Fed seen unveiling bond-buying taper plan next month, jobless rate falling slowly

 

The Federal Reserve will announce a plan to taper its asset purchases in September, according to a solid majority of economists polled by Reuters who also said the U.S. jobless rate would remain above its pre-pandemic level for at least a year.

Since the release last week of a strong U.S. jobs report, which showed an unexpectedly sharp drop in the unemployment rate to 5.4% in July, a flurry of Fed officials have suggested the U.S. central bank might start reducing its $120 billion in monthly purchases of Treasuries and mortgage-backed securities (MBS) sooner rather than later.

Nearly two-thirds of respondents, 28 of 43, said the Fed is likely to announce a taper of its asset purchases - currently set at $80 billion of Treasuries and $40 billion of MBS per month - at its September meeting.

But while that timing has become more likely in the minds of many Fed watchers over the past month, it is by no means a done deal for all of them.

"I know some Fed officials are pushing for it to happen at the September meeting, but that is very unlikely," said Jim O'Sullivan, chief U.S. macro strategist at TD Securities.

"November is possible if the next two employment reports are strong enough, but the odds favor December as the time of the formal announcement."

More than one-third of respondents in the poll said the central bank's policy-setting Federal Open Market Committee (FOMC) will wait until November or December. None of the respondents said it would be announced at the Fed's central banking conference in Jackson Hole, Wyoming, this month, compared with the more than one-quarter who said in a June poll that it would.

Nearly 60% of respondents, 26 of 43, said they expected the Fed to start the reductions of its asset purchases in the first quarter of next year. Nearly all the rest said it would happen in the fourth quarter of 2021.

The poll concluded the Fed will start with monthly reductions of $10 billion in its purchases of Treasuries and $5 billion in those of MBS. Some responses were as high as $20 billion for both Treasuries and MBS.

More than 80% of respondents, 24 of 29, said they expect the Fed to stop purchasing assets by the end of next year.

JOBLESS RATE TO LAG

U.S. inflation data for July, which was released this week, suggested to many that price pressures may have already peaked in the world's biggest economy.

Still, the core personal consumption expenditure price index was predicted to average 3.1%, 2.5% and 2.1% in 2021, 2022 and 2023, respectively, above the central bank's target of 2%.

But the unemployment rate is likely to remain above its pre-pandemic level of 3.5% for at least a year, according to 32 of 37 economists who replied to a separate question.

"We suspect recovering half of the job losses is sufficient for many on the FOMC to begin tapering, particularly in light of the Committee's view about upside risks to the inflation outlook," said Michael Gapen, chief U.S. economist at Barclays.

Still, the Fed was expected to keep its key interest rate unchanged at near zero at least until 2023.

"Relative to the performance of its economy, the U.S. central bank is the most dovish in the world and is likely to start its hiking cycle a year or so later than normal. Moreover, if growth falters the Fed will simply delay even longer," said Ethan Harris, global economist at Bank of America Securities.

Buoyed by around a trillion dollars of fiscal stimulus, ultra-easy monetary policy and a rapid COVID-19 vaccination drive, the U.S. economy surpassed its pre-pandemic level with an annualized 6.5% expansion in gross domestic product last quarter - the fastest recovery in the nation's history.

But economic growth is expected to average 6.2% in 2021, a significant downgrade from the 6.6% predicted a month ago, according to the poll, as the rapidly spreading Delta variant has pushed the number of new coronavirus cases to more than a six-month high.

The poll showed GDP growth slowing to 4.2% in 2022 and 2.4% in 2023 despite the Senate's passage of a $1 trillion infrastructure bill on Tuesday and the start of a debate on a separate $3.5 trillion spending blueprint. The infrastructure bill, which has not yet been passed by the U.S. House of Representatives, would be the biggest U.S. investment on roads, airports and waterways in decades.

https://www.marketscreener.com/news/latest/Fed-to-unveil-bond-buying-taper-plan-next-month-jobless-rate-to-fall-slowly--36153465/

Potential new medication for Alzheimer’s, Parkinson’s

 Researchers from Oregon Health & Science University have for the first time demonstrated it's possible to use a synthetic thyroid hormone to regulate a gene implicated in neurodegenerative diseases like Alzheimer's, Parkinson's and multiple sclerosis.

The findings from tests in cells and mice, published today in the journal Cell Chemical Biology, raise the possibility of development of new medication to treat debilitating diseases.

"This is the first example reported that shows it's possible to increase the expression of the TREM2 gene in a way that will lead to healing in certain diseases," said senior author Tom Scanlan, Ph.D., professor of physiology and pharmacology in the OHSU School of Medicine. "This will generate a lot of excitement."

The paper's first author is Skylar J. Ferrara, Ph.D., a postdoctoral fellow in the OHSU School of Medicine's chemical physiology and biochemistry department.

The discovery builds on a 2013 publication linking genetic variants of TREM2 to risk of Alzheimer's disease.

The new research from OHSU builds on that work by showing that it's possible to turn on TREM2 expression and the TREM2 pathway using a compound originally developed more than two decades ago to lower cholesterol.

Researchers administered an analog of the compound that penetrates into the central nervous system of mice. They discovered they were able to increase the expression of TREM2 and reduce damage to myelin. Myelin is the insulation-like protective sheath covering nerve fibers that's damaged in disorders like multiple sclerosis.

The pathway activated by the TREM2 gene is also implicated in neurodegenerative diseases, including Alzheimer's and Parkinson's.

"TREM2 is a receptor," Scanlan said. "It senses damaged cellular debris from disease and responds in a healing, productive way. The thought is, if you can simply turn up its expression, then that's going to lead to a therapeutic effect in most neurodegenerative diseases."

Joseph Quinn, M.D., professor of neurology in the OHSU School of Medicine, who treats patients with Parkinson's and Alzheimer's, said the findings are promising. Quinn wasn't involved in the research.

"TREM2 is a viable 'target' for treatment in Alzheimer's disease, based on genetics and other studies," Quinn said. "This new report has important implications for testing a new therapeutic approach for Alzheimer's, including raising the potential for developing a new medication to regulate TREM2."

The synthetic thyroid hormone compound, known as sobetirome and similar analogs, is already licensed by an OHSU spinoff company to conduct clinical trials for central nervous system diseases, including multiple sclerosis. In contrast to other basic science discoveries in mice, Scanlan said this latest discovery connects this class of compounds to Alzheimer's, Parkinson's and other neurodegenerative diseases, advancing the science that much closer to clinical trials in people with debilitating disease.

"The possibility of doing clinical trials is not millions of miles away," Scanlan said. "It would be an achievable thing."

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Story Source:

Materials provided by Oregon Health & Science University. Original written by Erik Robinson. Note: Content may be edited for style and length.

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Journal Reference:

1. Skylar J. Ferrara, Priya Chaudhary, Margaret J. DeBell, Gail Marracci, Hannah Miller, Evan Calkins, Edvinas Pocius, Brooke A. Napier, Ben Emery, Dennis Bourdette, Thomas S. Scanlan. TREM2 is thyroid hormone regulated making the TREM2 pathway druggable with ligands for thyroid hormone receptor. Cell Chemical Biology, 2021; DOI: 10.1016/j.chembiol.2021.07.014

https://www.sciencedaily.com/releases/2021/08/210812092728.htm

Metabolism changes with age, just not when you might think

 Most of us remember a time when we could eat anything we wanted and not gain weight. But a new study suggests your metabolism, the rate at which you burn calories, actually peaks much earlier and starts its inevitable decline later than you might think.

The findings appear in the journal Science.

"As we age, there are a lot of physiological changes that occur in the phases of our life such as during puberty and in menopause. . What's odd is that the timing of our 'metabolic life stages' doesn't appear to match the markers we associate with growing up and getting older," said study co-author Jennifer Rood, PhD, Associate Executive Director for Cores and Resources at Pennington Biomedical Research Center.

Four Pennington Biomedical researchers were part of an international team of scientists who analyzed the average calories burned by more than 6,600 people as they went about their daily lives. The participants' ages ranged from one week old to 95 years, and they lived in 29 different countries. The other Pennington Biomedical scientists are Peter Katzmarzyk, PhD, Associate Executive Director for Population and Public Health Sciences; Corby Martin, PhD, Professor and Director, Ingestive Behavior Laboratory; and Eric Ravussin, PhD, Associate Executive Director for Clinical Science.

Most previous large-scale studies measured how much energy the body uses for basic vital functions -- breathing, digesting, and pumping blood -- the calories you need just to stay alive. But basic functions account for just 50 percent to 70 percent of the calories we burn each day. They don't include the energy we spend doing everything else: washing the dishes, walking the dog, breaking a sweat at the gym, even just thinking or fidgeting.

To come up with a number for total daily energy expenditure, the researchers turned to the "doubly labeled water" method. It's a urine test that involves having a person drink water in which the hydrogen and oxygen in the water molecules have been replaced with naturally occurring "heavy" forms, and then measures how quickly they're flushed out.

Scientists have used the technique -- considered the gold standard for measuring daily energy expenditure during normal daily life outside of the lab -- to measure energy expenditure in humans since the 1980s. But previous studies were limited in size and scope due to cost. To get around that limitation, multiple labs shared their data in a single database, to see if they could tease out truths hidden or only hinted at in previous studies.

Pooling and analyzing energy expenditures across the entire lifespan revealed some surprises.

"Some people think of their teens and 20s as the age when their calorie-burning potential hits its peak," Dr. Katzmarzyk said. "But the study shows that, pound for pound, infants had the highest metabolic rates of all."

Energy needs shoot up during the first 12 months of life. By their first birthdays, babies burn calories 50 percent faster for their body size than adults.

And that's not just because infants are busy tripling their birth weight in their first year.

"The babies grow rapidly, which accounts for much of the effect. However, after you control for this, their energy expenditures tend to be higher than what you would expect for their body size," Dr. Martin said.

An infant's explosive metabolism may help explain why children who don't get enough to eat during this developmental stage are less likely to survive and grow up to be healthy adults.

"More research is needed to better understand the metabolism of babies. We need to know what is driving higher energy expenditures," Dr. Martin said.

After the initial surge in infancy, a person's metabolism slows by about 3 percent each year until our 20s, when it levels off into a new normal.

Surprisingly, the growth spurts of adolescence didn't generate an increase in daily calorie needs after researchers took body size into account. Another surprise? People's metabolisms were most stable from their 20s through their 50s. Calorie needs during pregnancy grew no more than expected.

The findings suggest that other factors lie behind the so-called "middle-age spread."

The data suggest that our metabolisms don't really start to decline again until after age 60. The slowdown is gradual, only 0.7 percent a year. But a person in their 90s needs 26 percent fewer calories each day than someone in midlife.

Lost muscle mass as we get older may be partly to blame, the researchers say, since muscle burns more calories than fat. But it's not the whole picture.

"We took dwindling muscle mass into account. After 60, a person's cells slow down," Dr. Ravussin said.

The patterns held even when differing activity levels were taken into account.

Aging goes hand in hand with so many other physiological changes that it has been difficult to parse what drives the shifts in energy expenditure. But the new research supports the idea that it's more than age-related changes in lifestyle or body composition.

"This study shows that the work cells do changes over the course of the lifespan in ways we couldn't fully appreciate before. But massive data sets like the one we collaborated on allow us to answer questions we couldn't address," Dr. Ravussin said.

This research was supported by the United States National Science Foundation (BCS-1824466), the International Atomic Energy Agency, Taiyo Nippon Sanso and SERCON.

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Story Source:

Materials provided by Pennington Biomedical Research Center. Note: Content may be edited for style and length.

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Journal Reference:

1. Herman Pontzer et al. Daily energy expenditure through the human life course. Science, 2021 DOI: 10.1126/science.abe5017

https://www.sciencedaily.com/releases/2021/08/210812145028.htm

FDA has not seen possible side-effects of COVID shots being studied in EU

 The U.S. Food and Drug Administration said on Thursday that it has not seen evidence yet to suggest that the Pfizer Inc/BioNTech and Moderna Inc COVID-19 vaccines are causing additional side effects.

Europe's drug regulator, the European Medicines Agency (EMA), said on Wednesday it was studying whether a small number of incidences of skin rashes and two kidney disorders were linked to the vaccines.

"FDA is aware of the EMA report. To date, we have not seen any safety signals for the adverse events identified in the report," FDA spokesperson Abby Capobianco said in a statement. "FDA is monitoring the safety of authorized COVID-19 vaccines through both passive and active safety surveillance systems."

https://news.trust.org/item/20210812185640-pd7jy/

Israel set to offer COVID-19 vaccine booster shots to under-60s

 Israeli Health Ministry experts recommended on Thursday (Aug 12) dropping from 60 to 50 the minimum age of eligibility for a COVID-19 vaccine booster, hoping to curb a rise in Delta variant infections.

The advisory panel's move, which followed a call by Prime Minister Naftali Bennett to expand Israel's booster campaign, still has to be approved by the Health Ministry's director.

But at least two major health providers have already said they would begin on Friday to schedule appointments for people in the 50-59 age group to get a third dose of the Pfizer-BioNTech vaccine.

After a successful vaccination campaign launched in late 2020 in which around 60per cent of the population have received two shots of the Pfizer vaccine, new daily cases dropped from more than 10,000 in January to single digits in June.

But with the spread of the Delta variant across the globe, new infections jumped in Israel, reaching 5,946 on Monday, and serious illnesses have been increasing as well.

Israelis aged 60 and up began receiving the booster two weeks ago, effectively turning Israel into a testing ground before any third-dose approval by the US Food and Drug Administration.

More than 700,000 seniors in Israel have received their third shot.

"I commend the team of experts on treating pandemics for making the right decision for the health of the citizens of Israel," Bennett said in a statement late on Thursday. "I call on everyone over 50 to get in line tomorrow morning. Go get vaccinated."

An initial survey has shown that most people who received a third vaccine dose felt similar or fewer side effects than they did after receiving the second shot.

https://www.channelnewsasia.com/world/israel-set-offer-covid-19-vaccine-booster-shots-under-60-year-olds-2109661

FDA authorizes COVID-19 vaccine boosters for immunocompromised

 The U.S. Food and Drug Administration on Thursday authorized a booster dose of COVID-19 vaccines from Pfizer Inc and Moderna Inc for people with compromised immune systems.

A few other countries, such as Israel and Germany, plan to or have already administered the third shot to avoid another crisis due to the contagious Delta variant of the coronavirus.

Scientists are still divided over the broad use of COVID-19 vaccine boosters among those without underlying problems as benefits of the boosters remain undetermined.

Pfizer has said the efficacy of the vaccine it developed with BioNTech drops over time, citing a study that showed 84% effectiveness from a peak of 96% four months after a second dose.

Moderna has also said it sees the eventual need for booster doses, especially since the Delta variant has caused "breakthrough" infections in fully vaccinated people.

The U.S. health regulator on Thursday amended the emergency use authorizations https://bit.ly/3scYWvj for the vaccines to allow an additional dose in certain individuals, specifically for recipients of solid organ transplant or those diagnosed with conditions that are considered to have an equivalent level of immunocompromise.

Reports of infections among vaccinated people and concerns about diminishing protection have galvanized wealthy nations to distribute booster shots, even as many countries struggle to access first vaccine doses.

The World Health Organization last week called for a moratorium on COVID-19 vaccine booster shots until at least the end of September.

Spurred by the Delta variant, coronavirus cases in the United States have spiked to their highest levels in more than six months, according to a Reuters tally.

Those with weak immune systems may not be sufficiently protected by their existing COVID-19 vaccinations, U.S. health officials have said.

U.S. regulators must fully authorize the COVID-19 vaccines or amend their emergency use approvals before officials can recommend additional shots. A panel of advisers to the U.S. Centers for Disease Control and Prevention will meet on Friday to discuss eligibility of immunocompromised individuals for booster doses.

Wall Street analysts expect the authorization of a booster dose for a broad population to bolster profits of COVID-19 vaccine makers, as hundreds of millions of fully inoculated people will come back for an extra dose. 

https://www.marketscreener.com/quote/stock/MODERNA-INC-47437573/news/Moderna-U-S-FDA-authorizes-COVID-19-vaccine-boosters-for-the-immunocompromised-36153783/

New Orleans to require vaccines, negative COVID test for indoor venues

 New Orleans became the latest American city to impose health requirements on patrons of indoor venues Thursday.

Mayor LaToya Cantrell announced at a news conference that people who want to enter Big Easy bars, restaurants, music halls or other facilities — including the Superdome — must provide either proof of vaccination or a recent negative COVID-19 test.

“Look for your vaccination card and be prepared to show it,” said Cantrell, who added that the policy would begin Monday, with a one-week grace period before the city starts aggressive enforcement Aug. 23.

The mayor added that she was not contemplating implementing capacity limits or shutdowns, telling reporters that “unlike this time last year, we have a tool that we did not have” in reference to the vaccines.

Cantrell implemented a mask mandate for New Orleans July 30. Many restaurants, bars and coffee shops have already put in place their own requirement that patrons either show proof of vaccination or a negative coronavirus test taken within 72 hours. The city has also required workers and contractors to get vaccinated.

Mayor LaToya Cantrell warned those in New Orleans to be prepared to show their vaccination card in order to enter indoor venues.

Getty Images

According to data from the Mayo Clinic, Louisiana and Idaho currently have the joint fourth-lowest percentage of fully vaccinated residents in the US (37.8 percent). Only Wyoming (37.2 percent), Mississippi (35.4 percent) and Alabama (35 percent) have lower rates.

However, the Crescent City’s population has taken up the vaccine at slightly higher rates than the US as a whole, with about 60 percent getting at least one dose and 53 percent considered fully vaccinated. Cantrell said Thursday that most of the people hospitalized in New Orleans with COVID-19 are from outside the city.

Cantrell announced her mandate on the same day San Francisco Mayor London Breed announced her city would demand proof of full vaccination for customers and staff at indoor restaurants, bars, gyms and entertainment venues — including concerts and sporting events — who are eligible to get the jab.

Last week, New York City Mayor Bill de Blasio said the city will require proof of at least one vaccine dose to enter certain indoor businesses, including restaurants, entertainment venues and gyms. Los Angeles is considering a similar measure to New York, while California Gov. Gavin Newsom said Wednesday all California public and private school employees will have to be vaccinated or submit to weekly COVID-19 tests.

https://nypost.com/2021/08/13/new-orleans-to-require-vaccines-negative-covid-19-test-for-indoor-venues/