Buckle up for a big economics week in Washington
Buckle up for a big economics week in Washington
It’s going to be a big week in Washington — a feast for economics and data nerds. Fed Chair Jerome Powell testifies on Capitol Hill on Tuesday and Wednesday, President Biden is set to release a budget outline on Thursday, and we’ll get the jobs numbers for February this Friday.
If you nerd out on economics as we do at Marketplace, it doesn’t get much better than this. And the best is saved for last: the jobs report on Friday.
“I’m optimistic we’ll have a good report Friday, but maybe not as surprisingly hot as it was in the January report,” said Yana Rodgers, an economist at Rutgers University.
The pent-up demand for workers is hitting the brick wall of the Fed’s higher interest rates, and higher borrowing costs are a constraint for companies, she said. “And when companies are constrained, they have to cut back somewhere else and it could be with new jobs, new hiring.”
Fed Chair Jerome Powell will read every word of the Friday jobs report. But first, he’ll face some scrutiny on Capitol Hill.
Patrick Horan, a research fellow at George Mason University, thinks Powell will be asked why the Fed is losing money. The Fed is getting a low rate of return on the bonds it bought to shore up the economy during the pandemic.
“Now, its liabilities are much larger than the revenue that it’s taking in,” Horan said, “and that’s why it’s costing the Fed so much.”
Powell might also be asked about the Congressional tussle over raising or suspending the debt limit, Horan said — setting the stage for Thursday’s release of President Biden’s budget outline.
“The budget will serve as a kick-off to the debt ceiling debate,” said Henrietta Treyz, managing partner at Veda Partners.
The president’s budget is really just a wish list, she said; Congress has the purse strings. But Treyz added that President Biden will try to narrow the budget deficit with new taxes on corporations and wealthy taxpayers.
“Traditional components of that tax policy are what allows him to reduce the deficit and also spend on things like clean energy, education,” she said.
Republicans have floated their own ideas, like capping some government spending at fiscal 2022 levels. You’ll hear lots more about all of this — with many more hearings to come.
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