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Treasury nominee Janet Yellen said all the right things to reassure the markets

Treasury Secretary nominee and former Fed chair Janet Yellen's confirmation hearing before the Senate Finance Committee on Tuesday showed markets just what they can expect from the administration of President-elect Joe Biden: more of what they got under President Trump — at least for now.

What it means: Investors and big companies reaped the benefits of ultralow U.S. interest rates and low taxes for most of Trump's term as well as significant increases in government spending, even before the coronavirus pandemic.


  • Last week Fed chair Jerome Powell reassured markets in remarks to Princeton's Bendheim Center for Finance that the Fed isn't even thinking about thinking about thinking about raising rates.
  • And Yellen's testimony provided reassurances that the rest of the bullish environment for risk assets will remain in place.

Key statements: “The focus right now is on providing relief and on helping families keep a roof over their heads and food on the table, and not on raising taxes,” Yellen said.

  • “Neither the president-elect nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big."
  • “Over the next few months, we are going to need more aid to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers on the job.”
  • “To avoid doing what we need to do now to address the pandemic and the economic damage that it’s causing would likely leave us in a worse place economically and with respect to our debt situation than doing what’s necessary.”

How it works: Rock bottom interest rates mean companies can issue debt for virtually nothing (or even less in the age of negative-yielding corporate bonds) and can therefore borrow their way out of slow- or no-growth periods.

  • Low rates also increase the amount of money in the economy — an environment that's been supercharged thanks to the Fed's quantitative easing and corporate bond-buying programs.
  • Adding trillions in deficit spending from the federal government further increases the money supply and makes it harder for big companies to fail, regardless of their ability to sell their products or generate a profit.

The bottom line: Fears of runaway inflation, inefficient markets and excess debt derailing the economy had kept policymakers from attempting such a cocktail in years past.

  • But with inflation unable to hold above 2% for more than a decade and an economy incapable of supporting itself without massive intervention, stock traders have cast off such concerns.

Report: "Clear evidence" China is committing genocide against Uyghurs

Chinese authorities have breached "each and every act prohibited" under the UN Genocide Convention over the treatment Uyghurs and other Muslim minorities in China's Xinjiang province, an independent report published Tuesday states.

Why it matters: D.C. think-tank the Newlines Institute for Strategy and Policy, which released the report, said in a statement the conclusions by dozens of experts in war crimes, human rights and international law are "clear and convincing": The ruling Chinese Communist Party bears responsibility.

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Twitter sues Texas AG Ken Paxton, alleging he launched probe in retaliation for Trump ban

Twitter on Monday filed a lawsuit against Texas Attorney General Ken Paxton (R), saying that his office launched an investigation into the social media giant because it banned former President Trump from its platform.

Driving the news: Twitter is seeking to halt an investigation launched by Paxton into moderation practices by Big Tech firms including Twitter for what he called "the seemingly coordinated de-platforming of the President" days after they banned him following the Jan. 6 Capitol insurrection.

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Twitter sues Texas AG Ken Paxton, alleging he launched probe in retaliation for Trump ban

Twitter on Monday filed a lawsuit against Texas Attorney General Ken Paxton (R), saying that his office launched an investigation into the social media giant because it banned former President Trump from its platform.

Driving the news: Twitter is seeking to halt an investigation launched by Paxton into moderation practices by Big Tech firms including Twitter for what he called "the seemingly coordinated de-platforming of the President" days after they banned him following the Jan. 6 Capitol insurrection.

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Retiring Republicans could clear the path for GOP troublemakers to join the Senate ranks

Sen. Roy Blunt's retirement highlights the twin challenge facing Senate Republicans: finding good replacement candidates and avoiding a pathway for potential troublemakers to join their ranks.

Why it matters: While the midterm elections are supposed to be a boon to the party out of power, the recent run of retirements — which may not be over — is upending that assumption for the GOP in 2022.

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Diversity in Congress is growing steadily, but lags behind the U.S. population

Data: Brookings Institution and Pew Research Center; Note: No data on Native Americans in Congress before the 107th Congress; Chart: Danielle Alberti/Axios

The number of non-white senators and House members in the 535-seat Congress has been growing steadily in the past several decades — but representation largely lags behind the overall U.S. population.

Why it matters: Non-whites find it harder to break into the power system because of structural barriers such as the need to quit a job to campaign full time for office, as Axios reported in its latest Hard Truths Deep Dive.

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As Senate Republicans retire, lobbyists eye staff as top-notch talent

The retirements of high-profile Senate Republicans mean a lot of experienced staffers will soon be seeking new jobs, and Washington lobbying and public affairs firms are eyeing a potential glut of top-notch talent.

Why it matters: Roy Blunt is the fifth Republican dealmaker in the Senate to announce his retirement next year. Staffers left behind who can navigate the upper chamber of Congress will be gold for the city’s influence industry.

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U.S. grants temporary protected status to thousands of Venezuelans

Venezuelans living in the United States will be eligible to receive temporary protected status for 18 months, the Department of Homeland Security announced Monday.

Why it matters: Tens of thousands of Venezuelans have fled to the U.S. amid economic, political and social turmoil back home. Former President Trump, on his last full day in office, granted some protections to Venezuelans through the U.S. Deferred Enforced Departure program, but advocates and lawmakers said the move didn't go far enough.

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Zuckerberg floated possibility of remote work in January 2020. Sandberg thought he was "nuts"

Chief operating officer Sheryl Sandberg thought Mark Zuckerberg was "nuts" when he raised the possibility in January 2020 that 50,000 Facebook employees might have to work from home. By March 6, they were.

Why it matters: In an interview Monday with Axios Re:Cap, Sandberg explained how Facebook moved quickly to respond to the pandemic with grants for small businesses and work-from-home stipends for its employees, and how the company has been watching the unfolding crisis for women in the workforce.

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