constraints and bottlenecks have limited how quickly production can respond to recent rises in demand, resulting in elevated levels of inflation.
“These problems have been larger and longer lasting than anticipated, exacerbated by waves of the virus,” Powell said. “While the drivers of higher inflation have been predominantly connected to the dislocations caused by the pandemic, price increases have now spread to a broader range of goods and services.”
While Powell didn’t use the words “temporary” or “transitory” to describe inflation levels — as he and the Fed have previously — he did say inflation is expected to continue falling, to levels closer to the longer-run goal of 2%, by “the end of next year.”
“I think the Fed is showing that they’re taking this threat of higher inflation seriously, more seriously than they seemed to be before, but they still think that inflation should abate next year,” said Megan Greene, global chief economist at the advisory firm Kroll Institute and a senior fellow at the Harvard Kennedy School.
Greene said open-ended questions about changing labor force participation patterns and evolving consumer habits in the wake of the pandemic ultimately will have a big impact on how policymakers can react to inflation.
“There are fewer people in the labor force now than there were before the pandemic, and there’s a big question about whether that’s just the big structural change, or whether people might still jump in off the sidelines and get jobs,” Greene told ABC News. “And we’ve never been through this before, so we just don’t know, but if the labor force participation rate is just lower now, then the labor market is pretty tight and that makes sustained inflation a bigger threat.”
Americans also are changing their spending habits, she said.
“It’s not just that as the economy reopened and there’s a surge in demand, there’s also been a change in what we have a demand for,” she said. “In the 1960s, two-thirds of what we bought were goods. Right before the pandemic, two-thirds of what we bought were services.”
The pandemic reversed that decades-long shift, but it’s unclear whether it’s structural or related to lingering worries over the virus, according to Greene.
“All the inflation pretty much is in goods, so there’s a question, Is this just a change in our consumption habits now? Or is it that people are worried that going to the gym will land them in the hospital, so they’re not paying for those kinds of services anymore?” Greene told ABC News.
She said while the “jury’s out” on how this trend will play out as the pandemic ebbs, it’s something the Fed will have to figure out to better address inflation.
While the Fed’s projections indicate the possibility of up to three rate hikes in 2022, Greene suggests Americans take this with a “grain of salt” for now, saying that the data released Wednesday only indicates what each member of the Federal Open Market Committee thinks will happen “based on their own assumptions about inflation and growth and unemployment.”
The Fed’s policy shifts comes, meanwhile, as data indicates inflation hit a 39-year high last month. The government’s consumer price index, which measures the prices consumers pay for a basket of everyday goods and services, soared 6.8% in the last 12 months — the largest such increase since 1982.
The latest indicators inflation is tightening its grip on the U.S. economy have thrown a wrench in the Fed’s original plans to boost the economy throughout the pandemic.
Economists have attributed the rapidly climbing consumer prices largely to supply-demand imbalances lingering from the pandemic shock to the economy. Global supply chain issues, and an apparent shortage of workers accepting low-wage jobs in the service industry, have been linked to supply not being able to keep up with the surging consumer demand for goods and services as the pandemic wanes in the U.S. As a result, prices have been rising at a rapid clip.
The risk of inflation snowballing out of control, such as what was seen in the U.S. in the 1970s, makes it more difficult for the Fed to continue its easy monetary policy that was initiated during the pandemic — such as keeping interest rates low and injecting liquidity into financial markets. While these policies can help stimulate consumer demand, economists have linked the rising prices to issues clobbering the supply-side of the equation, not the demand side.
“We understand that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing and transportation,” Powell said. “We are committed to our price stability goal. We will use our tools both to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched.”
(HONG KONG) — Scores of people were trapped in a Hong Kong skyscraper on Wednesday after a major fire broke out, authorities said.
Flames ignited at the World Trade Centre in Hong Kong’s bustling Causeway Bay shopping district at around noon local time, setting scaffolding ablaze and forcing many people inside to flee to higher floors, where they awaited rescue, authorities said.
At least 13 people were injured, mostly due to smoke inhalation, during the incident. One of the people suffering from smoke inhalation was hospitalized in serious condition, according to authorities.
Authorities said they believe the blaze emerged from electrical cables on the first or second level of a shopping mall inside the 38-story complex, which is under renovation. The Hong Kong Fire Services Department had received a notice that the World Trade Centre’s fire safety system, including alarms and sprinklers, were shut off due to the construction, authorities said.
More than 150 firefighters were deployed to the scene, according to authorities. Thick smoke was seen billowing out from the building’s entrance as firefighters used a crane to rescue people trapped on the rooftop.
By 4:30 p.m. local time, firefighters had extinguished the flames and evacuated everyone from the building. Some 770 people were evacuated by rescuers, while 40 others evacuated from the building themselves, authorities said.
The World Trade Centre complex houses offices, restaurants and a mall, but the shops were all closed due to the ongoing renovations.
