Economy

The Federal Reserve has been successful in bringing down inflation from its peak in June, with the current interest rate set between 5.2% and 5.5%. This has been achieved while maintaining an unemployment rate below 4%, indicating a resilient labor market amidst the central bank’s inflation control measures.Despite a slight increase in inflation in December, there is a consensus that interest rate cuts are on the horizon. However, officials emphasize the importance of waiting for clear evidence that inflation is on a sustained decline towards the Fed’s target before making any adjustments to the current policy.As of now, no changes to interest rates are expected at the upcoming Federal Reserve meeting scheduled for January 31. Some market participants are forecasting that rate cuts could begin as early as May, but this remains speculative until further data and official statements are provided.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

QUITO (Reuters) -The administration of Ecuadorean President Daniel Noboa has asked lawmakers to weigh an increase in value added tax (VAT) to finance efforts to combat crime gangs, as the armed forces increased operations in violent areas on Friday.A dramatic spike in violence this week – including the on-air storming of a TV station, the hostage-taking of 178 prison staff by inmates and the kidnapping of police officers – appears to be a response by gangs to Noboa’s plans to tackle a dire security situation, the government has said.Noboa, who took office in November, has declared a state of emergency and named 22 gangs as terrorist organizations. A total of eight prison staff have been released since late on Thursday, prisons agency SNAI said in a statement on Friday. Three were being held in Azuay prison in Cuenca, where 21 hostages have also been attended to by the Red Cross. Three were released from a prison in Canar province, while two others were freed in Esmeraldas.Remaining hostages number 170 – 155 are prison guards and 15 are administrative staff.The death of an inmate at a prison in El Oro province is being investigated, SNAI added. The government has said operations to free hostages taken at least seven prisons are ongoing, but there has been scant information about their status, leading to criticism by their families and union.Videos purporting to show prison staff being subjected to extreme violence, including shooting and hanging, have circulated on social media, but the government has said no hostage has been killed and that some videos had been altered.Reuters could not independently verify the videos.Security has worsened in tandem with serious economic troubles, as the country grapples with domestic liquidity problems, limited options for foreign financing and tens of billions in external debt.Noboa’s tax proposal, sent to the national assembly late on Thursday, would raise VAT by three points to 15%. The bill is classed as urgent and must be approved within 30 days.The measure would not be levied on basic food products, medicine, public utilities, transport, health or education costs or rented housing, among other things, the government said in a statement.”The current security crisis in Ecuador underlines the urgency to increase potential tax collection for the state,” Noboa said in a document shared with the assembly. “Increasing VAT will give the state a constant source of income.”LAWMAKER DISAGREEMENT The measure could raise more than $1.3 billion per year and would come into force in March. Funds would go to finance weapons and equipment for security forces and improvements to the prison system, as well as the payments owed to regional governments, the document said.Lawmakers – in a rare show of unity – have already approved two urgent proposals from Noboa’s government, another tax bill meant to increase youth employment and a law designed to attract investment in the electricity sector.But lawmakers from the leftist Citizens’ Revolution party, which is part of Noboa’s majority coalition, said in a statement they will not back the VAT measure, instead urging him raise funds through tax on foreign capital transfers or one-time duties on large sums.”President Noboa, you have options, but not at the cost of the wallets of a hurting citizenry!” the legislators said in a post to social media.The Social Christian party, also part of Noboa’s coalition, also said it would not back the bill, potentially forcing the president to seek agreements or make amendments with minority parties.Ecuador closed 2023 with a fiscal deficit of more than $5.7 billion, according to the government. Its foreign debt totals more than $47 billion.”Higher public spending on security and a likely loss in revenues from slower growth will put pressure on the government’s budget balance. That will make the job of establishing the country’s strained public finances even harder,” Capital Economics said in a note.The military on social media said it has intensified operations in several provinces, arresting gang members and seizing weapons.The attorney general’s office said three people were being held on charges of plotting an attack on the head of the national police, without providing further details. The police made no comment on the issue.Noboa’s government blames the deteriorating security situation on an increase in drug trafficking through Ecuador, which borders cocaine-producing Colombia and Peru and has become a major drug shipment point.Noboa on Thursday presented details of two new high-security prisons he has pledged to build to hold top gang leaders.The chairmen of foreign relations committees at the United States Congress reaffirmed their support for Noboa’s efforts to restore order in a joint Friday statement. Washington has not yet provided details of the aid it may offer Ecuador, but the State Department said on Thursday law enforcement officials will travel there to assist with criminal investigations.Ecuador will ask people entering the country across its borders with Peru and Colombia to show their criminal record or lack of one during the duration of the state of emergency, the government said late on Thursday. More

While W Café is now exclusively accepting non-cash payments, Woolworths supermarkets will continue to accept cash, ensuring that customers have options based on their payment preferences. The decision to go cashless at the café chain has sparked conversations about the evolving landscape of retail payments and the balance between technological advancements and the use of traditional currency.The shift towards cashless operations isn’t unique to Woolworths. Other retailers such as Checkers Rush, Starbucks (NASDAQ:SBUX), PNA, Checkers’ Uniq stores, and the OK Urban concept store have also adopted electronic payment methods exclusively. This global movement towards cashless transactions is designed to enhance the customer experience and increase safety measures. However, it also brings to the forefront issues concerning financial inclusivity and privacy, as not all consumers may have access to digital payment options or may be wary of the privacy implications of such transactions.The adoption of cashless systems by these retailers is part of a significant transformation in the industry, as businesses aim to streamline operations and cater to the changing preferences of consumers who increasingly rely on digital payment methods. Despite the potential benefits, the conversation around this transition also reflects the need to consider the diverse needs of all customers, including those who may be impacted by the shift away from cash.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The fake post on Tuesday said the SEC had approved trading of spot bitcoin exchange-traded funds (ETFs), sending industry executives scrambling. Bitcoin prices had whipsawed ahead of an expected announcement on Wednesday by the agency to allow trading of the products. “While SEC staff is still assessing the scope of the incident, there is currently no evidence that the unauthorized party gained access to SEC systems, data, devices, or other social media accounts,” the SEC said in a statement.The SEC quickly disavowed and deleted the post. X, formerly Twitter, later said the account was compromised because of an “unidentified individual” obtaining control of a phone number.The SEC did approve the bitcoin ETFs on Wednesday.The SEC said the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency has joined the FBI and the SEC’s inspector general in investigating the breach. More

The coffee chain has challenged a federal judge’s order to reinstate a group of union activists who were fired at a store in Memphis.The Supreme Court agreed on Friday to hear a case brought by Starbucks challenging a federal judge’s order to reinstate seven employees who were fired at a store in Memphis amid a union campaign there.Starbucks argued that the criteria for such intervention by judges in labor cases, which can also include measures like reopening shuttered stores, vary across regions of the country because federal appeals courts may adhere to different standards.A regional director for the National Labor Relations Board, the company’s opponent in the case, argued that the apparent differences in criteria among appeals courts were semantic rather than substantive, and that a single effective standard was already in place nationwide.The labor board had urged the Supreme Court to stay out of the case, whose outcome could affect union organizing across the country.The agency asks federal judges for temporary relief, like reinstatement of fired workers, because litigating charges of unfair labor practices can take years. The agency argues that retaliation against workers can have a chilling effect on organizing in the meantime, even if the workers ultimately win their case.In a statement on Friday, Starbucks said, “We are pleased the Supreme Court has decided to consider our request to level the playing field for all U.S. employers by ensuring that a single standard is applied as federal district courts.”The labor board declined to comment.The union organizing campaign at Starbucks began in the Buffalo area in 2021 and quickly spread to other states. The union, Workers United, represents workers at more than 370 Starbucks stores, out of roughly 9,600 company-owned stores in the United States.The labor board has issued dozens of complaints against the company based on hundreds of accusations of labor law violations, including threats and retaliation against workers who are seeking to unionize and a failure to bargain in good faith. This week, the agency issued a complaint accusing the company of unilaterally changing work hours and schedules in unionized stores around the country.The company has denied violating labor law and said in a statement that it contested the latest complaint and planned “to defend our lawful business decisions” before a judge.The case that led to the dispute before the Supreme Court involves seven workers who were fired in February 2022 after they let local journalists into a closed store to conduct interviews. Starbucks said the incident violated company rules; the workers and the union said the company did not enforce such rules against workers who were not involved in union organizing.The labor board found merit in the workers’ accusations and issued a complaint two months later. A federal judge granted the labor board’s request for an order reinstating the workers that August, and a federal appeals court upheld the order.“Starbucks is seeking a bailout for its illegal union-busting from Trump’s Supreme Court,” Workers United said in a statement on Friday. “There’s no doubt that Starbucks broke federal law by firing workers in Memphis for joining together in a union.”Starbucks said it was critical for the Supreme Court to wade into the case because the labor board was becoming more ambitious in asking judges to order remedies like reinstatement of fired workers.The labor board noted in its filing with the Supreme Court that it was bringing fewer injunctions overall than in some recent years — only 21 were authorized in 2022, down from more than 35 in 2014 and 2015.A Supreme Court decision could in principle raise the bar for judges to issue orders reinstating workers, effectively limiting the labor board’s ability to win temporary relief for workers during a union campaign.The case is not the only recent challenge to the labor board’s authority. After the board issued a complaint accusing the rocket company SpaceX of illegally firing eight employees for criticizing its chief executive, Elon Musk, the company filed a lawsuit this month arguing that the agency’s setup for adjudicating complaints is unconstitutional.The company said in its lawsuit that the agency’s structure violated its right to a trial by jury. More

Since President Tayyip Erdogan won re-election in May, authorities have abandoned the unorthodox low interest rate policy in favour of a sharp policy tightening.The ratings agency said the policy pivot now improves the prospects for bringing down the country’s currently very high inflation rates to more sustainable levels, the agency said.”While headline inflation is likely to rise further in the near term, there are signs that inflation dynamics are starting to turn, indicative of monetary policy regaining credibility and effectiveness,” Moody’s said.Turkey’s annual inflation rate climbed to 64.77% in December, sustaining an upward trend that is expected to continue in coming months after a big rise in the minimum wage.The agency maintained Turkey’s ratings at “B3”. More

The shift is indicative of the importance of new artificial intelligence technology to Silicon Valley and Wall Street investors.For more than a decade, Apple was the stock market’s undisputed king. It first overtook Exxon Mobil as the world’s most valuable public company in 2011 and held the title almost without interruption.But a transfer of power has begun.On Friday, Microsoft surpassed Apple, claiming the crown after its market value surged by more than $1 trillion over the past year. Microsoft finished the day at $2.89 trillion, higher than Apple’s $2.87 trillion, according to Bloomberg.The change is part of a reordering of the stock market that was set in motion by the advent of generative artificial intelligence. The technology, which can answer questions, create images and write code, has been heralded for its potential to disrupt businesses and create trillions of dollars in economic value.When Apple replaced Exxon, it ushered in an era of tech supremacy. The values of Apple, Amazon, Facebook, Microsoft and Google dwarfed former market leaders like Walmart, JPMorgan Chase and General Motors.The tech industry still dominates the top of the list, but the companies with the most momentum have put generative A.I. at the forefront of their future business plans. The combined value of Microsoft, Nvidia and Alphabet, Google’s parent company, increased by $2.5 trillion last year. Their performances outshined Apple, which posted a smaller share price increase in 2023.“It simply comes down to gen A.I.,” said Brad Reback, an analyst at the investment bank Stifel. Generative A.I. will have an impact on all of Microsoft’s businesses, including its largest, he said, while “Apple doesn’t have much of an A.I. story yet.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

The inflation rate during the previous year clocked in at 234%, one of the highest inflation rates anywhere in the world.But Venezuela’s monthly inflation for December eased to just 2.4%, according to the bank.While Venezuela’s economy has suffered a prolonged meltdown marked by triple-digit inflation and a mass exodus of millions of migrants seeking better prospects elsewhere, its inflation rate is no longer Latin America’s steepest since Argentina’s sped past 200% last year. More