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New York
CNN
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A full-blown debt ceiling crisis has the potential to stop the US economy in its tracks, according to the top economist at Goldman Sachs.

“If there were any doubt about the US government’s ability or willingness to make interest and principal payments on time, that could have very, very adverse consequences,” Jan Hatzius, the chief economist at Goldman Sachs, told CNN in an interview.

The United States hit the debt ceiling last week, forcing Treasury Secretary Janet Yellen to make accounting maneuvers to avoid breaching that $31 trillion borrowing limit.

If Congress fails to lift the debt ceiling in time, Hatzius said investors will worry there is a chance of a missed payment on US Treasuries – which are “maybe the most important asset in the global economy.”

Unlike many of its peers on Wall Street, Goldman Sachs is relatively bullish on the US economy, with Hatzius telling CNN that America will likely avoid a recession through the 2024 presidential election.

However, a debt ceiling crisis is a key risk to that optimistic outlook.

Asked if a default or even a near default could cause a recession, Hatzius said yes.

“That is the worry: That you get turmoil in financial markets, a big tightening in financial conditions and that adds to downward pressure on economic activity,” he said. “That is certainly the worry. It’s not our expectation.”

Economists and US officials have previously warned of dire consequences if the federal government exhausts the extraordinary measures being used to avoid a default.

Yellen told CNN’s Christiane Amanpour last week that a “global financial crisis” could result if Washington fails to make payments. Economist Mark Zandi once described an actual default as “financial Armageddon.”

History shows Congress eventually reaches a deal to raise the debt ceiling, although there have been close calls in the past. In 2011, the United States had its perfect AAA credit rating downgraded by S&P Global Ratings as lawmakers struggled to find a compromise. That episode helped set off turbulence on Wall Street and dented business confidence.

Leaders on Wall Street and Washington have warned that this debt ceiling negotiation could be especially challenging.

The historic dysfunction that preceded House Speaker Kevin McCarthy’s election earlier this month underscored how hard it will be to get contentious legislation through the House of Representative. Not only is McCarthy presiding over a razor-thin majority, but he agreed to concessions that give the most extreme corner of the GOP considerable influence.

Still, Goldman Sachs is expecting a deal on the debt ceiling will be reached, eventually.

“We think ultimately a solution will be found,” Hatzius said. “These solutions are often found at the very last moment.”

Assuming the United States gets through the debt ceiling episode, Goldman Sachs is optimistic about the prospects for the US economy.

“We don’t expect a recession,” Hatzius said, noting his firm sees a still-significant 35% chance of a recession, compared with the consensus on Wall Street of roughly 65%. “Our baseline is a soft-landing.”

And yet a wave of major companies have announced layoffs in recent weeks, including tech giants such as Microsoft and Amazon as well as financial firms like BlackRock and Goldman Sachs itself.

Goldman Sachs expects the red-hot labor market will continue to cool down, but only gradually. Hatzius does not see the economy losing jobs on a monthly basis at all this year, though he said monthly payroll growth could slip below 100,000.

That deceleration, combined with the housing slowdown, unwinding of supply chain turmoil and impact from the war in Ukraine should help bring down inflation without causing a downturn.

Hatzius expects inflation will go from 9.1% last summer to the 2% to 3% range by late this year or 2024.

“I think inflation has pretty clearly peaked,” Hatzius said, adding that he has “relatively high confidence” on that call.

The Goldman Sachs economist said his forecast is for the US economic expansion to continue through the 2024 presidential election, though that’s not a slam-dunk.

“The further out you go in time…the bigger the risk that something bad hits you along the way and you do get a recession,” Hatzius said. “By the time you get to November 2024, it becomes a closer call.”

CNN
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Here is a look at the life of Michael Bloomberg, former New York mayor and 2020 Democratic presidential candidate.

Birth date: February 14, 1942

Birth place: Boston, Massachusetts

Birth name: Michael Rubens Bloomberg

Father: William Henry Bloomberg, bookkeeper

Mother: Charlotte (Rubens) Bloomberg, office manager

Marriage: Susan Brown (1976-1993, divorced)

Children: Georgina, 1983; Emma, 1979

Education: Johns Hopkins University, B.S. in electrical engineering, 1964; Harvard Business School, M.B.A., 1966

Religion: Jewish

One of four New York City mayors to serve three terms.

Left the Democratic party in 2001 and won his first two mayoral terms as a Republican. His third mayoral term was won as an independent, and then he rejoined the Democratic party in 2018.

Diana Taylor has been his companion for more than 20 years.

As mayor of New York, Bloomberg made sweeping changes to city schools, transportation, including extending subway lines, and public health, implementing extensive regulations targeting smoking and obesity.

Since 2006, Bloomberg Philanthropies, an umbrella organization of Bloomberg’s charities which includes the nonprofit Bloomberg Family Foundation, has donated billions to political interests and causes such as education, the environment and public health.

1966-1981 – Works as a clerk, and later partner at Salomon Brothers in New York.

1981 – Co-founds Bloomberg L.P. (formerly Innovative Market Systems) using a $10 million partnership buyout from Salomon Brothers.

1982 – Creates the Bloomberg terminal, a software system with a specialized keyboard used by financial professionals to trade stocks electronically and access live market data.

1990 – Co-founds Bloomberg News (formerly Bloomberg Business News).

1994 – Launches Bloomberg Television (formerly Bloomberg Information TV).

1996-2002 – Serves as chairman of the Johns Hopkins University’s board of trustees.

1997 – His memoir, “Bloomberg by Bloomberg,” is published.

November 6, 2001 – Is elected mayor of New York.

November 8, 2005 – Is elected to a second term.

November 3, 2009 – Is elected to a third term after spending more than $100 million on his reelection campaign. In October, the New York City Council voted to extend the city’s mayoral term limits from two four-year terms to three.

May 2012 – Announces a proposal to ban the sale of sugary drinks larger than 16 ounces at restaurants, food carts and any other establishments that receive letter grades for food service. On June 26, 2014, New York’s Court of Appeals rules that New York City’s ban on large sugary drinks, which was previously blocked by lower courts, is illegal.

July 27, 2016 – Endorses Hillary Clinton for president at the Democratic National Convention in Philadelphia.

November 24, 2019 - Announces his late-entry Democratic presidential bid, unveiling a campaign squarely aimed at defeating President Donald Trump.

November 24, 2019 – Bloomberg News Editor-in-Chief John Micklethwait releases a statement addressing how the network will cover the 2020 presidential campaign and reveals that it will not investigate Bloomberg or any other Democratic candidates.

February 10, 2020 – Audio is posted online of Bloomberg from 2015, defending his use of “stop and frisk” as mayor by describing the policy as a way to reduce violence by throwing minority kids “up against the walls and frisk[ing] them.” Bloomberg later says his 2015 comments about the controversial stop and frisk policing policy do not reflect the way he thinks or the way he led as mayor of New York City.

February 18, 2020 – Qualifies for his first Democratic presidential debate, by polling four times at or above 10% nationally.

February 18, 2020 – A campaign adviser tells CNN that Bloomberg would sell his financial information and media company if he’s elected president, in an effort to be “180 degrees away from where Donald Trump is on these issues.”

February 19, 2020 – Faces criticism in first presidential debate from other Democratic candidates regarding campaign spending, his record on policing tactics as mayor of New York and misogynistic comments he allegedly made about women at his company in the 1980s and 1990s.

March 4, 2020 – Ends his presidential campaign and endorses Joe Biden.

September 3, 2020 – Bloomberg’s charity, Bloomberg Philanthropies, announces he is donating $100 million to the nation’s four historically Black medical schools to help ease the student debt burden for the next generation of Black physicians.

September 25, 2020 – Bloomberg announces $40 million in TV ads supporting Biden statewide in Florida.

February 2, 2022 – Joseph Beecher is arrested, accused of breaking into the Colorado ranch owned by Bloomberg and kidnapping a Bloomberg employee. Beecher demanded to know the location of Bloomberg’s daughters, according to an arrest warrant affidavit. Beecher is awaiting a February 8 federal court hearing in Wyoming, where he was found with the employee, who was unhurt.

February 9, 2022 – Bloomberg is nominated to serve as the chair of the Defense Innovation Board.

CNN
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The updated Covid-19 boosters are cutting the risk that a person will get sick from the coronavirus by about half, even against infections caused by the rapidly spreading XBB.1.5 subvariant.

New studies, conducted by researchers at the US Centers for Disease Control and Prevention, are among the first looks at how the bivalent boosters have continued to work in the real world as the virus has evolved. The data shows that the boosters are continuing to offer substantial protection against currently circulating variants.

The near-real-time data was collected by the federally funded Increased Community Access To Testing program, which administers Covid-19 tests through pharmacies. It includes results for adults receiving tests at participating pharmacies from December 1 to January 13.

Of nearly 30,000 test results included in the analysis, more than 13,000 (47%), were positive for Covid-19.

More people who tested negative had gotten an updated bivalent booster compared with those who tested positive.

On average, people in the study who had not gotten a bivalent booster also had not had a dose of a Covid-19 vaccine in more than a year. That’s about the same as the national average, the study authors said. Their protection against illness was probably very minimal, they said.

The study results show that the updated boosters are most effective for younger adults.

For adults between the ages of 18 and 49, the boosters cut the odds of getting a symptomatic infection caused by the BA.5 subvariant by 52%, and it cut the odds of getting an infection caused by XBB or XBB.1.5 by 49%. For adults 50 to 64, the new boosters cut the odds of getting sick with Covid-19 by 43% for BA.5 and 40% for XBB subvariants. For those 65 and older, the boosters cut the odds of an infection with symptoms by 37% and 43% for the BA.5 and XBB subvariants, respectively.

Ruth Link-Gelles, a senior epidemiologist at the CDC and lead study author, said at a news briefing Wednesday that these vaccine effectiveness numbers are averages. Because everyone is unique in terms of their underlying health, their past exposure to the virus and other factors, these estimates of vaccine effectiveness may not apply on an individual level. She said it’s important to think of them on population level.

For people who are wondering whether the protection from the bivalent booster they got in September has worn off by now, it’s too early to know how waning would work with these new two-strain shots, Link-Gelles said.

So far, there’s little evidence of waning effectiveness two to three months after people got their shots.

“It’s too early, I think, to know how waning will happen with the bivalent vaccine. We know from the older vaccines that we do see protection decrease over time, especially against symptomatic infection. Just like with overall protection, what we’ve seen in the past is, your protection lasts longer for more severe illness,” Link-Gelles said.

Researchers don’t have data past three months, she said, but based on experience, she would expect protection against severe disease and death to be higher and last longer than these results against infections.

“We will continue to monitor it over time in the coming months,” she said.

The study authors said that these are just estimates of how well the vaccines are protecting people against an infection that brings on symptoms like cough or fever. They are probably working even better against more severe outcomes like hospitalization and death.

“What we know from past experience is generally that the vaccines protect better against more severe disease. So these are estimates for symptomatic infection and we would expect that similar estimates for hospitalization and death would be higher,” Link-Gelles said.

Asked how well the two-strain vaccines may be working compared with the older one-strain shots, Link-Gelles said it was impossible to know.

“We can’t in the US do a direct, head-to-head comparison of the monovalent and the bivalent vaccines because they were never authorized at the same time,” she said. Because protection wanes over time, you’d need to compare groups of people who got each kind of shot at the same time.

“What this tells us is that people that had the bivalent vaccine were better protected than people that were up to date previously, had all their monovalent doses and had not gotten the bivalent vaccine,” Link-Gelles said.

The CDC said it was able analyze the data and publish it so quickly thanks to the use of a shortcut. Rather than sequencing the genomes of each positive result, the researchers relied on a different marker to distinguish between variants.

The tests used in the study rely on a series of probes, or markers, to identify a positive case. Some variants of the virus that causes Covid-19 have mutations in their spike protein that causes one of the test markers to fail. This is called an S-gene target failure.

In the study, test results that showed an S-gene target failure were considered to be an infection caused by a BA.5 subvariant. Those that were S-gene target positive were considered to be caused by the XBB or XBB.1.5 sublineage.

As the study continued, XBB.1.5 became a bigger player in the variant mix.

“Later in the study period, most would be XBB.1.5,” said Heather Scobie, an epidemiologist at the CDC.

This gave the researchers confidence that the vaccine effectiveness results reflect how well the vaccines are working right now.