Fed Gets Bold, Raises Rates .75% In Bid to Tame Inflation

Wednesday was Fed decision day, and the central bankers didn’t disappoint. Chair Powell and crew went BIG, opting for a 75 bps rate hike—the Fed’s largest single-day move since 1994—in an effort to convey the seriousness with which it is taking its inflation-fighting mandate – NYTimes and WSJ and Bloomberg and MarketWatch and Marketplace

Stocks rose in response to the Fed’s move. Though if recent trends continue, don’t count on sustained gains while traders “digest” the move - NYTimes and WSJ and Bloomberg and MarketWatch

While the Fed and markets try to sort out this inflation mess and how to attack it, the time is right for the rest of us to consider why economic models that had reliably predicted inflation for years ended up so terribly wrong as we’ve emerged from peak Covid - WSJ

And for you pessimists out there . . . - MarketWatch

Elsewhere, the Commerce Department reported yesterday that retail sales in the U.S. fell .3% in May from the month before—the first “decline in month-over-month retail spending this year.” Higher gas prices, rising interest rates, and (of course) inflation are seen as likely culprits for the cooling consumer spending - WSJ and Bloomberg

New data from the National Highway Traffic Safety Administration shows that “nearly 400 car crashes in the United States involved advanced driver-assistance technologies” over a recent 10-month span, with 6 resulting in deaths. The disclosures “are part of a sweeping effort by the federal agency to determine the safety of advanced driving systems as they become increasingly commonplace” - NYTimes and WSJ and Bloomberg and TechCrunch

Cosmetics giant Revlon Inc. has filed for Chapter 11 bankruptcy protection, “unable to manage its heavy debt load after failing to tap into a cosmetics sales boom driven by social-media influencers” - Bloomberg and MarketWatch

Internet Explorer is dead. Long live Edge (Microsoft hopes) - NYTimes and Mashable

Caterpillar is the latest big-name company to opt for Texas, announcing on Wednesday that it would relocate global HQ from Illinois to the Lone Star state. The move tracks that of other manufacturers that have targeted the Southern and Southwestern U.S. for “new factories, plant expansions and corporate bases, seeking what some have said is a growing available workforce and cheaper real estate” - WSJ

Shocker of shockers—the SPAC industry isn’t thrilled with a recently unveiled spate of SEC proposed rules aimed at “bolster[ing] investor protections so that SPACs are governed similarly to traditional initial public offerings” – Law360

The EU’s second-highest court has “scrapped” at $1 billion fine that its antitrust regulator assigned to Qualcomm “over payments it made to Apple Inc. for the iPhone maker’s exclusive use of Qualcomm chips.” The court cited “a number of procedural irregularities” in the case file against the San Diego-based company that “affected Qualcomm’s rights of defense and invalidate[d] the Commission’s analysis” of the alleged conduct - WSJ

No Big Mouse for the Twitter gang. The short-messaging company has “canceled a companywide retreat scheduled for January 2023 at Disneyland, saying cost-cutting measures to reduce corporate travel led the event to be scrapped” - Bloomberg

Fascinating piece on Nike at 50 that considers how the company “has become part of the root system that underlies the culture.” Not just sports. ALL culture - NYTimes

Stay safe,

MDR

The Robins Kaplan Financial Daily Dose features top stories and latest news headlines in financial markets, banking, securities and technology topics.