High inflation and efforts to tame it defined 2022 economy
WASHINGTON (AP) — At times, 2022 felt like the 1970s or early ’80s. Inflation running rampant. A bleak outlook leaving people feeling sour and anxious. It wasn’t supposed to turn out like this. When the Federal Reserve’s policymakers made their 2022 forecasts a year ago, they felt almost cheery. It turns out they underestimated how much wage growth, supply shortages and the pent-up desire of consumers to spend would conspire to keep inflation high. But mainly what they didn’t foresee was that Russia would invade neighboring Ukraine in February this year — an act of shocking aggression that upended world trade in energy and farm products and sent oil, natural gas and grain prices soaring.
Lawmakers quick to unload FTX founder’s contributions
WASHINGTON (AP) — Lawmakers who eagerly accepted piles of cash from Samuel Bankman-Fried now can’t move fast enough to offload contributions from the disgraced crypto mogul to anywhere but their own campaign coffers. Before Bankman-Fried’s arrest, he was a prolific political donor to individual candidates right up to President Joe Biden as well as super PACs that can wield outsized influence in campaigns. Now he’s facing a slew of charges, including making illegal campaign contributions. The Associated Press contacted more than four dozen current and incoming lawmakers who received contributions from Bankman-Fried this election cycle. Many were quick to respond, stressing that they had already donated or plan to send the money to charity.
Musk’s Twitter tweaks foreshadow EU showdown over new rules
LONDON (AP) — Elon Musk’s more unfettered version of Twitter could collide with new rules in Europe. Officials warn the social media company will have to comply with some of the world’s toughest laws targeting toxic content. The new digital rulebook means the European Union is likely to be a global leader in cracking down on Musk’s reimagined platform. But the 27-nation bloc will face its own challenges forcing Twitter and other online companies to comply. The law doesn’t fully take effect until 2024, and EU officials are scrambling to recruit enough workers to hold Big Tech to account.
CES 2023: Tech world to gather and show off gadgets
NEW YORK (AP) — CES is returning to Las Vegas this January with the hope that it inches closer to how it looked before the pandemic. Next month’s show will also come amid a tough climate for the tech industry, which has gone through a spate of layoffs and hiring freezes. Organizers say their goal for the show is to draw in 100,000 attendees. That would be a positive change from the look and feel of the past two events, which saw big drops in attendance over COVID fears or was held virtually. But even if organizers reach their goal, January’s CES would still see a 41% dip in attendance compared to the in-person show held in early 2020, before the pandemic consumed much of everyday life.
Retail sales drop at start of key holiday shopping season
WASHINGTON (AP) — Americans cut back their retail spending last month as the holiday shopping season began amid high prices and rising interest rates that are forcing some families, particularly those with lower incomes, curtail their consumption. The government said Thursday that retail sales fell 0.6% from November to December, after a sharp rise the previous month. Sales fell at furniture, electronics, and home and garden stores.
US stocks sink as Fed signals it will remain aggressive
NEW YORK (AP) — Stocks tumbled in the U.S. and Europe as investors grew increasingly concerned that the Federal Reserve and other central banks are willing to risk a recession to bring inflation under control. The S&P 500 fell 2.5% Thursday, erasing its gains from early in the week. The tech-heavy Nasdaq composite lost 3.2% and the Dow gave back 2.2%. A day earlier, the Fed said interest rates will need to go higher than previously expected in order to tame inflation. The yield on the two-year Treasury note, which tracks expectations for Fed moves, rose to 4.24% from 4.21% late Wednesday.
Tesla closes up despite Musk selling $3.58B of its shares
AUSTIN, Texas (AP) — Shares of Tesla have risen slightly despite news that CEO Elon Musk sold another $3.58 billion worth of the electric vehicle maker’s stock this week. The stock closed at $157.67, faring better than the broader markets. Musk sold the shares from Monday through Wednesday. That’s according to a filing posted Wednesday night by the U.S. Securities and Exchange Commission. It wasn’t clear where the proceeds were being spent. Musk has sold nearly $23 billion worth of Tesla stock since April, with much of the money likely going to help fund his $44 billion acquisition of Twitter. Tesla’s stock has lost over half its value since Musk first disclosed in April that he was buying up Twitter stock.
Average long-term US mortgage rates inch down this week
WASHINGTON (AP) — The average long-term U.S. mortgage rate declined for the fifth straight week, even as the Federal Reserve just raised its key borrowing rate for the seventh time this year and signaled there were more to come in 2023. Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate inched down to 6.31% from 6.33% last week. The Federal Reserve raised its rate again Wednesday by 0.50 percentage points in a bid to bring down the highest inflation in decades. Higher interest rates have stalled the housing market, with sales of previously occupied U.S. homes declining for nine straight months.
The S&P 500 tumbled 99.57 points, or 2.5%, to 3,895.75. The Dow Jones Industrial Average fell 764.13 points, or 2.2%, to 33,202.22. The Nasdaq lost 360.36 points, or 3.2%, to 10,810.53. The Russell 2000 index of smaller companies retreated 45.85 points, or 2.5%, to 1,774.61.