Tag Archives: Pandemic

Federal Reserve announces post-stress test capital ratios for large banks

By Pete Schroeder

WASHINGTON (Reuters) – The U.S. Federal Reserve announced on Monday how much each large bank that underwent its 2020 stress tests will have to hold in additional capital.

The results mark the first time the Fed has given out custom capital requirements for each bank under its new “stress capital buffer,” and takes effect on Oct. 1. Goldman Sachs and Morgan Stanley were ordered to hold the most capital of the 34 firms tested, with ratios of 13.7% and 13.4% respectively.

The custom capital requirements follow stress test results released in June, which found that banks would weather heavy capital losses should the economic fallout from the coronavirus pandemic drag on or worsen. The Fed ordered banks to cap dividend payments and bar share repurchases until at least the fourth quarter to ensure they have sufficient cushions.

The new capital ratio combines the minimum capital requirements of 4.5% and the new “stress capital buffer,” which is determined by how each bank fared under a hypothetical severe economic downturn. That buffer is at least 2.5%, but was highest for Deutsche Bank’s U.S. operations at 7.8%.

The nation’s largest banks also face an additional capital surcharge for their predominant role in the financial system, ranging from 1% to 3.5% for JP Morgan Chase, the nation’s biggest bank.

The Fed also announced that it had reaffirmed the stress test results for five banks that requested reconsideration: BMO Financial Corp., Capital One Financial Corp, Citizens Financial Group Inc, Goldman Sachs and Regions Financial Corp. The Fed said the additional review found its stress test models worked as intended and there were no errors.

(Reporting by Pete Schroeder; Editing by Chizu Nomiyama and Jonathan Oatis)

Trump signs coronavirus relief orders after talks with Congress break down

By Jeff Mason

BEDMINSTER, N.J. (Reuters) – President Donald Trump signed executive orders on Saturday partly restoring enhanced unemployment payments to the tens of millions of Americans who lost jobs in the coronavirus pandemic, as the United States marked a grim milestone of 5 million cases.

Negotiations broke down this week between the White House and top Democrats in Congress over how best to help Americans cope with the heavy human and economic toll of the crisis, which has killed more than 160,000 people across the country.

Trump said the orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis. Some of the measures were likely to face legal challenges, as the U.S. Constitution gives Congress authority over federal spending.

“This is the money they need, this is the money they want, this gives them an incentive to go back to work,” the Republican president said of the lower payments. He said 25% of it would be paid by states, whose budgets have been hard hit by the crisis.

Republicans have argued that higher payments were a disincentive for unemployed Americans to try to return to work, though economists, including Federal Reserve officials, disputed that assertion.

Trump’s move to take relief measures out of the hands of Congress drew immediate criticism from some Democrats.

“Donald Trump is trying to distract from his failure to extend the $600 federal boost for 30 million unemployed workers by issuing illegal executive orders,” said Senator Ron Wyden, the top Democrat on the Senate Finance Committee. “This scheme is a classic Donald Trump con: playacting at leadership while robbing people of the support they desperately need.”

The Democratic-majority House of Representatives passed a coronavirus support package in May which the Republican-led Senate ignored.

Democratic presidential candidate Joe Biden called the orders a “series of half-baked measures” and accused Trump of putting Social Security “at grave risk” by delaying the collection of payroll taxes that pay for the program.

Trump also said he was suspending collection of payroll taxes, which pay for Social Security and other federal programs, an idea that he has repeatedly raised but has been rejected by both parties in Congress. He said the suspension would apply to people making less than $100,000 per year.

His orders would also stop evictions from rental housing that has federal financial backing and extend zero percent interest on federally financed student loans.

Trump initially played down the disease’s threat and has drawn criticism for inconsistent messages on public health steps such as social distancing and masks.

He spoke to reporters on Saturday at his New Jersey golf club, in a room that featured a crowd of cheering supporters.

FAR APART

Nearly two weeks of talks between White House officials and congressional Democrats ended on Friday with the two sides still about $2 trillion apart.

House Speaker Nancy Pelosi had pushed to extend the enhanced unemployment payments, which expired at the end of July, at the previous rate of $600 as well as to provide more financial support for city and state governments battered by the crisis.

Pelosi and Senate Minority Leader Chuck Schumer on Friday offered to reduce the $3.4 trillion coronavirus aid package that the House passed in May by nearly a third if Republicans would agree to more than double their $1 trillion counteroffer.

White House negotiators Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows rejected the offer.

The $1 trillion package that Senate Majority Leader Mitch McConnell unveiled late last month ran into immediate opposition from his own party, with as many as 20 of the Senate’s 53 Republicans expected to oppose it.

Trump did not rule out a return to negotiations with Congress.

“I’m not saying they’re not going to come back and negotiate,” he said on Saturday. “Hopefully, we can do something with them at a later date.”

Democrats have already warned that such executive orders are legally dubious and would likely be challenged in court, but a court fight could take months.

Trump has managed to sidestep Congress on spending before, declaring a national emergency on the U.S.-Mexico border to shift billions of dollars from the defense budget to pay for a wall he promised during his 2016 election campaign.

Congress passed legislation to stop him, but there were too few votes in the Republican-controlled Senate to override his veto – a scenario that would likely play out again with less than 90 days to go before the Nov. 3 presidential election.

(Reporting by Jeff Mason, additional reporting by Raphael Satter, Brad Brooks, and Rich McKay; Writing by Scott Malone; Editing by Diane Craft, Daniel Wallis, Jonathan Oatis and Sonya Hepinstall)

Uber rides take COVID-19 hit but food-delivery business doubles

By Tina Bellon and Akanksha Rana

(Reuters) – Home-bound customers of Uber Technologies Inc. more than doubled their orders from the company’s food-delivery service in the second quarter but demand for ride-hailing trips only marginally recovered from pandemic rock-bottom.

The company said that despite those larger challenges it is sticking to its goal of being profitable on an adjusted basis before the end of 2021 thanks to stringent cost-cutting measures and a strong balance sheet. Uber recorded an adjusted loss in earnings before interest, taxes, depreciation and amortization of $837 million in the second quarter.

Shares were down 2.9% at $33.72 in after-hours trading.

Ride-hailing trips, in the past responsible for nearly two-thirds of Uber’s revenue, increased 5 percentage points from their low in April, but gross bookings remained down 75% from last year.

Uber’s chief executive officer, Dara Khosrowshahi, told analysts on a conference call on Thursday that rides recovery depended on the ability of different countries to contain the virus, with the recovery so far led by Asia, excluding India.

In Hong Kong and New Zealand, ride bookings at times exceeded pre-COVID-19 levels, while trip requests in Germany, France and Spain have improved to just a 35% decline from a year ago.

“Our global geographic footprint remains a huge advantage,” Khosrowshahi said.

The company on Thursday posted a $1.8 billion net loss from April through June, including charges related to laying off 23% of its global workforce during a period when infections of the novel coronavirus continued to spread in the United States, Uber’s largest market.

The number of active platform users across the 69 countries in which Uber operates nearly halved year-over-year, from 99 million to 55 million.

Uber’s second-quarter revenue fell 29% to $2.24 billion from the year prior, beating analysts’ average estimate of $2.18 billion, according to IBES data from Refinitiv.

Revenue at Uber Eats doubled to $1.2 billion, boosted by greater demand for delivery as Americans largely continue to stay home. Uber last month expanded its delivery reach by announcing the acquisition of Postmates Inc for $2.65 billion to expand the business of supplying everyday goods.

Uber’s ride-hailing segment remained battered by the coronavirus crisis, with revenue from the United States and Canada, its largest combined market, declining to $1.25 billion. Nevertheless, ride-hailing was the only segment generating an adjusted EBITDA profit, of $50 million.

Uber said fewer U.S. ride-hail drivers were returning to the platform compared with other countries. Uber faces several legal challenges over the status of its drivers in the United States, with California and Massachusetts suing the company over the alleged mis-classification of drivers as independent contractors.

Uber Eats, whose gross bookings more than doubled, narrowed losses, recording a $232 million adjusted EBITDA loss in the second quarter. Uber’s CFO, Nelson Chai, said the company expects third-quarter losses to be roughly the same.

He also told analysts that Uber’s food-delivery business would be profitable in the vast majority of countries in which it operates within a couple years.

Uber in recent months has closed Eats operations in eight smaller markets, including in Eastern Europe and the Middle East. It also cut losses from its Eats business in India, where it sold its food-ordering business to a local competitor in exchange for a stake in the company.

Uber Eats was also gaining traction in the suburbs, including the outer boroughs of New York City, where the food delivery service is now the market leader, the company said.

Uber executives said cost-cutting was helping to improve margins, along with better route planning and more restaurants relying on its delivery couriers.

(Reporting by Tina Bellon in New York and Akanksha Rana in Bangalore; Editing by Peter Henderson and Matthew Lewis)

New U.S. Postal Service chief warns of ‘dire’ finances as quarterly loss narrows

By David Shepardson

WASHINGTON (Reuters) – The head of the U.S. Postal Service (USPS) on Friday said the agency faces a “dire” financial position even as it posted a slightly narrower third-quarter loss amid soaring package demand during the coronavirus pandemic.

Postmaster General Louis DeJoy said USPS has a “broken business model” and is in need of organizational changes. “Without dramatic change, there is no end in sight and we face an impending liquidity crisis,” DeJoy said.

USPS said quarterly revenue rose to $17.6 billion, up $547 million. The quarterly net loss shrank to $2.2 billion from $2.3 billion in the same quarter last year.

First-class mail volume declined by 1.1 billion pieces, or 8.4%. Shipping and packages revenue increased by $2.9 billion, or 53.6%, on a volume increase of 708 million pieces, up 49.9%.

Democrats Thursday called on DeJoy to reverse changes that they say are resulting in delayed mail.

“We believe these changes, made during the middle of a once-in-a-century pandemic, now threaten the timely delivery of mail—including medicines for seniors, paychecks for workers, and absentee ballots for voters—that is essential to millions of Americans,” wrote House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer.

Voting by mail is expected to increase dramatically this fall amid the coronavirus pandemic. Trump has claimed without evidence that absentee voting leads to rampant fraud.

“We are not slowing down election mail or any other mail,” DeJoy, a Trump supporter, said Friday.

The Postal Service has faced financial woes with the rise of email and social media, and a measure passed in 2006 requiring it to pre-fund 75 years of retiree health benefits over the span of 10 years at a cost of more than $100 billion.

DeJoy said the Postal Service is eliminating inefficiencies, including “unnecessary overtime.” The Postal Service has lost $80 billion since 2007.

(Reporting by David Shepardson; Editing by Nick Zieminski)

Explainer: Trump wants to bypass U.S. coronavirus aid talks with executive order. Can he?

By Patricia Zengerle

WASHINGTON (Reuters) – With congressional Democrats and White House negotiators so far unable to agree on a deal to salve the heavy economic toll of the coronavirus pandemic, President Donald Trump has threatened to bypass Congress with an executive order.

Some of his proposals exceed his legal authority and would face immediate legal challenges, though in at least one case House of Representatives Speaker Nancy Pelosi, the nation’s top Democrat, told him to just go ahead.

WHAT DOES TRUMP WANT TO DO?

Trump said on Twitter he is considering executive orders to continue expanded unemployment benefits, reinstate a moratorium on evictions, cut payroll taxes and continue a suspension of student loan repayments amid a health crisis that has killed nearly 160,000 Americans.

He and administration officials negotiating with Congress have not provided specifics.

CAN HE DO IT?

The Constitution puts control of federal spending in the hands of Congress, not the president, so Trump does not have the legal authority to issue executive orders determining how money should be spent on coronavirus.

Democrats said executive orders would prompt a court fight, but legal action could take months.

Trump has sidestepped Congress on spending before. In 2019, he declared a national emergency at the border with Mexico to shift billions of dollars from the Pentagon budget to help pay for a promised wall that was the cornerstone of his 2016 election campaign.

Congress passed legislation to stop him, but there were too few votes in the Republican-controlled Senate to override his veto.

“There has to be a political will to do that and there has to be a priority given by members of Congress to assert their institutional interests,” said Mark Rozell, dean of the Schar School of Policy and Government at George Mason University in Virginia. “And that just isn’t there right now.”

WOULD DEMOCRATS OR REPUBLICANS OBJECT?

The $600 per week enhanced unemployment benefit in the massive “Cares Act” passed in March has been a major sticking point in negotiations. Democrats want to continue the federal payment, which expired on July 24, to the tens of millions who have lost their jobs in the crisis and have rejected a short-term extension. Trump’s fellow Republicans have argued that is too high a payment, contending it is a disincentive to work.

The moratorium on evictions was less contentious, and could be covered by reprogramming money that Congress has already approved for housing that has not been spent. Pelosi on Thursday said an order extending the moratorium “would be a good thing.”

Congressional Republicans and Democrats alike reject cutting the payroll tax, which is collected from both employers and employees to fund Social Security and Medicare. A cut would disproportionately benefit Americans with high salaries, and threaten funding for the popular programs for retirees. It also only benefits people still getting paychecks, not those who have lost their jobs.

The parties are closer together on student loans. Democrats included a 12-month extension of the student loan payment suspension in a relief bill the House passed in May. Republican senators did not include student loan relief in the proposal they unveiled in July. However, there is a Republican plan in Congress to extend the suspension for three months.

(Reporting by Patricia Zengerle; Editing by Scott Malone and Nick Zieminski)

It’s not for me: speed of COVID-19 vaccine race raises safety concerns

By Francesco Guarascio and Josephine Mason

BRUSSELS/LONDON (Reuters) – The frenetic race to develop a COVID-19 vaccine has intensified safety concerns about an inoculation, prompting governments and drugmakers to raise awareness to ensure their efforts to beat the coronavirus aren’t derailed by public distrust.

There are more than 200 COVID-19 vaccine candidates in development globally, including more than 20 in human clinical trials. U.S. President Donald Trump has vowed to have a shot ready before year’s end, although they typically take 10 years or longer to develop and test for safety and effectiveness.

In the drive to find a potential COVID-19 vaccine “fast is good for politicians,” said Heidi Larson, who leads the Vaccine Confidence Project (VCP), a global surveillance program on vaccine trust. “But from the public perspective, the general sentiment is: ‘too fast can’t be safe'”, she told Reuters.

Regulators around the world have repeatedly said speed will not compromise safety, as quicker results would stem from conducting in parallel trials that are usually done in sequence.

However, these reassurances have failed to convince many, including in Western countries where skepticism about vaccinations was already growing before the pandemic.

Preliminary results of a survey conducted over the last three months in 19 countries showed that only about 70% of British and U.S. respondents would take a COVID-19 vaccine if available, Scott Ratzan, co-leader of ‘Business Partners to CONVINCE’, told Reuters.

Business Partners to CONVINCE, a U.S./UK initiative that is partly government funded, conducted the survey jointly with VCP and the results were broadly in line with a Reuters/Ipsos poll of the U.S. public in May.

“We just see this distrust growing against science and government,” said Ratzan.

“We need to address legitimate concerns about the rapid pace of development, political over-promises and the risks of vaccination.”

The VCP/Business Partners’ survey, expected to be published in a few weeks, will also show that Chinese participants were the most trusting of vaccines, while Russians were the least so, Ratzan said.

Drugmakers and governments had hoped the scale of the COVID-19 crisis would allay concerns about vaccines, which they see as crucial to defeating the pandemic and enabling economies to fully recover from its impact.

Vaccine hesitancy – or the reluctance or refusal to be vaccinated – is also known as “anti-vax,” a term that is sometimes associated with conspiracy theories when often it simply reflects many people’s concerns about side-effects or industry ethics.

In January 2019 the World Health Organisation named vaccine hesitancy as one of the top 10 global health threats for that year.

TAILORED MESSAGES

In Europe, skepticism among the public was high before the pandemic due to a range of factors including negative coverage of pharmaceutical companies as well as false theories including suggested links between childhood immunizations and autism.

Only 70% of French people considered vaccines safe in a 2018 survey commissioned by the European Union executive. The EU average was 82%, but trust fell to 68% for the shot against seasonal flu.

The VCP project on vaccine trust, funded by the European Commission and pharmaceutical companies among others, aims to identify early signs and causes of public mistrust and tackle them with information campaigns before it is too late.

Larson said headlines referring to Warp Speed – the name of the U.S. operation aimed at delivering a COVID-19 vaccine to the U.S. population by next year – could increase vaccine hesitancy even more than perceptions that the disease could become less lethal.

“One of the most frequent things that comes up in people’s conversations is concerns about how quick it is. If I have to pick one theme that is more recurrent than others it is this one,” Larson said.

Data collected by VCP from social media show that by the end of June about 40% of Britons’ posts concerning a COVID-19 vaccine, for example, were negative, with many distrusting any coronavirus vaccine and the medical establishment.

Announcements about fast progress in COVID vaccines in Russia and China in particular could also contribute to rising skepticism. “We don’t have transparency and don’t know how accurate or valid their data are,” Ratzan said, adding that errors there could boost skepticism elsewhere.

Key for any information campaign to be successful is to tailor it to different audiences as there is no uniform profile of anti-vaxxers, said Kate Elder of Doctors Without Borders, a non-governmental organisation.

“They go from the highly educated to those who don’t believe in science,” she said, urging politicians to be more careful in their messages on vaccines and to better explain the reasons behind potentially fast results against COVID-19.

“We are exploring the idea of a chatbot that will speak in different languages,” said Ratzan, adding it could be something similar to Smokey Bear, the U.S. Forest Service’s campaign to educate about preventing wildfires.

“Different parts of the world will require different strategies. We know we need to tailor it and to be specific,” he said.

Risks are high if hesitancy is not addressed quickly.

During the 2009 swine flu pandemic, growing skepticism about the vaccine led to a failure of the vaccination campaign in France, where only 8% of the population got a shot against the virus which is estimated to have killed around 280,000 people across the world.

A study published in May in the Lancet by a group of French scientists warned of similar risks now in the country where vaccine hesitancy went up from 18% in mid-March when a lockdown was imposed on the French to 26% by the end of that month.

“Distrust is likely to become an issue when the vaccine will be made available,” the scientists concluded.

(Reporting by Francesco Guarascio @fraguarascio in Brussels and Josephine Mason in London; Editing by Susan Fenton)

Risk coronavirus or default: ride-hail drivers face tough choices as U.S. aid expires

By Tina Bellon

NEW YORK (Reuters) – Uber driver Johan Nijman faces a difficult decision as federal unemployment aid expires: risk failing to pay for groceries and even lose his home, or resume driving and potentially catch COVID-19.

Nijman is among thousands of Uber Technologies Inc and Lyft Inc drivers across the United States choosing between physical and financial health risks as $600 in additional weekly unemployment assistance expire.

While drivers are not the only workers struggling, they are particularly vulnerable as their work puts them close to many strangers. Also, as independent contractors, they have none of the formal protection or benefits that employees enjoy.

“I never thought that after working so hard for so long that I would ever find myself in a situation where I had to ask for food one day,” Nijman said.

With type 2 diabetes putting him at higher risk for severe COVID-19, Nijman stopped driving in mid-March when the virus was raging through New York City. Before the pandemic, he earned some $1,500 a week driving for Uber’s high-end black car service in an SUV he bought when he signed up in 2017.

He applied for unemployment and received around $900 in weekly benefits – some $300 from the state and $600 from the federal government. That barely covered his expenses, including city-mandated liability insurance drivers must keep paying.

Without the additional $600, Nijman said he faces financial ruin, putting his car and house on the line.

Other drivers, like Sacramento-based Melinda Pualani, are still waiting for their unemployment claims to process, with agencies overwhelmed by the slew of applications.

“Driving again was simply a necessity because I used up most of my savings and still have to keep food on the table,” Pualani said.

She resumed driving last week, rolling down windows, thoroughly disinfecting her car after every trip and asking passengers to wear masks.

Federal pandemic pay offered a lifeline to many gig workers not eligible for ordinary unemployment insurance. Uber and Lyft lobbied U.S. lawmakers to include gig workers in the taxpayer-funded March coronavirus relief bill and workers remain eligible for state-based assistance.

No data is available on the share of gig workers among the 30 million Americans currently collecting unemployment. But the enhanced $600 pay stopped last week and U.S. lawmakers are at an impasse over how to extend it.

Uber and Lyft have provided drivers with masks and disinfectants. They also pay two-week financial assistance to drivers infected by the virus or ordered to quarantine.

Trip requests dropped 80% in April and remain significantly below prior-year levels. Uber and Lyft are expected to provide updates when they report results later on Thursday and Wednesday, respectively.

For parents, the timing is particularly difficult.

Single mom Denise Rozier, a Lyft driver in Austin, Texas, burned through her savings and in April contracted the virus. Alone and struggling to breathe, she worried she might not recover.

“I have a lot of anxiety, but really need to go back (to work) with school starting and expenses piling up,” she said. “I don’t want to risk my safety, but I also don’t want to depend on my family.”

Rozier is afraid of bringing the virus to her family or even contracting it again.

But she also fears altercations with passengers refusing to wear masks. Uber and Lyft have mandated masks for drivers and passengers, but several driver dashcam videos posted online have shown heated arguments with riders refusing to wear one.

“I wished that people in power find a way to look after people that never looked for a handout,” Queens-based Nijman said.

(Reporting by Tina Bellon in New York; Editing by Ben Klayman and Peter Henderson)

Not in the room where it happens: U.S. Senate’s McConnell opts out of coronavirus talks

By Richard Cowan

WASHINGTON (Reuters) – As coronavirus aid negotiations between top White House officials and Democratic leaders in the U.S. Congress bogged down over the past week, the question reverberating through near-empty Capitol hallways has been “Where’s Mitch?”

That’s Mitch McConnell, the Senate majority leader with the reputation of being a legislative mastermind and a tough, wily deal-maker.

McConnell, a Republican like President Donald Trump, said on Tuesday he is deliberately hanging back as Congress’s top Democrats and White House negotiators work out a deal to help American families stay afloat during severe economic times caused by the coronavirus pandemic.

If they reach a deal, he said, it would be “something I’m prepared to support even if I have some problems with certain parts of it.”

Unlike in past showdowns over spending and borrowing authority bills, McConnell would not bring a strong hand to negotiations – his party’s 53-member majority in the 100-seat Senate is deeply fractured over his $1 trillion package, with dissenters expected no matter what emerges from the talks.

The betting is that Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows could have an easier time without McConnell in the room as they try to craft a bill that will need Democratic support for passage anyway.

An arm’s-length appearance could also help deflect fallout if this legislative battle ends poorly, something that could be on his mind as he seeks to retain his seat in congressional and presidential elections in November.

That’s not to say that McConnell has gone AWOL. While he may not be in the sessions, he is in close touch with the White House behind the scenes.

“He’s definitely giving guidance,” Senator Bill Cassidy told Reuters on Tuesday. “Clearly Mnuchin and his team are the ones negotiating directly. But I certainly get a sense that they’re going in there knowing that which McConnell will accept and that which he will not.”

Senator Mike Rounds called McConnell’s approach pragmatic.

“In the past he’s made it clear that unless you have House Democrats on board and you have the White House on board, you’re really not going to get to a conclusion,” Rounds told reporters.

‘WE DO HAVE DIVISIONS’

Unlike the wall of opposition Republicans erected against former President Barack Obama’s landmark healthcare law, or the party’s lockstep backing for tax cuts, many Republicans are leery of spending more to battle COVID-19 — despite the virus’ impact on Americans’ lives and America’s economy.

McConnell’s pledge to support a deal, even as he keeps a low profile, could anger conservative Republican senators who have questioned whether Washington should do anything beyond the $3 trillion it already has passed to battle the fallout from the pandemic, which has killed more than 157,000 nationwide.

“We do have divisions,” McConnell acknowledged in his understated way.

In contrast, Democrats led by House of Representatives Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer have presented a unified front around a $3 trillion proposal passed by the House in May.

On Tuesday, Schumer suggested McConnell had lost control of his caucus: “He’s not in the room negotiating because the Republicans can’t even articulate a coherent position.”

The Senate is being pressured from many sides to act on what could be the last piece of major legislation before election day on Nov. 3.

Trump, who has been trailing in polls versus presumptive Democratic nominee Joe Biden, repeatedly has called for steps to extend unemployment insurance or help those facing eviction from their homes, which Democrats have been pressing for months.

The U.S. Chamber of Commerce on Tuesday also urged action to protect businesses from liability lawsuits during the pandemic — McConnell’s main priority.

Former Republican House Speaker John Boehner always had a ready answer when he found himself, like McConnell now, in a tight spot.

“A leader without followers is simply a man taking a walk,” he would say during raucous times during his tenure.

Now, McConnell may have found himself in Boehner’s shoes.

(Reporting by Richard Cowan, David Morgan and Patricia Zengerle; Editing by Scott Malone and Sonya Hepinstall)

U.S. to pay over $1 billion for 100 million doses of Johnson & Johnson’s potential COVID-19 vaccine

(Reuters) – The United States government will pay Johnson & Johnson over $1 billion for 100 million doses of its potential coronavirus vaccine, its latest such arrangement as the race to tame the pandemic intensifies, the drugmaker said on Wednesday.

It said it would deliver the vaccine to the Biomedical Advanced Research and Development Authority (BARDA) on a not-for-profit basis to be used after approval or emergency use authorization by the U.S. Food and Drug Administration (FDA).

J&J has already received $1 billion in funding from the U.S. government – BARDA agreed in March to provide that money for the company to build manufacturing capacity for more than 1 billion doses of the experimental vaccine.

The latest contract equates to roughly $10 per vaccine dose produced by J&J. Including the first $1 billion deal with the U.S government, the price would be slightly higher than the $19.50 per dose that the United States is paying for the vaccine being developed by Pfizer Inc. and German biotech BioNTech SE.

The U.S. government may also purchase an additional 200 million doses under a subsequent agreement. J&J did not disclose that deal’s value.

J&J plans to study a one- or two-dose regimen of the vaccine in parallel later this year. A single-shot regimen could allow more people to be vaccinated with the same number of doses and would sidestep issues around getting people to come back for their second dose.

This is J&J’s first deal to supply its investigational vaccine to a country. Talks are underway with the European Union, but no deal has yet been reached.

J&J’s investigational vaccine is currently being tested on healthy volunteers in the United States and Belgium in an early-stage study.

There are currently no approved vaccines for COVID-19. More than 20 are in clinical trials.

(Reporting by Michael Erman in Maplewood, New Jersey, Shariq Khan in Bengaluru and Josephine Mason; Editing by Shinjini Ganguli, Emelia Sithole-Matarise and Jonathan Oatis)

Fed’s Clarida says economy could reach pre-pandemic levels by end of 2021

By Jonnelle Marte

NEW YORK (Reuters) – While U.S. economic growth slowed in July, it could pick up in the third quarter and reach pre-pandemic levels by the end of next year, Federal Reserve Vice Chairman Richard Clarida said on Wednesday.

“It will take some time, I believe, before we get back to the level of activity that we were in February before the pandemic hit,” Clarida said in an interview with CNBC.

Clarida said his personal forecast for the economy hasn’t changed because of the recent resurgence of the virus in the United States. He noted that economic momentum from May through early July was stronger than he expected and that the economy will receive more support from another fiscal package, which should even things out.

“My baseline view is that we could get back to the level of activity perhaps towards the end of 2021,” Clarida said. “But again, there are a lot of moving parts here with the virus and the global outlook, so I think there’s a pretty good range of uncertainty.”

Asked about the tepid use of the Fed’s Main Street Lending Program, which is supposed to help small and mid-sized businesses, Clarida said the facilities are meant to serve as backstops and that officials are open to changing the program if needed to reach more businesses.

“I do expect activity in the program to pick up,” Clarida said. “We’re focused on the goal of supporting the economy and if we need to adjust our programs we will do so.”

(Reporting by Jonnelle Marte; Editing by Kevin Liffey and Paul Simao)