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Illustration: Sarah Grillo/Axios

The Fed's latest survey of its business contacts around the country revealed a weakening labor market that could give the central bank grounds to ramp up its massive bond-buying program when its policy-setting committee meets later this month.

What happened: While most districts said they were still seeing a modest or moderate economic expansion, four districts described little or no growth.

  • The Philadelphia district as well as three of the four districts in the Midwest said that activity began to slow in early November as COVID-19 cases surged.
  • Banking contacts in multiple districts reported some deterioration of loan portfolios, especially in commercial lending into the retail and leisure and hospitality sectors, and said an increase in delinquencies in 2021 is widely anticipated.
  • Most districts reported that firms’ outlooks remained positive, but optimism had waned.
  • Nearly all districts reported that employment rose, but for most, the pace was slow, at best, and the recovery remained incomplete.

One level deeper: "Altogether, the December Beige Book is consistent with our view of a modest deceleration in economic activity in recent weeks due to new COVID-19 cases, increased restrictions on activity and waning fiscal support," Lewis Alexander, U.S. chief economist at Nomura, said in a note to clients.

The intrigue: Before the Beige Book's release, analysts at TD Securities noted, "We expect the Fed to take further easing action in December by extending the maturity of QE purchases."

Go deeper

Dion Rabouin, author of Markets
Jan 14, 2021 - Economy & Business

Rep. Ro Khanna calls on the Fed to reexamine its policies

Photo: Axios screenshot

Rep. Ro Khanna (D-Calif.) laid out a few specific policies he and some of Congress' other leading progressives are likely to demand when the next U.S. Congress begins its term.

The big picture: Khanna wants Congress to deliver more direct aid to Americans in the form of $2,000 monthly checks and to provide $1 trillion over 10 years in loans and grants to small businesses but is also taking aim at the Fed, arguing that the central bank has gone astray of its original intent to help small businesses and community banks.

Updated 6 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Politics: Biden unveils "wartime" COVID strategyBiden's COVID-19 bubble.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong to put tens of thousands on lockdown as cases surge.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.

Trump impeachment trial to start week of Feb. 8, Schumer says

Senate Majority Leader Chuck Schumer. Photo: The Washington Post via Getty

The Senate will begin former President Trump's impeachment trial the week of Feb. 8, Majority Leader Chuck Schumer announced Friday on the Senate floor.

The state of play: Schumer announced the schedule after reaching an agreement with Republicans. The House will transmit the article of impeachment against the former president late Monday.

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