The Federal Reserve will soon begin selling off the corporate bonds and exchange-traded funds it amassed last year through an emergency-lending vehicle set up to contain the Covid-19 pandemic’s economic fallout.

The vehicle, known as the Secondary Market Corporate Credit Facility, or SMCCF, held $5.21 billion of bonds from companies including Whirlpool Corp. , Walmart Inc. and Visa Inc. as of April 30. In addition, it held $8.56 billion of exchange-traded funds that hold corporate debt, such as the Vanguard Short-Term Corporate Bond ETF.

A Fed official said the sales should be completed by the end of this year. Net proceeds will be remitted to the Treasury Department.

The Fed’s corporate-debt holdings are distinct from its $7.3 trillion balance sheet of Treasury securities and agency mortgage-backed securities. The central bank is continuing to purchase those types of assets to the tune of at least $120 billion a month as part of its monetary-policy...

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This update to the Hutchins Fiscal Impact Measure shows a much smaller FIM in 2021 Q1 than we previously reported and, consequently, a smaller drag on the economy from fiscal policy over the remainder of the year. Most of this change reflects our correction of a coding error that double counted some of the provisions of the American Rescue Plan. We apologize for this error. The Hutchins Center Fiscal Impact Measure shows how much local, state, and federal tax and spending policy adds to or subtracts from overall economic growth, and provides a near-term forecast of fiscal policies’ effects on economic activity.  

Dept. of The Easy Stuff: President Joe Biden has tasked Vice President Kamala Harris with:

? Figuring out how to pass voting rights legislation -- a task that would likely require Harris to convince Sen. Joe Manchin (D-W.Va.), Kyrsten Sinema (D-Ariz.) and other hesitant senators to blow up the filibuster. It’s worth recalling that Harris went on West Virginia TV to push for passage of Biden’s coronavirus relief bill several months ago, which upset Manchin. 

? Figuring out how to stop Central American migrants from coming into the United States.

VPs get all the tough, undoable assignments. Just like former Vice President Mike Pence was tasked with managing the Covid response, and probing voter fraud early in the administration.

BTW: Biden called out Manchin and Sinema during his speech in Tulsa, Okla., on Tuesday, although not by name. 

"I hear all the folks on TV saying why doesn't Biden get this done?"...

This update to the Hutchins Fiscal Impact Measure shows a much smaller FIM in 2021 Q1 than we previously reported and, consequently, a smaller drag on the economy from fiscal policy over the remainder of the year. Most of this change reflects our correction of a coding error that double counted some of the provisions of the American Rescue Plan. We apologize for this error. The Hutchins Center Fiscal Impact Measure shows how much local, state, and federal tax and spending policy adds to or subtracts from overall economic growth, and provides a near-term forecast of fiscal policies’ effects on economic activity.  

It is a pleasure to join the Economic Club of New York for this discussion.1 Consumer demand is strong, vaccine coverage is expanding, and pandemic-affected sectors are reopening in fits and starts. As was the pandemic shutdown with its ebbs and flows, the reopening is without precedent, and it is generating supply–demand mismatches at the sectoral level that are temporary in nature. Separating signal from noise in the high-frequency data may be challenging for a stretch. The supply–demand mismatches at the sectoral level are making it difficult to precisely assess inflationary developments and the amount of resource slack from month to month.

Looking through the noise, I expect we will see further progress in coming months, but the economy is far from our goals, and there are risks on both sides. The best way to achieve our maximum-employment and average-inflation goals is to be steady and transparent in our outcome-based approach to monetary policy while remaining...

Inflation expectations are simply the rate at which people—consumers, businesses, investors—expect prices to rise in the future. They matter because actual inflation depends, in part, on what we expect it to be. If everyone expects prices to rise, say, 3 percent over the next year, businesses will want to raise prices by (at least) 3 percent, and workers and their unions will want similar-sized raises. All else equal, if inflation expectations rise by one percentage point, actual inflation will tend to rise by one percentage point as well.

 

Prospects for the world economy have brightened but the recovery is likely to remain uneven and, crucially, dependent on the effectiveness of public health measures and policy support, according to the OECD’s latest Economic Outlook. 

In many advanced economies more and more people are being vaccinated, government stimulus is helping to boost demand and businesses are adapting better to the restrictions to stop the spread of the virus. But elsewhere, including in many emerging-market economies where access to vaccines as well as the scope for government support are limited, the economic recovery will be modest.

The OECD has revised up its growth projections across the world’s major economies since its last full Economic Outlook in December 2020. It now sees global GDP growth at 5.8 % this year (compared with 4.2% projected in December), helped by a government stimulus-led upturn in the United States, and at 4.4% in 2022 (3.7% in December). The...

West Virginia Gov. Jim Justice is personally on the hook for nearly $700 million in loans his coal companies took out from now-defunct Greensill Capital, according to people familiar with the loans and documents described to The Wall Street Journal.

Mr. Justice’s personal guarantee of the loans, which hasn’t been reported, puts financial pressure on the popular Republican governor. He is also dealing with unrelated lawsuits alleging parts of his sprawling network of coal companies breached payment contracts or failed to deliver coal.

Greensill packaged the loans and sold them to investment funds managed by Credit Suisse Group AG . Credit Suisse and Greensill ran $10 billion in supply-chain finance funds that extended financing to a range of borrowers.

The Swiss bank froze the investment funds in March and is in talks with Mr. Justice’s Bluestone Resources Inc. and other borrowers to recoup money to make investors whole, according to the people familiar...

When Lawrence Summers criticized the Biden’s administration’s new economic policies in recent weeks as being the least responsible in 40 years, you might have expected the warning to jolt Democrats. Mr. Summers, after all, was formerly the U.S. Treasury Secretary under President Bill Clinton, the president of Harvard University and the economic adviser personally tapped by Barack Obama to help him navigate the financial crisis of 2008-09.

Instead, Mr. Summers was largely dismissed by his fellow Democrats. Progressives shouted him down on Twitter after he warned that the new administration’s $1.9 trillion economic rescue program could overstimulate the economy and spark inflation. Then Mr. Biden one-upped the stimulus program with a new $2 trillion spending plan for infrastructure and other projects. “It’s big, yes,” Mr. Biden said. “It’s bold, yes.”

Behind the drama, the party’s resistance to Mr. Summers’s call for moderation is a sign that a torch is...