A Fed governor argues for quickly cutting bond-buying, as debate intensifies.

Daily Business Briefing

Aug. 3, 2021, 12:15 p.m. ET

Aug. 3, 2021, 12:15 p.m. ET

Mr. Waller in 2020. “You could taper in October; you don’t have to wait until January,” he said on Monday.
Credit…Erin Schaff/The New York Times

Federal Reserve officials are divided over when and how they should begin reducing their monetary policy support as America’s economy rebounds, and they are increasingly airing their divergent views in public.

Among the most candid remarks yet came from Christopher J. Waller, the Fed’s newest governor, during an interview with CNBC on Monday. Mr. Waller said that he would support slowing the Fed’s big bond purchases “early” and “fast,” and he indicated that he would have preferred to first slow purchases of mortgage-backed securities — something Jerome H. Powell, the Fed chair, more or less took off the table in comments last week.

“The labor market should really take off starting in August and September,” Mr. Waller said, assuming that the opening of schools is not delayed by the Delta variant. If the economy continues to add jobs rapidly — perhaps at a pace of 800,000 to 1 million jobs per month — he said he thinks the Fed needs to get moving.

“In my view, with tapering, we should go early and go fast to make sure we’re in position to raise rates in 2022 if we have to,” Mr. Waller said. “You could taper in October; you don’t have to wait until January.”

Mr. Waller’s comments are in line with those made by James Bullard, the president of the Federal Reserve Bank of St. Louis (and Mr. Waller’s former boss) last week. Mr. Bullard also favors moving relatively rapidly to slow the Fed’s bond-buying. That policy tool boosts the economy by lowering longer-term interest rates and by keeping money flowing into stocks and other riskier investments. He, too, wants to get going so that the Fed is prepared to raise rates next year, if needed.

Most Fed officials signaled in their June economic projections that they expect to lift interest rates in 2023 at the earliest. And influential policymakers, notably Lael Brainard, another Fed governor, have struck a much more patient tone when it comes to dialing back bond purchases.

“I expect to be more confident in assessing the rate of progress once we have data in hand for September, when consumption, school, and work patterns should be settling into a post-pandemic normal,” Ms. Brainard said in remarks released on Friday.

Because economic data are reported at a delay, that would suggest that the Fed will only have a clear reading on the numbers they want to see before announcing tapering — which it wants to signal in advance — by mid-to-late October. The central bank does not have an October meeting, but it will gather in early November.

Bill Gates and Melinda French Gates in 2006. The organization that bears their names is by most measures the largest private foundation in the world.
Credit…Keith Meyers/ The New York Times

The divorce between Bill Gates and Melinda French Gates is now final.

A judge for the King County Superior Court in Washington State signed the dissolution decree on Monday, ending the 27-year marriage between the co-founders of the influential Bill and Melinda Gates Foundation while leaving the details of how the couple divided one of the largest fortunes in history shrouded in mystery.

Public filings showed that billions of dollars of shares were transferred into Ms. French Gates’s name following the public announcement in May of their plan to divorce. Forbes now estimates Ms. French Gates’s net worth at $3.2 billion, though it could be much higher. The magazine estimates Mr. Gates’s net worth at $131 billion.

The separation agreement that determined the split of assets was “not filed with the court,” according to a notation scrawled in blue ink on one of the court documents. It remained unclear, for instance, who will receive their 66,000-square-foot lakefront estate in the Seattle suburbs.

The couple’s three children are all over 18, so there was no custody arrangement necessary. The court document said that neither party had asked to make a formal name change, though Ms. French Gates has been publicly using her family name together with her married name since they separated.

In contrast, when Jeff Bezos and MacKenzie Scott divorced, a filing with the Securities and Exchange Commission detailed how Mr. Bezos would keep three-quarters of the couple’s shares of Amazon, while Ms. Scott would hold onto the rest, which came to 4 percent of the company.

The largest outstanding question is how, or indeed whether, the divorced couple can work together at their enormous charity. Both Mr. Gates and Ms. French Gates have insisted that they will continue to work on behalf of the foundation’s shared mission in areas including global health, poverty reduction and gender equality.

Last month they announced that they had given an additional $15 billion to the foundation, adding to its $50 billion endowment, which already made it by most measures the largest private charitable foundation in the world. The chief executive of the Gates Foundation, Mark Suzman, also said the foundation would add new outside trustees, a step toward better governance that philanthropy experts had urged for years.

At the same time, Mr. Suzman said that Mr. Gates and Ms. French Gates had agreed that if either person found after two years that they could not work together Ms. French Gates would leave the foundation, receiving funds from Mr. Gates to pursue her own charitable endeavors.

Ms. French Gates signed her part of the divorce papers on Friday at the offices of her own organization, Pivotal Ventures, an enterprise focused on gender equality and social progress.

Susan C. Beachy contributed research.

The Homeowner Assistance Fund was included in the $1.9 trillion measure enacted to help keep Americans “experiencing hardships associated with the pandemic” in their homes.
Credit…Christopher Lee for The New York Times

States can allocate some of the $10 billion in federal funding for struggling homeowners to help people who bought their residences with nontraditional home loans, according to Treasury Department officials.

Guidance issued on Monday for the new Homeowner Assistance Fund allows states to provide financial aid to qualified residents who face foreclosure on a loan for a mobile home or a home acquired through a contract for deed — a loan financed by the seller of the property. Some elderly residents who have taken out a reverse mortgage on their homes — a deal in which borrowers can get cash for the equity in their house — may also qualify for the emergency assistance money.

Advocates and some state governments had prodded the Treasury Department to extend the program’s support to those who do not have traditional mortgages. A handful of states, including Texas and New York, drew up preliminary plans that would allow them to allocate some of the money in the Homeowner Assistance Fund to those with mobile homes or houses acquired through contracts for deed, which are sometimes called land contracts.

Such homeowners are among the most vulnerable because they can be easily foreclosed on or evicted after they miss just a few payments. And these borrowers, who typically have poor credit ratings, tend to pay higher-than-normal interest rates on the loans they take out to acquire their residences.

The $10 billion allocated to the Homeowner Assistance Fund was included in the American Rescue Plan, the $1.9 trillion measure enacted by Congress and the Biden administration to help keep Americans “experiencing hardships associated with the pandemic” in their homes. The money is being allocated to states, Native American tribes and U.S. territories.

The Homeowner Assistance Fund is separate from the $47 billion that the federal government is giving to states to provide rental assistance to tenants facing eviction and that was also included in the American Rescue Plan.

Big companies like the Walt Disney Company, Facebook, Google and Walmart are introducing stricter requirements for employees returning to the workplace.
Credit…Chamila Karunarathne/EPA, via Shutterstock

The tide has begun to turn on corporate vaccine mandates, with large employers including the Walt Disney Company, Facebook, Google and Walmart introducing stricter requirements for employees returning to the workplace. But the policies come with some important caveats as executives juggle public health, labor relations and the bottom line, the DealBook newsletter reports.

So far, with the exception of the health care industry, corporate vaccine mandates tend to cover the white-collar workers whom executives want back in the office, not the lower-income workers on the front lines who are less likely to be vaccinated.

Walmart’s vaccination mandate, for example, doesn’t cover the company’s most vulnerable employees: workers at its stores and warehouses. The retailer, the biggest private employer in the United States, announced mandatory inoculation for employees at its headquarters and for managers who travel domestically. For a sense of scale, about 17,000 of Walmart’s 1.6 million employees are expected to work in new headquarters in Bentonville, Ark.

One fear that companies have with broad vaccine mandates is that they could drive away employees when workers are already in short supply, especially in industries like retail and restaurants. At the same time, not requiring vaccines may make other groups of workers anxious and more likely to quit.

“For Walmart, they have to weigh, I think, which is a real concern about turnover, what the reputation would be to the frontline workers, against the value that they could parlay this into saying, ‘We’re a leader in public health now as a big employer,’” said Peter Berg, a professor of employment relations at Michigan State University.

“From Walmart’s calculus, they may say, ‘Well, it’s really not going to benefit us that much as an organization to do this,’” he added.

For other companies, like airlines, negotiating mandates with unions, which are themselves mixed on the issue, adds complexity. As part of a deal reached in May between United Airlines and its union, the Air Line Pilots Association, for example, vaccinations will not be mandatory for pilots. But a deal agreed to among Hollywood’s major unions will allow studios to require everyone on a production set to be vaccinated.

“If you look at the divide of who is not vaccinated, it is people of lower income, it is people who are less likely to be insured, it is people in the states that reflect the politicization of the pandemic,” said Dr. Kirsten Bibbins-Domingo, vice dean for population health and health equity at the University of California, San Francisco.

Companies that adopt partial mandates that “further widen” that gap, she said, would “only go so far” in achieving what the vaccination drives were meant to accomplish.

Google’s new Pixel 6 will include custom chips called Tensor.

As the makers of the two largest mobile operating systems, Google and Apple have copied each other’s smartphone software for years. Now Google has taken a page from Apple’s hardware playbook: The search giant has designed the computing chip powering its latest phones.

On Monday, Google unveiled its Pixel 6 phones, the first to include its custom chips, which are called Tensor. The Tensor chip will enable the phones to rapidly perform complex computing tasks, the company said.

Google’s Android mobile operating system is by far the most widely used in the world, but its Pixel sales are dwarfed by those of Apple smartphones. A major disadvantage for Google has been its approach to hardware: Because it relied on third parties for mobile chips, it couldn’t make its phones as zippy as competitors that designed their chips in house.

In 2008, Apple acquired P.A. Semi to design the mobile processors that would eventually power its iPhones and iPads.

Now Google, with its own chip design, has embedded the most complex and frequently used algorithms, like voice transcriptions and advanced photography effects, into the processor to improve speeds, said Rick Osterloh, Google’s head of devices and services. That could give the Pixel a boost to compete with Apple and Samsung, which dominate the high-end phone market.

Google’s goal of a successful phone business has been expensive and rocky. After acquiring Motorola Mobility for $12.5 billion a decade ago and failing to sell a hit phone, Google sold the company three years later to Lenovo for about $3 billion. In 2018, Google closed a $1.1 billion deal to acquire most of HTC’s smartphone design unit, with more than 2,000 HTC engineers moving to Google.

Google’s investment in its in-house chip will lead to higher costs for consumers. Prices will be announced when the Pixel 6 phones are released this fall, Mr. Osterloh said, but he confirmed that the premium model, Pixel 6 Pro, was expected to surpass the cost of last year’s Pixel 5, which started at $700.

Starting Monday, the Florida-based chain Publix will require employees to wear masks in all its stores regardless of their vaccination status.
Credit…Scott McIntyre for The New York Times

With the coronavirus spreading across the country and hospitalizations rising again, and public health officials warning that the Delta variant carries new risks even for vaccinated people, big businesses are rethinking their plans.

Some are delaying their plans to bring workers back to the office, and others are restoring mask requirements for customers. In the last week, several have also imposed vaccine mandates, after having held off on such a step for months.

The decision to require vaccines was endorsed on Sunday by the director of the National Institutes of Health. Speaking on CNN’s “State of the Union,” Dr. Francis Collins said that asking employees for proof of vaccination or regular testing were steps “in the right direction.”

Here’s how some big businesses changed their plans in late July:

  • Lyft pushed back its return-to-office date to February from September, Google extended its work-from-home policy to mid-October, and Apple said employees would not be expected to return to the office until at least Oct. 1, a month later than before.

  • Uber said that it would not require employees to return until Oct. 25, instead of its initial September date, and that a further delay was possible if cases kept rising.

  • Twitter shut its San Francisco and New York offices, putting a halt to reopening plans without a timeline in place.

  • The New York Times Company also indefinitely postponed its planned return to the office, telling employees that they would be given four weeks notice before being expected to return. The company, which employs about 4,700 people, had planned for workers to start to return for at least three days a week in September. Its offices will remain open for those who want to go in voluntarily, with proof of vaccination.

  • Endeavor, the parent company of the William Morris Endeavor talent agency, closed its recently reopened offices after Los Angeles County reimposed its indoor mask mandate. An Endeavor spokesman said the company had decided that enforcement would be too difficult and would hinder group meetings.

  • Equinox, the luxury fitness company that includes SoulCycle, said on Monday that its members and employees must show one-time proof of vaccination — a physical immunization card, a photo of an immunization card or a digital vaccine card — to enter Equinox clubs, SoulCycle studios or corporate offices, starting in New York in September.

  • Walmart, the nation’s largest private employer, with nearly 1.6 million workers, said vaccines would be mandatory for employees in its headquarters and for managers who traveled in the United States. The mandate does not apply to much of its work force — employees in stores, clubs, and distribution and fulfillment centers.

  • The Walt Disney Company said salaried and nonunion hourly U.S. employees at its sites must be fully vaccinated. Unvaccinated workers who are already on site will have 60 days to get the immunization, and new hires will be required to be fully vaccinated before starting work.

  • Home Depot said all its associates, contractors and vendors will be required to wear a mask in its stores, distribution centers and offices and at the homes and businesses of customers. Customers will also be asked to wear masks. Lowe’s also said it would require masks of its employees, regardless of vaccination status.

  • Walmart said it was reinstating mask requirements for associates in areas of the country with substantial or high transmission rates. The company recommended that customers wear masks in those areas, too. The retailer also doubled its reward to employees who get vaccinated from $75 to $150.

  • Starting Monday, the Florida-based grocery chain Publix will require employees to wear masks in all its stores regardless of their vaccination status.

  • Apple said employees and customers would have to wear masks regardless of their vaccination status in more than half its stores in the United States. Apple said the stores would be determined by the rate of coronavirus cases in the area. Apple also told its employees that they would have to wear masks when inside the company’s main offices in the United States, regardless of whether they were vaccinated.

A delivery worker in Beijing. A conversation about treatment of China’s tech workers has expanded to include lower-skilled workers, especially gig laborers.
Credit…Jade Gao/Agence France-Presse — Getty Images

To understand work culture in China, start with a number: 996.

It’s shorthand for the grueling schedule that has become the norm at many Chinese firms: 9 a.m. to 9 p.m., six days a week.

The term originated in the technology sector about five years ago, when the country’s nascent internet companies were racing to compete with Silicon Valley. At first, workers were willing to trade their free time for overtime pay and the promise of helping China match the West.

China’s economy has grown into the second-largest in the world, after that of the United States. Tech behemoths like Alibaba, Huawei and ByteDance, which owns TikTok, are household names. But recently, more tech workers are resisting the at-all-costs culture, Vivian Wang writes for The Morning newsletter.

Some in China’s working class dismiss the complaints as elite griping; after all, tech workers are highly paid and educated. But the debate also offers a window into the country’s economy more broadly, and the expectations of its young people.

The first major pushback to 996 came in 2019, as China’s economic growth slowed and tech workers began questioning their work conditions. Online protests followed, but the movement faded under government censorship.

This year, 996 shot back into the news after two workers died at Pinduoduo, an e-commerce giant. Since then, some companies have taken steps to improve work-life balance.

The pushback to 996 also reflects the hopes and anxieties of China’s young people.

Many are willing to endure the working conditions because of the competitiveness of the job market. The number of college graduates in China rose by 73 percent in the past decade, a stunning achievement for a country that had fewer than 3.5 million university students in 1997. As a result, more people are competing for a limited pool of white-collar jobs.

But it’s also clear that many are sick of the rat race. Some Gen Zers have turned to reading Mao Zedong’s writings on communism to rage against capitalist exploitation. An online trend this year called on young people to “tangping,” or “lie flat” — essentially, to opt out.

The Chinese Communist Party sees the burnout and the threat it poses to economic growth. On the one hand, it has promised to better support college graduates in their job hunt. But it has also censored discussions of tangping.

What began as a conversation about tech companies’ treatment of elite workers has expanded to include lower-skilled workers, especially gig laborers.

Middle-class Chinese people have increasingly shown solidarity with those workers. Last year, when package couriers went on strike before a major shopping holiday, many on social media cheered them on.

Afterpay allows users to stagger the cost of their purchases over interest-free installments.
Credit…Stephen Coates/Reuters

Square announced on Sunday a $29 billion, all-stock deal to buy Afterpay, an Australian specialist in the “buy now, pay later” sector. The financial technology firms described the deal as a way to take on the traditional banking industry by building out an alternative to credit cards.

Square plans to incorporate Afterpay’s service, which allows users to stagger the cost of their purchases over interest-free installments, to its payment platforms that serve U.S. consumers and millions of small businesses. Square is run by Jack Dorsey, who also heads Twitter.

Square’s Cash App, a payment platform with more than 70 million customers, has been a key point of growth for the company, particularly during the pandemic as customers have sought out cash-free options. Afterpay works with more than 16 million consumers and nearly 100,000 merchants globally.

Installment plans were traditionally for low-income people, but the latest iteration serves online shoppers who may simply have a distrust of credit, a remnant of the 2008 financial crisis. (Consumer advocates have said the potential risks of the nascent service are not yet fully understood.) The industry has benefited from the pandemic boom in e-commerce, and could cover as much as $1 trillion in payment volume in a few years. Other players in the fast-growing sector include Affirm, Klarna, QuadPay and Sezzle.

Square also reported its second-quarter earnings on Sunday and said it had $4.7 billion in revenue in the quarter, more than double the total from a year earlier. Its share price has risen more than 80 percent this year.

The deal between Square and Afterpay requires shareholder and regulatory approval. Another big fintech deal, the $5.3 billion takeover of Plaid by Visa, was called off in January after the Justice Department sued to block it, and the Biden administration has pledged to take a tough stance on corporate consolidation. When asked about potential antitrust concerns, Amrita Ahuja, Square’s chief financial officer, said the “buy now, pay later” industry was still “highly competitive.”

  • Chinese business ban: A U.S. ban on investing in 59 Chinese firms with ties to China’s military or surveillance industries is set to take effect. The order complicates the firms’ ties with U.S. companies. China Mobile, included in the ban, has been bringing iPhones to Chinese customers since 2014.

  • Bank of England sets rates: Britain’s central bank is expected to add negative interest rates as a policy option after asking banks to prepare for below-zero rates. Most analysts will be looking for clues in new forecasts of inflation and economic growth about how soon the central bank will raise interest rates after its bond-buying programs ends this year.

  • Jobs report: Data from the Labor Department will show whether a hiring burst in June continued in July. Economists will learn whether the reopening of the U.S. economy is drawing back the millions of workers who left the labor force during the pandemic.

  • The S&P 500 fell 0.2 percent on Monday.

  • Despite a volatile stretch last week, the index ended July up 2.3 percent, its sixth consecutive month of gains. The Nasdaq composite ticked up 0.06 percent on Monday.

  • The yield on the 10-year Treasury note dropped to 1.20 percent from 1.24 percent.

  • Markets in Europe rose slightly, with the Stoxx Europe 600 closing 0.6 percent higher, and Asian markets were also higher.

  • Oil prices fell, with West Texas Intermediate, the U.S. crude benchmark, dipping about 3.4 percent to $71.44 a barrel.

  • Square rose 10.2 percent after saying on Sunday that it planned to acquire the Australian “buy now, pay later” company Afterpay in an all-stock deal that values Afterpay at about $29 billion. Shares of Affirm, another installment loan company, jumped almost 15 percent.

A long line outside an open house in suburban Belleville, N.J., last summer. There has been a wave of New York residents moving to the suburbs during the pandemic.
Credit…Karsten Moran for The New York Times

Some Federal Reserve officials are worrying that the housing boom could end up looking like a bubble, one that threatens financial stability, and that the central bank’s big bond purchases could be helping to inflate it.

Policymakers don’t need to look far to see escalating prices, because housing is growing more expensive nearly everywhere, The New York Times’s Jeanna Smialek reports. Buying a typical home in Boise, Idaho, cost about $469,000 in June, up from $335,000 a year ago, based on Zillow estimates of local housing values. A typical house in Boone, N.C., is worth $362,000, up from $269,000. Prices nationally have risen 15 percent over the past year, Zillow’s data shows, in line with the closely watched S&P CoreLogic Case-Shiller index of home prices, which rose a record 16.6 percent in the year through May.

“It’s making me nervous that you’ve got this incipient housing bubble, with anecdotal reports backed up by a lot of the data,” James Bullard, the president of the Federal Reserve Bank of St. Louis, said during a call with reporters on Friday. He doesn’t think things are at crisis levels yet, but he says the Fed should avoid feeding the situation further.

Industry experts say the boom emerged from a cocktail of low interest rates, booming demand and supply bottlenecks. It’s a situation that many are feeling acutely with no single policy to blame and no easy fix.

Fed officials face a particularly tricky calculus when it comes to housing.

Their policies definitely help to drive demand. Bond-buying and low Fed interest rates make mortgages cheaper, inspiring people to borrow more and buy bigger. But rates aren’t the sole factor behind the home price surge. There are also demographics, a pandemic-spurred desire for space, and a very limited supply of homes for sale — factors outside the central bank’s control.

The headquarters of News Corporation Australia in Sydney last year.
Credit…Peter Parks/Agence France-Presse — Getty Images

YouTube has suspended the conservative news channel Sky News Australia for a week for breaching the platform’s coronavirus misinformation policy.

The broadcaster, which is owned by Rupert Murdoch’s News Corporation and has nearly two million subscribers on YouTube, is not allowed to upload new videos for the duration of its suspension, which began on Thursday. Existing videos on its account can still be viewed.

In a statement to The New York Times on Monday, YouTube said it had removed Sky News videos and issued a strike against the broadcaster in accordance with policies “to prevent the spread of coronavirus information that could cause real-world harm.”

This is the first strike for Sky News. If it receives three strikes within 90 days, its YouTube channel will be permanently deleted.

The statement did not specify what content was removed.

Sky News said in a statement on its website on Sunday that the suspension had resulted from “a review of old videos published to the channel,” and that it “acknowledges YouTube’s right to enforce its policies.”

An opinion piece published by Sky News on Sunday criticized the suspension as an “assault on freedom of thought” and said that some of the removed videos had featured debates over the efficacy of masks and lockdowns.

Lockdowns have been a contentious topic in Australia, where two of the largest cities are under stay-at-home orders amid growing clusters of the more contagious Delta variant of the virus. Brisbane began a three-day lockdown on Saturday after six cases were discovered, and on Monday it was extended until Sunday. In Sydney, where an outbreak of the Delta variant has grown to more than 3,500 cases, 300 soldiers are patrolling the streets to enforce a lockdown that is in its sixth week.

Officials say the lockdowns are necessary because not enough Australians have been inoculated against Covid-19. Only 15 percent of the population is fully vaccinated, according to a New York Times database.

The Sky News suspension came on the same day it was reported that The Daily Telegraph, a Sydney tabloid that is also owned by News Corporation, had dropped a weekly column by the Sky News commentator Alan Jones.

In a segment on his Sky News show last month, Mr. Jones and Craig Kelly, an Australian lawmaker and conspiracy theorist, falsely claimed that the Delta variant was less deadly than the original form of the coronavirus and that people who had been vaccinated were more likely to die from the virus. Sky News subsequently retracted the segment and issued a correction.

The cryptocurrency industry had raised alarm about language in the infrastructure bill that would have subjected it to greater scrutiny from the I.R.S.
Credit…Stefani Reynolds for The New York Times

A last-minute lobbying push by the cryptocurrency industry to change language in the bipartisan infrastructure bill that was finalized over the weekend succeeded in scaling back some of the scrutiny that participants in the sector will face from the I.R.S.

The final legislative text included some changes to alleviate concerns of the cryptocurrency industry, which expressed alarm last week about new requirements that would define most of the participants in the sector as brokers and force them to turn over information to the I.R.S. The provision was projected to raise $28 billion over a decade.

After receiving pushback from cryptocurrency lobbyists, lawmakers revised that section of the bill to “clarify” the definition of a broker rather than expand upon it.

The legislation also removed language that explicitly targeted “any decentralized exchange or peer-to-peer marketplace.” It replaced that with a broader definition that characterizes brokers as anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”

The cryptocurrency industry has been adamant that the tougher tax enforcement should not apply to miners, or creators, of digital money, or the “node operators” that keep the software behind transactions moving.

Lobbyists were continuing to press senators for greater clarity to ensure that those parts of the nascent sector would be excluded from the law. They believe that they have assurances from top lawmakers, such as Senator Rob Portman, Republican of Ohio, about the intent of the law, but they are still seeking similar assurances from the Treasury Department, which will have broad discretion to implement the law if it is passed and signed by President Biden.

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