Authored by Joseph Lord via The Epoch Times (emphasis ours),
A bipartisan group of more than two dozen lawmakers in the House is demanding that Speaker of the House Nancy Pelosi (D-Calif.) allow a vote on a bill that would bar members of Congress from trading on the stock market, which critics say is inappropriate due to Congress’ inside knowledge on financial and political affairs.
The demand was made in a Jan. 24 letter spearheaded by Rep. Jared Golden (D-Maine). A total of 27 lawmakers signed Golden’s petition, including 25 Democrats and two Republicans.
In the letter’s opening line, the coalition demands that Pelosi “swiftly bring legislation to prohibit members of Congress from owning or trading stocks.” Two bills that would do just that, the “Ban Conflicted Trading Act” and the “TRUST In Congress Act,” have been sitting in congressional limbo.
The responsibility to bring them out of this limbo lies largely with Speaker Pelosi, but she has thus far made no effort to bring either bill to the floor for a vote.
Golden argued that such a ban would be a “common sense measure” that is “supported by Americans across the political spectrum.”
A recent poll vindicates this latter claim.
The poll, conducted by the conservative group Convention for States Action in conjunction with Trafalgar, found that more than three-fourths of Americans believe that lawmakers have an “unfair advantage” over others in the stock market.
Speaking on the poll results, Mark Meckler, president of Convention of States Action, said, “Congress has a history of passing laws that make it appear as if they are behaving ethically, while continuing to do things that are not honest nor ethical. This issue has received a lot of attention, and this data verifies the American people want this practice to end once and for all.”
This issue has a storied history in Congress.
In 2012, Congress passed the STOCK Act, a bill that required members of Congress to publicly disclose their financial transactions. However, a recent investigation by Insider found that a laundry list of lawmakers in both the House and Senate had violated the provisions of that law.
In view of this, the lawmakers write, “It’s clear the current rules are not working.”
In another recent example of potential insider trading, several members of Congress allegedly sold off stock ahead of the crash precipitated by the CCP (Chinese Communist Party) virus. These members had received nonpublic briefings on the developing virus, leading many to believe that their sudden stock sales were carried out on the basis of this knowledge.
“The law prohibits only those stock trades that members of Congress make or direct because of their nonpublic knowledge,” Golden explains in his letter.
“But it can be nearly impossible to determine what counts as ‘nonpublic knowledge’ or how personally involved members are in their stock trades.”
“Instead,” the lawmakers demand, “Congress should close these loopholes by simply banning members from owning or trading individual stocks while in office.”
“We came to Congress to serve our country, not turn a quick buck,” the lawmakers continue.
“While there are many difficult questions facing Congress, this is an easy one,” the letter concludes. “Members of Congress should not be allowed to own or trade individual stocks. Let’s get this done.”
The letter is a rare show of bipartisanship, including a very unlikely alliance of America First conservatives and left-wing progressives.
The Democrat roster includes prominent progressives like Reps. Rashida Tlaib (D-Mich.) and Pramilla Jayapal (D-Wash.), who have both been outspoken in favor of sweeping institutional reforms and pricey social spending bills.
The two Republican signatories are Rep. Matt Gaetz (R-Fla.), a Trump-adjacent Floridian who has fought against government measures that give an unfair advantage to major corporations or the ultra-wealthy, and Rep, Brian Fitzpatrick (R-Pa.), a longtime moderate who joined Democrats in passing the $1.2 trillion infrastructure bill in late 2021.
Speaking on the letter, Gaetz quipped that “Rashida Tlaib and I don’t often agree. But when we do,” he added, “America should totally go that direction.”
However, not all lawmakers feel the same way about a stock market ban.
Most prominently, Speaker Pelosi made it recently clear that she thinks lawmakers should have access to the market.
During a mid-December press conference, just after Insider released its report on violations of the 2012 STOCK Act among members of Congress from both parties, Pelosi was asked whether a stock ban for members of Congress would be appropriate.
“No,” Pelosi responded quickly. “We have a responsibility to report [our trades] … [and] if people aren’t reporting, they should be.”
Further pressed to explain her “no,” Pelosi argued, “Because we’re a free market economy. [Members of Congress] should be able to participate in that.”
Pelosi has had her own scandals in regards to trading by her husband Paul Pelosi.
In 2008, Paul Pelosi bought $2 million of stock in Visa at the same time that Congress was considering a bill that would have seriously undercut the debit and credit card giant’s profits. Though the bill had gained momentum, it inexplicably stalled and died in the House.
Because Pelosi was speaker at the time many, including NBC’s 60 Minutes in a 2011 episode, speculated that there was a connection between Pelosi’s trade and the bill’s sudden collapse.
More recently, Paul Pelosi made a bullish bet in favor of Google parent company Alphabet, just as a bill designed to undercut tech monopolies was gaining significant momentum in the House. While others pulled out over fears about the antimonopoly bill, Pelosi’s unlikely bet paid off, netting the Pelosis a cool $5 million.
In fact, Pelosi’s portfolio has seen such spectacular returns that would-be investors on the Chinese-owned social media platform TikTok began to follow Pelosi’s releases and emulate his trades.
Rep. Dan Crenshaw (R-Texas) has also defended stock trading by sitting members of Congress.
According to a report by Unusual Whales, Crenshaw received the fifth-highest returns of any member of Congress for his stock trading in fiscal year 2021. During an appearance on the All American Savage Show podcast, Crenshaw discussed the returns and his position on congressmen trading on the stock market.
The host asked Crenshaw whether he thought that sitting members of Congress should be allowed to go into the stock market.
“I think it would be fine if you banned individual stock trading,” Crenshaw said, before clarifying, “Notice I said ‘individual stocks.'”
The Texas Republican explained that while he would accept bans on buying and selling individual stocks, he thinks that congressmen should still be allowed to invest in ETFs and similar stock collections.
“I’m kinda neutral on it,” Crenshaw continued. But if such a ban were put in place, Crenshaw claimed, “no one would run for Congress because you have no way to better yourself.”
Ultimately, the decision to bring a stock trading ban to the floor lies with Speaker Pelosi.
Still, the bipartisan support for Golden’s Monday letter indicates that members on both sides of the aisle remain committed to moving the agenda forward.
If brought to the floor, either of the two bills proposed to address the situation would represent the most substantial stock market reforms for a decade.
However, the coalition behind the reforms remains small, and more support in both the House and Senate, plus Pelosi’s acquiescence to bring either bill to the floor, will be needed for the reform to have a shot at making it to President Joe Biden’s desk.
Ecommerce Stocks Could be Recession Proof as Household Spending Holds Up (AMZN, FBCD, SHOP, EBAY, BABA, PYPL, CVNA, ONLN)
The ecommerce space is a prime example of a new path toward recession-proof non-cyclicality in a world where household savings are robust into the teeth…
The ecommerce space is a prime example of a new path toward recession-proof non-cyclicality in a world where household savings are robust into the teeth of a potential recession. (1)
At this point, Goldman Sachs and other major Wall Street firms are starting to project a strengthening likelihood of a near-term recession as the Fed begins to tighten monetary policy while prices for basic goods, including gas and electricity, are rising. (2)
But, unlike other past recessionary periods, households have savings to tap to stay in the game, helping the most efficient retailers stand their ground as demand shifts. (3)
The ecommerce space could be a beneficiary because it offers greater efficiency in acquiring basic goods such as clothing, household durable goods, and basic daily necessities. When you shop online, you don’t have to use gasoline or time or energy to gain access to the goods you need. Ecommerce cuts out the middle-man. (4)
The pandemic was an exercise in market penetration for ecommerce retailers, converting the previously unconverted, providing everyone with a reason to try 21st century shopping, bringing hundreds of millions of people into the fold of a new way to acquire goods. (5)
For retailers already positioned for this boon, it represents a structural transformation and a tailwind. With that in mind, we take a look at some of the most interesting growth stories in the ecommerce space below.
Shopify Inc. (NYSE:SHOP) operates a cloud-based commerce platform designed for small and medium-sized businesses. Its software is used by merchants to run business across all sales channels, including web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops.
The firm’s platform provides merchants with a single view of business and customers and enables them to manage products and inventory, process orders and payments, build customer relationships and leverage analytics and reporting. It focuses on merchant and subscription solutions.
Shopify Inc. (NYSE:SHOP) recently announced financial results for the quarter ended March 31, 2022, including total revenue in the first quarter grew 22% to $1.2 billion, which represents a two-year compound annual growth rate of 60%. The first quarter of 2021 marked the highest revenue growth in the company’s history as a public company driven by stimulus and COVID-19 lockdowns. Shopify merchants are emerging from the last two years stronger and better prepared for commerce everywhere. (6)
“While we’ve experienced massive macro shifts since the start of the pandemic, the one mainstay has been that Shopify is the commerce platform of choice for merchants in any environment, with the ability to support commerce on any surface,” said Harley Finkelstein, Shopify’s President. “This has earned Shopify significant merchant trust and the ability to help them with more parts of their business, which is why we are eager to bring Deliverr’s team and technology to our merchants.”
Even in light of this news, SHOP has had a rough past week of trading action, with shares sinking something like -8% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way.
Shopify Inc. (NYSE:SHOP) managed to rope in revenues totaling $1.2B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 21.7%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($7.2B against $681.9M).
FBC Holding Inc. (OTC US:FBCD) is a tiny newcomer in the ecommerce retail fashion space that has started to make some waves, up 150% in the past few days as the company lays its foundation as a brand in the street fashion domain after announcing its intention to land a major influencer brand ambassador and connecting up with Amazon and eBay on the distribution side.
The company’s primary brand is “Formrunner” (https://formrunnerapparel.com/) (7).
FBC Holding Inc. (OTC US:FBCD) announced this week that it has begun selling its Premium High-End Apparel by expanding its E-Commerce presence on eBay.com. The company is thrilled to add sales from eBay as an additional revenue opportunity following its successful launch on Amazon last week.
President & CEO Lisa Nelson states “We are beyond excited to offer our Apparel on eBay! Our clothing will be available with eBay’s “Buy it Now” option and will kick off the launch with free shipping to the entire United States. Customers around the world will now have an additional platform to purchase our clothing with more to come moving forward.” Lisa Nelson also stated, “Over the past two years, Formrunner Apparel Inc. has been continuously expanding the company’s vertical sales channels, and eBay along with Amazon, are two great retail giants that will assist with expansion throughout the United States along with the rest of the world!” (8)
As noted in the release, with 185 million active buyers and nineteen million sellers worldwide, eBay is one of the world’s leading marketplace and eCommerce platforms. eBay serves customers globally. Like every popular site, there are tons of loyal customers who prefer to purchase on eBay. Customers may prefer to purchase from merchants like these than a site that they land on the first time. eBay also offers affiliate programs through multiple affiliate marketers will take your product link and promote your products to receive the affiliate commission. This will help to increase your sales. So, in addition to running your affiliate program, you can also benefit from the eBay affiliates.
The release goes on to note that the apparel market encompasses every kind of clothing, from sportswear to business wear, from value clothing to statement luxury pieces. After difficulties in 2020 during the coronavirus pandemic, when sales across the apparel industry took a hit, the global demand for clothing and shoes is set to rise again. The revenue of the global apparel market was calculated to amount to 1.5 trillion U.S. dollars in 2021 and was predicted to increase to approximately two trillion dollars by 2026. The countries that account for most of this apparel demand are the United States and China, both generating higher revenues than any other country.
FBC Holding Inc. (OTC US:FBCD) has been powering higher over recent days as the crowd starts to take notice. The recent upside momentum comes after a deep bear move well into sub-penny status driven by the company’s reorganization and pivot. But now that we have passed through that phase, shares may have found a more stable bottom in front of emerging catalysts that speak to the company’s new identity and momentum.
Alibaba Group Holding Ltd. ADR (NYSE:BABA) engages in providing online and mobile marketplaces in retail and wholesale trade. It operates through its Core Commerce, Cloud Computing, Digital Media & Entertainment, and Innovation Initiatives and Others segments.
The Core Commerce segment consists of platforms operating in retail and wholesale. The Cloud Computing segment consists of Alibaba Cloud, which offers a complete suite of cloud services, including elastic computing, database, storage, network virtualization, large scale computing, security, management and application, big data analytics, a machine learning platform, and Internet of Things (IoT) services. The Digital Media & Entertainment segment relates to the Youko Tudou and UC Browser businesses. The Innovation Initiatives and Others segment includes businesses such as AutoNavi, DingTalk, and Tmall Genie
Alibaba Group Holding Ltd. ADR (NYSE:BABA) recently announced that it has joined Low Carbon Patent Pledge (LCPP), an international platform that encourages sharing patents for low carbon technologies, to accelerate adoption of green technology and foster collaborative innovation by making nine key patents for green data center technology available for free to external parties. In keeping with its support for green initiatives, Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group also aims to have its global data centers running entirely on clean energy by 2030, starting with upgrades to five of its hyper-scale data centers in China.
“We believe technology innovation is a key driver in transitioning to the low-carbon circular economy of the future. As a pioneer and global technology leader, we are committed to taking broader social responsibility to use technology to level the playing field and to empower the wider social groups, creating long-term value. We are excited to join the pledge as a way to encourage a collective approach to build a sustainable and inclusive future for the society and environment through open collaboration, joint innovations and mutual inspiration.” said Dr. Chen Long, Vice President of Alibaba Group and Chair of Alibaba’s Sustainability Steering Committee. (9)
Traders will note -6% plucked from share pricing for the stock in the past week. That said, BABA has evidenced sudden upward volatility on many prior occasions. What’s more, the name has seen a growing influx of trading interest.
Alibaba Group Holding Ltd. ADR (NYSE:BABA) has a significant war chest ($654.4B) of cash on the books, which compares with about $502.2B in total current liabilities. One should also note that debt has been growing over recent quarters. BABA is pulling in trailing 12-month revenues of $1008.6B. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 14.3%.
Other key ecommerce players include Amazon.com Inc. (Nasdaq:AMZN), eBay Inc. (Nasdaq:EBAY), PayPal Holdings Inc. (Nasdaq:PYPL), Carvana Co. (NYSE:CVNA), and ProShares Online Retail ETF (NYSEArca:ONLN).
Please make sure to read and completely understand our disclaimer at https://www.wallstreetpr.com/disclaimer. While reading this article one must assume that we may be compensated for posting this content on our website.recession pandemic coronavirus covid-19 stimulus nasdaq stocks monetary policy fed link etf otc recession stimulus ukraine china
What Do Consumers Think Will Happen to Inflation?
This post provides an update on two earlier blog posts (here and here) in which we discuss how consumers’ views about future inflation have evolved in…
This post provides an update on two earlier blog posts (here and here) in which we discuss how consumers’ views about future inflation have evolved in a continually changing economic environment. Using data from the New York Fed’s Survey of Consumer Expectations (SCE), we show that while short-term inflation expectations have continued to trend upward, medium-term inflation expectations appear to have reached a plateau over the past few months, and longer-term inflation expectations have remained remarkably stable. Not surprisingly given recent movements in consumer prices, we find that most respondents agree that inflation will remain high over the next year. In contrast, and somewhat surprisingly, there is a divergence in consumers’ medium-term inflation expectations, in the sense that we observe a simultaneous increase in both the share of respondents who expect high inflation and the share of respondents who expect low inflation (and even deflation) three years from now. Finally, we show that individual consumers have become more uncertain about what inflation will be in the near future. However, in contrast to the pre-pandemic period, they tend to express less uncertainty about inflation further in the future.
The SCE is a monthly, internet-based survey produced by the Federal Reserve Bank of New York since June 2013. It is a twelve-month rotating panel (respondents are asked to take the survey for twelve consecutive months) of roughly 1,300 nationally representative U.S. household heads. Since the inception of the SCE, we have been eliciting consumers’ inflation expectations at the short- and medium-term horizons on a monthly basis. The short-term horizon corresponds to the year-ahead (with the survey question phrased as “over the next 12 months”), while the medium-term horizon corresponds to the three-year-ahead one-year rate of inflation (“0ver the 12-month period between M+24 and M+36,” where M is the month in which the respondent takes the survey). So, for instance, a respondent taking the survey in April 2022 is asked about inflation “over the 12-month period between April 2024 and April 2025.” Recently, we have on occasion elicited longer-term inflation expectations, by asking respondents to report their expected five-year-ahead one-year rate of inflation (“over the 12-month period between M+48 and M+60”). For each horizon, SCE respondents are asked to report their density forecasts by stating the percent chance that the rate of inflation will fall within pre-specified bins. These density forecasts are used to calculate the two measures that we focus on in this blog: the individual inflation expectation (the mean of a respondent’s density forecast), and the individual inflation uncertainty (measured as the interquartile range of a respondent’s density forecast).
The Median Consumer Expects Inflation to Fade over the Next Few Years
SCE respondents think the current high inflation environment will not fade over the next twelve months, but that it will taper off in the next three years and not persist beyond that. The chart below shows the monthly median individual inflation expectation at each horizon since January 2020. As can be seen here, inflation expectations in January 2020 were similar to the average readings during 2018-19 and are therefore representative of the period directly before the COVID-19 pandemic. Short- and medium-term inflation expectations increased slightly and at a similar pace during the first year of the COVID-19 pandemic. In the spring of 2021, as readings of actual inflation started to surge, short-term and, to a lesser extent, medium-term inflation expectations started to increase at a faster rate, reaching levels not seen previously in the nearly ten years since the inception of the SCE. Note that, unlike one-year-ahead inflation expectations which are still on an increasing trajectory, three-year-ahead inflation expectations have leveled off in recent months and even started decreasing slightly after reaching a peak of 4.2 percent in September and October 2021. Looking now at the few data points we have for the longer horizon, five-year-ahead inflation expectations have been remarkably stable in recent months and substantially lower than short- and medium-term inflation expectations.
Inflation Expectations at the Longer Horizon Are Stable and Much Lower
Consumers’ Medium-Term Inflation Expectations Have Become More Divergent
At the onset of the COVID-19 pandemic, respondents disagreed about what impact the pandemic would have on short-term inflation, but most of them now believe inflation will be high over the next year. The chart below shows the distribution of individual inflation expectations across respondents in a given month. The left panel shows the share of respondents with low inflation expectations in a given month (that is, with an individual inflation expectation below 0 percent, which corresponds to deflation). The right panel shows the share of respondents with high inflation expectations (that is, with an individual inflation expectation above 4 percent). Starting with the short-term horizon, the chart shows that at the onset of the COVID-19 pandemic in the spring of 2020, there was a sharp increase in the share of respondents who expected deflation (left panel) and, simultaneously, an increase in the share of respondents who expected high inflation (right panel). Hence, consumers’ short-term inflation expectations became more divergent at the onset of the pandemic, with some consumers expecting COVID-19 to be an inflationary supply shock over the subsequent twelve months, and other consumers expecting COVID-19 to be a large deflationary demand shock. Starting in the second half of 2020, the share of respondents with low short-term expectations declined, while the share of the respondents with high short-term expectations continued to increase, consistent with the overall increase in short-term inflation expectations discussed in the previous paragraph.
The divergence in inflation beliefs we observed for short-term expectations at the onset of the pandemic has shifted to medium-term expectations during the past eight months. The chart below shows little change in the share of respondents with extreme (high or low) medium-term inflation beliefs at the onset of the pandemic. This suggests that consumers initially thought the pandemic would not have a strong persistent effect on inflation. After the fall of 2020, the share of respondents who expect high inflation in the medium-term started to increase steadily (see right panel). However, the rate of increase over the past year was slower than at the short-term horizon. Furthermore, after reaching a plateau last fall, the share of respondents who expect high inflation has declined slightly in the past few months. Perhaps more surprisingly, the left panel of the chart below shows that the share of respondents who expect deflation in the medium-term started to increase sharply in the fall of last year, moving from about 10 percent in August 2020 to nearly 20 percent in March and April 2022.
Although we caution against drawing strong conclusions from only a few data points, it seems that the distribution of longer-term inflation expectations has shifted to the left (toward lower inflation outcomes) in recent months. The chart below indicates that the recent increase in the share of respondents with low inflation expectations is similar at the medium- and longer-term horizons. In contrast, the share of respondents who expect high inflation five years from now is substantially lower than at the short- and medium-term horizons and it has remained mostly stable over the past eight months.
The Distribution of Longer-Term Inflation Expectations Has Shifted toward Lower Inflation Outcomes
Individual Consumers Have Become More Uncertain about Future Inflation
Finally, we find that consumers have become more uncertain about future inflation, especially at shorter horizons. The final chart shows the median of individual inflation uncertainty across respondents in a given month. As can be seen in this staff study, inflation uncertainty exhibited two main patterns prior to the pandemic. First, inflation uncertainty at both the short- and medium-term horizons had been declining slowly and steadily since the start of the SCE in 2013. Second, SCE respondents almost always expressed more uncertainty for three-year-ahead inflation than for one-year-ahead inflation, perhaps reflecting the fact that predicting inflation further into the future tends to be more difficult. The chart below shows a complete reversal of these two trends after the World Health Organization declared COVID-19 to be a pandemic in March 2020: inflation uncertainty at both horizons has since increased steadily to record levels, and short-term inflation uncertainty has generally been higher than medium-term inflation uncertainty. The few observations we have for longer-term inflation uncertainty seem to confirm these trends. Indeed, five-year-ahead inflation uncertainty has increased over the past eight months, but has remained substantially lower than at the one- and three-year horizons.
Inflation Uncertainty Is Lower at a Longer-Term Horizon
To conclude, the results presented in this blog post provide fresh evidence that consumers still do not expect the current spell of high inflation to persist long into the future. While median one-year-ahead inflation expectations have continued to rise over the past six months, three-year-ahead expectations have declined slightly, and five-year-ahead inflation expectations have remained remarkably stable and at a level well below recent inflation readings. However, there is now a divergence in consumers’ medium-term inflation expectations: a larger share of consumers expects high inflation three years from now, while simultaneously a growing share of consumers expects low inflation and even deflation. Finally, we have shown that consumers have become increasingly uncertain about future inflation, especially at shorter horizons. We are now conducting new research aimed at better understanding the factors driving these changes in consumer beliefs.
Olivier Armantier is head of Consumer Behavior Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.
Fatima Boumahdi is a senior research analyst in the Bank’s Research and Statistics Group.
Gizem Kosar is a research economist in Consumer Behavior Studies in the Bank’s Research and Statistics Group.
Jason Somerville is a research economist in Consumer Behavior Studies in the Bank’s Research and Statistics Group.
Giorgio Topa is an economic research advisor in Labor and Product Market Studies in the Bank’s Research and Statistics Group
Wilbert van der Klaauw is an economic research advisor on Household and Public Policy in the Bank’s Research and Statistics Group.
John C. Williams is the president and chief executive officer of the Bank.
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.
US Allows 2 Million Baby Formula Cans In From UK, Lets Abbott Release 300,000 Specialty Cans
US Allows 2 Million Baby Formula Cans In From UK, Lets Abbott Release 300,000 Specialty Cans
Authored by Mimi Nguyen Ly via The Epoch Times…
Authored by Mimi Nguyen Ly via The Epoch Times (emphasis ours),
The U.S. Food and Drug Administration (FDA) announced on Tuesday it will allow about 2 million cans of baby formula from the United Kingdom into the country, and allow Abbott Laboratories to release about 300,000 cans of specialty formula, to help ease the ongoing nationwide shortage.
“We continue to do everything in our power as part of the all-of-government efforts to ensure there’s adequate infant formula available wherever and whenever parents and caregivers need it,” FDA Commissioner Robert Califf said in a statement. “Our recent steps will help further bolster supply of infant formula, including through the import of safe and nutritious products from overseas based on our increased flexibilities announced last week.
“Importantly, we anticipate additional infant formula products may be safely and quickly imported into the U.S. in the near-term based on ongoing discussions with manufacturers and suppliers worldwide.”
The FDA announced it is “exercising enforcement discretion” to allow the importation of the 2 million cans from UK-based company Kendal Nutricare. The cans, which are under the company’s Kendamil brand, have no safety or nutrition concerns after an evaluation, and are expected to land on U.S. store shelves starting in June, the FDA said.
Kendal Nutricare currently has over 40,000 cans in stock for immediate dispatch, the agency said, adding that the U.S. Department of Health and Human Services is discussing options to get those cans into the country as soon as possible.
The FDA also announced it is letting Abbott release some 300,000 cans of its EleCare amino acid-based formula for babies and infants who urgently need it to survive, on a case-by-case basis.
The cans of specialty formula were previously produced at Abbott’s facility in Sturgis, Michigan, where other baby formula products that were recalled by Abbott on Feb. 17 were produced.
“These products will undergo enhanced microbiological testing before release. Although some EleCare product was included in Abbott Nutrition’s infant formula recall, these EleCare products that will be released were in different lots, have never been released and have been maintained in storage under control by Abbott Nutrition,” the FDA noted.
“Given the critical need of this product for some individuals, the FDA encourages parents and caregivers to consult with their health care providers to weigh the potential risk of bacterial infection with this product,” it added. “Parents and caregivers seeking access to these products should contact Abbott directly to request that a product be made available to them by calling 1-800-881-0876.”
The ongoing baby formula shortage in the United States was recently exacerbated after Abbott Laboratories, the biggest U.S. supplier of powder baby formula, in February recalled some products, including those under the brand Similac, and temporarily shuttered its manufacturing facility in Sturgis, Michigan, which was producing up to one-quarter of the country’s baby formula.
The recall came after reports of bacterial infections among four infants, two of whom died. The FDA, which launched an investigation into the matter following consumer complaints, cannot conclude whether the cases of infants that fell sick were directly related to the Abbott facility until its investigation is concluded, Califf previously said.
Production at the Sturgis facility is set to restart on June 4, Abbott said in a statement. The company said it would prioritize making EleCare and supplying it on or about June 20. It also the formula would be provided to children in need for free.
Prior to the Abbott recall, the baby formula shortage among multiple manufacturers was brought on by supply chain pressures linked to COVID-19 pandemic lockdowns.
Also on Tuesday, the Federal Trade Commission launched an inquiry into the ongoing shortage of baby formula in the country, calling for public input on the matter.
The Biden administration has sought to relieve the shortage by importing emergency supplies from Europe via Defense Department-contracted commercial aircraft under “Operation Fly Formula.” The first lots of formula arrived in Indianapolis, Indiana, from Germany on Sunday.
President Joe Biden has also invoked the Cold War-era Defense Production Act to help manufacturers obtain ingredients to produce more formula.
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