Fed: Bernanke lays out stimulus timeline
Federal Reserve Chairman Ben Bernanke indicated this week that the central bank would begin tapering off its monetary stimulus measures later this year, said Binyamin Appelbaum in The New York Times, “if unemployment continued to decline” as expected. In a much anticipated press conference, Bernanke said that the Fed would continue its economy-boosting practice of purchasing about $85 billion in securities per month until the unemployment rate falls to about 7 percent from its current rate of about 7.6 percent. Bernanke said ending the stimulus program properly was like trying “to land the ship in a smooth way onto the aircraft carrier.”
Bernanke made a point of not locking in his course, said Ylan Q. Mui in The Washington Post. “Our policy is in no way predetermined and will depend on the incoming data and the outlook,” the Fed chairman said. Yet investors quickly acted on their impression that the Fed’s aggressive stimulus program would fade by selling stocks, pushing major indexes down by at least 1 percent during and immediately after Bernanke’s remarks. The central bank lowered its prediction for overall U.S. economic growth this year to 2.6 percent, from 2.8 percent, but upgraded its projection for 2014 growth to 3.5 percent, from 3.0 percent.
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Retail: Men’s Wearhouse founder ousted
Discount clothing outlet Men’s Wearhouse Inc. this week removed founder George Zimmer as executive chairman, said Tiffany Hsu in LATimes.com. Zimmer, who launched the company in 1973, was best known for his television commercial catchphrase, “You’re going to love the way you look. I guarantee it.” The company gave no reason for his dismissal. Men’s Wearhouse’s stock has risen more than 30 percent in the last year, but shares “quickly dived nearly 7 percent” upon this week’s announcement.
Banks: Charges leveled in Libor rigging case
British authorities this week charged former UBS and Citibank trader Tom Hayes with “conspiracy to defraud” by rigging the London Interbank Offered Rate, or Libor, said David Enrich in The Wall Street Journal. Hayes—“nicknamed ‘Rain Man’ by colleagues because they saw him as brainy but socially awkward”—is alleged to have colluded with other traders to manipulate the benchmark rate, which determines a vast array of international interest rates. The British charges make it unlikely that Hayes will be extradited to face earlier U.S. charges. The trader told the Journal that “this goes much much higher than me.”
Cars: Chrysler agrees to recall Jeeps
Chrysler caved in to the government’s request that it recall 2.7 million defective Jeeps, said James R. Healey in USAToday.com. The National Highway Traffic Safety Administration “set events in motion earlier this month” when it recommended that Chrysler voluntarily recall Jeep Grand Cherokees from the years 1993 to 2004 and Liberty SUVs from the years 2002 to 2007. The NHTSA said the vehicles were liable to “erupt into fire if rear-ended.” Chrysler had insisted the vehicles were safe, but this week agreed to carry out inspections and provide upgrades.
Food and drink: Starbucks posts calorie counts
Your morning Starbucks is about to “come with a full disclosure of its caloric content,” said Alexandra Sifferlin in Time.com. The company has announced that its 11,000 U.S. locations will provide calorie counts for their beverages and baked goods. Starbucks already offers nutritional information online and in its New York outlets. By publishing the data nationwide, the company gets a head start on an Affordable Care Act provision requiring that “any restaurant chain with over 20 locations in the U.S. must post calorie counts on their menus by 2014.”
