Central bank: Fed signals likely rate cut
The Federal Reserve “indicated a readiness” to make rate cuts soon, said Craig Torres in Bloomberg.com. The central bank held rates steady but “dropped a reference in their statement to being ‘patient’ on borrowing costs,” signaling that it could move if the economic outlook weakens. One of the Fed’s top policymakers voted in favor of an immediate rate cut, “the first dissent of Jerome Powell’s tenure as chairman.” President Trump, angry that the Fed has not lowered rates to “juice the economy,” had earlier asked White House lawyers “to explore his options for demoting Powell from the chairmanship.”
Airlines: Relief for Boeing in 200-plane purchase
The parent company of British Airways agreed to purchase 200 of Boeing’s troubled 737 Max jets this week, said Dominic Gates in the Seattle Times, the first deal for the once best-selling planes since The fleet was grounded in March after two fatal crashes. The list price for the jets is about $24 billion, but the purchase “might merit a discount much larger than standard.” Nonetheless, it was a “stunning vote of confidence at a pivotal moment” for Boeing, after rival Airbus announced it would build a new long-range, single-aisle jetliner.
Payments: Facebook to launch its own currency
Facebook unveiled plans this week to launch a “secure, scalable, and reliable” cryptocurrency, said Jeff Horwitz and Parmy Olson in The Wall Street Journal. The social media giant is working with 27 corporate partners on developing a digital payment system, called Libra, for users to “buy things and pay each other” all around the world. The currency would be “backed by a basket of global currencies,” and thus cushioned from “the volatility of other cryptocurrencies that aren’t pegged to anything,” such as Bitcoin.
China: Getting closer on trade
President Trump said he “had a very good telephone conversation” with Chinese President Xi Jinping this week. The two leaders, said Kevin Breuninger in CNBC.com, plan to hold “an extended meeting” at next week’s G-20 summit. Markets welcomed the rapprochement; Trump had threatened an immediate tariff hike if Xi did not attend the summit, and the stock market rallied on the news. While some analysts say Trump “is ready to move toward an agreement,” a major hurdle remains the treatment of Huawei, the Chinese telecom that has been blacklisted by the U.S. Huawei estimates U.S. sanctions will cost it $30 billion in revenue.