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Federal Reserve raises its key rate for 11th time by a quarter-point in its drive to slow inflation
WASHINGTON (AP) — The Federal Reserve raised its key interest rate for the 11th time in 17 months, a streak of hikes that are intended to curb inflation but that also carry the risk of going too far and triggering a recession. The move lifted the Fed’s benchmark short-term rate from roughly 5.1% to 5.3% — its highest level since 2001. Coming on top of its previous rate hikes, the Fed’s latest move could lead to further increases in the costs of mortgages, auto loans and credit cards. Though inflation has eased, Wednesday’s hike reflects the concern of Fed officials that the economy is still growing too fast for inflation to fall back to their 2% target.
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Facebook users have one month to apply for share of $725M settlement
U.S. Facebook users have one more month to apply for their share of a $725 million privacy settlement that parent company Meta agreed to pay late last year. Meta is paying to settle a lawsuit alleging the world’s largest social media platform allowed millions of its users’ personal information to be fed to Cambridge Analytica, a firm that supported Donald Trump’s 2016 presidential campaign. Anyone in the U.S. who has had a Facebook account at any time between May 24, 2007, and December 22, 2022, is eligible to receive a payment. To apply for the settlement, users can fill out a form and submit it online, or print it out and mail it. The deadline is August 25.
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Car buyers bear a heavy burden as Federal Reserve keeps raising rates: Auto-loan rejections are up
NEW YORK (AP) — The Federal Reserve’s decision Wednesday to raise interest rates for the 11th time could once again send ripple effects across the economy. Perhaps no one has felt the pain more than car buyers. It’s not just that sticker prices are way up. Or that lenders have tightened credit standards. On top of all that, steadily higher auto loan rates have elbowed many would-be buyers out of the market. A study by the New York Federal Reserve has found that 14% of applicants for auto loans were rejected over the past year — the highest such proportion since the New York Fed began tracking the figure in 2013 — up from 9% in February.
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British billionaire whose family trust owns Tottenham soccer club faces US insider trading charges
NEW YORK (AP) — British billionaire Joe Lewis, whose family trust owns the Tottenham Hotspur soccer team, has pleaded not guilty to insider trading and conspiracy charges and been released on a $300 million personal recognizance bond. Federal authorities announced the arrest of Lewis and two of his personal pilots on Wednesday. U.S. Attorney Damian Williams said Lewis had orchestrated a brazen insider trading scheme that utilized secrets he learned in corporate boardrooms to the benefit of his romantic partners, personal assistants, friends and pilots. Williams said he used inside information to compensate employees and shower gifts on friends and lovers. His attorney says he’ll fight the charges vigorously. Two of Lewis’ pilots also pleaded not guilty to related charges.
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Major automakers unite to build electric vehicle charging network they say will rival Tesla’s
DETROIT (AP) — Seven major automakers say they’re joining forces to build a North American electric vehicle charging network that would rival Tesla’s and nearly double the number of fast-charging plugs in the U.S. and Canada. General Motors, BMW, Honda, Hyundai, Kia, Mercedes and Stellantis said Wednesday that they will share in a multibillion-dollar investment to build “high power” charging stations. They want at least 30,000 plugs in urban areas and along travel corridors by 2030. The dramatic move is intended to speed the adoption of electric vehicles, allaying fears that chargers won’t be available for long distance travel.
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Union Pacific hires CEO hedge fund recommended as 2Q profit fell 15% on weaker demand
OMAHA, Neb. (AP) — Union Pacific hired the CEO Wednesday that a hedge fund pressuring the railroad to improve recommended earlier this year. And the railroad cut its outlook after reporting disappointing second-quarter results driven by weakening consumer demand. Union Pacific said its former chief operating officer Jim Vena will take over as CEO next month. The Soroban Capital Partners hedge fund that holds a $1.6 billion stake in Union Pacific had been urging the railroad to hire Vena because of his expertise in streamlining operations. The hedge fund declined to comment on the hiring news Wednesday but investors endorsed it by sending Union Pacific’s stock soaring more than 9%.
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Congressional Budget Office predicts slower economic growth and 4.7% unemployment into 2024
WASHINGTON (AP) — The Congressional Budget Office reports that economic and job growth so far this year has been stronger than forecast in February, but an updated outlook sees parts of the economy as weakening through 2024. The latest 10-year budget and economic outlook from the nonpartisan office shows how difficult it is to figure out where the United States is going in the wake of the pandemic. The CBO said it expects interest rates to continue to rise, as well as slower growth in the gross domestic product for the rest of this year and unemployment reaching 4.7% by the end of 2024.
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Stellantis CEO dangles a potential factory relaunch as autoworkers say a strike is possible
MILAN (AP) — Stellantis CEO Carlos Tavares has dangled a potential relaunch of a shuttered Illinois factory if it can be made more competitive as the United Auto Workers Union says a strike is possible. UAW President Shawn Fain is looking for major gains, including cost-of-living pay increases, in talks with Stellantis, Ford and General Motors. He’s warned that workers at all three automakers could walk off the job. Tavares told reporters Wednesday during an earnings conference call that the plant in Belvidere, Illinois, could get a new production line depending on factors like the success of Stellantis’ launch of fully electric vehicles in the U.S.
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Boeing loses $149 million in Q2 as the plane maker is pushing ahead with production increases
Boeing is reporting a $149 million loss for the second quarter despite higher revenue, as the plane maker struggles with higher costs in both its airline and defense business. CEO David Calhoun said Wednesday that Boeing has “more work ahead” but is making progress in stabilizing its factories and supply chain. Boeing says it’s starting to boost production of its two most popular airline planes, the 737 Max and the 787 Dreamliner, to take advantage of demand for newer, more fuel-efficient planes. However, the company is continuing to see problems with its supply chain, which continued in the second quarter.
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The S&P 500 fell 0.71 points, less than 0.1%, to 4,566.75. The Dow Jones Industrial Average rose 82.05 points, or 0.2%, to 35,520.12. The Nasdaq composite fell 17.27 points, or 0.1%, to 14,127.28. The Russell 2000 index of smaller companies rose 14.24 points, or 0.7%, to 1,980.36.
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