Business Highlights: Fed’s rate hike, a rally on Wall Street

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Fed raises key rate by a half-point in bid to tame inflation

WASHINGTON (AP) — The Federal Reserve intensified its drive to curb the worst inflation in 40 years by raising its benchmark short-term interest rate by an sizable half-percentage point. The half-point hike in the Fed’s key rate — its largest since 2000 — raised it to a range of 0.75% to 1%, the highest point since the pandemic struck two years ago....

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Fed raises key rate by a half-point in bid to tame inflation

WASHINGTON (AP) — The Federal Reserve intensified its drive to curb the worst inflation in 40 years by raising its benchmark short-term interest rate by an sizable half-percentage point. The half-point hike in the Fed’s key rate — its largest since 2000 — raised it to a range of 0.75% to 1%, the highest point since the pandemic struck two years ago. The Fed will likely follow Wednesday’s move with the fastest pace of hikes in 30 years. The Fed also announced Wednesday that it will start reducing its huge $9 trillion balance sheet, which consists mainly of Treasury and mortgage bonds. Reducing the Fed’s holdings will have the effect of further raising loan costs throughout the economy.

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Markets cheer after Powell downplays even larger rate hikes

NEW YORK (AP) — Stocks soared to their biggest gain in two years Wednesday and bond yields dropped after Federal Reserve Chair Jerome Powell downplayed the likelihood of an even larger rate increase than the one just announced Wednesday. That allayed concerns that the central bank was on its way to a massive increase of three-quarters of a percentage point at its next meeting in June. The comments came after the Fed announced a half-point increase in its benchmark rate as part of its effort to fight inflation. The S&P 500 jumped 3%. The yield on the 2-year Treasury fell sharply, to 2.64%.

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Biden showcases deficit progress in bid to counter critics

WASHINGTON (AP) — President Joe Biden is highlighting new figures showing the government’s red ink will grow less than expected this year and the national debt will shrink this quarter as he tried to counter criticism of his economic leadership and growing dismay over inflation going into midterm elections that will decide control of Congress. The dip in the national debt is an achievement that eluded former President Donald Trump despite his promises to improve the federal balance sheet. Strong job gains over the past 16 months have increased total incomes and led to additional tax revenues. That means this fiscal year’s budget deficit will decline $1.5 trillion, better than initially forecast. Still, the long-term outlook is problematic.

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EU takes major step toward Russian oil ban, new sanctions

BRUSSELS (AP) — The European Union’s chief executive has called on the 27-nation bloc to ban oil imports from Russia in a sixth package of sanctions over the war in Ukraine. European Commission President Ursula von der Leyen told EU lawmakers on Wednesday that she envisions member nations phasing out imports of crude oil within six months and refined products by the end of the year. The proposals must be unanimously approved to take effect and are likely to be the subject of fierce debate. Von der Leyen conceded that getting all 27 EU members to agree on oil sanctions “will not be easy.” Some landlocked countries are highly dependent on Russian oil.

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Elon Musk asked to testify on Twitter by UK Parliament

LONDON (AP) — A British parliamentary committee scrutinizing draft online safety legislation has invited Elon Musk to discuss his plans to buy Twitter and the changes he’s proposing for the social media platform. Parliament’s digital committee asked the Tesla CEO on Wednesday to give evidence about his proposals “in more depth.” Musk said it’s too early to give an answer because shareholders haven’t voted on the Twitter deal yet. The committee said it’s interested in Musk’s plans, especially his intention to roll out verification for all users, which echoes its own recommendations. The U.K. government’s online safety bill would give regulators wide-ranging powers to crack down on digital and social media companies.

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Intuit to pay $141M settlement over ‘free’ TurboTax ads

NEW YORK (AP) — New York’s attorney general is announcing that the company behind the TurboTax tax-filing program will pay $141 million to customers across the United States who were deceived by misleading promises of free tax-filing services. Under the terms of a settlement signed by the attorneys general of all 50 states, Intuit Inc. will suspend TurboTax’s “free, free, free” ad campaign and pay restitution to nearly 4.4 million taxpayers. New York Attorney General Letitia James began investigating Intuit after the news organization ProPublica reported in 2019 that the company was charging low-income customers for tax services that they should have received for free.

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Moderna Q1 profit triples on robust COVID vaccine sales

NEW YORK (AP) — COVID-19 vaccine sales helped Moderna triple its net income in a better-than-expected first quarter. The vaccine maker said Wednesday that revenue from its coronavirus preventive shots jumped to $5.92 billion from $1.73 billion in last year’s quarter, when the vaccines were debuting in most markets. More than 217 million doses of Moderna’s Spikevax vaccine have been administered in the U.S., where it is one of three approved options for adults. In the first quarter, Moderna earned $3.7 billion, compared to $1.2 billion in last year’s quarter.

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Airbus posts profit, plans new jet assembly line in Alabama

PARIS (AP) — Airbus says its first-quarter profit rose sharply from a year ago, as the airlines that buy its planes recover from the worst of the pandemic. And it’s planning to build a second assembly line at its plant in Mobile, Alabama, to hit ambitious new production targets. Airbus said Wednesday that it earned 1.22 billion euros ($1.28 billion) in the first three months of this year. Revenue is up 15% from a year ago. Airbus says it plans to increase production of its best-selling A320 family of airliners to 75 a month by 2025. Those planes compete with Boeing 737 jets for use on short and medium-range flights.

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The S&P 500 surged 124.69 points, or 3%, to 4,300.17. The Dow Jones Industrial Average jumped 932.27 points, or 2.8%, to 34,061.06. The Nasdaq rose 401.10 points, or 3.2%, to 12,964.86. The Russell 2000 index of smaller companies added 51.07 points, or 2.7%, to 1,949.92.

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