Aurelia Butler

WASHINGTON (Reuters) -Federal Reserve officials said on Monday they still had faith that U.S. inflation will ease, with housing price increases in particular expected to help pull down the headline pace of price increases, but also acknowledged an increased sense of caution around the debate.”Although housing-services inflation remains quite high, the current low rate of increase on new rental leases suggests that it will continue to fall,” Fed Governor Lisa Cook told an event hosted by Harvard University in which she endorsed a “cautious” approach to easing monetary policy.In an interview with Yahoo Finance, Chicago Fed President Austan Goolsbee said the persistence of housing inflation continues to surprise him, but that he also felt it would ebb.Noting the slowed progress on inflation overall this year, after a steady decline in 2023, “the main puzzle has been about housing,” Goolsbee said, a major component in the consumer spending basket that has accounted for a large share of recent headline inflation readings.”We’ve got to get housing inflation coming down closer to where it was before the pandemic,” he said. “I do think the market rents show that there is progress to be made, but we have yet to see that in the overall data.”The Fed last week held its benchmark overnight interest rate steady in the 5.25%-5.50% range, and in new quarterly economic projections showed the median policymaker still expects three quarter-percentage-point rate cuts this year. Goolsbee said he was in that median group, showing continued faith among Fed policymakers that inflation will decline enough in the coming months for the monetary policy easing to proceed.But the rhetoric and the substance of the debate have begun to shift since the steady decline of inflation last year gave way to a slower pace of progress. “We’re in a little bit of a murky period,” Goolsbee said, though in general he said he agreed with Fed Chair Jerome Powell’s characterization last week that the overall “story” of a continued decline in inflation had not changed.”It doesn’t feel to me like we’ve changed fundamentally the story that we’re getting back to target,” Goolsbee said, arguing that the months of steady inflation decline last year were probably not “just random.”Others, however, have begun to have their doubts.In comments to reporters late Friday afternoon, Atlanta Fed President Raphael Bostic said he was “definitely less confident” than he was in December about continued progress on the inflation front, and had trimmed his policy outlook from two expected quarter-percentage-point cuts this year to just one. “We’ve got to stay on top of this to make sure we understand what these dynamics are,” Bostic said, noting that the share of items with prices increasing by outsized rates were “reminiscent” of what was seen when inflation jumped to 40-year highs in 2021 and 2022.TREADING CAREFULLYThough investors still are betting the Fed will start cutting rates in June, policymaker projections issued last week showed a seeming drift towards less monetary easing this year.Though the median stayed the same, it did so only barely, with nine of 19 policymakers seeing a higher policy rate of interest at the end of 2024 than the 10 who determined the median. In addition, policymakers’ risk assessments shifted slightly towards concern about higher inflation.New inflation data is due to be released on Friday.Asked whether he thought that data would confirm steady downward progress, Goolsbee said “well, it better, and let’s hope we even start speeding up the improvement. We have to,” given that current inflation is “well above our target.”The personal consumption expenditures price index excluding food and energy, which the Fed considers a good indication of underlying inflation, rose 2.8% in January. Economists polled by Reuters expect it to have increased at the same pace in February.While Cook did not specify her policy expectations for the year, she agreed the Fed should tread carefully as it considers easing monetary policy.”The risks to achieving our employment and inflation goals are moving into better balance,” she said. “Nonetheless, fully restoring price stability may take a cautious approach to easing monetary policy over time.” More

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This article is an on-site version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesThe UN Security Council passed a resolution demanding an immediate ceasefire between Israel and Hamas as well as the immediate and unconditional release of all hostages. The US abstained from the vote, allowing the body to pass its first resolution calling for a ceasefire since the war began in October.Boeing chief executive Dave Calhoun is to step down at the end of this year, as part of personnel changes at the US aircraft manufacturer, which is battling with the fallout from an incident in which a plane door blew out mid-flight. The US and Japan are planning the biggest upgrade to their security alliance since 1960 in a move to counter China. The plans to restructure the US military command in Japan will be unveiled on April 10.For up-to-the-minute news updates, visit our live blogGood evening.Could this be the day Big Tech finally met its match? The EU this morning announced investigations into Apple, Alphabet and Meta in the first applications of its landmark Digital Markets Act. Apple and Google-owner Alphabet were accused of favouring their own app stores while Facebook-owner Meta is being probed over its use of personal data for advertising. If found guilty, companies face fines of up to 10 per cent of global turnover.The DMA, a sweeping set of rules unveiled in March 2022, aims to keep in check the market power of six “gatekeepers”: Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft. As our Big Read details, it is being closely watched around the world as a test of how the tech giants can be successfully regulated.West coast editor Richard Waters says the magnitude of the EU’s giant test in micromanagement is hard to overstate. It has been met with deep concern in Silicon Valley, where it is seen as a government attempt to override years of design and technical decisions made by product managers and engineers. Greater user choice may sound fine in theory, they argue, but it will challenge fundamental aspects of how services work.Today’s moves come a few weeks after the EU fined Apple more than €1.8bn for stifling competition from rival music streaming services in a long-running case dating from 2021. Another brush with Brussels this month ended with Apple allowing apps to be downloaded directly from their developers’ websites for the first time.Apple is also feeling the heat on the other side of the Atlantic. The US Department of Justice last week announced it was suing the company for allegedly using its power in the smartphone sector to squash competition.   Attorney-general Merrick Garland noted that Apple’s net income — which was $97bn in 2023 — “exceeds the GDP of more than 100 countries”, in large part because of the success of the iPhone.  Apple until now was one of the few Big Tech companies to avoid major antitrust action in the US, but, says Rana Foroohar in today’s Swamp Notes newsletter (sign up here), the DoJ move could be the “harbinger of a big correction”.Back in Europe, some are sceptical that Brussels’ actions will have the desired effect. Judging by the record share prices enjoyed by some of these companies in recent months, Wall Street doesn’t believe it either. Not for nothing have Microsoft, Amazon, Meta, Apple and Alphabet — along with chip company Nvidia and electric-car maker Tesla — been dubbed the “Magnificent Seven” for their outsized contribution to stock market returns.Signs are emerging however that this shareholder exuberance could be peaking. Tech bosses Peter Thiel, Jeff Bezos and Mark Zuckerberg are among those who have sold hundreds of millions of dollars of their companies’ shares this quarter.Or as one legal expert put it: “If they think that we’re at the top and so they’re getting out, that’s a rather stark signal to everyone else.”Need to know: UK and Europe economyThe House of Commons was told that China-linked hackers were responsible for a raft of cyber attacks against British MPs and peers, plus a big attack on the Electoral Commission last year.The French president and EU officials called on Vladimir Putin not to use a terror attack on a Moscow concert hall, which has been claimed by the Isis militant group, as a pretext to expand the war in Ukraine. Four suspects have appeared in court.Belgian Prime Minister Alexander De Croo told the Financial Times that the EU must wean itself off Russian nuclear fuel “as fast as possible” to stop Moscow using revenues to fund its war chest. Russia’s enriched uranium makes up 30 per cent of EU supply.Polish central bank chief Adam Glapiński told the FT he was seeking a truce with Prime Minister Donald Tusk after an increasingly bitter feud. Tusk’s new government has claimed that Glapiński abused his powers to try to help the PiS party win last October’s election. Need to know: global economyIMF chief Kristalina Georgieva said China was at a “fork in the road” and must choose between past policies and “pro-market reforms” to get growth. Analysts expect the country’s economy to continue to slow in the medium term thanks to the property downturn and demographic decline.China has introduced new guidelines that will mean US microprocessors from Intel and AMD are phased out of government PCs and servers in its most significant step yet in replacing foreign technology with homegrown solutions. Contributing editor Ruchir Sharma says many of the world’s most troubled economies such as Turkey, Argentina, Egypt, Nigeria and Kenya are making great progress with recovery and markets are starting to reward them for it.A new Big Read looks at how infrastructure has become a favoured area for investment, for example from pension funds looking for yield and protection against market volatility.China and Russia are challenging US claims to mineral-rich stretches of seabed because Washington has failed to ratify a treaty — the UN Convention on the Law of the Sea — that governs access to resources in international waters.Need to know: businessNovo Nordisk announced a €1bn deal for a German biotech developing therapies to treat heart disease, as the Danish group seeks to branch out from its blockbuster diabetes and weight loss drugs Ozempic and Wegovy.American Express Global Business Travel has agreed to buy rival CWT for $570mn in a bet on the continued recovery of business travel. The deal comes amid growing competition and consolidation as the industry looks to move beyond the disruption of the pandemic.Even as global temperatures smash through record highs, the oil industry is claiming the world can’t afford the rapid transition from fossil fuels to cleaner energy. The green investment backlash led by US Republicans has led to investment funds pulling more than $13bn from BlackRock, the world’s largest asset manager. Xiaohongshu or “little red book”, China’s answer to Instagram, has made its first profits as advertising and ecommerce revenues ramp up. The business is a rare recent success story in a sector battered by falling valuations and divestments from foreign investors.Mutual funds have enabled millions to invest in the stock market since they were introduced 100 years ago, but newer, nimbler products are reshaping asset management. A Big Read asks whether they’ve had their day.The World of WorkCompanies are seeking legal help to deal with a surge in neurodiversity claims from staff, a particular problem when employees only mentioned conditions such as autism and ADHD once they were put on some form of performance management plan or facing dismissal.Persuading employees to speak up when they see something wrong is crucial if companies are to avoid disaster, but there are many pitfalls, including being passed over for promotion or forced out.Menopause has risen up employers’ agenda as acceptance grows that once-private issues, such as mental health, have an impact on working life. Help is welcome, writes columnist Emma Jacobs, but it must avoid the risk of “meno-washing”. April marks an important month for workers in the UK with a swath of new rights including carers’ leave and enhanced paternity provision. The Working It newsletter explains what’s coming.Some good newsA new light-activated antimicrobial that kills all bugs in minutes without generating resistance has been adopted by NHS hospitals for the first time in a bid to reduce surgical infections.Recommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from work & careers editor Isabel Berwick. Sign up hereThe Climate Graphic: Explained — Understanding the most important climate data of the week. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. And please share your feedback with us at [email protected]. Thank you More

The FAA had temporarily grounded 171 Boeing (NYSE:BA) 737 MAX 9 planes after a panel flew off an Alaska Airlines jet shortly after takeoff on Jan. 5.Here is what regulators and airlines are doing as a result of the incident:AIRLINES WITH THE AFFECTED PANEL:ALASKA AIRLINES The airline grounded all 65 of its Boeing 737 MAX 9 planes and cancelled hundreds of flights after the incident.It said on Jan. 8 that initial reports from its technicians indicated some “loose hardware” was visible on some aircraft in the relevant area. Fifty-seven of 65 grounded Alaska Airlines jets have resumed flying as of Feb. 5, according to the FAA. Alaska Airlines had said it expected inspections to be completed over the course of the following week after the FAA gave the green light to the resumption of MAX 9 flights. UNITED AIRLINESThe only other U.S. airline operating the jets that suspended service on all 79 of its 737 MAX 9 aircraft. The carrier said on Jan. 8 its preliminary checks found bolts that needed tightening on several panels. After receiving final approval from the FAA to complete the process to return its 79 MAX 9 fleet to service, 78 of the 79 United Airlines have returned to flying as of Feb. 5, according to the FAA.The company has 100 MAX deliveries scheduled for this year, according to a regulatory filing in October. COPA AIRLINESThe Panamanian carrier said on Jan. 9 that 21 Boeing 737 MAX 9 planes remained grounded while authorities and the manufacturer defined inspection instructions.AEROMEXICOThe airline said on Jan. 12 that the 19 Boeing 737 MAX 9 jets in its fleet remained grounded awaiting inspection.Aeromexico added it had launched a flexible flight-change policy for affected travellers, but did not specify how many flights had been cancelled. TURKISH AIRLINESThe airline said on Jan. 7 it had withdrawn five 737 MAX 9 aircraft from service for inspection. REGULATORS:U.S. FEDERAL AVIATION ADMINISTRATION (FAA)The FAA allowed MAX 9 planes to resume flying after inspections were completed. It said on Feb. 5 that nearly all planes had been inspected and returned to service since the emergency. The regulator had launched a formal investigation into the aircraft on Jan. 11.In an unprecedented move that came with the approval to return planes to service in January, the FFA had also barred Boeing from expanding production, following “unacceptable” quality issues.An expert panel the administration appointed to review the planemaker’s safety management processes found on Feb. 26 a “disconnect” between Boeing’s senior management and employees on safety culture. The report was directed by the U.S. Congress originally after two fatal Boeing 737 MAX crashes in 2018 and 2019 that killed 346 people. The door panel blowout “amplified the expert panel’s concerns.”U.S. NATIONAL TRANSPORTATION SAFETY BOARD (NTSB)The independent U.S. agency opened an investigation into the incident, and it appointed International Associations of Machinists and Aerospace workers (IAM) to the investigation.On Feb. 6 it released a report that said that a door panel that flew off a Boeing 737 MAX 9 jet mid-flight on Jan. 5 appeared to be missing four key bolts.The door plug panel was manufactured by Spirit AeroSystems (NYSE:SPR), a former Boeing subsidiary, NTSB said. It had arrived at Boeing’s assembly plant in Renton, Washington on Aug. 31, 2023.The report shows the panel had to be removed at Boeing’s factory before being reinstalled. Previously, the NTSB had also said the plane’s cockpit voice recorder was overwritten, renewing long-standing calls for longer in-flight recordings.BRAZILBrazil’s aviation regulator ANAC said on Jan. 7 the FAA ruling automatically applies to all flights in Brazil.In Brazil, only Copa Airlines operates the plane, it said. BRITAINThe UK Civil Aviation Authority said on Jan. 6 that no UK-registered planes were affected. It will require any 737 MAX 9 operators entering its airspace to comply with the FAA directive.CHINAChinese airlines do not have the MAX 9 model in their fleet, only MAX 8 which do not have the panel involved in the Alaska Airlines incident.China’s foreign ministry said on Jan. 25 that Boeing has permission to resume deliveries of its 737 MAX 8 to Chinese customers as authorities completed a design approval of the aircraft.EUROPEAN UNIONThe EU Aviation Safety Agency (EASA) adopted the FAA directive, but noted no EU member state airlines operate aircraft with the affected configuration.INDIAIndia’s Directorate General of Civil Aviation (DGCA) said on Jan. 8 that one-time inspections it had ordered of 737 MAX 8 aircraft had been performed satisfactorily. None of the country’s airlines fly the MAX 9 model.INDONESIAIndonesia temporarily grounded three MAX 9 planes operated by Lion Air on Jan. 6, a transport ministry spokesperson said, adding that the planes had different configurations from the Alaska Airlines plane.PANAMAPanama’s civil aviation authority said on Jan. 11 it had grounded 21 of Copa Airlines’ 737 MAX 9 planes. The carrier has 29 in its fleet, but only 21 have the affected panel.SOUTH KOREASouth Korea’s transport ministry said on Jan. 11 it will conduct inspections of maintenance procedures of the country’s airlines operating 737 MAX 8 aircraft.The ministry said five South Korean airlines operate 14 MAX 8 airplanes. This comes after the ministry said no problems had been detected after inspections on Jan. 9. TURKEYTurkey’s Directorate General of Civil Aviation on Jan. 8 noted the FAA’s actions and said it was coordinating with stakeholders regarding affected aircraft belonging to airlines in Turkey and those using Turkish airspace.UNITED ARAB EMIRATESThe civil aviation said on Jan. 7 that none of its national carriers have planes affected by the order. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Zambia has agreed a revised deal to restructure nearly $4bn in US dollar bonds with private investors, moving the bankrupt southern Africa nation closer to exiting a years-long default after months of tensions between China and other creditors.Africa’s second-biggest copper producer and the bondholders said an agreement announced on Monday would provide more debt relief than a deal which China, the country’s single biggest creditor, rejected in November as appearing to favour private investors.Zambian President Hakainde Hichilema said in a post on X that “history has been made” with the new deal.Hichilema’s government signalled that China and the country’s other official creditors were happy with the latest bondholder deal, after delays that made Zambia a symbol of the failure of a G20 initiative for faster solutions to debt crises in poor countries.Zambia’s limbo was an “indictment” of the global system for sovereign debt restructuring, Hichilema told the Financial Times last week, as he pushed creditors “to just walk the extra mile and close this transaction”.Under the new deal bondholders will take a cut to the face value of their claim worth $840mn, up from $700mn under the initial agreement. That has increased the direct “haircut” taken by bondholders from 16 per cent to 22 per cent of their overall claim, based on the 5 per cent discount rate that official creditors are using to judge the value of cash flow relief in the restructuring, people familiar with the matter said.Bondholders will also extend repayment dates and provide payment relief, enabling Zambia to continue receiving funds under a $1.3bn IMF bailout. They will receive better terms on a $1.35bn portion of the bonds if the IMF judges that the Zambian economy can carry more debt in the years ahead or if Lusaka beats the fund’s key targets. This structure has been carried over from the November deal. Official creditors will benefit from a similar arrangement if Zambia outperforms.Prices on Zambia’s defaulted dollar bonds rose on Monday to about 74 cents on the dollar, after rallying since the start of the year on revived hopes for a deal.Zambia’s official creditors including China have already signed up to giving relief on more than $6bn of debt, which made deals with private creditors the last hurdle to leaving behind its 2020 default on about $13bn of debt.After dealing with bondholders, Zambia must agree terms with other commercial creditors such as bank lenders, including Chinese banks.“Prompt implementation of a debt restructuring agreement with bondholders is not only in Zambia’s interests, but the wider creditor community as a whole,” said a steering committee for the external bondholders. The committee includes Amia Capital, Amundi and Greylock Capital Management among other emerging markets investors.Hichilema’s government said it had “received confirmation that the agreed terms are compatible” with the view of official creditors on the burden-sharing between themselves and private creditors — an indication that Chinese objections to a deal had been overcome.Zambia’s previous deal with bondholders collapsed in November after official creditors led by China said the terms did not compare with the relief they were already offering.The new deal will include protections against “certain other creditors” receiving better terms than bondholders. This applies to future deals with commercial creditors, people familiar with the deal said.Closing a restructuring deal became more urgent for Hichilema’s government in recent months as inflation soared in Zambia after its currency plummeted against the US dollar and the country was hit by drought. More