Fed Betting It Will Avoid Central Banks’ Errors of the Past
LONDON (AP) – The Fed is poised to raise interest rates Wednesday for the first time in 9 ½ years. It may not take long to know whether its decision was correct.
History is filled with cases when central banks raised rates prematurely, sometimes with dire consequences. Raising rates or otherwise tightening credit too soon can slow borrowing, jolt confidence and choke growth.
Some economists have suggested that the Fed could wait a bit longer before raising rates, especially with inflation still low amid slumping oil and commodity prices. In a survey of top academic economists, the University of Chicago found that while 48 percent favored a rate hike, 36 percent felt the Fed should hold off.
U.S. Consumer Prices Unchanged But Core Inflation Up
WASHINGTON (AP) – U.S. consumer prices were unchanged in November as declines in energy and food held down overall costs. But core inflation was up 2 percent over the 12 months ending in November, the fastest pace in more than a year and the kind of increase Fed officials want to see to justify the start of a round of interest rate increases.
The flat reading for consumer prices last month followed a modest 0.2 percent increase in October and outright declines in August and September, the Labor Department reported Tuesday.
U.S. Homebuilder Sentiment Slips in December
WASHINGTON (AP) – U.S. homebuilders are feeling slightly less confident about their sales prospects in coming months, though they remain positive overall that the housing market will continue to improve next year.
The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday slipped to 61 this month, down one point from a reading of 62 in November.
Readings above 50 indicate more builders view sales conditions as good, rather than poor. The index has been consistently above 60 since June.
Valeant in New Distribution Deal With Walgreens
TRENTON, N.J. (AP) – Valeant Pharmaceuticals regained some credibility with upset investors thanks to its announcement Tuesday of a new distribution deal with Walgreens and plans to line up more pharmacies to sell its products after a scandal forced it to cut ties with a key distributor, Philidor.
The news drove up shares of the beleaguered Canadian drug company, but it still faces U.S. government scrutiny over big medicine price hikes and allegations it used Philidor, a mail-order pharmacy, to steer payers toward Valeant’s more expensive drugs, rather than cheaper alternatives.
Seattle’s Uber Unionization Measure A New Economy Test Case
SEATTLE (AP) – Seattle has become the first city in the nation to allow drivers of ride-hailing companies such as Uber and Lyft to unionize over pay and working conditions.
The legislation approved by the City Council Monday is seen as a test case for the changing 21st century workforce.
Supporters erupted into cheers after councilmembers voted 8-0 in favor of the legislation, which the city expects to be challenged in court.
It requires companies that hire or contract with drivers of taxis, for-hire transportation companies and app-based ride-hailing services to bargain with their drivers, if a majority show they want to be represented. Drivers would be represented by nonprofit organizations certified by the city.