Fed's Powell cautions against ending Fed power to pay interest on reserves
NEW YORK, June 25 (Reuters) - Federal Reserve Chairman Jerome Powell said Wednesday that the central bank's power to pay interest on cash that banks park at the central bank is a key part of the Fed's interest rate control toolkit and would be difficult to unwind.
"If you were to want to go back to a scarce reserves, it would be a long and bumpy and volatile road," Powell told a Senate committee during testimony. "I wouldn't recommend that we undertake that road" and if it were done it "would not save any money."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Rhyl Journal
30 minutes ago
- Rhyl Journal
Welfare concessions being discussed with Labour rebels, Rayner suggests
Angela Rayner insisted the Government was not expecting backbenchers to go against traditional party values amid a looming revolt over the welfare Bill set for a Commons vote next week. Some 120 Labour MPs have put their names to a bid to block the legislation in its tracks, arguing that disabled people have not been properly consulted about the plans and further scrutiny is required before making any changes. Asked what concessions could be offered to convince rebels to back the Bill, Ms Rayner said 'discussions are ongoing'. 'I'm not going to get into that on your show tonight,' she said in an interview on ITV's Peston programme. 'Those discussions are ongoing around making sure that the welfare reforms that we're bringing in support people into work who need that, and we're putting a huge amount of investment into doing that, but also protecting the most vulnerable.' She acknowledged that 'a lot of people are very scared about these changes' but added: 'I haven't changed my Labour values and we're not expecting our benches to do anything that isn't in check with them. 'What we want to do is support people, and that is the crucial bit around these reforms of what Labour are trying to achieve, and we're discussing that with our MPs.' Work and Pensions Secretary Liz Kendall, who has already taken steps to soften the impact of the welfare Bill, has been locked in talks with backbenchers as she seeks to win over those opposed to the measures. The Universal Credit and Personal Independence Payment Bill faces its first Commons test on Tuesday. The plans restrict eligibility for personal independence payment (Pip), the main disability payment in England, and limit the sickness-related element of universal credit, with the aim of getting more people back into work and saving up to £5 billion a year. Existing claimants will be given a 13-week phase-out period of financial support, a move seen as a bid to head off opposition. But the fact so many Labour MPs are prepared to put their names to the 'reasoned amendment' calling for a change of course shows how entrenched the opposition remains. Earlier on Wednesday, Sir Keir Starmer defended his leadership against accusations he had misjudged the mood in his party, insisting he is 'comfortable with reading the room'. At a press conference at the Nato summit in the Hague, he said: 'Is it tough going? Are there plenty of people and noises off? Yes, of course, there always are, there always have been, there always will be. 'But the important thing is to focus on the change that we want to bring about.' Ms Rayner earlier told MPs in the Commons the vote will take place as planned despite the rebellion, saying: 'We will go ahead on Tuesday.' Social security minister Sir Stephen Timms said he was 'looking forward to the debate' next week. He told the Commons Work and Pensions Committee the changes need to be made urgently to cut the spiralling welfare bill. Committee chairwoman Debbie Abrahams, who is one of the Labour MPs to have signed the amendment to block the legislation, asked why the provisions within the Bill had not been consulted on. Sir Stephen said: 'Essentially because of the urgency of the changes needing to be made.' He said the cost of Pip had gone up from £12 billion before the pandemic to £22 billion last year 'and that is not a sustainable trajectory'. Setting out the impact of the reforms, he told the Committee 370,000 people getting Pip under the current system would not be receiving it by the end of the decade. Other senior Labour figures outside Parliament, including Greater Manchester Mayor Andy Burnham and London Mayor Sir Sadiq Khan, have also publicly expressed their opposition to the plans. Meanwhile, the Tories seem unlikely to lend the Government their support, with leader Kemi Badenoch setting out conditions for doing so including a commitment to rule out tax rises in the autumn budget and further cut the benefits bill.
The Guardian
31 minutes ago
- The Guardian
Mediator reportedly proposes $20m settlement in Trump suit against CBS
Donald Trump and CBS could settle their legal battle over a contested interview with Kamala Harris for $20m, as the dispute continues to shadow a major media merger. A mediator has proposed the settlement figure to resolve Trump's lawsuit against CBS News over alleged deceptive editing of a 60 Minutes interview with Harris during last year's presidential campaign, the Wall Street Journal reported on Wednesday. The lawsuit, filed in October and later amended to seek $20bn in damages, accused CBS of election interference through selective editing that allegedly made Harris appear more coherent in her responses about the Israel-Gaza conflict. CBS has consistently denied wrongdoing, saying it simply aired a more concise version of Harris's answer rather than doctoring her comments. The proposed deal would see $17m donated to Trump's presidential foundation or museum, with additional millions covering legal costs and funding public service announcements against antisemitism on Paramount-owned networks. However, negotiations remain stuck on Trump's demand for an apology from CBS – something the network has refused to provide, sources familiar with the talks tell the WSJ. The dispute also complicates Paramount's $8.4bn merger with Skydance Media, as Federal Communications Commission chair Brendan Carr indicated that the controversy could influence regulatory approval of the deal. According to the reporting, settlement discussions began in mediation this spring after Paramount initially offered $15m – less than Trump's team demanded. The proposed $20m figure aligns with recent settlements between Trump and other major media companies. Disney paid $15m to the Trump presidential foundation and another $1m for his lawyer fees to resolve a defamation case involving ABC News anchor George Stephanopoulos in December, while Meta agreed to a $25m settlement over Trump's social media account suspension following the 6 January riot at the Capitol. The legal pressure has contributed to mass upheaval at CBS News, with both longtime 60 Minutes producer Bill Owens and news division chief Wendy McMahon announcing their departures earlier this year amid tensions over the network's response to the lawsuit.
North Wales Chronicle
38 minutes ago
- North Wales Chronicle
Planning reforms could break housebuilders' ‘failed' dominance
Lord Best, who is vice president of the Town and Country Planning Association, hit out at the 'oligopoly' in the sector said the major firms for building homes had failed in their task of building enough. He told peers that small building firms were responsible for 10% of new homes since 2000, down from a previous figure of 40%. A Government report from 2024 found the 11 biggest housebuilders, including Barratt Homes, Taylor Wimpey and Persimmon made up 40% of all new homes built in 2021-22. The crossbench peer said: 'A key question hanging over the ambition to build 1.5 million more and better homes is, who will the nation entrust to get this job done? 'For many years, the answer for most house building has been 'we will let the volume housebuilders acquire the sites, come up with the plans, design and build the homes, and make their profits, while we try to require them to allocate a modest proportion of their output for affordable housing'. 'My lords, this reliance on the large housebuilders has not produced the quantity or quality of homes we need.' Lord Best's comments come a year after a report by the Competition and Markets Authority criticised the speculative model employed by many of the largest housebuilders. He added: 'It's led to so-called 'fleece-hold' sales to homebuyers, to uniform, soulless design, and with little attempt to provide the green spaces and community facilities that are the making of any place. 'And the housebuilders have worked at a rate that suits themselves, a build-out rate that ensures no reduction in house prices.' He said he believed the proposed development corporations, which form part of the Planning and Infrastructure Bill which was getting its second reading in the House of Lords on Wednesday, would make the Government less reliant on large firms which could see more homes built. '(It) enables the use of this development corporation model for any major development, introducing an alternative to the failed business model of the oligopoly of volume housebuilders,' he said. 'Here is the breakthrough that the Bill could achieve.' The Bill includes measures to help the Government achieve its central manifesto commitment of building 1.5 million homes by 2029. It restores mandatory housing targets, legislates for a generation of new towns, and will reform planning to make it harder to reject developments. The debate heard that there are 1,000,000 planning permission applications for homes that have gone unbuilt in England, with 250,000 in London. ONS figures showed fewer than 185,000 homes were completed in 2024. Housing minister Lord Khan of Burnley had hit out at his predecessor's 'mismatched territory of ill-fitting, short-termist reforms, tinkered around the edges rather than resolving our problems'. The Labour peer said the Bill could 'turn this around'. He said: 'Home building has fallen from already insufficient levels. There are simply not enough homes … this would be the lowest year for net-additional dwellings in England since 2015-16.' However, his opposite number, shadow housing minister Baroness Scott of Bybrook said: 'In 2019 the Conservative Party committed to delivering one million additional homes over the Parliament. In 2024, before the general election, we delivered on that commitment. 'The Labour Party has now committed to deliver 1.5 million homes over this Parliament, and it is essential that they deliver on that manifesto commitment.' Conservative former housing minister in John Major's governments, Lord Young of Cookham warned about a lack of planning officers in councils which could hamstring the Government's housebuilding hopes. Lord Young recalled a discussion with a senior economist from his time as a Treasury minister. He said: 'I suggested a new policy that had been tried in New Zealand. He said it may work in practice, but it doesn't work in theory. 'Now, the risk of this Bill is exactly the opposite. It may work in theory, but it won't work in practice unless planning departments are resourced.' Party colleague Lord Patten, who as John Patten served as education secretary in the 1990s, declared a shareholding in housebuilder Persimmon. He said: 'The record sadly shows that no Conservative or Labour government since 1945 have ever met their stated aspirations or hopes or pledges to build this, or that particular number of homes in any one year or in any one decade.' Tory peer Lord Lilley, who held ministerial positions under Mr Major and Margaret Thatcher said reforms to speed up the planning process were much-needed, as he decried sums spent on planning processes. He said: 'Virtually every housing project in my old constituency, and in indeed parts of the country, has faced objections locally. 'We've created in effect, a 'vetocracy', objectors can impose such costs and delays on project developers that they can effectively veto those projects going ahead. 'We must find ways of reducing the power of that plutocracy and I welcome steps in this Bill to do that.'
