FRANKFURT — Cars with internal combustion engines will disappear from showrooms by 2035. Steel producers and cement makers will pay for every ton of carbon dioxide their factories emit. Cargo ships may not be able to dock in Rotterdam or Hamburg unless they run on clean fuels. Airliners will be required to tank up with synthetic fuel produced with green energy.
The European Union’s plan to cut its greenhouse gas emissions by more than half by the end of the decade will touch almost every industry, with profound consequences for the economy.
The plan unveiled Wednesday by the European Commission, branded “Fit for 55,” calls for its 27 members states to cut their output of greenhouse gases 55 percent by 2030, compared with 1990 levels.
The E.U.’s target is more aggressive than that of the United States, which committed to reduce emissions by 40 to 43 percent over the same period, but behind Britain, which pledged a 68 percent reduction. China, the world’s largest emitter, has only said it aims for emissions to peak by 2030.
Here’s how the plan would affect industries in Europe:
Most automakers have announced plans to shift to electric vehicles, but many have resisted putting an expiration date on the fossil-fuel powered vehicles that still generate the most profits. The European Commission plan would effectively require them to do so by 2035.
Airlines would be compelled to begin mixing synthetic fuel with the fossil fuels they now use, and steel makers and other manufacturers would need to pay more for emissions credits.
Electricity producers will be pushed to speed up the switch to wind, solar and hydropower instead of coal.
Shipping companies would not be able to dock at European ports unless they shift to cleaner fuels.
The plan also provides financial incentives that may be welcomed by industry, for example money to build a more comprehensive network of charging stations for electric cars. The current network is concentrated in Germany, France and the Netherlands and it can be difficult to find a place to charge an electric vehicle in, say, Italy or Poland.
There will also be cash for groups hit by the new mandates. European Union governments will be able to draw on a fund worth 750 billion euros, or $890 billion, to help farmers, small businesses and low-income households make the transition to cleaner energy.
Given how many interests are at stake, the plan is likely to face furious lobbying by industry representatives as it makes its way through the legislative process in Brussels. The commission’s proposals require endorsement by the European Parliament and leaders of European national governments before they become law, a process that is expected to take around two years.
The plan could also meet resistance from major trading partners like the United States and China, because it would penalize imports from countries seen as having lower environmental standards.
Ursula von der Leyen, the president of the European Commission, has made the “European Green Deal” one of her top priorities and can tap support from Europeans increasingly alarmed by wildfires, record hot summers, severe storms and other tangible evidence of the toll of climate change.
Monika Pronczuk contributed reporting in Brussels.
Jerome H. Powell, the Federal Reserve chair, is set to tell House lawmakers that inflation has increased “notably” and is poised to remain higher in coming months before moderating — but he will make no indication that the recent jump in prices is pushing central bankers to rush to change policy.
The Fed chair will attribute high inflation numbers to factors tied to the economy’s reopening from the pandemic, based on the text of his prepared remarks. He will offer no precise estimate for when or how much price pressures will ease.
Mr. Powell’s testimony before the House Financial Services Committee on Wednesday, starting at noon, will come at a fraught moment politically and economically when it comes to inflation. The Consumer Price Index spiked by 5.4 percent in June, the biggest jump since 2008 and a larger move than economists had expected. Price pressures appear to be poised to last longer than policymakers at the White House or Fed had expected.
“Inflation has increased notably and will likely remain elevated in coming months before moderating,” Mr. Powell is prepared to say.
He will explain that today’s higher inflation comes from temporary data quirks, rising prices on goods and services facing supply constraints that ought to “partially reverse,” and prices for services that were hard-hit by the pandemic and are now experiencing a demand surge. He will also note that longer-run inflation expectations remain under control — which matters because inflation outlooks help to shape the future path for prices.
Expectations “have moved up from their pandemic lows and are in a range that is broadly consistent with the F.O.M.C.’s longer-run inflation goal,” Mr. Powell said, referring to the policy-setting Federal Open Market Committee.
The Fed chair’s prepared remarks make no indication that the path for policy will change based on the hotter-than-expected price data. Instead, he will say that labor market conditions are improving but that “there is still a long way to go” and that the Fed’s goal of achieving “substantial further progress” toward its economic goals before taking the first steps toward a more normal policy setting “is still a ways off.”
Fed officials are debating when and how to slow their $120 billion of monthly government-backed bond purchases, which would be the first step in moving policy away from an emergency mode. Mr. Powell said those discussions will continue “in coming meetings.”
The central bank is also maintaining its policy interest rate at near-zero, which helps to keep borrowing cheap for consumers and businesses. Officials have set out a higher standard for lifting rates: They want the economy to return to full employment and inflation to come in on track to average 2 percent over time.
Raising rates is not yet up for discussion, officials have said publicly and privately.
Mr. Powell said the Fed’s current approach means that “monetary policy will continue to deliver powerful support to the economy until the recovery is complete.”
Americans are ramping up spending. That’s good for Bank of America’s bottom line.
The lender reported solid results for the second quarter on Wednesday, saying that its profit soared to $9.2 billion in the period — more than double its earnings of $3.5 billion a year earlier — as consumers charged more on their cards, bought homes and made investments while emerging from the pandemic shutdowns of 2020.
“Consumer spending has significantly surpassed prepandemic levels, deposit growth is strong, and loan levels have begun to grow,” Brian Moynihan, Bank of America’s chief executive, said in a statement. “More than 85 percent of our buildings and offices are open, and we’re welcoming our teammates back,” he said.
The company’s losses from consumers not paying back their debts fell to the lowest rates in 25 years, while balances on loans grew for the first time since the beginning of last year, according to the bank’s chief financial officer, Paul Donofrio. It also released $2.2 billion from a rainy-day fund that it had set aside for a predicted wave of loan defaults that never emerged, thanks to robust government stimulus efforts that helped keep many Americans afloat.
Still, the results weren’t entirely rosy: Revenue fell short of analyst’s expectations to $21.5 billion, declining 4 percent from a year ago.
Two other major banks, Citigroup and Wells Fargo, reported profit and revenue that beat expectations.
Citi reported profit of $6.2 billion on revenue of $17.5 billion. Analysts had been expecting slightly lower revenue of $17.2 billion, and Citi’s per-share earnings of $2.85 exceeded analysts’ expectations by 88 cents. Wells Fargo posted earnings per share of $1.38, swinging from a loss of $1.01 a year earlier, while revenue increased to $20.3 billion, up 11 percent from a year earlier.
Citi’s chief executive, Jane Fraser, said the company was benefiting from a faster-than-expected economic recovery, which had lowered the amount it cost the bank to make loans. Wells Fargo’s chief executive, Charlie Scharf, also highlighted the economic recovery as a boon.
Two other banking behemoths, JPMorgan Chase and Goldman Sachs, reported strong results on Tuesday. Bank stocks have rebounded slightly in the past week after weakening recently as investors became concerned about economic growth slowing down from its breakneck pace.
Britain’s annual rate of inflation climbed to 2.5 percent in June, data published on Wednesday showed, exceeding economists’ expectations. The British pound and government bond yields rose as investors weighed how the central bank might eventually react to the continued increase in prices.
The pace was the highest since August 2018. After the 2016 Brexit referendum, Britain went through a period of high inflation set off by the slump in the pound. Inflation rose 0.5 percent in June from the previous month, the fifth-consecutive month of increases.
Analysts noted that the price increases were broad-based, reaching across food, used cars, clothing and footwear, eating and drinking out and fuel. Last month, Bank of England policymakers said they expected the inflation rate to temporarily rise above their 2 percent target, and even exceed 3 percent, before falling again.
Price rises are mostly contained to items that either fell a lot the previous year or are part of sectors reopening from the winter lockdown. This should allow the Bank of England to “continue to judge that rising inflation will prove temporary,” analysts at Royal Bank of Canada wrote.
The potential path of inflation has gripped investors and economists globally as they debate whether the increase might be sustained and force central banks to take action. On Tuesday, data showed the annual rate of inflation in the United States climbed to 5.4 percent, the fastest pace in 13 years. On Wednesday, Jerome H. Powell, the Federal Reserve chair, is set to tell House lawmakers that inflation has increased “notably” and is poised to remain higher in coming months before slowing down again.
The pound rose 0.5 percent against the U.S. dollar and 0.1 percent against the euro. The yield on 10-year bonds rose as much as five basis points, or 0.05 percentage point, to 0.68 percent.
Elsewhere in markets
U.S. stock futures were slightly stronger and indicated the S&P 500 would open 0.2 percent higher.
Most European indexes were lower. The Stoxx Europe 600 index fell 0.2 percent.
Oil prices dipped. Futures of West Texas Intermediate, the U.S. crude benchmark, fell 0.3 percent to $75.05 a barrel.
Delta Air Lines reported a $652 million profit in the second quarter of the year, its first since the pandemic began and the latest sign that the airline recovery is well underway. The carrier reported $7.1 billion in revenue.
There were also promising indications that the business is returning to normal, Delta said, noting that booking trends recovered as customers bought tickets further out, with average daily sales beating Delta’s internal expectations by 20 percent.
“Domestic leisure travel is fully recovered to 2019 levels and there are encouraging signs of improvement in business and international travel,” the airline’s chief executive, Ed Bastian, said in a statement.
Corporate travel recovered as offices reopened throughout the quarter, with the number of business travelers down 60 percent in June compared with 80 percent in March, according to the airline.
Despite those encouraging signs, Delta’s quarterly profit, which was buoyed by $1.5 billion in federal stimulus money, was still down 55 percent from the same quarter in 2019. Its revenue was down 43 percent from two years ago.
The number of people flying for vacation or to visit friends and family within the United States has recovered to prepandemic levels, but Delta’s revenue from domestic travel was down 45 percent from 2019 because of the drop-off in business travel.
Revenue from travel to Latin America was down only 36 percent, while longer flights across the Atlantic or Pacific oceans brought in about 85 percent less revenue. Cargo revenue, on the other hand, was up 35 percent.
Delta also offered a preview of how it expects to fare during the quarter encompassing July, August and September: Passenger capacity will be down 28 to 30 percent and revenue will be off 30 to 35 percent, compared with the same period in 2019.
The financial results came as Delta announced plans to buy 29 used Boeing 737 planes and lease seven used Airbus A350s, some of which will replace older aircraft that the carrier had removed from its fleet. That decision drove improvements in fuel efficiency, which was up more than 7 percent in the second quarter compared with 2019.
Delta is the first major airline to report financial results for the second quarter. American Airlines, United Airlines and Southwest Airlines are all expected to announce earnings next week.
American offered a preview of those results, saying in a securities filing on Tuesday that it expected to announce earnings between a $35 million loss and a $25 million profit for the quarter.
“We are clearly moving in the right direction,” the airline’s chief executive, Doug Parker, and president, Robert Isom, said in a staff memo on Tuesday. “Our revenue and expense performance in the quarter came in better than expectations, and this was achieved while bringing the operation back up to full capacity and safely transporting a record number of travelers.”
Travel within the United States is down about 20 percent compared with the same period in 2019, according to Transportation Security Administration screening data. Summer is the industry’s busiest season, but it’s unclear what the fall will look like, when corporate travel typically picks up.
Americans get millions of illegal robocalls every month, despite attempts by the telecommunications industry and government agencies to stop them.
The Federal Communications Commission — the government agency that regulates communications — is trying to cut down on the calls with new rules that went into effect on June 30, Christine Hauser reports for The New York Times.
Here’s how it works.
In short, the F.C.C. is trying to make sure that if you’re getting a call, the network on which it is being made is verifying the caller.
The F.C.C.’s first step was setting a June 30 deadline for what it calls “voice service providers” (you know them as phone companies) to register their efforts to reduce the scourge of scams in a public Robocall Mitigation Database. So far, more than 1,500 of them have, the F.C.C. said.
Starting on Sept. 28, phone companies must refuse calls from providers that have not registered with the F.C.C.
The F.C.C. hopes to get all providers, including smaller regional networks, on board. That would reduce spam by verifying calls as they pass through different networks, from the caller to the recipient.
This will help stop some scammers from manipulating their number to make the call appear more legitimate. But some businesses legitimately change the number displayed on caller ID to show their switchboard number or toll-free number, rather than a specific department or extension.
“The key thing here is it was never intended to be a silver bullet,” one analyst said of the new effort. “It was intended to be a tool to help.”
A planned merger involving an upstart space transportation company may not get off the ground after securities regulators brought one of the first major enforcement actions targeting special purpose acquisition companies, or SPACs. The Securities and Exchange Commission said on Tuesday that it had reached a settlement with several parties involved in the planned merger of Momentus, a company that said it had developed a unique propulsion technology, and Stable Road Acquisition, a SPAC. Investors were misled into believing the propulsion system had been successfully tested in space, when the test had failed, regulators said. “This case illustrates risks inherent to SPAC transactions, as those who stand to earn significant profits from a SPAC merger may conduct inadequate due diligence and mislead investors,” the S.E.C. chairman, Gary Gensler, said in a statement.
The United States is hopeful that Ireland will drop its resistance to joining the global tax agreement that it is brokering, as Treasury Secretary Janet L. Yellen made the case to her Irish counterpart this week that it is in its economic interests to join the deal. Ms. Yellen held high-stakes meetings in Brussels this week with Paschal Donohoe, Ireland’s finance minister and president of the Eurogroup, a club of European finance ministers. She needs Mr. Donohoe’s support because the European Union requires unanimity among its members to formally join the deal, which will require changes to domestic tax laws. After meeting with Ms. Yellen on Monday, Mr. Donohoe struck a positive tone and said he would continue to engage in the process.