The world this week--Business
The Federal Reserve raised its benchmark interest rate by another three-quarters of a percentage point, to a range of between 2.25% and 2.5%.
Central banks around the world are said to have reacted too late to the threat of sharp increases in inflation, forcing them to adopt a more aggressive approach to tightening monetary policy.
The European Central Bank recently lifted its deposit rate for the first time in a decade, taking it from a negative rate of -0.5% to zero.
Martins Kazaks, a member of the ECB’s governing council, said that its next rate increase in September “also needs to be quite significant”.
Walmart shook investors when it issued its second profit warning in ten weeks.
It blamed food and fuel inflation, which is affecting how its customers spend on other things.
Retailers are resorting to big markdowns of their products to entice shoppers.
Unilever said it was facing “a truly unprecedented cost landscape”, though that didn’t stop the consumer-goods company from raising its sales forecast.
Amazon also blamed inflation when it lifted the price of its Prime membership in European markets, and at a much stiffer rate than its price rise for American subscribers.
A raft of quarterly earnings pointed to a sharp slowdown in digital advertising.
Meta reported its first-ever decline in revenue, year on year, albeit of 1%.
Revenue at Alphabet, Google’s parent company, grew at the slowest pace since mid-2020.
Snap and Twitter also gave a bleak outlook for digital ads when they reported weak earnings.
Spirit Airlines called off its proposed merger with Frontier amid lukewarm shareholder support for the deal.
That opens the way for it to be taken over by JetBlue, which has been circling Spirit with a rival offer for months.
Their combination would create America’s fifth-largest airline.
Credit Suisse reported a quarterly net loss of SFr1.6bn ($1.7bn).
Unlike many rivals, the Swiss bank’s income from trading fell sharply, and its investment-banking business made a big loss.
It announced the departure of Thomas Gottstein as chief executive, to be replaced by Ulrich Korner, who will conduct a strategic review of its operations, the second within a year.
Credit Suisse hit the headlines in recent years for a number of scandals, such as its exposure to Archegos, a collapsed family office, and for spying on employees.
Intel said that it would make chips for MediaTek, based in Taiwan.
It is one of the biggest deals for Intel’s foundry business, which makes semiconductors for other firms without designing them.
Meanwhile, the American Senate gave its approval to a bill that would provide huge subsidies to domestic chip firms, in order to reduce America’s reliance on foreign ones.