Business Highlights: Federal Reserve, McDonald's
The day's top business stories.
Fed increases key rate, but suggests it may pause amid banking turmoil
WASHINGTON, AP -- The Federal Reserve has stepped up its fight against inflation by increasing its key interest rates by a quarter point to their highest level in sixteen years. The Fed has also indicated that it might pause the streak of 10 rate increases, which have steadily increased borrowing costs for businesses and consumers. The Fed has removed from its statement a sentence that said "some additional" rate hikes may be required. The Fed replaced the sentence with language saying it would weigh a variety of factors to 'determine the extent' that future rate hikes may be necessary.
McDonald's franchises fined over child labor violations
Officials from the federal government say that two children aged 10 are among 300 children who were employed at McDonald's in Kentucky without pay or with little compensation. Labor Department fines three Louisville franchises $212,000 for wage theft and minors working underage. In a press release, one franchise owner said that the 10-year olds were visiting their parent who was working the night shift. The owners of the agency employed 24 minors below 16 years old to work longer hours than allowed by law. The investigation is part of a continuous effort by the Labor Department’s Wage and Hour Division, to stop child labour abuses in Southeast. McDonald's said the reports were unacceptable and deeply disturbing.
Stock market today: Markets slip after latest Fed rate hike
NEW YORK, NY (AP) - Stocks fell after the Federal Reserve announced their latest interest rate hike but it said that they are not certain what could happen next. S&P 500 dropped 0.7% on Wednesday, after a period of modest gains and losses following the Fed announcement. The Dow Jones Industrial Average dropped 0.8%, and the Nasdaq fell 0.5%. The Fed's decision, which was widely anticipated, is intended to slow down the economy in order to bring inflation under control. Investors hope that this will be the last increase after the Fed's most rapid series of increases in decades.
FTC: Facebook failed to protect children's privacy and misled parents
U.S. regulators claim that Facebook misled parents about its Messenger Kids app and failed to protect children's privacy. Federal Trade Commission claims that Facebook misrepresented its access to private data for app developers. The FTC proposed on Wednesday sweeping changes to an 2020 privacy order that Facebook - now known as Meta - signed with the FTC. This would prevent it from profiting off data it collects about users under 18 years old. The FTC proposed on Wednesday sweeping changes to a 2020 privacy order with Facebook -- now called Meta -- that would prohibit it from profiting off data it collects about users under 18. Meta will also face other restrictions, such as its use of facial recognition technology and the requirement to provide extra protection for users.
Hollywood braces for a long struggle as the writers strike continues
LOS ANGELES, CA (AP) - It's going to be a long struggle for Hollywood writers on strike in order to protect their pay and job security. Writers Guild of America members protested in Los Angeles on Tuesday after their contract expired. Due to the economic pressures brought about by streaming, the first Hollywood strike since 15 years has already caused most late-night programs to go into reruns. Some scripted shows have been put on hold, and more may follow if the strike drags out. There are no ongoing or current talks, so a resolution does not seem imminent.
United Airlines plans to add 15,000 new jobs, a surge in airline employment
United Airlines has posted a hiring sign. The airline announced Wednesday that it will hire 15,000 new employees this year. It has already hired 7,000 people in the last four months. This is part of a growing trend as airlines profit from the boom in travel. The airlines are trying to avoid the same mistake they made last year when they were unprepared for the rapid rise in air travel. The shortage of flight attendants and pilots has contributed to an increase in cancelled and delayed flights. United claims it has enough pilots for its summer schedule.
Scientists warn about AI dangers, but they disagree on solutions
(AP) -- While computer scientists who built the foundations for today's artificial-intelligence technology warn of its dangers and offer suggestions on how to avoid them, they don't agree about what these dangers are. Geoffrey Hinton, the so-called "Godfather of AI", spoke out at a Massachusetts Institute of Technology conference on Wednesday after retiring from Google to speak freely. He expressed doubts about the survival of humanity if machines become smarter than humans. Yoshua Bengio is a fellow AI pioneer and co-winner of the top computer prize with Hinton. He told The Associated Press that he 'almost agrees' with Hinton, but that simply saying 'We are doomed,' will not help.
French constitution rejects pension referendum
PARIS (AP). France's highest constitutional body rejected a last ditch effort by opposition legislators to overturn President Emmanuel Macron’s law increasing the retirement age to 65. The Constitutional Council determined that the proposed bill did not meet all of the criteria. The council rejected the plan for restoring the retirement age at 62 through a referendum or a new bill. Even if it was approved, the process would still be lengthy. It wouldn't have prevented Macron's legislation from moving forward. The council decided on Wednesday that this proposal did not address "reforms regarding social policies" and, therefore, does not satisfy the French constitution.
US Approves First RSV Vaccine after Decades of Attempts
WASHINGTON, D.C. (AP) - The United States has approved the first RSV vaccine. These shots are meant to protect older adults. Last fall, the respiratory virus was responsible for a flood of wheezing babies in hospitals. It also poses a threat to seniors. The Food and Drug Administration decided Wednesday that GSK's RSV shot would be the first in a pipeline of vaccines to be approved. After decades of failing in developing an RSV vaccination, the FDA decision makes GSK’s shot the most recent of many in the pipeline. The Centers for Disease Control and Prevention will then decide whether everyone over 60 years old needs the shot, or only those who are at high-risk. Pfizer is preparing a similar adult vaccine that the FDA will consider. It's not yet available for children.
Senate Democrats push for new legislation to counter China
WASHINGTON, D.C. (AP) - Senate Democrats launched a new legislative initiative to take on China. Democratic Leader Chuck Schumer said on Wednesday that they would propose new legislation in an effort to prevent U.S. capital and technology from going to Chinese firms. The bill could also contain provisions to prevent China from purchasing U.S. farmland, and give the Biden administration greater authority to review foreign computer apps and possibly restrict them. Schumer did not provide a firm deadline for the bill's consideration.
The S&P500 fell 28.83 or 0.7% to 4,090.75. The Dow Jones Industrial Average dropped 270.29 or 0.8% to 33,414.24. The Nasdaq Composite fell 55.18 or 0.5%, to 12,025.33. Russell 2000, an index of smaller companies, rose 7.17 points or 0.4% to 1,739.28.