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Fed plans to raise rates as soon as March to cool inflation
WASHINGTON: The Federal Reserve signaled Wednesday that it will likely begin a series of interest-rate hikes in March. That would reverse pandemic-era low-rate policies that have fueled hiring and growth and stock market gains but also high inflation. Chair Jerome Powell said at a news conference that inflation has gotten slightly worse since the Fed last met in December. He said raising the Feds benchmark rate, which has been pegged at zero since March 2020, will help prevent high prices from becoming entrenched. Powell said the central bank can manage the process in a way that prolongs economic growth and keeps unemployment low.
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How Fed hikes could affect mortgages, car loans, card rates
WASHINGTON: Will mortgage rates go up? How about car loans? Credit cards? How about those nearly invisible rates on bank CDs any chance of getting a few dollars more? With the Federal Reserve signaling Wednesday that it will begin raising its benchmark interest rate as soon as March and probably a few additional times this year consumers and businesses will eventually feel it. The Feds thinking is that with Americas job market essentially back to normal and inflation surging well beyond the central banks annual 2% target, now is the time to raise its benchmark rate from near zero.
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Stocks fall, yields rise after Fed signals rate hike soon
NEW YORK: An early market rally gave way to a broad slide for stocks and a surge in bond yields Wednesday after the Federal Reserve signaled it plans to begin raising interest rates soon to fight a spike in inflation that the central bank says is probably getting worse. Fed Chair Jerome Powell took repeated questions about how and when the Fed will start letting its balance sheet shrink after buying trillions of dollars of bonds through the pandemic. The S&P 500 fell 0.1% after giving up an early gain of 2.2%. The yield on the 10-year Treasury rose to 1.86%.
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China 2008 vs 2022: Richer, stronger, more confrontational
BEIJING: Richer, more heavily armed and openly confrontational, China has undergone history-making changes since the last time it hosted the Olympics, in 2008. Then, as fireworks exploded over Beijing, China was about to pass Japan to become the No. 2 global economy. The ruling Communist Party celebrated with the most expensive Summer Games to date in what foreign media dubbed Chinas coming out party, echoing the Tokyo Olympics in 1964 that symbolized Japans recovery from its defeat in World War II. Now, China is leveraging its economic might against complaints by the U.S. and other governments over trade, technology theft and its treatment of Taiwan, Hong Kong and Muslim minorities.
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Tesla posts record profits as its deliveries soared in 2021
DETROIT: Tesla Inc. has posted record fourth-quarter and full-year earnings. The results came as its vehicle deliveries soared last years despite a global shortage of computer chips that has slowed the entire auto industry. The Austin, Texas, company made $5.5 billion last year compared with the previous record year of $3.47 billion in net income posted in 2020. The company said in a letter to shareholders that there should be no doubt about the viability and profitability of electric vehicles. Tesla made $2.32 billion in the fourth quarter. Excluding special items such as stock-based compensation, the company made $2.54 per share. That beat Wall Street expectations of $2.36 per share. Revenue for the quarter was $17.72 billion, also ahead of analysts estimates.
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Biden gets CEO support for economic agenda
WASHINGTON: President Joe Biden is getting support from several business leaders on his economic agenda that has stalled in the Senate. Its an effort to restart some momentum for his proposed nearly $2 trillion in spending and tax increases. Biden met at the White House with top executives from General Motors, Ford, Microsoft, Etsy, Salesforce and other companies. Biden asked the executives about the possible benefits from spending more on climate issues, manufacturing and child care. Its unclear just how fast Congress will move to take up Bidens plans. West Virginia Sen. Joe Manchin opposed the measure in December for its possible impact on the national debt and inflation.
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US new home sales jump in December as prices fall
SILVER SPRING, Md.: Sales of new single family homes in December rose to their highest level in 10 months as buyers snapped up cheaper homes in anticipation of higher interest rates. The Commerce Department reported that Decembers increase put the seasonally adjusted annual sales pace to 811,000 for the month, an 11.9% increase over Novembers figure, which was revised down to 725,000 from 744,000. The median price of a new home, the point where half the homes sold for more and half for less, fell to $377,700, last month, its lowest level since June but about 4% higher than December 2020.
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Boeing posts $4 billion loss tied to problems with 787 jet
CHICAGO: Boeing has reported a fourth-quarter loss of $4.16 billion after taking a big charge against earnings to cover delays in delivering one of its jets to airline customers. The aircraft maker said Wednesday that it took a charge of $3.5 billion to cover additional delays related to production problems with its 787 jetliner and compensation for airlines that are still waiting to get their planes. The company also says the problems will add $2 billion in unusual production costs to the 787, double an earlier projection. Deliveries of new 787s have been halted since May 2021 because of flaws including gaps where panels of the carbon-composite fuselage are joined.
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The S&P 500 slipped 6.52 points, or 0.1%, to 4,349.93. The Dow Jones Industrial Average lost 129.64 points, or 0.4%, to 34,168.09. The Nasdaq rose 2.82 points, or less than 0.1%, to 13,542.12. The Russell 2000 index of smaller companies fell 27.57 points, or 1.4%, to 1,976.46.
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