Author: Minnie Arwood

Here’s what to watch for from the Fed.

• The Fed’s statement. The policy-setting Federal Open Market Committee will release its statement at 2 p.m. and the central bank is widely expected to announce its plans to taper off bond purchases.

  Investors will also look for an update to the Fed’s discussion about inflation. In its September policy statement, the Fed said “inflation is elevated, largely reflecting transitory factors.” The central bank noted that prices had previously run persistently below the Fed’s goal, language that suggested high prices were not a long-term threat.

• Mr. Powell’s price forecast. The Fed chair has been clear that he thinks it is time to scale back its bond purchases but not to raise interest rates, and that the pace at which the Fed tapers is not meant to signal when borrowing costs are going to move up. But he and his colleagues have also sounded increasingly worried about price increases, which they had previously argued would be “transitory.” While Mr. Powell is likely to maintain that rapid price increases should fade as the economy normalizes, he will probably also stress the uncertainty around that forecast.

• Mr. Powell’s take on inflation expectations. Fed officials had pointed to inflation expectations as an encouraging sign that consumers and businesses expected price gains to simmer down with time. But several price outlook gauges have now moved higher. Most are still at historically normal levels, but the continuing increases are sure to catch policymakers’ attention.

• Mr. Powell’s thoughts about the inflation and jobs trade-off. The Fed is trying to avoid raising rates quickly in response to today’s hot inflation, worried that it will cool off the economy just as supply chains begin to right themselves and booming demand for goods fades — a cocktail what would naturally bring inflation back down. That could unnecessarily slow the economy, weakening hiring at time when millions of jobs remain missing compared with before the pandemic. After all, the Fed has two goals: stable prices and full employment.

• The global context. High inflation isn’t a problem made in America. Prices are surging across many wealthy nations. The Bank of England could become the first major central bank to lift interest rates when it meets on Thursday. The Reserve Bank of Australia has ditched part of its economy-stoking monetary policy, and the Bank of Canada is walking back its own stimulus package.

• The politics. President Biden’s White House studiously avoids commenting on Fed policy in deference to the central bank’s independence. But this is a high-stakes meeting for Mr. Powell. It could well be the last one before the administration announces whether it will keep him or replace him at the central bank’s helm after his term ends early in 2022. Some commentators expect the administration will want a Fed chair who favors growth-friendly policies, but it is also the case that the White House is focused on inflation. Mr. Biden himself has demurred when asked about his criteria and whether he has made a decision yet.

  “I’m not going discuss it with you because that’s in train now, we’ll be making those announcements fairly quickly,” Mr. Biden said during a news conference Tuesday when asked about Mr. Powell’s potential renomination.

This week’s move by the Algerian government comes after it broke off diplomatic relations with Morocco in August, in part to protest Morocco’s efforts to control the Western Sahara, a disputed territory. Since then Algeria has also closed off its airspace to Moroccan aircraft.

The dispute was rekindled last year when the Polisario Front, a Western Sahara separatist group backed by Algeria, broke off a longstanding cease-fire with Morocco.

On Sunday the Algerian government said that Sonatrach would end its commercial activities with Morocco because that country’s “hostile” actions threatened “the national unity” of Algeria.

Morocco said the gas shut-off would have an “insignificant” impact on its electricity network. Morocco had been using Algerian gas to power two electricity plants that are partly operated by Spanish companies.

After an emergency meeting in Algiers last week, Spain’s environment and energy minister, Teresa Ribera, said that she was confident that Algeria could “guarantee that everything works in the most fluid and best manner possible” to keep gas supply flowing to Spain.

Some analysts are warning that it will be a challenge for Algeria to raise the capacity of the undersea pipeline or charter more liquefied natural gas ships, given that there is a shortage of available vessels.

Gonzalo Escribano, an energy expert at the Real Instituto Elcano, a Madrid-based think tank, said that Algeria’s pipeline closing could result in Spain paying more for the gas, given the high cost and complicated logistics of shipping liquefied natural gas, but it should not pose a major supply risk ahead of the winter. Despite the latest tensions, he said, “Algeria has historically always honored its contracts and political pledges in this field.”

For Morocco, however, Mr. Escribano said, “the situation is much more complicated,” both in terms of losing Algerian gas that had fueled its electricity grid and losing the fees that it had received from the gas transiting through the pipeline.

In all the company lost nearly $330 million in the third quarter, which was far worse than Wall Street analysts had predicted. The company made a $40 million profit in the same period a year ago.

Shares of Zillow have fallen more than 50 percent from a high of nearly $200 in February, when it was still a darling of investors as the housing market heated up. The stock dropped 11.5 percent on Tuesday to about $85.50 before it released its financials, and a further 7.5 percent in after-hours trading. (Even so, Zillow’s shares are worth double what they were at the beginning of the pandemic.)

Three years ago, the company announced plans to employ its pricing estimates to buy and sell houses. Now, Zillow is sitting on thousands of houses worth less than what the company paid for them. Last month, Zillow announced it would temporarily stop buying new homes. At the time, it blamed a lack of workers to fix up and sell the houses it had bought. But on Tuesday, Mr. Barton said using its algorithm to buy and sell houses had not produced predictable profits. It is now looking to offload its remaining 7,000 houses.

It appears the company underestimated the risk of holding houses in between transactions, which was a departure from the low-risk, high-margin ad business. And it tried to quickly ramp up its home-flipping business to 5,000 transactions a month, which Mr. Barton set as a goal, in a housing market that was already low on inventory and was starting to cool off.

Zillow’s stumble also raises questions about its core product, which is built around its value estimates. Aaron Edelheit, who began buying houses in the wake of the Great Recession, tweeted his thanks to Zillow for paying “such an extremely high price” for one of his properties this summer. “It appeared they were panic buying,” Mr. Edelheit, who is leaving the real estate market to focus on cannabis, told The New York Times’s DealBook newsletter. “I didn’t get it. I should have shorted the stock.”

Many workers had complained that wage increases and retirement benefits included in the initial proposal were too weak given that the company — known for its distinctive green-and-yellow John Deere products — was on pace for a record of nearly $6 billion in annual profits.

According to a summary produced by the union, wage increases under the more recent proposal would have been 10 percent this year and 5 percent in the third and fifth years. During each of the even years of the six-year contract, employees would have received a lump-sum payment equivalent to 3 percent of their annual pay.

That was up from earlier proposed wage increases of 5 or 6 percent this year, depending on a worker’s labor grade, and 3 percent in 2023 and 2025.

The more recent proposal also included traditional pension benefits for future employees and a post-retirement health care fund seeded by $2,000 per year of service, neither of which were included in the initial agreement.

Chris Laursen, a worker at a John Deere plant in Ottumwa, Iowa, who was president of his local there until recently, said he voted in favor of the new agreement after voting to reject the previous one.

“We have the support of the community, we have the support of workers all around the country,” Mr. Laursen said. “If we turned down a 20 percent increase over a six-year period, substantial gains to our pension plan, I’m afraid we would lose that.”

But Mr. Laursen said he still had concerns about the vagueness of the company’s commitment to improving its worker incentive plan, and such concerns appeared to weigh on his co-workers, 55 percent of whom voted to reject the newer contract.

One wrinkle complicating the vote was suspicion among rank-and-file workers toward the union leadership related to a series of corruption scandals, which have led to more than 15 convictions, including two recent U.A.W. presidents.

The work stoppage at Deere was part of an uptick in strikes around the country last month that also included more than 1,000 workers at Kellogg and more than 2,000 hospital workers in upstate New York.

Overall, more than 25,000 workers walked off the job in October, versus an average of about 10,000 in each of the previous three months, according to data collected by researchers at Cornell University.

But critics said the pledges fell short because they don’t commit investors to stop placing money in fossil fuels.

“This announcement yet again ignores the biggest elephant in the room: fossil fuel companies,” Richard Brooks, the climate finance director of STAND.earth, an environmental group, said in a statement. “We cannot keep under 1.5 degrees if financial institutions don’t stop funding coal, oil and gas companies.”

The coalition, which was created in April, is chaired by Mr. Carney, the United Nations’ climate finance envoy. Among its members are the investment management company BlackRock, HSBC Holdings, Morgan Stanley and Deutsche Bank.

Critically, the initiative would create a new body to hold investors and companies to account on climate-related goals.

The alliance also said that nearly 40 central banks in countries generating two-thirds of the world’s emissions would introduce stress tests to gauge how financial firms are handling climate-related risks. Some, including the European Central Bank and Bank of England, plan to administer the stress tests to the banks they supervise early next year.

The alliance also pledged to scale more private capital flows to emerging and developing economies, which are among those facing the most brutal costs of climate change.

Mr. Carney said on Tuesday at the Climate Horizon Summit in Glasgow that the finance industry was moving away from just seeing global warming as a risk to their business, and instead considering how the industry could be part of the solution.