March 6, 2023

The Fed is raising interest rates to combat inflation. “For the past year, the Fed has enacted a series of interest rate hikes aimed at chilling demand and cooling historically high inflation,” wrote Alicia Wallace for CNN. But what is high enough or maybe too high? If the goal is to bring down inflation, how do you find that tipping point and avoid a serious downturn in the economy? All ears will be on Fed Chairman Powell as he delivers remarks before the Congress this week. 

Former Treasury Secretary Larry Summers is quoted by Wallace adding that, “I don’t think there’s any question that we do not yet have inflation on a secure glide path anywhere near down to the 2% Fed target level. And until the Fed can be confident of that, it’s going to have to be tightening rather than easing.”  

For Delaware businesses and consumers, that means borrowing costs may continue to increase, putting pressure on company procurements and investments, and households alike.  

We start the week of economic news off with January factory orders on Monday. On Tuesday, Fed Chairman Jerome Powell testifies in the Senate, while consumer credit and wholesale inventories results from January are made public. Powell heads to the House of Representatives on Wednesday, while ADP employment results from February are released and the U.S. trade balance for January is revealed. We wrap up the week on Friday with U.S. unemployment results from February.  

Companies with earnings calls this week include VW, Dick’s Sporting Goods, Dole, and Squarespace. Campbell Soup, Ulta Beauty, Korn/Ferry, Brown-Forman, BJ’s Wholesale, DocuSign, National Beverage, and Toro round out the week of calls. 

Delaware employers have a deadline of January 1, 2024, to take action if they want to pursue the opportunity to opt out of Delaware’s public plan and perhaps also potentially reduce the amount of parental leave they will be required to provide, though details for that are unclear. Employers must also be prepared to take action as it pertains to providing various notices to employees including regarding the amount of “contribution” that will be passed onto employees through payroll deduction, particularly since many employees likely are unaware of this consequence to them from the new law (i.e. less pay in their pocket).

Iin February, Connolly Gallagher's Tim Holly submitted a letter to the DDOL on behalf of the State Chamber which presents high-level comments and provides regulation-specific observations, requests, and/or concerns. Read more >

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