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Fed raises key rate by half-point and signals more to come
WASHINGTON (AP) — The Federal Reserve reinforced its inflation fight by raising its key interest rate for the seventh time this year and signaling more hikes to come. But the Fed announced a smaller hike than it had in its past four meetings at a time when inflation is showing signs of easing. Though lower than its previous three-quarter-point hikes, the latest move will further increase the costs of many consumer and business loans and the risk of a recession. The policymakers also signaled that they are prepared to raise their benchmark rate by an additional three-quarters of a point and leave it there through 2023. Some economists had expected that the Fed would project only an additional half-point increase.
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AP-NORC Poll: Americans say holiday gifts harder to afford
More than half of U.S. adults say it’s harder to afford holiday gifts this year. According to a new poll from The Associated Press-NORC Center for Public Affairs Research, 69% of them say they have seen higher prices for holiday gifts in recent months, up from 58% last year. And 57% say it has been harder to afford the things they want to give, a dramatic increase from 40% one year ago. Price increases have especially impacted lower-income shoppers. Two-thirds of Americans in households earning less than $50,000 annually say they’ve had a harder time affording gifts and holiday meals this year.
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Senate crypto hearing yields big claims, possible regulation
Whether increased regulation would have prevented the spectacular collapse of cryptocurrency exchange FTX was fiercely debated at a hearing of the Senate’s banking committee Wednesday. However, new legislation is potentially on the way. Sen. Elizabeth Warren announced at the hearing bipartisan legislation aimed at cracking down on cryptocurrencies being used in money laundering. Republican Sen. Cynthia Lummis, of Wyoming, asaid she and Democratic Sen. Kirsten Gillibrand, of New York, would reintroduce their bipartisan legislation, the Responsible Financial Innovation Act, next year. That act would require disclosures and consumer protection obligations from cryptocurrency issuers.
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UK inflation eases but little relief at near 40-year high
LONDON (AP) — U.K. inflation has eased in November but is still stuck near a 40-year high. The Office for National Statistics said Wednesday that consumer prices rose 10.7% in the 12 months through November, down from 11.1% in October. The figures offer little relief for consumers as the high cost of food and energy erodes spending power. Inflation is stubbornly high across Europe, where it slowed in the 19 countries that use the euro last month but was still a painful 10%. That contrasts with the U.S., where the inflation rate dropped to 7.1% in November from a recent peak of 9.1% in June.
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EU to US: We already have war, don’t give us trade war, too
BRUSSELS (AP) — Disappointment has set in two years after the election of U.S. President Joe Biden was supposed to reset trans-Atlantic relations with the European Union. EU leaders are openly talking about fights, not only friendship. They say conflict with Washington is the last thing they want, with war raging on their doorstep in Ukraine and common resolve essential in stopping Russia. But money is threat to that unity. The point of contention is the U.S. Inflation Reduction Act. The $369 billion plan favors American-made climate technology through subsidies and, according to the EU, will unfairly discriminate against its firms.
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US charges 8 in social media ‘pump-and-dump’ stock scheme
WASHINGTON (AP) — The government has charged eight men of earning more than $100 million in illicit stock market profits by manipulating their novice-investor followers on social media. The Justice Department and the Securities and Exchange Commission said that since at least early 2020, the influencers promoted themselves as successful traders on Twitter and in Discord chat rooms and encouraged hundreds of thousands of their followers to buy certain stocks. When prices or volumes of the promoted stocks would rise, the influencers allegedly regularly sold their shares without ever having disclosed their plan to sell.
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AIG unit that had big role in 2008 crisis nears official end
NEW YORK (AP) — A unit of American International Group that played an outsized role in the 2008 global financial crises is nearing its official end. AIG said Wednesday that its Financial Products unit has filed for Chapter 11 bankruptcy protection. Bad bets on mortgages by the Financial Products unit knocked parent AIG off its feet and a cascading series of bank failures nearly led to a global economic collapse. AIG was saved by a U.S. funded bailout that exceeded $182 billion. The company paid off those loans by 2013 and the AIG subsidiary ceased to function years ago and had no employees. There will be no material effect on AIG’s finances because those losses were booked in 2008.
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Twitter suspends account that tracked owner Elon Musk’s jet
Twitter has suspended an account that used publicly available flight data to track Elon Musk’s private jet, despite a pledge by the social media platform’s new owner to keep it up because of his free speech principles. Tweets from the widely followed @elonjet account were no longer viewable Wednesday. The account had more than 526,000 followers as of Tuesday. Started in 2020 by then-teenage programmer Jack Sweeney, the account automatically posts the private jet’s flights with a map and an estimate of the amount of jet fuel and carbon emissions it expended. Musk had said in November it would stay up.
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The S&P 500 fell 24.33 points, or 0.6%, to 3,995.32. The Dow Jones Industrial Average fell 142.29 points, or 0.4%, to 33,966.35. The Nasdaq fell 85.93 points, or 0.8%, to 11,170.89. The Russell 2000 index of smaller companies fell 11.91 points, or 0.6%, to 1,820.45.
