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Joe Biden will today ask Congress to suspend the federal gas and diesel tax for three months in a bid to provide temporary relief to US households struggling with high inflation.
Gasoline prices have soared to around $5 a gallon in recent weeks and consumer prices are rising at their fastest rate in decades, worsening Americans’ perceptions of the strength of the US recovery and threatening the Democrats’ chances in the midterm elections later this year.
The so-called gasoline tax exemption would involve removing the 18.4-cent federal tax on every gallon of gasoline and the 24-cent tax on diesel that consumers pay at the pump.
But critics say the policy could backfire, boost demand and contribute to inflation, while failing to bring significant relief to families. There is also no guarantee that it would be approved by Congress.
Biden’s announcement comes a day after the president hit out at Chevron chief executive Mike Wirth, calling the oil big boss “sensitive” after criticizing the US administration’s energy policy.
The president, who will meet oil company executives on Thursday, has stepped up his criticism of domestic producers in recent weeks. He said ExxonMobil was “doing more than god this year” and told the oil supermajor to “start investing more.” He also called the industry’s high profits “unacceptable” in “wartime” as conflict rages in Ukraine.
The president’s comments are part of a strategy to ease pressure at the pumps for American consumers. Earlier this year, he ordered the largest-ever release of oil from the United States’ Strategic Petroleum Reserve and will travel to Saudi Arabia next month for talks with a regime he once considered a “pariah.” “.
Biden’s announcement comes the same day the head of the International Energy Administration, a Western energy watchdog, warned Europe to prepare for Russia to cut gas exports this winter.
“Europe should be ready in case Russian gas is completely cut off,” Fatih Birol told the Financial Times in an interview.
The White House briefing ahead of Biden’s announcement appeared to push down US oil prices. US West Texas Intermediate, the US benchmark, was down almost 6% earlier in the day at $104.15 a barrel. Brent, the international benchmark, was down 4.5% at $109.55 a barrel.
Thanks for reading FirstFT Americas. Here’s the rest of the news from the day — Gordon
Five other stories in the news
1. Donald Trump urged state officials to void election, committee says Local officials described being under intense pressure by the former president and his lawyers as part of a plan to have him declared the winner of the 2020 elections. During yesterday’s hearing, several witnesses said they received death threats while another said they were inundated with 4,000 text messages after Trump tweeted his home phone number.
2. Kellogg’s will split into three food companies Kellogg splits into three public companies, retaining its core global snacks business while creating the North American cereal brands where the Cornflakes maker’s origins lie and a plant-based foods business.
3. Exclusive: UK plans to force Arm’s IPO in London The British government has debated using national security legislation to convince SoftBank to list Arm in London, as the Japanese investor plans to hold an IPO for the chip designer exclusively in the United States.
4. Democrats question Reckitt Benckiser’s plan to sell formula unit Lawmakers are urging the top U.S. competition chief to review a plan to sell Reckitt Benckiser’s baby formula unit to a private equity firm, warning it ‘could squeeze’ the market in the event of a national shortage .
5. Crypto exchange FTX bails out lending platform Sam Bankman-Fried has delivered his second bailout of a struggling digital asset firm in as many weeks. The 30-year-old chief executive of crypto trading platform FTX has granted a $250 million loan to lending platform BlockFi. This comes just a week after it helped crypto broker Voyager Digital pull itself out of the sinkhole.
More crypto news: Chen Boliang, former senior executive of Huobi, one of the world’s largest crypto exchanges, is being sued in Hong Kong after he was accused of making $5 million by secretly trading against a corporate account he controlled .
The day ahead
Fed Chairman testifies Federal Reserve Chairman Jay Powell begins two days of congressional testimony by presenting his semi-annual monetary policy report to the Senate Banking Committee after the U.S. central bank last week raised its main interest rate from 0 .75 percentage points, its largest increase since 1994.
Market outlook Investors will be watching Powell’s testimony closely as they weigh the risks to the U.S. economy and corporate earnings from a rapid rise in interest rates. Futures ahead of Powell’s appearance on Capitol Hill suggest the gauges for US equities will open lower.
Earnings Canadian grocer Empire Co and US builder KB Home will report before the bell. Empire is expected to report earnings of 69 cents Canadian per share on C$8 billion ($6.2 billion) in revenue. KB is expected to report earnings of $2.03 per share on $1.64 billion in revenue. On Tuesday, US automaker Lennar beat consensus estimates despite rising mortgage rates.
International relationships Saudi Crown Prince Mohammed bin Salman is due to make his first visit to Turkey since the murder of Saudi columnist Jamal Khashoggi in Istanbul. Saudi Arabia’s de facto leader will meet Turkish President Recep Tayyip Erdoğan on the final leg of a Middle East tour that has also taken him to Egypt and Jordan.
What else we read
The big mistakes of alterglobalists Globalization is not dead. He might not even be dying. But that is changing, writes Martin Wolf. From treating trade as optional to exaggerating the merits of self-sufficiency, Martin describes the big mistakes of anti-globalizationists.
Corporate feud over satellites pits the West against China In February, European financiers and entrepreneurs gathered for a late-night online meeting to resolve a board dispute over prized satellite permits. At its root was the question: who controls an asset in orbit? Here’s how a clash of cultures and geostrategic interests sank a German-Chinese joint venture.
Anarchy is a more likely future for the West than tyranny The history of our species is above all a history of disorder, not too much order. Even now, the state, a recent invention, is unequal and temporary in much of the world. Janan Ganesh maintains that the trend of events is not towards strong men but towards ungovernability.
How Boards Can Meet Climate Action Expectations HSBC bus stop advertisements. BlackRock’s investment plans. Carbon offsets from BP and Microsoft. Green politics is becoming the fast fashion of business strategy. Pilita Clark explains how to navigate this changing landscape.
Regrets? We’ve all had a few, but they can help your career In this week’s Working It podcast, Senior Business Writer Andrew Hill interviews bestselling author Daniel Pink. In The power of regret Pink urges us to think differently about our regrets at work and reframe our past to show us the way to a brighter future.
Earlier this year, we published an overview of private libraries around the world. It fostered a flurry of responses regarding notable reading rooms. Here are some of your favorites.
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