Business highlights: Fed rate hike, retail spending
Business highlights: Fed rate hike, retail spending

Business highlights: Fed rate hike, retail spending

___

The Fed begins the inflation battle with policy rate hikes, more on the way

WASHINGTON (AP) – The Federal Reserve launched a high-risk effort to tame the worst inflation since the 1970s, raising its benchmark short-term interest rate and potentially signaling up to seven rate hikes this year. The Fed’s quarter-point rise in its key interest rate, which it has kept close to zero since the pandemic recession hit two years ago, marks the start of its efforts to curb the high inflation that has followed the recovery from the recession. The interest rate hikes will ultimately mean higher lending rates for many consumers and businesses.

___

How Higher Interest Rates Will Affect Americans’ Economy

WASHINGTON (AP) – Americans, who have long enjoyed the benefits of historically low interest rates, will have to adapt to a very different environment as the Federal Reserve ushers in a period of rate hikes to fight inflation. Record low mortgage rates below 3%, reached last year, are already gone. Credit card interest rates and the cost of a car loan are also likely to rise. Savers can get somewhat better returns, depending on their bank, while the returns on long-term bond investment funds are likely to suffer. Here are some questions and answers on what the rate hikes could mean for consumers and businesses.

___

U.S. retail spending is declining as inflation begins to bite

NEW YORK (AP) – After starting the year in a buying mood, Americans lowered their spending in February on gadgets, home furnishings and other discretionary items as higher prices for food, gasoline and shelter take a bigger bite out of their wallets. Retail sales rose 0.3% after registering a revised 4.9% jump from December to January, driven by wage increases, solid employment and more money in bank accounts, according to the Ministry of Commerce. January’s rise was the biggest jump in spending since March last year, when U.S. households received a final federal stimulus check for $ 1,400. Restaurant sales increased in February as customers shifted more of their spending on services as the threat of COVID-19 disappears.

___

How to mitigate the economic hit from sky-high gasoline prices

DETROIT (AP) – Any motorist who has filled up lately can be forgiven for shrinking in disbelief. World gas prices are mainly driven by Russia’s invasion of Ukraine and have risen. In the US, they have reached record highs above $ 4.30 per. gallon. That’s 50%, or $ 1.43 per gallon, more than they were a year ago. But there are steps you can take to make an old car, truck or SUV perform better, go further and maybe save money on fuel. Keeping the tires properly inflated, replacing fluids and filters, driving to the stoplights and turning off the engine if it idles for more than a minute are among the actions you can take.

___

Equities, interest rates end higher after the Fed raises interest rates

NEW YORK (AP) – Equities shook off a stumbling afternoon fall and ended higher on Wall Street on Wednesday after the Federal Reserve announced its first rate hike since 2018. Bond yields also rose as the Fed began turning its policy to fight inflation. As the markets had expected, the Fed raised its short-term interest rate by 0.25 percentage points. The move marks a shift from the Fed away from maintaining the ultra-low interest rates it had in place during the worst part of the pandemic, which was intended to stimulate the economy. Now that prices are rising, it is changing course. The S&P 500 added 2.2 per cent.

___

Howard Schultz returns to lead Starbucks on a temporary basis

SEATTLE (AP) – Longtime Starbucks CEO Howard Schultz returns to run the company on a temporary basis after the coffee giant’s current CEO announced his retirement. Starbucks announced this Wednesday ahead of its annual meeting. President and CEO Kevin Johnson said he will retire next month after five years as CEO and 13 years at Starbucks. Johnson, a former CEO of Microsoft and Juniper Networks, succeeded Schultz as CEO in 2017. Johnson, 61, said he told the company’s board last year that he was considering retiring. Investors cheered on the news. Starbucks shares rose 5% in pre-market trading.

___

BMW, VW warns of shortage of spare parts suppliers in Ukraine

LONDON (AP) – BMW and Volkswagen have warned that Russia’s invasion of Ukraine is causing a shortage of vital components, forcing them to reduce vehicle production in Europe. The two German carmakers said this week that the conflict has a “negative” effect on car supply chains. BMW said on Wednesday that bottlenecks at their suppliers in Ukraine have forced the carmaker to adjust or interrupt production at a number of factories, which is likely to have a negative impact on car sales figures. Managers from both companies said that wiring harnesses that assemble and organize wires or cables are in short supply because their main suppliers are in western Ukraine.

___

Tired of waiting for driverless vehicles? Go to a farm

DES MOINES, Iowa (AP) – For years, Americans have been told that autonomous technology was improving and that driverless vehicles were just around the corner. Finally they are here, but to get a glimpse of them, you will have to go to a farm. From this fall, tractors that can plow day or night without anyone sitting in the cab will come off the John Deere factory assembly line in Waterloo, Iowa. The development follows more than ten decades of efforts from the world’s largest producer of agricultural equipment and marks a milestone for automation advocates, who for years have explained why driverless cars are not quite ready for prime time. Deere are not released for the cost of the tractor. It plans to run the tractors on 10 to 50 farms by the fall.

___

The S&P 500 rose 95.41 points or 2.2% to 4,357.86. The Dow Jones Industrial Average rose 518.76 points, or 1.5 percent, to 34,063.10. The Nasdaq rose 487.93 points, or 3.8%, to 13,436.55. The Russell 2000 Small Business Index rose 61.75 points, or 3.1%, to 2,030.72.

Leave a Reply

Your email address will not be published.