The daily business briefing: June 14, 2023

1. Inflation slowed in May

Consumer price growth dropped to an annual rate of 4% in May from 4.9% in April, adding to data supporting an expected pause in the Federal Reserve's aggressive campaign to raise interest rates at the close of a two-day meeting on Wednesday. Inflation has been falling slowly but steadily since peaking at a 40-year high of 9.1% in June 2022. The Fed has been committed to hiking rates sharply enough to slow the economy and bring down inflation, even it if means tipping the economy into a recession. Despite the improvement, "core inflation," excluding volatile food and energy costs, remained high at 5.3%, down from 5.5% in April, suggesting more rate hikes are likely later in the year.

The Washington Post Politico

2. Instant Pot maker files for bankruptcy protection

Instant Brands, maker of Pyrex glassware and Instant Pot cooking gadgets, has filed for Chapter 11 bankruptcy protection as inflation added to its longstanding financial troubles. The Chicago-based company said in its filing with the U.S. Bankruptcy Court for the Southern District of Texas that it has more than $500 million in both assets and liabilities. The company benefited from a pandemic-fueled surge in home cooking, but sales plunged after lockdowns were lifted and people could go out. Inflation later forced U.S. households to cut spending, and sales dropped further. Sales of "electronic multicooker devices," most of them Instant Pots, soared to $758 million in 2020 and plummeted to $344 million last year.

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The Associated Press

3. Judge grants FTC request to temporarily block Microsoft's Activision deal

U.S. District Judge Edward Davil on Tuesday temporarily blocked Microsoft's planned $69 billion deal to acquire video game maker Activision Blizzard. Davila scheduled a two-day evidentiary hearing for next week to consider the Federal Trade Commission's request to prevent the deal from going through during an administrative review of the case. Davila said the temporary restraining order "is necessary to maintain the status quo while the complaint is pending (and) preserve this court's ability to order effective relief in the event it determines a preliminary injunction is warranted." The FTC argues that the deal would reduce competition by giving Microsoft's Xbox consoles exclusive access to Activision games like "Call of Duty." Microsoft says the deal would benefit gamers.

CNN

4. S&P 500 futures edge higher ahead of Fed decision

S&P 500 and Nasdaq futures rose slightly ahead of the Federal Reserve's decision on interest rates. Futures tied to the S&P 500 and the Nasdaq were up 0.2% at 6:30 a.m. ET. Dow Jones Industrial Average futures were down 0.2%. The Fed is expected to pause its aggressive campaign to hike rights to fight high inflation at the end of its two-day policy meeting later Wednesday. Investors will pay close attention to Fed Chair Jerome Powell's remarks, seeking clues on where interest rates might be headed later this year. May's producer price index is due out Wednesday morning. Economists polled by Dow Jones expected a 0.1% decline, which would add to indications inflation is edging lower and bolster the case for pausing rate hikes.

CNBC

5. 'Last Beatles record' coming thanks to AI

Paul McCartney said Tuesday he has used artificial intelligence to convert an old recording of his late bandmate John Lennon to create "the last Beatles record." He said it would be released later this year, more than a half century after the group's last studio album. McCartney said Hollywood director Peter Jackson, who made the 2021 documentary film "The Beatles: Get Back," isolated Lennon's voice from "a ropy little bit" of an old demo tape. "We were able to take John's voice and make it pure through AI and you were able to mix the record as you would normally do," McCartney told the BBC. The BBC said the song was probably Lennon's 1978 composition "Now and Then."

The Wall Street Journal