The daily business briefing: June 15, 2017
The Fed hikes interest rates as economy improves, judge orders fresh Dakota Access Pipeline environmental review, and more
Fed hikes interest rates in sign of confidence in economy
The Federal Reserve on Wednesday raised its benchmark short-term interest rate for the third time since December in a sign of confidence in the economy. At the end of a two-day meeting, Fed policy makers lifted the interest rate by a quarter percentage point to a range of 1 percent to 1.25 percent, and said they were sticking to their forecast of one more interest rate increase this year. They also announced a plan to reduce the $4.5 trillion portfolio in Treasurys and mortgage-backed securities the central bank accumulated as part of its effort to stimulate the economy after the 2008 financial crisis. Fed leaders said that with inflation nearing their 2 percent target and the employment market improving, they believe the economy can continue gaining strength on its own. "We continue to feel the economy is doing well," Fed Chairwoman Janet Yellen said.
Judge orders new environmental review of Dakota Access Pipeline
A federal judge on Wednesday ordered the federal government to conduct a new environmental review of the Dakota Access Pipeline project, saying the original review was inadequate. The ruling marked a limited victory for Native American tribes that challenged a North Dakota stretch of the 1,170-mile pipeline project, although U.S. District Judge James Boasberg did not order the pipeline's operators to stop pumping oil through the now-completed pipeline. Boasberg wrote that the Army Corps of Engineers, which permitted the project, "did not adequately consider the impacts of an oil spill on fishing rights, hunting rights, or environmental justice, or the degree to which the pipeline's effects are likely to be highly controversial." Boasberg said opponents' request to halt the flow of oil was a "separate question" he will consider later.
Automakers and tech companies ask to test more autonomous vehicles
Automakers are asking Congress to expand the cap on how many experimental self-driving cars are allowed on the road, hoping to accelerate the development of the technology, according to testimony from the Alliance of Automobile Manufacturers at a Senate hearing Wednesday. Automakers and technology companies, including GM, Apple, Uber, and Alphabet Inc.'s Waymo unit, are testing autonomous vehicle systems, racing to put the technology on the road, promising it can reduce traffic fatalities. They say they need more waivers from safety officials, however, to log enough test miles to prove the technology is safe.
Stocks struggle after Fed announces latest rate hike
Global stocks lost ground early Thursday after the Federal Reserve raised interest rates by a quarter point for the third straight quarter. Germany's DAX dropped by 0.6 percent, and Britain's FTSE 100 fell by 0.4 percent to 7,474.40. In the U.S., Dow Jones Industrial Average futures fell by 0.3 percent, and S&P 500 futures lost 0.5 percent, pointing to a lower open. The Dow closed at a fresh record on Wednesday, up 45 points, after the Fed announced the hike as expected, but the S&P 500 closed down by 0.1 percent. Despite a falling inflation rate, Fed Chairwoman Janet Yellen "wants to hike again and stocks don't like that," said Peter Boockvar, chief market analyst at The Lindsey Group.
Fiat Chrysler recalls nearly 300,000 minivans over airbag issue
Fiat Chrysler announced Thursday that it was recalling 297,000 minivans in North America due to a wiring issue that can lead to "inadvertent deployment" of driver-side airbags. The issue in 2011-2012 Dodge Grand Caravans has been linked to 13 minor injuries, the company said. The recall covers 209,135 vehicles in the U.S., and 87,703 in Canada. Dealers will replace wires, if necessary, and add protective covering to fix the problem.