ECB hikes interest rates in the struggle to control inflation
The ECB raised its benchmark deposit rate by 50 basis points to zero percent, breaking its guidance for a 25-basis point move, as it joined global peers in jacking up borrowing costs. It was the eurozone central bank’s first rate hike for 11 years. Ending an eight-year experiment with negative interest rates, the ECB lifted its main refinancing rate too, to 0.50%, and promised more hikes possibly as soon as its Sept. 8 meeting. The euro climbed as much as 0.8% to $1.0261, having traded at $1.0198 just before the statement but turned negative on the day.
Twitter fast-tracks lawsuit in October against Elon Musk
Twitter expedites its lawsuit against business magnate Elon Musk over his abandoned $44 billion takeover of the social media site. Musk backed out of the deal to buy the platform on July 8, saying in a regulatory filing that Twitter had made “misleading representations” over the number of bot accounts. Twitter also hasn’t “complied with its contractual obligations” to provide information about how to assess how prevalent the bots are on the social media service, Musk said. Twitter countered that Musk is asking for information that “does not exist, has already been provided, or is the subject of requests only made recently.” The billionaire “refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his interests,” Twitter said in the suit.
Ranil Wickremesinghe as Sri Lanka’s new president
Acting President and veteran Sri Lanka politician Ranil Wickremesinghe were elected President of Sri Lanka by Parliament Wednesday even as protesters on the street vowed to continue their Aragalaya (struggle) and reiterated their demand for his resignation, calling him an accomplice of the discredited Rajapaksa regime. Wickremesinghe will replace Gotabaya Rajapaksa who fled the country and resigned after public anger over the country’s worst economic crisis exploded.
Fed spikes up rates second time in a row
For the second consecutive month, Federal Reserve officials increased interest rates by 75 basis points, delivering the most aggressive tightening in more than a generation to combat rising inflation, but with the risk of dealing with a serious hit to the economy. Policymakers, facing the hottest cost pressures in 40 years, lifted the target for the federal funds rate to a range of 2.25% to 2.5%. With the most recent increase, rates are now close to what Fed policymakers consider neutral, or the point at which the economy is neither growing faster nor slower. Rate increases were anticipated by regulators to reach approximately 3.4 percent this year and 3.8 percent in 2023, according to forecasts from mid-June.
