The economy's not fixed yet, fears of a second wave rise, and stocks fall. Powell, MnuchinFed Chairman Jerome Powell was very clear yesterday that the central bank would keep its foot on the stimulus pedal until the labor market has recovered from the devastation caused by the pandemic. The FOMC projections show rates staying at current levels through 2022, while asset purchases would continue at the current pace. Elsewhere in Washington, Treasury Secretary Steven Mnuchin said that the U.S. needs additional fiscal stimulus, with the focus on travel, retail and leisure businesses. He also suggested there may be a need for more cash for American families. Second waveThere are growing fears that the virus may be far from under control in the U.S., with Texas reporting on Wednesday its highest one-day total of new cases since the pandemic emerged. On the other hand, Georgia, one of the states that reopened earliest, has seen cases plateau. More than 2 million people in America have contracted coronavirus and over 112,000 have died. In the U.K., Prime Minister Boris Johnson finds himself in a public spat with his scientific advisors after the chief medical officer highlighted a "long list" of potentially flawed decisions while on live television with Johnson. ClaimsThe perils of the labor market, highlighted by Powell, will again come under the spotlight today when weekly initial jobless claims data is published at 8:30 a.m. Eastern Time. The consensus is that 1.55 million Americans filed for benefits last week, with the number of continuing claims falling to 20 million. Economists, humbled by last week's jobs report, continue to try to reconcile weekly data with the unemployment rate. Markets plungeWarnings that the economy is a long way from fixed and fears of a second virus wave have put equity investors firmly on the back foot today. Overnight the MSCI Asia Pacific Index dropped 1.8% while Japan's Topix index closed 2.2% lower. In Europe the Stoxx 600 Index was down 2.2% by 5:50 a.m. with every industry sector in the red. S&P 500 futures indicated another day of losses, the 10-year Treasury yield was at 0.7% and oil was lower. Coming up...As well as claims, PPI for May is published at 8:30 a.m. with a slight rise in the headline figure expected after April's plunge. In the Senate the Judiciary Committee considers subpoenas in the Russia investigation, while the House Financial Services Committee holds a hearing on stimulus payment delivery. President Trump travels to Dallas where he will hold a roundtable on the economy. Adobe Inc. and Lululemon Athletica Inc. report earnings. What we've been readingThis is what's caught our eye over the last 24 hours. And finally, here's what Joe's interested in this morningAt yesterday's Fed press conference, there were a number of questions about the rising stock market and inequality. There's a sense that with record highs and stocks barely down on the year that the Fed has fueled this massive bubble, thus exacerbating some of the deeper societal problems that we had prior to this crisis. Those problems are indeed real, but the obsession with the Fed and its role in all this is myopic. The new Odd Lots podcast which Tracy Alloway and I recorded with Jon Turek, the author of the Cheap Convexity blog, gets into a lot of these themes: Inequality, low interest rates and booming asset prices. But as Turek explains, the story precedes the Fed. It's fiscal policy makers who make the decisions that put growth down, contributes to huge pools of savings flooding into asset markets, deprives lower and middle-income households of spending power -- and ultimately forces the Fed's hand to push rates lower and lower. It's a really important conversation for not only understanding the Fed's position as a fairly passive player in all this, but also for understanding the huge macro questions that the world will face in the wake of this crisis.  Joe Weisenthal is an editor at Bloomberg. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. A Japanese edition of Five Things is coming soon.世界のビジネスニュースが届くニュースレターへの登録はこちら。日本時間の朝に配信します。 | 
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