Federal Reserve Chair Jerome Powell won praise for his deft leadership during the maelstrom of the pandemic recession. As threats to the U.S. economy have mounted, though, Powell has increasingly struck Fed watchers as much less sure-footed.
Inflation has proved higher and far more persistent than he or the Fed’s staff economists had foreseen. And at a policy meeting last week, Powell announced an unusual last-minute switch to a bigger interest rate hike than he had previously signaled — and then followed with a news conference that many economists described as muddled and inconsistent.
It’s been a sharp turnaround for Powell, who is widely credited with preventing what could have been a far worse economic crisis during the pandemic and who last month won an easy bipartisan Senate confirmation for a second four-year term.
Now, as he confronts chronically high inflation, plunging financial markets and the growing threat of a recession, Powell is facing questions — and criticism — surrounding his stewardship of the Fed at a time when its challenges are multiplying.
Thanks to a once-in-a-century pandemic, the first major European war in decades and soaring gas and food prices that the Fed has limited power to affect, Powell could become the first Fed chair since Paul Volcker in the early 1980s to grapple with “stagflation,” a miserable combination of slow economic growth and high inflation.
Kellogg to split into three companies
Kellogg Co., the 116-year-old maker of Frosted Flakes, Rice Krispies, Pringles and Eggo, will split into three companies focused on cereals, snacks and plant-based foods.
Kellogg’s, which also owns plant-based food brand MorningStar Farms, said Tuesday that the spinoff of the yet-to-be-named cereal and plant-based foods companies should be completed by the end of next year.
Kellogg’s had net sales of $14.2 billion in 2021, with $11.4 billion generated by its snack division, which makes Cheez-Its, Pringles and Pop-Tarts, among other brands. Cereal accounted for another $2.4 billion in sales last year while plant-based sales totaled around $340 million.
In a conference call with investors, CEO Steve Cahillane said separating the businesses will make them more nimble and better able to focus on their own products. All three businesses have significant stand-alone potential, he said.
“Cereal will be solely dedicated to winning in cereal and will not have to compete for resources against the high-growth snacking business,” said Cahillane, a former Coca-Cola and AB InBev executive who joined Kellogg in 2017.
Cahillane will become chairman and CEO of the global snacking company.
Ex-Tesla worker turns down jury award after judge cuts it 89%
A former Tesla Inc. contractor has refused to accept $15 million in damages over racist abuse he was subjected to at the electric vehicle maker’s northern California factory after a judge drastically slashed a $137 million jury verdict.
Owen Diaz on Tuesday told U.S. District Judge William Orrick that he won’t agree to the 89% cut. Instead, Diaz plans to seek a new trial, his lawyer Larry Organ said.
“In rejecting the court’s excessive reduction by asking for a new trial, Mr. Diaz is again asking a jury of his peers to evaluate what Tesla did to him and to provide just compensation for the torrent of racist slurs that was directed at him,” Organ said in an emailed statement. “Mr. Diaz seeks to restore a fair and just punitive damages award that will punish and deter Tesla for the racist conduct to which Mr. Diaz was subjected and to prevent future harassment from occurring.”
In October, Diaz won what’s believed to be one of the largest verdicts in US history for an individual plaintiff in a racial discrimination case, following a seven-day trial in San Francisco.
Orrick had denied Tesla’s request for a new trial, based on the condition that Diaz accept the reduced award.
Tesla didn’t immediately respond to a request for comment.