WASHINGTON (AP) — Intensifying its fight against high inflation, the Federal Reserve raised its key interest rate by a substantial three-quarters of a point for a third straight time and signaled more large rate hikes to come — an aggressive pace that will heighten the risk of an eventual recession. The Fed’s move boosted its benchmark short-term rate, which affects many consumer and business loans, to a range of 3% to 3.25%, the highest level since early 2008. The officials also forecast that they will further raise their benchmark rate to roughly 4.4% by year’s end, a full percentage point higher than they had forecast as recently as June.
Stocks slump on Wall Street as Fed steps up inflation fight
NEW YORK (AP) — Wall Street closed sharply lower after the Federal Reserve stepped up its fight against inflation by raising interest rates. The S&P 500 lost 1.7% Wednesday, as did the Dow Jones Industrial Average. The Fed’s fifth rate hike of the year came in as expected, three-quarters of a percentage point, but the central bank also raised its forecasts for how high interest rates will ultimately have to go. The Fed is raising rates to fight the worst inflation in 40 years. The worry is that it may cause a recession by hitting the brakes too hard on the economy.
US gas prices tick up, ending 99-day streak of lower costs
NEW YORK (AP) — After 99 consecutive days of declining gasoline prices, the cost for a gallon has edged a penny higher. National-average prices soared above $5 per gallon over the summer adding to financial pressure on families and a potential threat for the Biden administration. While the White House has no role in determining what you pay at the pump, gas prices are always a political issue. According to the AAA, the average price for gasoline Wednesday rose a penny to about $3.68 per gallon, but prices have been in steady decline. Wednesday’s average is lower than the week-ago average of $3.70 per gallon, and well below last month’s average of $3.90 per gallon.
Home Depot workers petition to form 1st store-wide union
NEW YORK (AP) — Home Depot workers in Philadelphia have filed a petition with the federal labor board to form what could be the first store-wide union at the world’s largest home improvement retailer. The petition, filed with the National Labor Relations Board, seeks to form a collective bargaining unit for 274 employees who work in merchandising, specialty and operations. Home Depot spokesperson Sara Gorman said the company will work through the process and talk to employees about their concerns but does “not believe unionization is the best solution for our associates.” Discontent with working conditions in the wake of the COVID-19 pandemic have kicked off labor movements at several major U.S. companies, including Amazon and Starbucks.
Bank CEOs warn of ‘daunting’ challenges from inflation
WASHINGTON (AP) — The CEOs of the nation’s biggest banks appeared in front of Congress Wednesday and gave a dim view of the U.S. economy, reflecting the financial and economic distress many Americans are facing. JPMorgan Chase’s Jamie Dimon, Citigroup’s Jane Fraser and other chief executives said the U.S. consumer is currently in good shape but faces threats from high inflation and rising interest rates. The hearing happened on the same day the Federal Reserve announced a 3/4-point hike to its benchmark interest rate as it tries to contain inflation. While billed as a hearing on everyday finances, the CEOs also faced difficult political questions with Washington in the midst of an election year.
Front line farming: Bombs disrupt critical Ukraine industry
NOVOMYKOLAIVKA, Ukraine (AP) — Ukrainian farms near the front lines are facing constant shelling that is damaging fields, equipment and buildings and making it difficult to plant and harvest crops. At one farm, a worker says returning to growing grain “will be difficult.” Agriculture is a critical part of Ukraine’s economy, accounting for about 20% of its gross national product and 40% of its export revenue before the war. The country is often described as the breadbasket of Europe and millions rely on its affordable supplies of grain and sunflower oil in parts of the world where many already face hunger. Russia’s invasion has dealt a heavy blow to the industry, severely hampering transport and exports on top of damage at farms.
US home sales slipped, prices grew more slowly in August
NEW YORK (AP) — Sales of previously occupied U.S. homes slowed in August for the seventh month in a row, as sharply higher mortgage rates and rising home prices made homebuying less affordable. The National Association of Realtors said Wednesday that existing home sales fell 0.4% last month from July to a seasonally adjusted annual rate of 4.80 million. That’s higher than what economists were expecting, according to FactSet. Sales fell 19.9% from August last year, and are now at the slowest annual pace since May 2020, near the start of the pandemic. The national median home price jumped 7.7% in August from a year earlier to $389,500.
Walmart takes a cautious approach to holiday hiring
NEW YORK (AP) — Walmart is taking a cautious approach to the holiday shopping season, announcing it will hire 40,000 U.S. workers for the holidays, a majority of them seasonal workers. Walmart said Wednesday it is now focusing on hiring seasonal workers only, rather than permanent workers. Just like in past years, it will first offer current workers the opportunity to pick up additional shifts if they want to earn extra money for the holidays. Companies that typically hire thousands of seasonal workers are again heading into the holidays during one of the tightest job markets in decades, making it again challenging to find the workers they need.
The S&P 500 fell 66 points, or 1.7%, to 3,789.93. The Dow Jones Industrial Average shed 522.45 points, or 1.7%, to 30,183.78. The Nasdaq lost 204.86 points, or 1.8%, to 11,220.19. The Russell 2000 index of smaller companies dropped 25.35 points, or 1.4%, to 1,762.16.