AP Business SummaryBrief at 11:44 p.m. EDT

Fed unleashes another big rate hike in bid to curb inflation

WASHINGTON (AP) — The Federal Reserve on Wednesday raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in more than three decades to tame high inflation. The Fed’s move will raise its key rate, which affects many consumer and business loans, to a range of 2.25% to 2.5%, its highest level...

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Fed unleashes another big rate hike in bid to curb inflation

WASHINGTON (AP) — The Federal Reserve on Wednesday raised its benchmark interest rate by a hefty three-quarters of a point for a second straight time in its most aggressive drive in more than three decades to tame high inflation. The Fed’s move will raise its key rate, which affects many consumer and business loans, to a range of 2.25% to 2.5%, its highest level since 2018. Speaking at a news conference, Chair Jerome Powell gave mixed signals about the Fed’s next moves. He stressed that the central bank remains committed to defeating chronically high inflation, while at the same time holding out hope that it may soon shift to smaller rate hikes.

How the Federal Reserve’s rate hikes affect your finances

WASHINGTON (AP) — Higher mortgage rates have sent home sales tumbling. Credit card rates have grown more burdensome, and so have auto loans. Savers are finally receiving yields that are actually visible, while crypto assets are reeling. The Federal Reserve’s move to further tighten credit raised its benchmark interest rate by a sizable 0.75 percentage point for a second straight time. The Fed’s latest hike, its fourth since March, will further magnify borrowing costs for homes, cars and credit cards, though many borrowers may not feel the impact immediately.

What’s in, and out, of Democrats’ inflation-fighting package

WASHINGTON (AP) — President Joe Biden’s initial effort to rebuild America’s public infrastructure and family support systems had a price tag of $4 trillion. And it stalled in Congress. A much slimmer but still substantial compromise package costing $739 billion is now being considered by lawmakers. With strategies aimed at inflation-fighting health care, climate change and deficit reduction, the new measure appears headed toward quick votes in the Democratic-controlled House and Senate. A major component is allowing the Medicare program to negotiate prescription drug prices with pharmaceutical companies. That could save the federal government some $288 billion over 10 years, money that would help seniors pay for their medications.

With Frontier deal dead, Spirit ponders sale to JetBlue

Spirit Airlines and Frontier Airlines are abandoning their merger proposal, which opens the way for JetBlue Airways to strike a deal for Spirit. Frontier and Spirit agreed Wednesday to drop their merger even while Spirit shareholders were still voting on it. It was apparent that despite the support of Spirit’s board, shareholders were prepared to reject the Frontier deal. Spirit, the largest budget carrier in the United States, says it’s still in discussions with JetBlue and expects to have more to say in the near future. The Frontier offer was worth more than $2.6 billion in cash and stock, far short of JetBlue’s all-cash bid of $3.7 billion.

US economy sending mixed signals: Here’s what it all means

WASHINGTON (AP) — The U.S. economy is caught in an awkward, painful place. A confusing one, too. Growth appears to be sputtering, home sales are tumbling and economists warn of a potential recession ahead. But consumers keep spending, businesses keep posting profits and the economy keeps adding hundreds of thousands of jobs each month. In the midst of it all, prices have accelerated to four-decade highs, and the Federal Reserve is desperately trying to douse the inflationary flames with higher interest rates. That’s making borrowing more expensive for households and businesses. The Fed hopes to pull off the triple axel of central banking: Slow the economy just enough to curb inflation without causing a recession.

Report: Federal debt lower in 2022; still poised to climb

The Congressional Budget Office says the end of pandemic-era spending, fast economic growth and higher tax revenues have caused the federal debt this year to be lower than forecast. But the non-partisan office also includes a warning in its 30-year outlook. Debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy. Accumulated debt held by the public will be equal to 98% of U.S. gross domestic product this year. That’s four points lower than the 2021 forecast. But this would be a brief respite from rising levels of debt that will surpass the historical high in 2031 and climb by 2052 to 185% of GDP.

Facebook parent Meta posts first revenue decline in history

Facebook and Instagram’s parent company Meta posted its first revenue decline in history Thursday, dragged by a drop in ad spending as the economy falters — and as competition from rival TikTok intensifies. The company earned $6.69 billion, or $2.46 per share, in the April-June period. That’s down 36% from $10.39 billion, or $3.61 per share, in the same period a year ago. Revenue was $28.82 billion, down 1% from $29.08 billion a year earlier. The results were below Wall Street’s expectations and Meta’s stock fell after-hours. Meta is in the midst of a corporate transformation that it says will take years to complete.

DOJ: Buffett company discriminated against Black homebuyers

NEW YORK (AP) — The Justice Department says a Pennsylvania mortgage company owned by billionaire businessman Warren Buffett’s company discriminated against potential Black and Latino homebuyers in Philadelphia, New Jersey and Delaware. Officials are calling it the second-largest redlining settlement in history. Trident Mortgage Co. deliberately avoided writing mortgages in minority-majority neighborhoods in West Philadelphia, Camden, New Jersey and in Wilmington, Delaware. That’s according to a Justice Department Consumer Financial Protection Bureau settlement with Trident. As part of the agreement with the government agencies, Trident will have to set aside $20 million to make loans in underserved neighborhoods.

Senate passes bill to boost computer chip production in US

WASHINGTON (AP) — The Senate has passed a bill that’s designed to encourage more semiconductor companies to build chip plants in the United States. The $280 billion measure, which awaits a House vote, includes federal grants and tax breaks for companies that construct their chip facilities in the U.S. It also directs Congress to significantly increase spending on high-tech research programs that lawmakers say will help the country stay economically competitive in the decades ahead. Senate passage came by a 64-33 vote Wednesday. The House vote is expected later this week as lawmakers try to wrap up business before returning to their home states and districts in August.

US stocks jump after Fed rate hike; tech shares surge

Stocks jumped on Wall Street Wednesday after the Federal Reserve ratcheted up its campaign against surging inflation by raising its key interest rate three-quarters of a point. The Fed’s latest hike lifts the benchmark short-term rate to its highest level since 2018. The S&P 500 gained 2.6% and the technology heavy Nasdaq jumped by the most in over two years. The Dow Jones Industrial Average also closed higher. Strong earnings from Google’s owner Alphabet, Microsoft and other companies helped lift investors’ mood.

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