Business Briefs – May 3, 2018

Fed Keeps Key Rate Steady But Notes Rising Inflation

WASHINGTON (AP) – The Federal Reserve is keeping its benchmark interest rate unchanged but notes that inflation is rising after years of being stuck below the Fed’s target level. The Fed left its key short-term rate at 1.5 percent to 1.75 percent, the level it set in March after its sixth increase since December 2015.

Data Firm at Center of Privacy Scandal Will Close

NEW YORK (AP) – The data firm at the center of Facebook’s privacy scandal is declaring bankruptcy and shutting down. Cambridge Analytica sought information on Facebook to build psychological profiles on a large portion of the U.S. electorate. In a statement, Cambridge Analytica says it has been “vilified” for actions it says are both legal and widely accepted as part of online advertising.

Facebook said it will keep looking into data misuse by Cambridge Analytica even though the firm is closing down.

Tesla Posts Record 1Q Loss As Cash Burn Accelerates

DETROIT (AP) – Tesla posted a record $709.6 million net loss in the first quarter and burned through $745.3 million in cash while struggling to crank out large numbers of its Model 3 mass-market electric car. The loss and cash burn announced Wednesday raised questions about the company’s future and whether it will be able to pay all of its bills by early next year without more borrowing or another round of stock sales.

Co-author of Dodd-Frank Says Bill’s Foundation Will Survive

WASHINGTON (AP) – Congress is trying to pass a hefty rewrite of a banking law that bears Barney Frank’s name, but the former Massachusetts congressman isn’t worried. Frank says he’s confident Dodd-Frank will survive Republican efforts to dismantle it. He crafted the bill with a fellow Democrat, former Connecticut Sen. Christopher Dodd, after the 2008 financial crisis. The GOP-controlled House has passed legislation to dramatically scale back the government’s oversight role, but the Senate bill is more modest.

Carl Icahn Makes Push to Remove Xerox CEO

NEW YORK (AP) – Xerox’s CEO and most of its board will resign as investors Billionaire investor Carl Icahn and Darwin Deason push the company to stop its sale to longtime partner Fujifilm. The duo called for Jacobson to resign in late January, shortly before Xerox announced a deal that will result in Fujifilm taking majority control of Xerox. Jacobson and five other directors are being replaced. Xerox said the new board will reconsider the deal with Fujifilm and could terminate or restructure Xerox’s relationship with the company. Xerox shares fell 9 percent to $29.38.