Layoffs remain low even as interest rates go higher. We’ll also look at the scrapping of a major cannabis banking bill and where a top Fed official sees rates going.
But first, Nike is sprinting out of Russia and isn’t looking back.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Subscribe here.
Jobless claims fall slightly amid recession fears
New applications for unemployment aid fell slightly last week as the U.S. job market showed few signs of a slowdown despite rising interest rates.
In the week ending June 18, initial claims for unemployment insurance totaled 229,000 after adjustments for seasonal factors, a decrease of 2,000 from the previous week, the Labor Department reported Thursday.
The background: The labor market has remained historically strong, even as the Federal Reserve has raised interest rates at a rapid pace to help cool inflation. Higher interest rates usually slow job growth as businesses facing higher borrowing costs and slower sales pull back job openings and lay off employees.
“The steady weekly data suggests that the impact of the Federal Reserve’s interest rate increases has yet to show up in earnest as monetary policies often take months to make their way through the economy,” wrote Tuan Nguyen, economist at RSM, in a Thursday analysis.
Sylvan has more here.
LEADING THE DAY
Cannabis banking bill removed from China competition package
Congressional leaders have removed a key cannabis banking measure from their China competition bill, dealing a blow to marijuana advocates who pushed for its inclusion.
Supporters will now aim to get the cannabis banking bill, which has passed the House several times with broad bipartisan support, included in another spending package.
- The SAFE Banking Act, which would allow legally operating cannabis businesses to access banking services, was included in House Democrats’ COMPETES Act but not the Senate’s bipartisan U.S. Innovation and Competition Act passed last year.
- The decision isn’t surprising, as Republican leaders argued that the cannabis bill didn’t fit with other measures in the China competitiveness package, and prominent Democrats want to pair the banking bill with social justice measures, something that can’t be done in the conference committee.
- The bill’s supporters said Thursday that lawmakers are endangering cannabis workers by failing to overhaul the current system, which forces most dispensaries to use cash, making them top targets for robberies.
Cannabis lobbying groups have warned Democrats that they cannot afford to enter the midterms without having passed any marijuana reforms.
“The support and political will is there to get the SAFE Banking Act across the finish line. We are encouraged by conversations about pairing the bill with other helpful cannabis and criminal justice reforms,” Steven Hawkins, president of the U.S. Cannabis Council, said in a statement. “We look forward to working with our members and allies to help get the job done.”
Read more here from The Hill’s Karl Evers-Hillstrom.
HIGHER AND HIGHER
Fed’s Bowman expects 75 basis point hike in July
Federal Reserve Governor Michelle Bowman said Thursday she expects the central bank to raise interest rates by another 0.75 percentage points at its next monetary policy meeting in July.
In a speech to Massachusetts bankers Thursday, Bowman said she believes the Fed will need to issue its second consecutive 75 basis point hike in July with several 50 basis point hikes to follow. She said with inflation “unacceptably high,” the Fed must move quickly to move its baseline interest rate range higher than where markets expect inflation to settle.
“I expect that an…
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