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    Fed sees more rate hikes ahead, but at a slower pace, meeting minutes show

    Fed officials at their June meeting decided to hold off on raising interest rates, opting for a pause to assess the impact of 10 previous hikes.
    Minutes released Wednesday indicated disagreement among members, with some saying that rates should go higher as inflation remains elevated.

    Almost all Federal Reserve officials at their June meeting indicated further tightening is likely, if at a slower pace than the rapid-fire rate increases that had characterized monetary policy since early 2022, according to minutes released Wednesday.Policymakers decided against a rate rise amid concerns over economic growth, even though most members think further hikes are on the way. Citing the lagged impact of policy and other concerns, they saw room to skip the June meeting after enacting 10 straight rate increases.Officials felt that “leaving the target range unchanged at this meeting would allow them more time to assess the economy’s progress toward the Committee’s goals of maximum employment and price stability.”Federal Open Market Committee members voiced hesitance over a multitude of factors.They said that a brief pause would give the committee time to assess the impacts of the hikes, which have totaled 5 percentage points, the most aggressive moves since the early 1980s.”The economy was facing headwinds from tighter credit conditions, including higher interest rates, for households and businesses, which would likely weigh on economic activity, hiring, and inflation, although the extent of these effect remained uncertain,” the minutes said.The unanimous decision not to raise rates came in “consideration of the significant cumulative tightening in the stance of monetary policy and the lags with which policy affects economic activity and inflation.”
    Markets showed little reaction to the release. The Dow Jones Industrial Average was off about 120 points nearing the final hour of trading while Treasury yields were sharply higher.

    Disagreement at the Fed

    The document reflected some disagreement among members. According to projection materials released after the June 13-14 session, all but two of the 18 participants expected that at least one hike would be appropriate this year, and 12 expected two or more.”The participants favoring a 25 basis point increase noted that the labor market remained very tight, momentum in economic activity had been stronger than earlier anticipated, and there were few clear signs that inflation was on a path to return to the Committee’s 2 percent objective over time,” the minutes said.Even among those favoring tightening, there was a general feeling that the pace of hikes, which included four straight 0.75 percentage point increases at consecutive meetings, would abate.”Many [officials] also noted that, after rapidly tightening the stance of monetary policy last year, the Committee had slowed the pace of tightening and that a further moderation in the pace of policy firming was appropriate in order to provide additional time to observe the effects of cumulative tightening and assess their implications for policy,” the minutes said.Since the meeting, policymakers mostly have stuck with the narrative that they don’t want to give in too quickly on the inflation fight.In remarks to Congress a week after the June 13-14 meeting, Fed Chairman Jerome Powell said the central bank has “a long way to go” to bring inflation back to the Fed’s 2% goal.He also has emphasized a united front among the 18 Federal Open Market Committee members, noting that all of them foresee rates staying at least where they are through the end of the year, and all but two see rates rising.That has been largely true, despite some misgivings. Atlanta Fed President Raphael Bostic, for instance, has said he thinks rates are sufficiently restrictive and officials can back off now as they wait for the lagged impact from the 10 hikes making their way through economy.Data also has been largely on the Fed’s side, even though inflation remains well above the target.Most recently, the Fed’s preferred inflation gauge saw just a 0.3% increase in May, though it was still reflecting a 4.6% annual rate.The labor market also has showed some signs of loosening, though job openings still outnumber available workers by a nearly 2-to-1 margin. Fed officials have stressed the importance of reducing that disparity as they look to tamp down the demand that pushed inflation higher. More

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    GM second-quarter sales increase 18.8% as supply chain stabilizes

    General Motors’ U.S. vehicle sales increased by 18.8% in the second quarter compared with subdued results a year ago.
    The Detroit automaker reported sales Wednesday of 691,978 new vehicles from April through June, including 15,652 EVs.
    GM’s second-quarter sales, along with those of other automakers such as Honda Motor, Nissan Motor and Stellantis, indicate demand for new vehicles remains strong.

    2024 Chevrolet Silverado HD ZR2

    DETROIT – General Motors’ U.S. vehicle sales increased by 18.8% in the second quarter compared with subdued results a year ago when the automaker was battling supply chain issues.
    The Detroit automaker reported sales Wednesday of 691,978 new vehicles from April through June. That compared with 582,401 vehicles during the second quarter of 2022. It also is a sequential increase compared with GM’s first-quarter sales of just over 600,000 new cars and trucks.

    GM’s second-quarter sales, along with those of other automakers such as Honda Motor, Nissan Motor and Stellantis, indicate demand for new vehicles remains strong as inventories of cars and trucks improve from historically low levels during the coronavirus pandemic and supply chain problems.
    Auto industry forecasters project U.S. new vehicle sales to have increased 16% to 18% during the second quarter compared with a year earlier.
    Cox Automotive recently increased its full-year new vehicle sales forecast to 15 million for the broader industry, a gain of nearly 8% from 2022, when sales finished at 13.9 million due to low inventory levels and inflated prices.
    GM said retail sales increased 15% through the first half of the year, while its fleet business jumped 30%.
    GM maintained its status as the country’s largest automaker through the first six months of the year, with sales up 18.3% to nearly 1.3 million vehicles. The Detroit carmaker regained that decades-long title last year after Toyota Motor took the top spot in 2021. That year was the first time since 1931 that GM wasn’t the bestselling car company in the U.S.

    On Wednesday, Toyota reported sales of more than 1 million vehicles in the U.S. through June.

    EV sales

    GM’s EV sales topped 36,300 during the first half of this year, including 15,652 in the second quarter. EVs accounted for just 2.8% of the company’s total sales during the first half of the year.
    The company previously said it planned to produce 50,000 EVs during the first half of the year, followed by 100,000 during the second half of the year.
    A GM spokesman reconfirmed those targets Wednesday but did not immediately comment on whether the company had met them. Sales trail production due to logistics and inventory on dealer lots. Further production details are expected to be discussed when the automaker reports second-quarter earnings on July 25, the spokesman said.
    GM has been criticized for not ramping up production of its EVs quickly enough, as Tesla continues to dominate the U.S. market.
    The vast majority of GM’s EV sales during the first six months of the year – roughly 93% – were sales of its outgoing Chevrolet Bolt models, which will be discontinued later this year. GM has been slow to increase production of its new EVs such as the GMC Hummer and Cadillac Lyriq. The new EVs and their batteries are collectively known as Ultium vehicles.
    GM CEO Mary Barra reiterated last week that the company’s output of newer EVs has been constrained due to domestic production of its batteries that’s taking longer than expected.
    “When people ask me if I could push a button and do something over, I would have done EVs faster, but I am where I am and we’re going as fast as we can,” she said June 26 during the Aspen Ideas Festival.
    GM has several important EV launches during the second half of this year including new versions of the Chevrolet Silverado, Blazer and Equinox. It’s also launching a new electric delivery van and a $300,000-plus bespoke Cadillac EV called the Celestiq.
    Disclosure: NBCUniversal News Group, of which CNBC is a part, is the media partner of the Aspen Ideas Festival. More

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    FTC warns about student loan scams following Supreme Court decision

    The Supreme Court struck down the Biden administration’s student loan forgiveness plan Friday in a 6-3 ruling. Loan payments are poised to restart in October.
    The Federal Trade Commission warned in a consumer alert that scammers would likely target borrowers, perhaps posing as U.S. Department of Education personnel and offering loan assistance.
    The FTC offered tips for borrowers to protect themselves.

    Damircudic | E+ | Getty Images

    Scammers are likely to target student loan borrowers after the Supreme Court struck down the Biden administration’s debt forgiveness plan Friday and as loan repayments are poised to restart in the fall, according to the Federal Trade Commission.
    Scammers often “take advantage of confusion around big news like this,” the FTC said in a consumer alert issued Saturday.

    “If you’re worried about repaying your loans, the offers to ‘help’ can be tempting,” the alert said. “Scammers are likely to start blasting out robocalls and texts about ‘helping’ you with your loans.”
    More from Personal Finance:Biden administration gives student loan holders payment leewaySteps student borrowers should take after Supreme Court rulingWhat Supreme Court student loan ruling could mean for economy
    The Biden administration forgiveness plan would have erased up to $20,000 of federal student loans for tens of millions of borrowers.
    Estimates suggest the student debts of about 14 million people would have been fully erased. Now, they and other borrowers must brace for monthly loan payments to restart in October, after more than three years of an interest-free pause.
    President Joe Biden said Friday after the Supreme Court’s ruling that his administration would pursue another way to deliver debt forgiveness. And when payments restart, there will also be a 12-month period during which borrowers won’t face the harshest consequences of missing payments, including default or negative marks on a credit report, Biden said.

    In the meantime, here are three ways to spot a student loan scam should a fraudster try to contact you, according to the FTC.
    1. Don’t trust anyone who promises debt relief or loan forgiveness
    Scammers try to look real, with official-looking names, seals and logos, the FTC said. They may say they’re affiliated with the U.S. Department of Education.
    “They promise special access to repayment plans or forgiveness options — which don’t exist,” the FTC said. “If you’re tempted, slow down, hang up and log into your student loan account to review your options.”
    2. Don’t give away your FSA ID login information
    Anyone who says they need your Federal Student Aid ID to help you is a scammer, the FTC said.
    “If you share it, the scammer can cut off contact between you and your servicer — and even steal your identity,” the agency wrote.
    3. Never pay for help with your student loans
    “There’s nothing a company can do that you can’t do yourself for free,” the FTC said.
    You can get help at StudentAid.gov/repay. Go directly to your loan servicer if your loans are private, the FTC said. More

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    in Business

    Moderna strikes deal to develop mRNA drugs in China

    Moderna struck a deal with Chinese officials to research, develop and manufacture messenger RNA medicines in the country, despite rising tensions between the U.S. and China. 
    The Massachusetts-based biotech company will develop those drugs “exclusively for the Chinese people,” a spokesperson told CNBC.  
    Moderna is trying to capitalize on the success of its Covid vaccine, which uses a platform called mRNA to teach human cells to produce an immune response against a virus. 

    Nikos Pekiaridis | Nurphoto | Getty Images

    Moderna on Wednesday said it struck a deal with Chinese officials to research, develop and manufacture messenger RNA medicines in the country, despite rising tensions between the U.S. and China. 
    The Massachusetts-based biotech company signed a memorandum of understanding and a related land collaboration deal to develop drugs that will “be exclusively for the Chinese people” and won’t “be exported,” a Moderna spokesperson told CNBC.  

    Chinese media outlet Yicai first reported on Tuesday that Moderna was slated to make its first investment in China that could be worth around $1 billion, citing unnamed sources. The outlet also reported that Moderna CEO Stéphane Bancel was visiting Shanghai. 
    The Moderna spokesperson did not confirm the report or comment on the size of the deal.
    “These agreements are focused on strengthening health security by targeting unmet needs and contributing to the ecosystem of medical solutions available to patients in China,” the spokesperson said. 
    Moderna is trying to capitalize on the success of its Covid vaccine, which uses a platform called mRNA to teach human cells to produce an immune response against a virus.
    Moderna has several contracts to export or locally manufacture Covid jabs for countries such as Japan, Canada, Australia and Kenya. The deal disclosed Wednesday is the company’s first agreement with China.

    It’s also the first deal to involve developing mRNA medicines overall, not just Covid shots. 
    Moderna in May said it was keen to sell its mRNA Covid vaccine to China after registering a legal entity in the world’s second-largest economy. 
    But the company and other U.S.-based companies have so far been shut out from the Chinese market.
    Beijing has repeatedly insisted on using Chinese-made Covid vaccines for its population, even though their shots are seen as less effective than jabs from Moderna and New York-based Pfizer. 
    The country has also struggled to develop mRNA technology at home during the pandemic. China only approved its first mRNA shot earlier this year.
    Separately on Wednesday, China’s Ministry of Commerce said it held a meeting with some of the world’s leading drugmakers to discuss their business operations in the country.
    That includes Pfizer, AstraZeneca, Novo Nordisk, Merck, Sanofi and GE HealthCare Technologies. It’s unclear whether Moderna was included in the rountable discussion.
    Moderna’s deal comes as tensions between the U.S. and China rise over issues ranging from national security to a heavy reliance on Chinese supply chains. The Biden administration has taken aggressive measures to diversify away from China in investment and trade. More

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    Major League Pickleball names new CEO and COO to capitalize on surging popularity

    Major League Pickleball has named Julio DePietro as CEO and Bruce Popko as COO.
    They will work to grow the professional sports league as the sport has gained enormous popularity.
    Their priorities include growing sponsorships, building the media rights business, and licensing and merchandising strategy.

    Season One Super Finals at the Life Time Rancho San Clemente in San Clemente, California. The Seattle Pioneers play the Los Angeles Mad Drops in the Premier League mixed doubles competition.
    Source: Major League Pickleball

    Major League Pickleball is getting new leadership as it looks to capitalize on the rise of America’s fastest-growing sport at the professional level.
    The team-based pro pickleball league announced Wednesday it has named finance and media executive Julio DePietro as its chief executive officer and former NFL executive Bruce Popko as chief operating officer.

    “The additions of Julio and Bruce signify another landmark step forward in the evolution of Major League Pickleball,” said MLP founder Steve Kuhn.
    DePietro and Popko will be tasked with steering the league at a time when the sport of pickleball has seen explosive growth at the amateur level.
    “We’re pretty confident that we have both the platform and the product. We’re at just the beginning of this hockey-stick growth,” DePietro told CNBC.
    DePietro was formerly a partner at Citadel where he worked alongside Kuhn for many years. In 2022, he purchased a stake in the Florida Smash MLP team, calling the investment a “no-brainer.” As part of his new role, he will soon divest his stake in the Smash.
    In the year-plus that he’s served as an owner in the league, DePietro said, team valuations have seen 100-times growth. Teams today, he said, are going for as much as $10 million. Previously, teams were being scooped up for as little as $100,000.

    With more than 36 million people playing pickleball last year, DiPietro and Popko say their biggest challenge is converting all of the new casual pickleball fans into MLP followers.
    The rapidly growing sports league has attracted dozens of high-profile athlete owners and investors including NBA superstars LeBron James and Kevin Durant as well as Tom Brady and Drew Brees of NFL fame. In November, beer maker Anheuser-Busch bought a team.
    Popko’s background includes more than 30 years working in the sports industry, with previous COO roles at the Buffalo Bills and Pegula Sports & Entertainment.
    “One of the things that I’ve learned over the years in sports is that the most avid fans are those fans that participate in the sport directly, and that’s why I love this sport so much, because we have such a great running start,” Popko told CNBC.
    Popko said he will focus on three pillars once he steps into his role: growing sponsorships, building the media rights business, and licensing and merchandising strategy.
    As they continue to build the fanbase, DePietro says MLP is just scratching the surface in terms of the opportunity and monetization.
    “We have barely turned on any of the advertising knobs, much less the subscription knobs, we think there’s a massive opportunity to leverage a lot of the installed base, the excitement behind it, the avidity of the fans, of the players, and there’s tons of sponsorship and marketing opportunities for the league,” DePietro said.
    Another challenge the MLP faces is marketing and positioning more of its players as household names. Part of that effort means finding a consistent media partner. Currently, MLP tournaments can be viewed anywhere from YouTube and ESPN to the Tennis Channel or MSG Networks, which can be confusing to fans.
    “The good news is we are in advanced conversations with an A-plus-type broadcast partner who is interested in carrying our season live and all of our content for 2024,” DePietro said.
    Media viewership has consistently been growing for the sport. MLP’s Premier Level Super Final on June 19 reached over 975,000 viewers on ESPN2, according to the league.
    MLP said its YouTube livestream channel has seen a viewership increase of 500% over last year.
    DePietro also said MLP is in advanced conversations with another household name production company to create a series about the players themselves. He declined to name the production company or the broadcaster that MLP is in talks with.
    “They’re amazing athletes, some of them have incredible stories. Bringing the human element into it, I think is going to be a huge part in driving viewers for us,” he said. More

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    Stocks making the biggest moves in the premarket: Rivian, UPS, Coinbase and more

    SAN ANSELMO, CALIFORNIA – JUNE 06: In this photo illustration, the Coinbase logo is displayed on a screen on June 06, 2023 in San Anselmo, California. The Securities And Exchange Commission has filed a lawsuit against cryptocurrency exchange Coinbase for allegedly violating securities laws by acting as an exchange, a broker and a clearing agency without registering with the Securities and Exchange Commission. (Photo Illustration by Justin Sullivan/Getty Images)
    Justin Sullivan | Getty Images

    Check out the companies making the biggest moves before the bell:
    Rivian — Shares popped 6.5% in premarket trading, adding to Monday’s gains after the electric vehicle maker reported 12,640 deliveries during the second quarter. The deliveries were up 59% from the previous quarter and beat analyst expectations of 11,000 vehicles, according to StreetAccount.

    United Parcel Service — Shares of the logistics and delivery company fell more than 1% in premarket trading as negotiations between UPS and the Teamsters union appeared to hit an impasse. The union said in a statement Wednesday that negotiations had collapsed after UPS “walked away from the table.” UPS said in response that it had not walked away and was encouraging the union to return to the table. The current UPS Teamsters contract expires at the end of July.
    Coinbase — The crypto services company fell more than 2% after Piper Sandler downgraded the stock and said that, despite the recent market rally following the SEC’s lawsuit against Coinbase, the increase in crypto prices haven’t translated to an increase in trading volume. The firm also expects Coinbase to report its lowest trading volumes and monthly transacting users in over two years for the third quarter.
    AstraZeneca — The drugmaker climbed nearly 3%, after sinking 8% on Monday when AstraZeneca announced preliminary results of its phase three lung cancer treatment. The company said data for overall survival was “not mature” and results were not statistically significant, but the trial will continue. 
    Transocean — Shares of the offshore oil drilling company rose 3.7% after Citi upgraded them to buy from neutral. “We think Transocean is favorably positioned among offshore drilling peers given its sizable available fleet of idle rigs returning to work in the coming years,” Citi said.
    Hertz — Hertz shares gained more than 1% after Jefferies initiated coverage of the car rental company with a buy rating, citing the potential for stronger margins.

    American Equity Investment Life Holding — The stock added more than 2% after the company announced it will be acquired by Brookfield Reinsurance for about $4.3 billion. As part of the agreement, each AEL shareholder will receive $55 per AEL share.
    Wolfspeed — Shares soared more than 17% after the company signed a decade-long supply deal with Renesas to provide silicon carbide bare and epitaxial waters for $2 billion.
    — CNBC’s Tanaya Macheel and Jesse Pound contributed reporting. More

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    Airlines struggled ahead of July Fourth weekend. Their stocks didn’t

    Airline stocks have surged to multi-year highs despite a chaotic lead up to the July 4 holiday period.
    United had outsize delays as rolling thunderstorms hit its major hub in Newark, New Jersey.

    Travelers are seen ahead of the fourth of July holiday weekend at Hartsfield-Jackson Atlanta International Airport on June 30, 2023, in Atlanta, Georgia.
    Elijah Nouvelage | AFP | Getty Images

    Flight disruptions piled up at airports around the country ahead of the July Fourth weekend, but airline investors have largely shrugged them off.
    More than 63,000 flights operated by U.S. airlines, or 30% of their schedules, were delayed between June 24 through July 2. More than 9,000, or 4.2%, were canceled. Both of those percentages are above disruption averages so far this year, according to flight-tracking site FlightAware.

    On Tuesday, disruptions lessened with nearly 2,500 U.S. flight delays, half the number that were delayed on Monday, though thunderstorms continued to disrupt flights at major airports like Newark and Denver.
    The recent delays were driven mostly by a series of rolling storms coupled with other issues like a shortage of air traffic controllers in congested airspace around New York and other areas, derailing travel plans of thousands of customers. It upended what has been a mostly calm spring for travelers.
    But sky-high travel demand continues to keep airline stocks aloft, with several reaching multi-year highs.
    The Transportation Security Administration said it screened nearly 2.9 million people on Sunday, a record for a single day. It’s the clearest sign yet of unrelenting demand for air travel, as passengers book flights or cash in on rewards points and make up for lost time after the Covid pandemic halted trips.
    American Airlines and Delta Air Lines have recently raised their profit outlooks thanks to strong bookings. Lower fuel prices from last year continue to be a tailwind for the industry, too.

    Airlines release second-quarter results and will offer a full-summer outlook starting in mid-July, reports that will likely include the financial impact of the late June and early July disruptions.

    Airline stocks rise

    Major U.S. carriers’ stock gains this year are far outpacing the broader market.
    United Airlines and Delta are each up 46% so far this year through Monday, while American Airlines is up 42%. For comparison, the S&P 500 has gained 16% over the same period. Delta and United recently touched their highest levels since June 2021.
    Southwest Airlines, whose 2022 year-end meltdown drove it to a first-quarter loss, is up 10% this year.

    Stock chart icon

    The NYSE Arca Airline Index, which tracks mostly U.S. airlines, is up 51% year to date through Monday, outpacing the S&P 500’s 16% gain.

    Even over the past week as travel chaos hit operations, many airline stocks topped the S&P 500. United Airlines was an exception. Its stock dropped 1.7% as the carrier struggled to stabilize its operation while storms kept rolling through its hub at Newark Liberty International Airport.
    From June 24 through July 2, United had the biggest share of delays of U.S. carriers, accounting for 42% of its mainline schedule, according to FlightAware.

    Snowball effect

    The Federal Aviation Administration at the start of last week slashed the departure rate at Newark, which led to pileups of delays, CEO Scott Kirby said. When planes can’t depart, arriving flights don’t have a place to park so disruptions can easily snowball.
    “Airlines, including United, simply aren’t designed to have their largest hub have its capacity severely limited for four straight days and still operate successfully,” Kirby said in a note to staff this weekend.
    He said the airline will have to reduce its schedule in Newark, particularly during the spring and summer thunderstorm season to avoid pileups unless there is more capacity at the airport.
    Thunderstorms are difficult for airlines because they can pop up with little warning and are harder to predict than other types of weather like hurricanes or winter storms.
    Often, airlines will delay flights to wait for thunderstorms to clear and airspace to open up, rather than cancel, but crews can reach federally-mandated workday limits, adding to disruptions.
    David Neeleman, founder and former CEO of JetBlue Airways and CEO of Breeze Airways, said there’s not a lot an airline can do when there are such sharp cuts to airline arrival rates.
    Airlines could cancel proactively only to have the weather to clear up, he said. More