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Illustration: Sarah Grillo/Axios
A new era of more frequent press conferences begins today, and it will likely change the way investors look at Federal Reserve Chairman Jerome Powell's words, Axios' Courtenay Brown reports.
Powell talks about inflation, unemployment and growth more than anything else, an Axios analysis of the chairman's speeches and congressional testimonies in his first year shows.
The details: Powell dropped the word "inflation" much more often than Janet Yellen, Ben Bernanke, Alan Greenspan and Paul Volcker did during their first year at the helm.
The big picture: As the Wall Street Journal's Nick Timiraos points out, there have been a series of confusing comments from Powell that have spooked markets. Both investors and the chairman himself will now have to get used to a bigger and more regular dose of Powell.
What to watch: Virtually no one expects the Fed to announce an interest rate hike at today's meeting, so the focus will be on the press conference.
This chart sheds light on the words the past 5 Fed chairs used most in their first year of duty but there is no metric for tone, or differentiation between concern and optimism.
Jay Powell reiterated earlier this month that the Fed would be "patient" with future interest rate hikes and ready to change course "significantly if necessary," — a reversal of his previous stay-the-course message after the Fed raised U.S. interest rates in December.
Tom Essaye, financial analyst and founder and editor of the Sevens Report:
"I believe that Powell wants to return to a state of normalcy with the Fed and that he wants to raise rates to get there."
"What he’s realized is that for 25 years now the market has gotten used to the idea that there is a Fed put — when things go sideways, even a little bit, the Fed will ease off and get more dovish — and he’s pushing back on that. That’s a pretty big change for the markets, and the market reaction in December was hopefully a wake up call for him."
"You hope that he’s realized that there’s a finesse game here that he needs to play."
Mike DePalma, fund manager and CEO of PhaseCapital:.
"If the Fed is going to answer to the president, who doesn’t have even a basic understanding of economics 101, then that’s a huge problem. Central bank independence is very, very important and I’m concerned we’ve moved away from that."
"They’ll never admit that they’re capitulating, but I believe they have."
"I understand [Powell] is trying to calm financial markets, but what changed in those two months other than the stock market declining?"
The number of Americans filing jobless claims fell to the lowest in close to 50 years last week. Based on historical trends, LPL Financial analysts argue this could signal a recession is further off than many expect.
The big picture: Jobless claims are a leading indicator, LPL Research Chief Investment Strategist John Lynch says. Historically, a 75,000–100,000 increase in claims over a 26-week period has been associated with a recession.
Yes, but: The data excludes 380,000 workers who went without pay because of the political impasse over President Trump’s plan to build a wall along the Mexican border.
Unemployment claims by federal workers are rare and tend to average around 1,000 or less per week. But 35,873 federal workers filed jobless claims in the first 2 weeks of 2019, more than 12 times the number who typically apply during that time frame.
Reading the chart: In 2010, local and state governments shed more than 200,000 full-time equivalent employees from the previous year and close to 28,000 part-time employees in the aftermath of the financial crisis.
The 2013 government shutdown affected more government agencies than its 2019 counterpart. That year about 850,000 federal employees did not work for at least part of the 16-day shutdown, and more than 1 million employees did not receive a paycheck, the Office of Management and Budget found.
During Apple’s earnings call for the first quarter of 2018, chief executive Tim Cook told investors, "everywhere I look, I feel really good about how we’re doing in China."
Axios' Ina Fried has 3 big takeaways from the call:
Apple's focus is shifting from unit sales to user base.
New Apple subscription services are imminent.
iPhone prices took a hit from exchange rates.
There's a growing realization on Wall Street that self-driving cars are still many years away. But there's a growing consensus that Silicon Valley has a better shot at making money from them than Detroit, Axios' Joann Muller reports.
The big picture: Investors are betting the real value of autonomous vehicle companies will come from the estimated 4 terabytes of data each car will generate per day.
The bet on data helps to explain why analysts at Morgan Stanley have very different views on the two leading AV companies.
The mood has changed about automated vehicles. Bold predictions by Tesla and others that cars would be able to drive themselves by now have evaporated in the face of technology challenges and market realities.
The business model for AVs assumes that by removing the driver, the cost per mile falls dramatically.
What to watch: Morgan Stanley's Jonas says his more conservative $9 billion value for Cruise is warranted, and the massive gap between Cruise and Waymo is realistic because of the data analytics capability of Waymo's parent, Google.
The coldest air in decades is hitting the Upper Midwest, and at least 88 million people will see temperatures dip below 0°F by the end of this week, Axios Science editor Andrew Freedman reports.
Driving the news: The stratospheric polar vortex — which is a whirl of low pressure at upper levels of the atmosphere over the pole — was knocked askew in early January, increasing the odds of cold outbreaks in the U.S. and Europe.
The big picture: The Earth as a whole, however, is still much warmer than normal, and scientists say the cold snap in parts of the U.S. in no way invalidates the overwhelming scientific evidence showing the planet is warming over the longer term due to the burning of fossil fuels for energy.
Go deeper: Andrew explains more of what's going on.
Days without a factual error: 2