Fed keeps rates unchanged
for first time in 15 months
WASHINGTON — The Federal Reserve kept its key interest rate unchanged after having raised it 10 straight times to combat high inflation. But in a surprise move, the Fed signaled that it may raise rates twice more this year, beginning as soon as next month. The Fed’s move to leave its benchmark rate at about 5.1%, its highest level in 16 years, suggests that it believes the much higher borrowing rates it’s engineered have made some progress in taming inflation. But top Fed officials want to take time to more fully assess how their rate hikes have affected inflation and the economy. The central bank’s 18 policymakers envision raising its key rate by an additional half-point this year, to about 5.6%.
Google should break up digital ad business over concerns
BRUSSELS — European Union regulators have hit Google with fresh antitrust charges, saying the only way to satisfy competition concerns about its lucrative digital ad business is by selling off parts of the tech giant’s main moneymaker. The unprecedented decision Wednesday to push for such a breakup marks a significant escalation by Brussels in its crackdown on Silicon Valley digital giants. The European Commission said its preliminary view after an investigation is that “only the mandatory divestment by Google of part of its services” would satisfy the concerns. Google can now make its case before a final decision. The company says it disagreed with the preliminary finding and “will respond accordingly.”
New planes required to have secondary barriers to cockpit
It will be harder to break into the cockpit on new airline planes. The Federal Aviation Administration issued a final rule Wednesday that will require commercial planes built after mid-2025 to have secondary barriers for extra security when the main cockpit door is open. Pilot groups have been lobbying for the change. Officials call the rule an important step to give pilots more protection. In 2018, Congress ordered the FAA to require secondary barriers, but the agency didn’t issue a proposal until last year.
Shell ditches lower oil production target
LONDON — Shell has effectively abandoned a plan to cut oil production by 1-2% per year until the end of the decade. Europe’s largest energy company argued Wednesday that it had already met the target it had set for itself in 2021 through asset sales. It says it has seen its production drop from 1.9 million barrels of oil equivalent per day in 2019 to 1.5 million last year. New chief executive Wael Sawan insisted that the company was still committed to decarbonizing its operations, reiterating the goal that Shell will become a net-zero emissions energy business by 2050. Shell and other oil giants have faced increasing pressure to do more to fight emissions from climate activists.
Inflationary pressures continue to ease, producer prices drop
WASHINGTON — Wholesale prices in the United States dropped 0.3% from April to May, another sign that inflationary pressures continue to ease in the face of repeated interest rate hikes by the Federal Reserve. The Labor Department’s producer price index — which measures inflation before it reaches consumers — rose 1.1% last month from May 2022, the smallest year-over-year gain since December 2020. Excluding volatile food and energy prices, so-called core wholesale inflation was up 0.2% last from April and 2.8% from a year earlier.
— The Associated Press