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Capital Journal |
Good morning from the WSJ Washington bureau. We produce this newsletter each weekday to deliver exclusive insights and analysis from our reporting team. Sign up here if you aren't subscribed. Thank you for reading. |
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Biden administration: The president is scheduled to meet at the White House with private-sector chief executives at 1 p.m. E.T. to discuss Democrats' roughly $2 trillion education, healthcare and climate bill. He is set to sign an executive order on sexual harassment in the military at 3:30 p.m. Federal Reserve: Fed officials are expected to keep interest rates near zero today, the second day of their two-day policy meeting, while likely signaling a rate increase in March. The Fed is set to release its policy statement at 2 p.m., and Chairman Jerome Powelll will hold a news conference at 2:30 p.m. See story below. Financial Regulation: The Securities and Exchange Commission is set to hold its first open meeting of the year at 10 a.m. to discuss rule proposals targeting private-equity funds and the market for U.S. Treasury debt. 💬Live Q&A: Join WSJ’s Jerry Seib, Ann M. Simmons and James Marson at 1 p.m. for a conversation about the origins of the Russia-Ukraine crisis, the latest developments on the Ukraine border and where the U.S. goes from here. |
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| Under current law, private insurers pay for over-the-counter tests but Medicare doesn’t. PHOTO: JAY MALLIN/ZUMA PRESS |
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The White House is exploring regulatory changes or other measures that would let seniors on Medicare get free, over-the-counter Covid-19 tests, Stephanie Armour reports. The administration recently launched a website where people can order free tests via mail and began requiring private insurers to cover the cost of any additional over-the-counter tests. But the insurance requirement doesn’t apply to the more than 76 million people on Medicare, which typically doesn’t cover self-administered diagnostic tests. |
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The Biden administration is withdrawing an emergency private-sector vaccination mandate against Covid-19 after the Supreme Court blocked its implementation, David Harrison reports. The Occupational Safety and Health Administration said Tuesday it would continue to work on imposing the vaccination requirement through the regular, lengthier rulemaking process. The emergency rule, issued in November, mandated that employers with 100 or more employees require their workers to be vaccinated against Covid-19 or submit to weekly testing and wear a mask while indoors. |
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| Speaker Nancy Pelosi, a California Democrat, is the first woman to hold the highest position in the House. PHOTO: BONNIE CASH - POOL VIA CNP/ZUMA PRESS |
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House Speaker Nancy Pelosi (D., Calif.) said she plans to seek re-election this fall, but gave no indication of whether she wants to remain her party’s leader, as Democrats face an uphill battle to keep control of the chamber in the midterms elections, Natalie Andrews reports. To win backing for the speakership in 2018, Mrs. Pelosi made a deal with party lawmakers that she would serve as speaker for just two more terms. Since then, she has declined to discuss any plans to step aside. She has the support of her caucus, though many have called for a leadership change. Mrs. Pelosi, who is 81 years old and has led her party in the House for nearly two decades, has easily won re-election since first coming to Congress in a special election in 1987 and is a shoo-in for another term. |
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| A Ukrainian soldier walked near the front line with Russia-backed separatists in eastern Ukraine on Tuesday. PHOTO: ANATOLII STEPANOV/AGENCE FRANCE-PRESSE/GETTY IMAGES |
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The U.S. is prepared to impose sanctions and export controls on critical sectors of the Russian economy if Russia invades Ukraine, and is working to soften market shocks if Russia withholds energy supplies in retaliation, Kate O'Keeffe, Gordon Lubold and Laurence Norman report. Taking a page out of the Trump administration playbook to pressure Chinese telecom giant Huawei Technologies Co., U.S. officials on Tuesday described potentially banning the export to Russia of various products that use microelectronics based on U.S. equipment, software or technology. While the officials didn’t specify the products, they said that the goal would be to hit critical Russian industrial sectors that Mr. Putin has given priority to, such as artificial intelligence and quantum computing. |
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PHOTO: CHRISTOPHER OCCHICONE/BLOOMBERG NEWS |
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The port city of Mariupol, just outside Ukraine’s Russia-linked breakaway region, bears scars from eight years of war, with shells of buildings untouched to remind locals of the price of Russian occupation, Vivian Salama reports. Residents' views reflect a city torn between two worlds—Russia to the east and Europe to the west. |
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Some argued that the central government in Kyiv had abandoned them. Others said Ukraine shouldn’t pander to either side. |
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As many as 200 U.S. soldiers are involved in a fight alongside Kurdish-led forces to regain control of a Syrian prison attacked by Islamic State, U.S. officials said, in the most serious test in years for the country’s American military contingent, Jared Malsin and Nancy A. Youssef report. |
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| The Fed slashed interest rates to near zero in March 2020, when the pandemic upended global commerce. PHOTO: JOSHUA ROBERTS/REUTERS |
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Federal Reserve officials are set to keep interest rates near zero today, at the conclusion of their two-day policy meeting, while likely signaling they are preparing to raise rates at their following gathering in mid-March, Nick Timiraos reports. The central bank is also poised to approve one final round of asset purchases and resume deliberations over how and when to reverse the pandemic-driven expansion of its $9 trillion securities portfolio later this year. |
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Economists say the Fed will likely work to prepare markets for the start of interest rate increases by upgrading how it describes the job market in the policy statement today, Michael S. Derby reports. |
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| The IMF estimates the economic damage from supply-chain disruptions has already been extensive. PHOTO: DAMIAN DOVARGANES/ASSOCIATED PRESS |
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The pace of economic growth both in the U.S. and globally is likely to decline more sharply than previously expected, the International Monetary Fund said in its latest forecast, citing inflation, fallout from the Omicron variant and chronic supply-chain problems, Josh Zumbrun reports. The global economy will expand a predicted 4.4% this year, the IMF said Tuesday in its World Economic Outlook. That figure is down from an estimated 5.9% in 2021 and is a downgrade of one-half of a percentage point from its last projection in October. The decline will be steeper in the U.S.—4% in the coming year, a 1.2 percentage-point downgrade from the October estimate—the largest downgrade for any major country or major group of countries for which the IMF provides forecasts. |
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U.S. home-price growth decelerated in November as months of fast-rising prices pushed some buyers out of the market, Nicole Friedman reports. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas, rose 18.8% in the year ended in November, down from a 19% annual rate the prior month. |
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U.S. manufacturers and other companies that use semiconductors are down to less than five days of inventory for key chips, compared with 40 days in 2019, the Commerce Department said Tuesday, Josh Zumbrun and Alex Leary report. |
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China’s tech stocks cratered last year, and America’s are following suit this year. But their selloffs have very different drivers, and therein lies a potential inflection point in the emerging competition between the two countries, Greg Ip writes. The Nasdaq correction is the natural consequence of speculative froth that allowed numerous unprofitable companies to go public and many established companies to achieve nosebleed valuations. By contrast, China’s selloff was the result of a deliberate policy by the ruling Communist Party to rein in its freewheeling entrepreneurial class and reprioritize its investments. |
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| A patient receiving treatment last week in the acute care Covid-19 unit at Seattle’s Harborview Medical Center. PHOTO: KAREN DUCEY/GETTY IMAGES |
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Covid-19 deaths in the U.S. reached the highest level since early last year as the Omicron variant's spread eclipsed daily averages from the Delta-fueled surge and prompted record case counts, Jon Kamp reports. The seven-day average for newly reported Covid-19 deaths reached 2,191 a day by Monday, up about 1,000 from daily death counts two months ago, before Omicron was first detected, data from Johns Hopkins University show. While emerging evidence shows Omicron is less likely to kill the people it infects, it spreads so quickly that the avalanche of cases can overwhelm any mitigating factors, epidemiologists say. |
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An appellate judge reinstated New York’s indoor mask mandate on Tuesday after the state Health Department appealed a Monday ruling that struck down pandemic-related requirements for schools and businesses. |
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The European Union is lifting Covid-19 travel restrictions, allowing member countries to do away with quarantine and testing for vaccinated fliers traveling inside the bloc, Benjamin Katz reports. Officials said the virus's spread has reached a level at which travel restrictions may not help curb its footprint anymore. |
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China is clinging to its zero-Covid strategy, even though it has left the population unsettled and potentially vulnerable to a new surge in infections. (Foreign Affairs) The Biden administration is working on a plan to bring thousands more Afghan refugees to the U.S. (Axios) In Washington state, the share of voters now identifying as Republican is surging. (Seattle Times) |
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This newsletter is a production of the WSJ Washington bureau. Our newsletter editors are Miguel Gonzalez Jr., Kate Milani, Troy McCullough and Toula Vlahou. Send feedback to capitaljournal@wsj.com. You can follow politics coverage on our Politics page and at @wsjpolitics on Twitter. |
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