Business briefing

The daily business briefing: April 7, 2022

Fed minutes show support for bigger rate hikes, Big Oil tells lawmakers high pump prices aren't its fault, and more

1

Fed minutes show support for tougher action against inflation

The Federal Reserve released minutes from its most recent policy meeting that suggested it was prepared to take more aggressive steps to fight inflation. Fed officials said in the minutes from the March meeting that it "could be appropriate" to raise interest rates by a half-point, instead of the traditional quarter-point, several times this year. Several of the central bank's leaders backed a half-point hike at the March meeting, although the Fed wound up raising rates by just a quarter-point at the close of the two-day meeting. It was the Fed's first rate hike since 2018. One reason the Fed held back was uncertainty about the economic impact of Russia's invasion of Ukraine.

2

Big Oil tells lawmakers it's not responsible for high pump prices

Oil executives defended themselves in a House hearing on Wednesday, saying their companies were not responsible for high gasoline prices. Gas prices surged after Russia's invasion of Ukraine sent crude oil prices soaring. Since then, crude prices have dropped by 23 percent but pump prices have dropped just 4 percent from their March 11 record. Rep. Diana DeGette (Colo.), the Democratic chair of the House Energy and Commerce Subcommittee on Oversight and Investigations, said gas prices are "constraining our constituents' budgets and patience." Chevron's chief executive, Mike Wirth, said companies have little control over the market dynamics that determine fuel prices, and it takes time for competition at gas stations to bring prices down.

3

Buffett's Berkshire takes 11 percent stake in HP

Billionaire investor Warren Buffett's Berkshire Hathaway has bought an 11 percent stake in PC and printer maker HP. The news sent HP shares jumping by more than 15 percent in pre-market trading on Thursday. Berkshire purchased nearly 121 million HP shares, worth about $4.2 billion at Wednesday's closing price. HP has lagged behind other tech giants for years, with its stock rising by less than 50 percent since 2009 before the Berkshire news. The investment came as Berkshire was getting more active after holding back earlier in the coronavirus pandemic. The company last month announced a deal to buy insurance company Alleghany for $11.6 billion. It also has been buying shares of Occidental Petroleum.

4

Senate to consider ending normal trade relations with Russia

The Senate on Thursday will consider legislation to end normal trade relations with Russia and ban Russian oil imports over its invasion of Ukraine, Senate Majority Leader Chuck Schumer announced Wednesday. The House passed the trade suspension measure three weeks ago, but the legislation has been stalled in the Senate. The push to vote on the proposal in the Senate comes as global outrage rises over evidence of Russian atrocities against civilians. "It's a big, big deal that we are finally getting them done," Schumer said. Final approval of the trade suspension would clear the way for President Biden to raise tariffs on Russian imports. The Biden administration announced new sanctions on Wednesday, including an executive order banning new investment in Russia.

5

Stock futures rise after 2 days of losses

U.S. stock futures rose slightly early Thursday following Wednesday's losses. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up by 0.1 percent and 0.3 percent at 6:30 a.m. ET. Nasdaq futures were up 0.5 percent. Stocks dropped for the second straight day on Wednesday after the Federal Reserve released minutes from its March meeting showing that officials "generally agreed" the Fed should reduce its balance sheet by $95 billion per month. The minutes also indicated support for sharper interest rate hikes to fight surging inflation. The 10-year Treasury yield rose 2.65 percent to a three-year high. The Dow closed down 0.4 percent. The S&P 500 fell 1 percent and the tech-heavy Nasdaq dropped 2.2 percent.

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