A drop in which of the following measures would typically send a government bond price down


  • California, Arizona and Nevada in talks on new plan to save Colorado River water
  • 3 factors that affect bond prices
  • What Is Deflation?
  • Pressure on Fed’s Powell is rising as inflation worsens
  • 23. The Great Depression
  • California, Arizona and Nevada in talks on new plan to save Colorado River water

    Inequality can prevent the U. Just a week later, though, the government reported that consumer prices grew over the previous 12 months by the most in three decades. The inflation spike has squeezed consumers, posed a threat to the Biden administration and intensified pressure on Powell to act. Some economists — and some Fed officials — want the Fed to move faster to rein in its ultra-low-rate policies.

    Other policymakers favor a more patient approach to interest rates. The result is a split within the Fed that Powell will likely have to settle, with potentially far-reaching consequences for the economy. The question of whether the Fed should act faster to withdraw the enormous aid it injected into the economy to fight the pandemic recession highlights the extraordinarily delicate task before the Fed as it seeks to contain inflation without slowing an economy that is still 4 million jobs short of pre-pandemic levels.

    But the Fed did not commit to sticking to that pace; it held out the possibility of accelerating the pullback. Doing so would give the Fed the option to raise its key short-term interest rate as early as the first half of A rate hike would, in turn, lead to higher consumer borrowing costs for things like mortgages and credit cards.

    Higher inflation lowers the effective cost of loans, which makes Fed policy even more supportive of growth — and potentially of inflation — than it was early in the pandemic. He said the Fed should finish tapering by March, plan to raise rates in the first half of next year and potentially do so three times in , unless inflation were to quickly fall back. Many economists have been moving up their timetable for an initial Fed rate hike. Goldman Sachs now foresees two rate increases next year, nearly a year earlier than their previous projections.

    Some Fed officials, though, want to take a more patient approach, allowing the taper to continue through June and then taking time to assess whether rate further rate hikes are needed Mary Daly, who leads the San Francisco Fed, said this week that she understands the difficulties caused by high inflation, particularly for people living paycheck to paycheck.

    Still, Daly said she thought the Fed should continue its current pace of tapering through June, and then, assuming the pandemic steadily loosens its grip on the economy, wait to get a clearer sense of whether inflation will fade. Furman advocates a more hawkish approach because of the risk that inflation may be driven higher in coming months by factors unrelated to the pandemic, such as higher rents and steady wage increases.

    Businesses, in turn, may raise prices to offset the cost of higher pay. This time, they say, the main factor has been a shift among consumers to spend heavily on goods like furniture, appliances and cars, as the pandemic has kept people at home longer and has limited spending on services such as flying, eating out and attending movies and concerts.

    That powerful demand is clogging ports and overwhelming the freight trains and trucks that deliver them. Consumers are likely to shift some of that spending back to services as the pandemic fades, which could slow inflation, said Michael Pugliese, an economist at Wells Fargo.

    The debate is intensifying as Biden nears a decision on whether to reappoint Powell as Fed chair. The president told reporters Tuesday that he would announce his decision as soon as this week. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

    Print Two and a half years after signing a deal aimed at averting a damaging crisis along the Colorado River, water officials from California, Arizona and Nevada are discussing plans to take even less water from the shrinking river and leave it in Lake Mead in an effort to prevent the reservoir from falling to dangerously low levels.

    Representatives of water agencies from the three states said they are firming up the details of a deal that would leave an additional , acre-feet of water in the reservoir next year, and the same amount again in — about double the quantity of water used annually by Las Vegas and the rest of southern Nevada.

    For California, the deal would mean participating in water reductions prior to Lake Mead reaching levels that would otherwise trigger mandatory cuts. The talks took on urgency this summer after federal projections showed growing risks of Lake Mead falling to critically low levels, despite plans for mandatory cutbacks throughout the Southwest that the states agreed to in Advertisement With the reservoir in a first-ever shortage and those cuts still insufficient, water management officials settled on a goal of together leaving half a million acre-feet of additional water in the reservoir instead of sending it flowing to farms, cities and tribal lands.

    The stored water would be roughly as much as 1. He said representatives of California, Arizona and Nevada developed the framework of the deal within about two months after they saw projections showing growing risks of Lake Mead dropping to lows that would trigger much larger water reductions in all three states. The water would come from various sources, including farmers who would be paid for leaving portions of their land dry, tribes that would contribute water supplies, and water agencies that would leave some water in Lake Mead instead of taking it out as planned.

    Negotiations on the details are continuing, and officials from California and Arizona said they hope to have the overarching agreement ready to be signed next month at a conference in Las Vegas. The board of the Metropolitan Water District of Southern California is scheduled to consider the proposed agreement next month. If the details of the proposal come together as planned, , acre-feet of water over two years would translate into water levels about 16 feet higher in Lake Mead.

    For now, the talks have focused on lining up funds and water for two years. If the winter were to bring heavy snow to the Rocky Mountains, it could still help ease the shortages. And we think now is the time to step up. Buschatzke said officials from the three states have together identified , acre-feet of water that could be freed up in and He declined to give details, saying negotiations are continuing and those that contribute water could include farmers, tribes, cities and other entities.

    Such deals have been tried on a smaller scale in recent years. In California, MWD has recently scaled up a deal in which farmers in the Palo Verde Irrigation District are paid to leave a portion of their lands dry and fallow. In Arizona, the leaders of the Colorado River Indian Tribes have also been leaving some of their farmland dry in a similar deal. While a large portion of the water is likely to be purchased through the fallowing of farmland, participants in the talks said some water will also come from other sources, including urban agencies leaving water in Lake Mead instead of sending it through their aqueducts.

    That unused water is projected to be about 95, acre-feet this year, and likely a similar amount next year, said J. Hamby, vice president of the IID board. Others agreed that the quick negotiations bode well for more collaboration in dealing with worsening shortages. Since , the Colorado River has been ravaged by a series of mostly dry years, which have been compounded by the heating of the planet with the burning of fossil fuels. Scientists have estimated that about half the decrease in runoff in the watershed since has been caused by unprecedented warming.

    And this heat-driven aridification is projected to significantly worsen as temperatures continue to climb. Brad Udall, a water and climate scientist at Colorado State University, recently likened the planned water reductions under the existing deal to a parachute — one that is too small and being opened too close to the ground.

    Hopefully that next parachute will be ready well before , he said, when the existing rules expire, and the Southwest needs to have long-term plans in place for adapting to a hotter, drier watershed and a river that yields less water. Newsletter Toward a more sustainable California Get Boiling Point, our newsletter exploring climate change, energy and the environment, and become part of the conversation — and the solution.

    Enter email address.

    Middle- and working-class Americans might rely on disappearing credit at neighborhood stores, default on utility bills, or skip meals. As one New York City official explained inWhen the breadwinner is out of a job he usually exhausts his savings if he has any.

    He gets credit from the corner grocery store and the butcher shop, and the landlord forgoes collecting the rent until interest and taxes have to be paid and something has to be done. All of these resources are finally exhausted over a period of time, and it becomes necessary for these people, who have never before been in want, to go on assistance. As one Detroit city official put it inMany essential public services have been reduced beyond the minimum point absolutely essential to the health and safety of the city.

    Thus has the city borrowed from its own future welfare to keep its unemployed on the barest subsistence levels. For the coming year, Detroit can see no possibility of preventing wide-spread hunger and slow starvation through its own unaided resources. Social workers and charity officials, for instance, often found the unemployed suffering from feelings of futility, anger, bitterness, confusion, and loss of pride.

    But, in such a labor crisis, many employers, subscribing to traditional notions of male bread-winning, were less likely to hire married women and more likely to dismiss those they already employed. Since the start of the twentieth century, single women had become an increasing share of the workforce, but married women, Americans were likely to believe, took a job because they wanted to and not because they needed it.

    Once the Depression came, employers were therefore less likely to hire married women and more likely to dismiss those they already employed. The Great American Depression. Black workers were generally the last hired when businesses expanded production and the first fired when businesses experienced downturns.

    Beginning insevere droughts hit from Texas to the Dakotas and lasted until at least The droughts compounded years of agricultural mismanagement. To grow their crops, Plains farmers had plowed up natural ground cover that had taken ages to form over the surface of the dry Plains states. Relatively wet decades had protected them, but, during the early s, without rain, the exposed fertile topsoil turned to dust, and without sod or windbreaks such as trees, rolling winds churned the dust into massive storms that blotted out the sky, choked settlers and livestock, and rained dirt not only across the region but as far east as Washington, D.

    The Dust Bowl, as the region became known, exposed all-too-late the need for conservation. It was an exodus. Oklahoma lostpeople, or a full Lange, a photographer for the Farm Security Administration, captured the image at a migrant farmworker camp in Nipomo, California, in In the photograph a young mother stares out with a worried, weary expression. She was a migrant, having left her home in Oklahoma to follow the crops to the Golden State. She took part in what many in the mids were beginning to recognize as a vast migration of families out of the southwestern Plains states.

    In the image she cradles an infant and supports two older children, who cling to her. The subject of the photograph seemed used to hard work but down on her luck, and uncertain about what the future might hold. The Okies, as such westward migrants were disparagingly called by their new neighbors, were the most visible group who were on the move during the Depression, lured by news and rumors of jobs in far-flung regions of the country.

    Men from all over the country, some abandoning families, hitched rides, hopped freight cars, or otherwise made their way around the country. Bysociologists were estimating that millions of men were on the roads and rails traveling the country. These years witnessed the first significant reversal in the flow of people between rural and urban areas. Thousands of city dwellers fled the jobless cities and moved lump throat under jaw line the country looking for work.

    As relief efforts floundered, many state and local officials threw up barriers to migration, making it difficult for newcomers to receive relief or find work. Some state legislatures made it a crime to bring poor migrants into the state and allowed local officials to deport migrants to neighboring states.

    This family, captured by Lange inwas in the process of traveling miles by foot, across Oklahoma, because the father was ill and therefore unable to receive relief or WPA work. Starting inthe committee held widely publicized hearings.

    But it was too late. Such relief was nowhere to be found in the s. Americans meanwhile feared foreign workers willing to work for even lower wages. The crisis itself had stifled foreign immigration, but such restrictive and exclusionary actions in the first years of the Depression intensified its effects. The number of European visas issued fell roughly 60 percent while deportations dramatically increased.

    Between andfifty-four thousand people were deported. Officials in the Southwest led a coordinated effort to push out Mexican immigrants.

    According to the federal census, from to the Mexican-born population living in Arizona, California, New Mexico, and Texas fell fromtoFranklin Roosevelt did not indulge anti-immigrant sentiment as willingly as Hoover had. Over the course of the Depression, more people left the United States than entered it. The Capitol in the background. In the summer ofmore than fifteen-thousand unemployed veterans and their families converged on Washington, D.

    Given the economic hardships facing the country, the bonus came to symbolize government relief for the most deserving recipients. The veterans in D. Calling themselves the Bonus Expeditionary Force, or the Bonus Army, they drilled and marched and demonstrated for their bonuses. Concerned with what immediate payment would do to the federal budget, Hoover opposed the bill, which was eventually voted down by the Senate. When thousands failed to heed the vacation order, General Douglas MacArthur, accompanied by local police, infantry, cavalry, tanks, and a machine gun squadron, stormed the tent city and routed the Bonus Army.

    Troops chased down men and women, tear-gassed children, and torched the shantytown. His overall unwillingness to address widespread economic problems and his repeated platitudes about returning prosperity condemned his presidency.

    Hoover of course was not responsible for the Depression, not personally. But neither he nor his advisors conceived of the enormity of the crisis, a crisis his conservative ideology could neither accommodate nor address. Americans had so far found little relief from Washington. But they were still looking for it. The early years of the Depression were catastrophic. The crisis, far from relenting, deepened each year. Unemployment peaked at 25 percent in With no end in sight, and with private firms crippled and charities overwhelmed by the crisis, Americans looked to their government as the last barrier against starvation, hopelessness, and perpetual poverty.

    Few presidential elections in modern American history have been more consequential than that of The United States was struggling through the third year of the Depression, and exasperated voters overthrew Hoover in a landslide for the Democratic governor of New York, Franklin Delano Roosevelt. Inhe was appointed assistant secretary of the navy, a position he held during the defense emergency of World War I. In the course of his rise, in the summer ofRoosevelt suffered a sudden bout of lower-body pain and paralysis.

    He was diagnosed with polio. The disease left him a paraplegic, but, encouraged and assisted by his wife, Eleanor, Roosevelt sought therapeutic treatment and maintained sufficient political connections to reenter politics. InRoosevelt won election as governor of New York.

    3 factors that affect bond prices

    He oversaw the rise of the Depression and drew from the tradition of American progressivism to address the economic crisis. Roosevelt crushed Hoover in November. He won more counties than any previous candidate in American history. He spent the months between his election and inauguration—the twentieth amendment, ratified inwould subsequently the inauguration from March 4 to January 20—traveling, planning, and assembling a team of advisors, the famous Brain Trust of academics and experts, to help him formulate a plan of attack.

    So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In his first days in office, Roosevelt and his advisors prepared, submitted, and secured congressional enactment of numerous laws designed to arrest the worst of the Great Depression.

    What Is Deflation?

    His administration threw the federal government headlong into the fight against the Depression. Roosevelt immediately looked to stabilize the collapsing banking system. Two out of every five banks open in had been shuttered and some Federal Reserve banks were on the verge of insolvency. On March 12, the night before select banks reopened under stricter federal guidelines, Roosevelt appeared on the radio in the first of his Fireside Chats.

    The addresses, which the president continued delivering through four terms, were informal, even personal. In the first chat, Roosevelt described the new banking safeguards and asked the public to place their trust and their savings in banks.

    Americans responded and deposits outpaced withdrawals across the country. The act was a major success. In the remainder of his First Hundred Days, Roosevelt and his congressional allies focused especially on relief for suffering Americans. The Civilian Conservation Corps CCC employed young men on conservation and reforestation projects; the Federal Emergency Relief Administration FERA provided direct cash assistance to state relief agencies struggling to care for the unemployed; 45 the Tennessee Valley Authority TVA built a series of hydroelectric dams along the Tennessee River as part of a comprehensive program to economically develop a chronically depressed region; 46 and several agencies helped home and farm owners refinance their mortgages.

    GDP climbed once more, but even as output increased, unemployment remained stubbornly high. Though the unemployment rate dipped from its high inwhen Roosevelt was inaugurated, vast numbers remained out of work. If the economy could not put people back to work, the New Deal would try. While deflation may seem like a good thing, it can signal adguard home blocklist impending recession and hard economic times.

    When people feel prices are headed down, they delay purchases in the hopes that they can buy things for less at a later date. But lower spending leads to less income for producers, which can lead to unemployment and higher interest rates.

    This negative feedback loop generates higher unemployment, even lower prices and even less spending. In short, deflation leads to more deflation.

    Throughout most of U. How Is Deflation Measured? The CPI tracks the prices of a group of commonly purchased goods and services and publishes the changes every month. When the prices measured in aggregate by the CPI are lower in one period than they were in the period before, the economy is experiencing deflation.

    Conversely, when the prices collectively rise, the economy is experiencing inflation. Deflation vs. Disinflation Deflation is not to be confused with disinflation. Though they both sound like they would indicate decreases in prices, disinflation actually signifies that prices are still rising, just more slowly than they have been.

    Pressure on Fed’s Powell is rising as inflation worsens

    Deflation, on the other hand, describes actual decreases in prices, not a decrease in the rate that inflation is rising. What Causes Deflation?

    There are two big causes of deflation: a decrease in demand or growth in supply. Each is tied back to the fundamental economic relationship between supply and demand.

    A decline in aggregate demand leads to a fall in the price of goods and services if supply does not change. A drop in aggregate demand may be triggered by: Monetary policy: Rising interest rates may lead people to save their cash instead of spending it and may discourage borrowing. Less spending means less demand for goods and services. Declining confidence: Adverse economic events—such as a global pandemic—may lead to a decrease in overall demand.

    If people are worried about the economy or unemployment, they may spend less so they can save more.

    23. The Great Depression

    Higher aggregate supply means that producers may have to lower their prices due to increased competition. This boost in aggregate supply may stem from a drop in production costs: If it costs less to produce goods, companies can make more of them for the same price. Representatives of water agencies from the three states said they are firming up the details of a deal that would leave an additionalacre-feet of water in the reservoir next year, and the same amount again in — about double the quantity of water used annually by Las Vegas and the rest of southern Nevada.

    For California, the deal would mean participating in water reductions prior to Lake Mead reaching levels that would otherwise trigger mandatory cuts. The talks took on urgency this summer after federal projections showed growing risks of Lake Mead falling to critically low levels, despite plans for mandatory cutbacks throughout the Southwest that the states agreed to in Advertisement With the reservoir in a first-ever shortage and those cuts still insufficient, water management officials settled on a goal of together leaving half a million acre-feet of additional water in the reservoir instead of sending it flowing to farms, cities and tribal lands.

    The stored water would be roughly as much as 1. He said representatives of California, Arizona and Nevada developed the framework of the deal within about two months after they saw projections showing growing risks of Lake Mead dropping to lows that would trigger much larger water reductions in all three states. The water would come from various sources, including farmers who would be paid for leaving portions of their land dry, tribes that would contribute water supplies, and water agencies that would leave some water in Lake Mead instead of taking it out as planned.

    Negotiations on the details are continuing, and officials from California and Arizona said they hope to have the overarching agreement ready to be signed next month at a conference in Las Vegas. The board of the Metropolitan Water District of Southern California is scheduled to consider the proposed agreement next month.

    If the details of the proposal come together as planned,acre-feet of water over two years would translate into water levels about 16 feet higher in Lake Mead.


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