The Fed will keep raising rates until it gets inflation under control
Fed Chairman Jerome Powell underscored the Federal Reserve’s determination to keep raising interest rates until it gets inflation under control.
“What we need is a clear and convincing decline in inflation,” Powell told a Wall Street Journal conference. “And we’re going to keep pushing until we see that.”
The Fed Chairman, who was confirmed last week by the Senate for a second four-year term, suggested the Fed would consider raising rates even faster if price increases do not moderate.
It’s a high-stakes effort that risks provoking an eventual recession. Increases by the Fed to its benchmark short-term rate typically, in turn, lead to higher borrowing costs for consumers and businesses, including for mortgages, auto loans and credit cards.
Argo A1 tests self-driving cars
An autonomous vehicle technology company that partners with Ford and Volkswagen says it has launched driverless operations in two of the eight cities where it is developing its technology.
Pittsburgh-based Argo AI has pulled drivers from its self-driving cars in Miami and Austin, Texas, though it’s still in the testing phase. Its business partnerships with Walmart and Lyft still have backup drivers in both cities. The company is partnering with Lyft to use its self-driving test vehicles for its ride-sharing network in Miami Beach and grocery delivery for Walmart in Miami and Austin.
Argo says it’s the first company to go driverless in two US cities, but Argo isn’t the first company to go driverless. Waymo, the autonomous vehicle unit of Alphabet, Google’s parent company, announced in March that it had started ferrying employees in Jaguar I-Pace electric SUVs around San Francisco without a human backup driver.
In February, General Motors and its autonomous vehicle subsidiary Cruise released a registration page allowing anyone to book a free ride, also in San Francisco.
Netflix lays off 2% of its employees
Following Netflix’s announcement last month that it was losing subscribers for the first time in a decade, the streaming giant said on Tuesday it was laying off some 150 people at the company, mostly in the United States, this which represents 2% of its total workforce.
“As we explained on earnings, our slowing revenue growth means we also need to slow our cost growth as a business,” Netflix said in a statement. “These changes are primarily driven by business needs rather than individual performance, which makes them particularly difficult because none of us want to say goodbye to such great colleagues.”
During the first quarter earnings call in April, Netflix Chief Financial Officer Spencer Neumann said that over the next two years the company intends to cut some of its expenses. While Netflix will continue to spend around $17 billion a year developing new TV shows and movies, it will do so with fewer people working behind the scenes.
“We’re trying to be smart and careful in terms of reducing some of that expense growth to reflect the realities of growing business revenue,” Neumann said at the time.
Stocks rebound on Tuesday after previous selloffs
Stocks rose steadily throughout the day and ended Tuesday with large gains as traders started buying again after a mostly miserable few weeks on Wall Street.
Tech giants like Apple and Microsoft were among the biggest gainers, and video game maker Take-Two Interactive surged after forecasting better results than analysts expected. Paramount soared after Warren Buffett’s Berkshire Hathaway disclosed a new stake in the media company.
The S&P 500 rose 2% and the tech-heavy Nasdaq added 2.8%. Shares of small companies rose more than the rest of the market, a signal that investors are feeling optimistic about the economy. Treasury yields rose.
— Compiled by Dave Flessner