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Fed seen holding rates at zero for five-years plus in new policy – BNN

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The Federal Reserve looks likely to keep short-term interest rates near zero for five years or possibly more after it adopts a new strategy for carrying out monetary policy.

The new approach, which could be unveiled as soon as next month, is likely to result in policy makers taking a more relaxed view toward inflation, even to the point of welcoming a modest, temporary rise above their two per cent target to make up for past shortfalls.

Fed Chairman Jerome Powell is slated to provide an update on the Fed’s 1-1/2-year-old framework review of its policies and practices when he speaks on Thursday to the central bank’s Jackson Hole conference, being held virtually this year because of the coronavirus pandemic.

“I wouldn’t be surprised if interest rates are still zero five years from now,” said Jason Furman, a former chief White House economist and now Harvard University professor.

That would be good news for some investors. Thanks in no small part to the Fed’s ultra-accommodative monetary policy, the S&P 500 stock-market index is trading at a record high even though the U.S. economy has yet to recover much of the ground it lost in the deepest downturn since the Great Depression as the pandemic took hold.

FOMC Forecasts

At their June meeting, all 17 Fed policy makers projected that the federal funds rate they target would remain near zero this year and next. And all but two saw rates staying at that level in 2022. Officials will provide updated quarterly forecasts at their meeting next month, including for the first time projections for 2023.

“We’re not even thinking about thinking about raising rates,” Powell told reporters following the June meeting, in a memorable maxim that he’s repeated since.

Eurodollar futures aren’t currently pricing any premium for Fed rate hikes until early 2023, with a full quarter-point increase priced in toward the end of 2023. Some traders, though, have viewed this as slightly too dovish, with demand emerging for hedges against a steeper path than is currently priced in for 2023 and 2024. Some see ultra-easy monetary policy eventually spurring inflation.

Lower for Longer

The Fed held rates near zero for seven years during and after the financial crisis before raising them in December 2015. Former Fed Vice Chairman Alan Blinder doubts it will be that long this time, though he adds that he would have said the same thing when the Fed first cut rates effectively to zero in December 2008.

“It’s perfectly conceivable it could take seven years” before rates are increased, given how difficult it’s been for the Fed to generate faster inflation, said former U.S. central bank official Roberto Perli, who is now a partner at Cornerstone Macro LLC.

In the last decade, it took more than three years for inflation-adjusted gross domestic product to rise back to the level that prevailed before the 2007-09 financial crisis. The recovery is expected to be faster this time: Deutsche Bank global head of economic research Peter Hooper sees GDP attaining its first-quarter level in the first half of 2022, though much will depend on the development and dissemination of a vaccine.

Framework Review

But staying the Fed’s hand will be a change in how it reacts to developments in the economy as a result of the framework review.

When it raised interest rates in December 2015, core inflation was clocked at 1.5% — it’s since been revised lower — while unemployment stood at five per cent.

Economists said it’s hard to see the Fed increasing rates under similar conditions now.

The Fed first pronounced a 2 per cent target for inflation in 2012, and officials took that to mean they would always shoot for 2 per cent, no matter how much or for how long they missed. Bygones, they said, would be bygones. The trouble was that inflation has consistently run below their objective since then.

Under the new regime, the Fed is expected to seek an inflation rate that roughly averages 2 per cent over time. So a modest rise in inflation above target would be welcomed, not feared, after an extended period where it undershot.

The Fed is also expected to codify a change in its approach toward achieving full employment. In the past, officials shied away from pushing joblessness below what was considered its long-run natural rate out of concern that would lead to too rapid inflation.

Labour Market

Now, the emphasis is on the benefits of a strong labor market for the economy and society. “They’re not going to act to cool off the labor market unless it’s generating unwanted inflation,” said Nomura Chief U.S. Economist Lewis Alexander. “That’s essentially walking away from the concept that there is a natural rate that it is irresponsible to push beyond.”

Powell has said he’d like to see the jobs market return to its pre-COVID-19 state, when unemployment stood at a half-century low of 3.5 per cent. It’s now 10.2 per cent

Blinder said it will take years to do that. “I hope it won’t be decades,” the Princeton University professor added.

The bottom line for policy: a prolonged period of rock-bottom interest rates.

“I’d be very surprised if it’s less than three years,” said David Wilcox, a former Fed official now with the Peterson Institute for International Economics. “I could see it being as much as six or seven years if the damage from the crisis proves to be much more long lasting.”

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13 Ottawa pharmacies to begin offering COVID-19 tests Friday – CBC.ca

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Thirteen Ottawa pharmacies will begin offering free COVID-19 tests Friday to people who have no symptoms of the viral illness, the province says.

Last week, Premier Doug Ford announced the province would be allowing pharmacists to perform the tests in order to alleviate some of the pressures facing Ontario’s existing COVID-19 assessment centres.

Long lineups have been a major problem recently at Ottawa’s test sites, with stories of people waiting more than four hours for a throat or nose swab.

As of Sept. 25, the following pharmacies in Ottawa will be offering tests:

  • Cedarview Pharmacy, 12-4100 Strandherd Dr.
  • Medicine Shoppe, 19-5303 Canotek Rd.
  • Rexall, 1615 Orléans Blvd.
  • Shoppers Drug Mart, 1-2148 Carling Ave.
  • Shoppers Drug Mart, 1309 Carling Ave.
  • Shoppers Drug Mart, 1102 Klondike Rd.
  • Shoppers Drug Mart, 1937 Portobello Blvd.
  • Shoppers Drug Mart, 2954 St. Joseph Blvd.
  • Shoppers Drug Mart, 3940 Innes Rd.
  • Shoppers Drug Mart, 541 Montreal Rd.
  • Shoppers Drug Mart, 455 Bank St.
  • Shoppers Drug Mart, 647 Earl Armstrong Rd.
  • Shoppers Drug Mart, 1180 Walkley Rd.

Friday ambitious for some pharmacies 

The Ontario Pharmacists Association warned not all the pharmacies identified for testing in Ontario will be prepared to start Friday.  

“It may not be [that] all stores [are] ready to go immediately as stores adjust to the necessary precautions and changes they might need to make to their workflow,” said board of directors chair Jen Baker on Wednesday. 

Those precautions include proper cleaning, directional signs, making a separate space for the test and ensuring the right personal protective equipment is in place. Stores will also have to perform a pre-screening process to make sure only asymptomatic people are being tested.

“There will be funding associated with performing the COVID-19 testing in the pharmacies, so that could be used to hire additional staff…should they find that they need to, in order to accommodate the demand in the community.” 

Baker said pharmacies are also busy trying to figure out how to implement COVID-19 testing and the flu shot program at the same time. She said many pharmacies are opting to do appointments for flu shots too and looking at other management programs such as allocating certain times of day for each service.  

Anyone seeking a COVID-19 test must first make an appointment. More locations will be announced in the coming weeks, the province said Wednesday.

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Johnson & Johnson’s single-dose COVID-19 vaccine candidate begins phase 3 trial – Global News

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Johnson & Johnson is beginning a huge final study to try to prove if a single-dose COVID-19 vaccine can protect against the virus.

The study starting Wednesday will be one of the world’s largest coronavirus vaccine studies so far, testing the shot in 60,000 volunteers in the U.S., South Africa, Argentina, Brazil, Chile, Colombia, Mexico and Peru.

A handful of other vaccines in the U.S. — including shots made by Moderna Inc. and Pfizer Inc. — and others in other countries are already in final-stage testing. Hopes are high that answers about at least one candidate being tested in the U.S. could come by year’s end, maybe sooner.

U.S. health officials insist the race for a vaccine isn’t cutting corners.

Read more:
9 drugmaker executives testing coronavirus vaccines pledge safety, high standards

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“We want to do everything we can without sacrificing safety or efficacy — we’re not going to do that — to make sure that we end up with vaccines that are going to save lives,” Dr. Francis Collins, director of the National Institutes of Health, told reporters.

But many vaccine specialists question whether the Food and Drug Administration will stick to that goal under intense pressure from the Trump administration. President Donald Trump has consistently presented a faster timeline for a new vaccine than experts say is adequate to fully test the candidates.

Meanwhile, testing of still another experimental vaccine, made by AstraZeneca, remains on hold in the U.S. as officials examine a safety question, even though studies have resumed in other countries.

Earlier this week, Vice-President Mike Pence urged state governors to “do your part to build public confidence that it will be a safe and effective vaccine.”






5:37
Coronavirus: Trump says his administration expects vaccines for every American by April


Coronavirus: Trump says his administration expects vaccines for every American by April

And Dr. Anthony Fauci, the top U.S. infectious disease expert, added in the call to governors that he is confident in “a tried and true process” that has checks and balances built in, including an independent board evaluating the progress of each vaccine trial, as well as “the integrity of the FDA.”

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A recording of the call was provided to The Associated Press.

Senators were scheduled to question FDA Commissioner Stephen Hahn, Fauci and other administration officials later Wednesday about the pandemic response.

Even if the FDA were to allow emergency use of a vaccine by year’s end, supplies would be limited and given first to vulnerable groups such as health workers. Most Americans aren’t likely to receive a vaccine until sometime next year.

Read more:
Canada to join global coronavirus vaccine procurement program

The Centers for Disease Control and Prevention wants states to get ready now to roll out vaccinations, which will present enormous logistical challenges. On Wednesday the CDC was set to announce distribution of $200 million in congressionally approved funds to help begin setting up operations.

Health and Human Services Secretary Alex Azar said the COVID-19 vaccine campaign will build on longstanding co-operation between the federal government and the states on immunizations.

J&J’s vaccine is made with slightly different technology than others in late-stage testing, modeled on an Ebola vaccine the company created. Unlike the other three vaccines that started late-stage testing in the U.S., it requires only one shot, not two. Despite a later start to testing than some of its competitors, Dr. Paul Stoffels, J&J’s chief scientific officer, told reporters that the study was large enough to yield answers possibly by early next year.

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Associated Press writers Lauran Neergaard and Ricardo Alonso-Zaldivar contributed to this report.

© 2020 The Canadian Press

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Johnson & Johnson begins giant trial testing one-dose COVID shot – BNN

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Johnson & Johnson has begun dosing up to 60,000 volunteers in a study of its COVID-19 vaccine, marking the first big U.S. trial of an inoculation that may work after just one shot.

J&J became the fourth vaccine maker to move its candidate into late-stage human studies in the U.S. If enrollment goes as expected, the trial could yield results as soon as year-end, allowing the company to seek emergency authorization early next year, should it prove effective, according to Chief Scientific Officer Paul Stoffels.

“A single dose could be a very efficient tool to combat the pandemic as it is faster acting,” he said Wednesday in an interview. Animal models and early human studies showed that one shot of its vaccine generated a strong immune response in just 15 days, he said.

The final-stage study will pit the vaccine against a placebo injection, with a goal of showing whether it reduces cases of moderate to severe COVID-19, “the most important part of the disease to prevent,” Stoffels said. J&J is also looking at whether the shot curbs the virus’s spread.

The company’s shares rose as much as 2.3 per cent in New York.

The New Brunswick, New Jersey-based company published detailed trial plans on Wednesday. Frontrunners Pfizer Inc., Moderna Inc. and AstraZeneca Plc have already done the same in a broader transparency push.

“It is likely that multiple COVID-19 vaccine regimens will be required to meet the global need,” said Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, in a statement. J&J’s vaccine “may be especially useful in controlling the pandemic if shown to be protective after a single dose.”

The study is nearly two months behind those of Moderna, working with NIAID, and Pfizer, partnered with BioNTech SE, whose final-stage trials started in late July. Pfizer has said it could get efficacy results by the end of October. Those vaccines use two-dose regimens.

J&J’s vaccine could offer an advantage in distribution over those inoculations, which require vaccination sites to ensure recipients return for their second dose. The company also said its vaccine can be stored at refrigerator temperatures for three months, far longer than the Pfizer vaccine that requires deep freezing for long-term storage.

“In countries where there is less health-care infrastructure, it can be much better used at a very large scale,” Stoffels told Bloomberg. “Single dose, easy to use in the field are the main characteristics that make it different.”

Years in the Making

The J&J product is made from a cold virus, called an adenovirus, that’s modified to make copies of the coronavirus’s spike protein, which the pathogen uses to enter cells. The altered virus can’t replicate in humans, but it induces an immune response that prepares the body for an actual COVID-19 infection. The vaccine was developed with researchers at Harvard University who have spent years working on the adenovirus vaccine platform, which is also used in J&J’s Ebola vaccine.

The health-care behemoth is running the study in conjunction with NIAID and the Biomedical Advanced Research and Development Authority at sites in the U.S., Brazil, Mexico, South Africa and other countries. It will include significant representation among those over the age of 60, as well as minorities at disproportionate risk of becoming infected, including Black, Hispanic, American Indian and Alaskan Native peoples, according to a statement.

J&J has also agreed to collaborate with the U.K. on a separate phase 3 clinical trial that will test a two-dose regimen of the vaccine in multiple countries, with two months between each dose, according to Stoffels. That booster could be critical to providing long-term protection, he said.

Trial Protocol

The decision to begin the final-stage trial was based on data from an earlier human study that showed a single shot was safe and stimulated a strong immune response, Stoffels said.

Like other final-stage vaccine trials, J&J’s study is monitored by an independent board of doctors and statisticians who wait for a certain number of coronavirus cases to accumulate before looking at the data.

The trial aims to accumulate 154 cases for a final analysis. If the vaccine turns out to be more than 90% effective, the study could produce results after just 20 cases, Stoffels said. He said that scenario is unlikely, though.

J&J’s trial appears to have stringent criteria for declaring early success that prevent a readout based on very short-term results in patients with relatively moderate symptoms. Based on discussions with U.S. regulators, the data won’t undergo its first analysis until at least half of participants have been vaccinated for two months or more.

The study will also have to accrue at least 5 severe cases for an early readout. And to be considered a success, the absolute number of severe cases needs to be half of that in the placebo group, along with other benchmarks, according to documents posted on J&J’s website.

Still, the study will take less time to complete than it would with two doses. Scientists will start counting cases just 15 days after patients get their inoculations or placebo shots.

Despite accelerated timelines, Operation Warp Speed won’t cut corners in confirming vaccine safety or efficacy, National Institutes of Health director Francis Collins said on the Tuesday media call. “That absolutely will not be allowed to happen,” he said.

Stoffels said J&J will continue to clinch new manufacturing partnerships to meet its 1 billion dose production goal for 2021. The company has already kick-started at-risk manufacturing in hopes the shot will prove successful in the clinic.

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