The daily business briefing: March 16, 2017

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1. Fed raises interest rates
2. Trump orders review of Obama fuel-efficiency standards
3. Stocks rise in Fed-fueled rally
4. Tesla to raise more than $1 billion ahead of Model 3 production
5. U.S. indicts Russian spies and hackers for Yahoo breach

published 16 March 2017

1. Fed raises interest rates

The Federal Reserve announced Wednesday that it was raising its benchmark interest rate by a quarter percentage point for the second time in three months. Fed policy makers had telegraphed the move, which lifts the rate to a range of 0.75 percent to 1 percent, by saying before the two-day meeting that improving employment and inflation data showed that the economy was strong enough to justify raising rates. Some economists had expected the Fed to pick up the pace of its rate hikes, but the central bank's leaders stuck with their forecast of two more increases this year and three in 2018. "The simple message is the economy is doing well," Fed Chair Janet Yellen said.

President Trump on Wednesday ordered a review of tough automobile fuel-efficiency standards imposed by the Obama administration. The decision was interpreted as a sign that Trump plans to ease fuel standards in what would be a significant victory for auto makers and a bitter defeat for environmental groups and Democrats. "The assault on the American auto industry is over," Trump told cheering union workers in Michigan. He promised to "ensure that any regulations we have protect and defend your jobs, your factories." Sen. Edward Markey (D-Mass.) said Trump's move would hurt consumers. "President Trump's rollback of fuel economy emissions standards means families will end up paying more at the pump," Markey said.

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U.S. stock futures gained early Thursday as a rally inspired by the Federal Reserve's decision to raise interest rates continued. Stocks soared on Wednesday after the Fed announced that it was hiking rates for the third time in 15 months, but signaled a less aggressive pace for future hikes than some investors had feared. After the Fed's move on Wednesday, the Dow Jones Industrial Average jumped by about 110 points, and the Nasdaq-100 closed at a record high, helped by an all-time high for Apple shares. "Most people were expecting a much more hawkish statement," said Diane Swonk of DS Economics. "The dissent along with the waffling language on inflation, even though the economic language was strong," indicated that the Fed would continue its gradual approach, she said.

Tesla said on Wednesday that it expected to get a $1.15 billion infusion of capital by selling off some stock and convertible notes. The money will give the company much-needed cash as it prepares for production of its Model 3 sedan. Tesla's CEO, tech entrepreneur Elon Musk, telegraphed the move last month when he said the electric-car maker would be "close to the edge" on its cash needs as it heads into the launch of the Model 3, its first mass-market electric sedan. Some analysts had expected Tesla to try to raise up to $2.5 billion.

Federal prosecutors on Wednesday unsealed indictments against two Russian spies and two criminal hackers in connection with a cyberattack that compromised the accounts of 500 million Yahoo users in 2014. The charges mark the first criminal hacking case the U.S. government has ever filed against Russian agents. The two Russian officials — Dmitry Dokuchaev and his superior, Igor Sushchin — are officers in Russia's Federal Security Service, a successor of the Soviet-era KGB. The alleged hackers named in the indictment were Alexsey Belan, who is on the list of most-wanted cyber criminals, and Karim Baratov, a Kazakhstan-born Canadian citizen who was arrested in Canada.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.