The daily business briefing: September 20, 2022
Ford warns supply chain costs are jumping an extra $1 billion this quarter, "Grand Theft Auto" maker confirms a major leak, and more
Ford warns 3rd-quarter supply-chain costs up an extra $1 billion
Ford Motor shares fell more than 4 percent in after-hours trading after the automaker said Monday that supply-chain costs would jump $1 billion higher than previously expected in the third quarter due to inflation and shortages of some parts. Ford and other car manufacturers have struggled to produce enough vehicles for nearly two years due to a shortage of computer chips, and Ford's warning suggests supply-chain issues will remain a problem into next year. Ford said it expects to have up to 45,000 vehicles it won't be able to ship at the end of the quarter because of missing components. That's more than expected, but down from the 53,000 vehicles that weren't completed in July.
'Grand Theft Auto' maker confirms major leak
Rockstar Games confirmed Monday that 90 videos of in-development footage from the next installment of its blockbuster Grand Theft Auto game were leaked online Sunday. "We recently suffered a network intrusion in which an unauthorized third party illegally accessed and downloaded confidential information from our systems, including early development footage for the next Grand Theft Auto," the publisher said. Bloomberg reporter Jason Schreier described it as "one of the biggest leaks in video game history." The breach was particularly significant because little information had previously been available about the game, Grand Theft Auto VI, which Rockstar only confirmed was in development in February 2022, nearly a decade after the release of Grand Theft Auto V.
Fed leaders start 2-day meeting expected to end with big rate hike
Federal Reserve policy makers gather Tuesday to start a two-day meeting expected to end with a third straight 0.75 percentage point interest-rate hike, part of the Fed's aggressive effort to fight inflation. When the central bank made the first three-quarter point increase, Fed chair Jerome Powell described it as an "unusually large one," and said he didn't "expect moves of this size to be common." But following the release of hotter-than-expected August inflation data last week, some analysts are now suggesting the Fed might even consider raising rates a full percentage point to slow growth and consumer demand enough to stop prices from rising so sharply.
FAA rejects Republic Airways request to ease pilot training standards
Federal regulators on Monday denied Republic Airways' request to relax commercial pilot hiring standards to help airlines contend with a global pilot shortage. The regional airline asked the Federal Aviation Administration in April to let graduates of Republic's LIFT Academy to become airline co-pilots with 750 hours of flight experience, down from the typical 1,500 flight-hour requirement. Republic, which operates 1,000 daily flights for American Eagle, Delta Connection, and United Express, had argued its in-house program would still be providing training as complete as military flight training. The FAA said it "determined that the airline's new training program does not provide an equivalent level of safety as the regulation requiring 1,500 hours of flight experience before a pilot may work for an airline."
Stock futures fall as Fed leaders meet
U.S. stock futures fell early Tuesday as investors awaited the Federal Reserve's next interest rate hike, which is expected Wednesday at the end of a two-day policy meeting. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.4 percent at 7 a.m. ET. Nasdaq futures were down 0.5 percent. The Dow gained 0.6 percent on Monday. The S&P 500 and the tech-heavy Nasdaq rose 0.7 percent and 0.8 percent, respectively. The Fed is expected to announce a 0.75 percentage point rate hike Wednesday. Stocks fell last week as an unexpectedly hot August consumer price index report fueled concerns the Fed would have to intensify and extend its already aggressive rate hikes to fight high inflation.