Business Highlights: More rate hikes possible, Fed’s Powell says; Tax preparers under fire
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Economy’s solid growth could require more Fed hikes to fight inflation, Powell says at Jackson Hole
JACKSON HOLE, Wyoming (AP) — The continued strength of the U.S. economy could require further interest rate increases, Federal Reserve Chair Jerome Powell said in a closely watched speech that also highlighted the uncertain nature of the economic outlook. Powell noted that the economy has been growing faster than expected and that consumers have kept spending briskly — trends that could keep inflation pressures high. Speaking at an annual conference of central bankers in Jackson Hole, Wyoming, Powell reiterated the Fed’s determination to keep its benchmark rate elevated until inflation is reduced to its 2% target. “Although inflation has moved down from its peak — a welcome development — it remains too high,” he said.
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ECB’s Lagarde says interest rates to stay high as long as needed to defeat inflation
JACKSON HOLE, Wyoming (AP) — Interest rates in the European Union will need to stay high “as long as necessary” to slow still-high inflation, Christine Lagarde, president of the European Central Bank, said Friday. Lagarde’s remarks, at an annual conference of central bankers in Jackson Hole, Wyoming, came against the backdrop of the ECB’s efforts to manage a stagnating economy with still-high inflation. The central bank has raised its benchmark rate from minus 0.5% to 3.75% in one year. Inflation in the 20 countries that use the euro has dropped from a peak of 10.6% last year to 5.3%, largely reflecting sharp drops in energy prices. But inflation still exceeds the ECB’s 2% target.
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Stock market today: Wall Street climbs to clinch its first winning week in a month
NEW YORK (AP) — Stocks rose to send Wall Street to its first winning week since July. The S&P 500 climbed 0.7% Friday after flipping between small gains and losses a few times through the day. The Dow Jones Industrial Average added 247 points, and the Nasdaq composite rose 0.9%. The gains came after the head of the Federal Reserve said it will proceed carefully as it decides what to do with interest rates. The Fed has already hiked its main rate to the highest level in 2001 in hopes of driving down inflation, and many investors would rather not see any more.
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Europe is cracking down on Big Tech. This is what will change when you sign on
LONDON (AP) — Starting Friday, Europeans will see their online life change. People in the 27-nation European Union can alter some of what shows up when they search, scroll and share on the biggest social media platforms like TikTok, Instagram and Facebook and other tech giants like Google and Amazon. That’s because Big Tech companies are now subject to a pioneering new set of EU digital regulations. The Digital Services Act aims to protect European users when it comes to privacy, transparency and removal of harmful or illegal content. They can now turn off AI-recommended videos, know why a post was taken down and report fake products. It’s also easier to flag harmful content, and kids won’t be targeted by digital ads.
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Auto workers vote overwhelmingly to let union leaders call strikes against Detroit companies
LOUISVILLE, Ky. (AP) — Auto workers have voted overwhelmingly to give union leaders the authority to call strikes against Detroit car companies if a contract agreement isn’t reached. The United Auto Workers union said Friday that 97% have voted in favor of authorizing one or more strikes against Stellantis, General Motors and Ford. Such votes are almost always approved by large margins. Contracts between the union representing about 146,000 workers at Stellantis, General Motors and Ford expire at 11:59 p.m. on Sept. 14.
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Hawaiian Electric shares plunge after utility is sued over devastating Maui fires
NEW YORK (AP) — Shares of Hawaiian Electric Company’s parent fell more than 19% Friday, one day after the utility was sued by Maui County over the fires that devastated Lahaina. Maui County accused Hawaiian Electric of negligently failing to shut off power despite exceptionally high winds and dry conditions — saying that the destruction from the deadly Aug. 8 fires could have been avoided if the company had taken essential actions. Outrage towards the company grew as witness accounts and video indicated that sparks from power lines ignited fires as utility poles snapped in the winds, which were driven by a passing hurricane. In the weeks since the fires broke out, Hawaiian Electric Industries Inc.’s market capitalization has fallen from $4.1 billion to $1.1 billion.
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Dutch brewer Heineken sells its Russian operations for 1 euro, taking a 300-million-euro hit
THE HAGUE, Netherlands (AP) — Dutch brewer Heineken says it has completed its withdrawal from Russia, 18 months after Moscow launched its full-scale invasion of Ukraine. The company announced Friday the sale of its business in Russia for just 1 euro. Heineken says it will incur a total loss of 300 million euros ($325 million) for the sale to Russian manufacturing giant the Arnest Group. Heineken had faced criticism for the slow pace of its exit in the wake of the outbreak of war, but insisted it was seeking to look after its local employees in Russia.
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Democrats accuse tax prep firms of undermining new IRS effort on electronic free file tax returns
WASHINGTON (AP) — Congressional Democrats are accusing big tax preparation firms including Intuit and H&R Block of undermining the federal government’s upcoming electronic free file tax return system. Letters obtained by The Associated Press show the lawmakers accuse the tax prep companies of lobbying against the new program, hiring former government workers to sway public interest against free file for all, and deliberately sabotaging a government program that offered free tax prep services. The Democratic lawmakers on Thursday demanded lobbying, hiring and revenue data to determine what’s going on. The tax prep companies say taxpayers already have the ability to file taxes free of charge and an IRS system is redundant.
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The S&P 500 rose 29.40 points, or 0.7%, to 4,405.71. The Dow Jones Industrial Average rose 247.68 points, or 0.7%, to 34,346.90. The Nasdaq composite rose 126.67 points, or 0.9%, to 13,590.65. The Russell 2000 index of smaller companies rose 7.35 points, or 0.4%, to 1,853.63.