Stock indexes return to record territory after Powell speech
NEW YORK (AP) — Wall Street is rallying Friday after the head of the Federal Reserve said it’s still far from pulling interest rates off the record low that has helped the market soar, even if it does begin dialing back its support for the economy later this year. The S&P 500 was 0.9% higher in afternoon trading and back above its all-time high set on Wednesday. In a highly anticipated speech, the Fed’s chair said that one milestone has been reached for the central bank to slow a bond-buying program that’s assisting the economy. But he stressed that the move toward eventually raising rates will be a gradual one.
Powell: Fed on track to slow aid for economy later this year
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell says the Fed will start dialing back its ultra-low-interest rate policies this year as long as hiring continues to improve. Powell’s comments Friday signal the beginning of the end of the Fed’s extraordinary response to the pandemic recession. They indicate the Fed will likely announce a reduction, or tapering, of those purchases sometime in the final three months of the year. The Fed has been purchasing $120 billion a month in bonds to lower longer-term interest rates and support borrowing and spending.
July US consumer spending eeks up 0.3% as delta threatens
WASHINGTON (AP) — Growth in U.S. consumer spending slowed in July to a modest increase of 0.3% while inflation over the past 12 months rose to the fastest pace in three decades. The Commerce Department says July’s increase in spending was down sharply from a 1.1% rise in June, a sign that the surge in the delta variant of the coronavirus was having an impact on consumer spending. Friday’s report showed that consumer prices over the past 12 months have risen 4.2%, the biggest 12-month gain since a 4.5% increase for the 12 months ending in January 1991. Incomes, which provide the fuel for future spending, rose a solid 1.1% in July reflecting in part the strong job gains seen that month.
US projects $3.12T budget deficit for this year, down $555B
WASHINGTON (AP) — The Biden administration is forecasting that this year’s budget deficit will be $555 billion lower than it estimated back in May, helped by an economy that is rebounding more quickly than had been expected. But even with the improvement, the administration said Friday that it is forecasting a deficit of $3.12 trillion for the budget year that ends Sept. 30. That would be the second largest deficit in history, exceeded slightly by last year’s $3.13 billion deficit. And for the next decade, the administration never sees the deficit falling below $1 trillion. These estimates were contained in the administration’s Mid-Session Review of the budget released Friday.
T-Mobile CEO says “truly sorry” for hack of 50M users’ data
BELLEVUE, Wash. (AP) — T-Mobile says it has notified nearly all of the millions of customers whose personal data was stolen and that it is “truly sorry” for the breach. CEO Mike Sievert said in a written statement Friday that the company spends lots of effort to try to stay ahead of criminal hackers “but we didn’t live up to the expectations we have for ourselves to protect our customers.” The company disclosed earlier in August that the names, Social Security numbers and information from driver’s licenses or other identification of about 50 million accounts was exposed.
Peloton acknowledges subpoenas, SEC investigation
UNDATED (AP) — Peloton says it has been subpoenaed by the Justice Department and the Department of Homeland Security for documents and other information related to its reporting of injuries associated with its products. The exercise equipment company also said in a regulatory filing today that the Securities and Exchange Commission is “investigating our public disclosures concerning these matters.” In May, Peloton recalled about 125,000 of its treadmills less than a month after denying they were dangerous despite the death of at least one child and injuries to 29 users. The U.S. Consumer Product Safety Commission warned in April that people with children and pets should immediately stop using the Tread+.
Judge urges talks between Purdue Pharma and holdout states
UNDATED (AP) — A federal bankruptcy judge is urging the 10 states that oppose a settlement plan with Purdue Pharma to try to work out differences with the OxyContin maker before he issues a ruling next week. During a videoconference hearing on Friday, Judge Robert Drain warned of lengthy and expensive appeals if he approves the plan over their objections. The key objection for most of the states is that members of the Sackler family would be granted protection from lawsuits over the opioid crisis, even though it is the company — not the family — that is going through bankruptcy proceedings.
Rivian, an EV startup with big backers, files to go public
UNDATED (AP) — Rivian, an electric vehicle startup backed by Amazon, Ford, and other deep-pocketed investors, has confidentially filed to become a publicly traded company. The size of the initial public offering has yet to be determined, but the company has created a lot of buzz. Rivian last year raised $2.5 billion from accounts advised by investment firm T. Rowe Price and it has become a standout amid fledgling EV start-ups. The company has a contract with Amazon to build 100,000 electric delivery vans starting this year at its factory, a former Mitsubishi plant in Normal, Illinois. Rivian also is rolling out a pickup truck and an SUV.