Briefly: Fed voices determination to curb inflation

Fed voices determination to curb inflation

Federal Reserve officials at their last meeting stressed their commitment to taming “unacceptably high” inflation before announcing that they were raising their benchmark interest rate by a substantial three-quarters of a point for a third consecutive time and signaling more large rate hikes ahead.

In minutes from their Sept. 20-21 meeting released Wednesday, the Fed policymakers judged that a “softening of the labor market” — likely including higher unemployment — would be needed to curb the nation’s inflationary pressures. They noted that hiring remained “robust,” which itself fuels high inflation as wages rise sharply.

The minutes show that the policymakers expressed concern during their meeting that the U.S. economy might be vulnerable to damage from a sputtering Chinese economy and a slowdown in Europe arising from Russia’s war against Ukraine.

Beginning in March this year, the Fed has raised rates five times in an aggressive pace that has boosted its key short-term rate to a range of 3% to 3.25%, the highest level since 2008. The central bank is set to raise rates again at its meetings in November and December, beginning with another large three-quarter-point hike early next month.

German airline prohibits AirTags in luggage

Lufthansa, a German airline, set off confusion recently after telling passengers that they could not use trackers like Apple AirTags in checked baggage because of international guidelines for personal electronic devices. Apple rejected that interpretation Tuesday, saying its trackers comply with all regulations.

It does not appear that any other airlines are requiring passengers to turn off the trackers, which have become popular as a way to find lost baggage. Lufthansa found itself in the middle of the issue when reports surfaced in the German news media that the devices were prohibited.

Although Lufthansa said it has no desire to prohibit the devices that it deemed safe, the airline seems to have stepped in a mess based on the reading of obscure international guidelines and regulations, with no clear consensus on what is and is not allowed in Europe.

Regulators in the United States have said the trackers, which use Bluetooth technology and do not interfere with the airplanes’ communications equipment, are permitted in carry-on or checked baggage.

Late slide pulls markets into the red

A wobbly day of trading on Wall Street ended with a modest pullback for stocks Wednesday as investors weighed a report showed that inflation remains very hot, likely paving the way for more aggressive interest rate hikes by the Federal Reserve.

Treasury yields, which have driven much of Wall Street’s recent trading, ended lower. The yield on the 10-year Treasury, which affects mortgage rates, fell to 3.90% from 3.95% late Tuesday. The yield on the two-year Treasury slipped to 4.28% from 4.30%.

Utilities, technology companies and health care stocks weighed on the market, keeping gains elsewhere in check. Duke Energy fell 4%, Texas Instruments slid 1.2% and Abbott Laboratories closed 1.6% lower.

PepsiCo rose 4.2% after raising its profit forecast for the year following encouraging quarterly financial results.

Cruise line operators were among the biggest gainers in the S&P 500. Carnival rose 10.1%, Norwegian Cruise Line gained 11.6% and Royal Caribbean climbed 11.5%.

Compiled from Associated Press and Bloomberg reports.