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  • Asian shares gain after Fed chair signals slower rate hikes

    Asian shares gain after Fed chair signals slower rate hikes

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    BANGKOK — Shares advanced in Europe and Asia on Thursday after a rally on Wall Street spurred by the Federal Reserve chair’s comments on easing the pace of interest rate hikes to tame inflation.

    Signs that China may be shifting its approach to containing COVID-19 outbreaks to focus more on vaccinations, while some cities have lifted pandemic lockdowns, also helped lift sentiment.

    In Europe, Germany’s DAX gained 0.5% to 14,472.99 while the CAC 40 in Paris edged 0.1% higher to 6,750.81. Britain’s FTSE 100 also was 0.1% higher, at 7,580.56. The future for the S&P 500 was down 0.1% while that for the Dow industrials fell 0.2%.

    Stocks on Wall Street roared higher Wednesday after Fed Chair Jerome Powell, said in comments at the Brookings Institution that the central bank could begin moderating its pace of rate hikes as soon as December, when its policymaking committee will hold its next meeting.

    “We have a risk management balance to strike,” Powell said. “And we think that slowing down (on rate hikes) at this point is a good way to balance the risks.”

    The benchmark S&P 500 rose 3.1%, snapping a three-day losing streak. The Dow Jones Industrial Average gained 2.2% and the Nasdaq composite climbed 4.4%. The Russell 2000 index rose 2.7%.

    “The optimism in the market is that perhaps the worse is over for the U.S. in terms of inflation reading, and the Fed isn’t going to increase the interest aggressively,” Naeem Aslam of Avatrade said in a commentary.

    In Asia on Thursday, Tokyo’s Nikkei 225 index added 0.9% to 28,226.08 while the Hang Seng in Hong Kong advanced 0.8% to 18,736.44. The Shanghai Composite index climbed 0.5% to 3,165.47. In Seoul, the Kospi picked up 0.3% to 2,479.84. Australia’s S&P/ASX 200 gained 1% to 7,354.40.

    Bangkok’s SET rose 0.8% a day after the central bank raised its key interest rate by a quarter point to 1.25%, aiming to curb inflation.

    The stronger gains seen early in Asian trading had faded by the day’s end.

    Markets have wobbled all year as the Fed has fought high inflation with aggressive interest rate increases.

    “While it could be argued that Jerome Powell’s comments on Wednesday were relatively balanced — slower tightening now but rates high for longer — the last year has proven that anticipating the path of inflation even a short period ahead is incredibly difficult,” Craig Erlam of Oanda said in a commentary.

    Powell stressed that the Fed will push rates higher than previously expected and keep them there for an extended period to ensure inflation comes down sufficiently.

    “History cautions strongly against prematurely loosening policy,” he said. “We will stay the course until the job is done.”

    Wall Street has been hoping that the Fed will slow the scale and pace of its interest rate hikes. It has raised its benchmark interest rate six times since March, driving it to a range of 3.75% to 4%, the highest in 15 years. The goal is to make borrowing more costly and generally slow the economy in order to tame inflation.

    Higher mortgage rates have caused home sales to plunge and higher interest rates also have raised costs for most other consumer and business loans.

    The economy has been slowing, and many economists expect the U.S. to slip into a recession next year. But there are strong pockets of growth. The government said Wednesday that the economy expanded at a 2.9% annual rate from July through September, an upgrade from its initial estimate.

    Consumers have continued spending, despite inflation squeezing wallets. Overall, employment remains strong, though job openings dropped in October more than economists had anticipated and human resources company ADP reported an easing in private sector hiring in November.

    Investors will get more data Thursday on the employment sector with a report on weekly unemployment claims. The closely watched monthly report on the job market will be released on Friday.

    In other trading, U.S. benchmark crude oil lost 12 cents to $80.43 a barrel in electronic trading on the New York Mercantile Exchange. It climbed 3% on Wednesday.

    Brent crude, the pricing basis for international trading, shed 14 cents to $86.83 a barrel.

    The U.S. dollar fell to 136.31 Japanese yen from 138.09 yen. The euro rose to $1.0435 from $1.0409.

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  • Powell: Fed to keep rates higher for longer to cut inflation

    Powell: Fed to keep rates higher for longer to cut inflation

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    WASHINGTON — The Federal Reserve will push rates higher than previously expected and keep them there for an extended period, Chair Jerome Powell said Wednesday, in remarks likely intended to underscore the Fed’s single-minded focus on combating stubborn inflation.

    Powell also signaled in a written speech to be delivered to the Brookings Institution that the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point, after four straight three-quarter point hikes. But Powell also stressed that the smaller hike shouldn’t be taken as a sign the Fed will let up on its inflation fight anytime soon.

    “It is likely that restoring price stability will require holding (interest rates) at a restrictive level for some time,” Powell said. “History cautions strongly against prematurely loosening policy.”

    Powell acknowledged there has been some good news on the inflation front, with the cost of goods such as cars, furniture, and appliances in retreat. He also said that rents and other housing costs — which make up about a third of the consumer price index — were likely to decline next year.

    But the cost of services, which includes dining out, traveling, and health care, are still rising at a fast clip and will likely be much harder to rein in, he said.

    “Despite some promising developments, we have a long way to go in restoring price stability,” Powell said.

    Services costs are mostly pushed higher by rising wages, he added, which have been rising at the fastest pace in four decades, before adjusting for inflation. Powell said the robust wage gains are largely being driven by a labor shortage that began during the pandemic and that is unlikely to unwind anytime soon.

    The lack of workers reflects a jump in early retirements, the death of several hundred thousand working-age people from COVID-19, and a sharp decline in immigration and slower population growth, he said.

    “Wage growth remains well above levels that would be consistent with 2% inflation over time,” Powell said.

    Last month’s inflation report showed that prices rose 7.7% in October from a year earlier, straining many families’ budgets. That is down, however, from a 9.1% peak in June.

    The Fed has lifted its key rate six times this year, to a range of 3.75% to 4%, the highest in 15 years. Those increases have sharply boosted mortgage rates, causing home sales to plunge, and it has raised costs for most other consumer and business loans.

    Fed officials forecast in September that they would ultimately push their short-term rate to a range of 4.5% to 4.75% by next year. Powell suggested that rates will likely go higher than that. Many economists forecast the Fed’s key rate will instead rise to at least 5% to 5.25%.

    Fed officials hope that by tightening credit they can slow consumer and business spending, reduce hiring and wage growth, and cool inflation. Powell said the Fed’s efforts have slowed demand, and will have to keep it slow “for an extended period.”

    At the Fed’s last meeting in November, it hiked rates by a hefty three-quarters of a point for the fourth straight time. But Powell signaled at the time that its next increase would likely be only a half-point, still a significant step up. Typically the central bank moves interest rates in quarter-point increments.

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  • Gaetz friend says lighter sentence deserved for cooperation

    Gaetz friend says lighter sentence deserved for cooperation

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    ORLANDO, Fla. — A former Florida tax collector whose arrest led to a federal investigation of U.S. Rep. Matt Gaetz learns this week how much prison time he gets on charges of sex trafficking a minor and identity theft, but not before trying to persuade a judge that his cooperation in several probes should lighten his sentence.

    Former Seminole County Tax Collector Joel Greenberg had faced a prison sentence of between 21 and 27 years under federal sentencing guidelines, but prosecutors asked a judge to substantially reduce any sentence of incarceration. During a court hearing Wednesday, U.S. District Judge Gregory Presnell calculated that the reduction would put prison time at between 9 1/4 and 11 years. The judge will make a final sentencing decision Thursday.

    Greenberg pleaded guilty to six federal crimes, including sex trafficking of a minor, identity theft, stalking, wire fraud and conspiracy to bribe a public official. Prosecutors said he had paid at least one underage girl to have sex with him and other men.

    His attorney, Fritz Scheller, told the judge that the jurist has the discretion to reduce the prison time even further. But the judge during Wednesday’s hearing appeared disinclined to follow that advice and seemed ready to add more time since he said he didn’t think the sentencing guidelines worked appropriately in Greenberg’s case. Greenberg was in the courtroom during the hearing.

    “I have, I think, considerable discretion to deal with this anomaly,” Presnell said.

    Scheller told the judge that Greenberg had assisted in the probes of two dozen individuals, including eight people being investigated for sex crimes. Greenberg’s cooperation had led to four federal indictments and two new indictments were expected in the coming months, said Scheller, without elaborating on which type of cases the new indictments involved.

    “It’s clear that his cooperation has been useful,” said Scheller, noting that Greenberg had given testimony to prosecutors on 15 occasions.

    The minor in the sex crimes case was almost an adult and had advertised as being over age 18 in her escort profile on the website “Seeking Arrangements,” which facilitates “sugar daddy” relationships, Scheller said in court papers.

    “Greenberg appreciates the seriousness of his crimes. Based on such a recognition, he has been trying to make amends through cooperation and the payment of restitution,” Scheller said. “He has provided significant substantial assistance to the government in the areas of public corruption, election fraud, wire fraud, and sex trafficking.”

    The judge should also take into consideration Greenberg’s struggles with mental illness, starting with an attention-deficit disorder diagnosis at age 7 and panic attacks, depressive and anxiety disorders as an adult. At the time he committed the crimes, he was suffering from bipolar disorder with symptoms of mania, which affected his judgment and impulse control, Scheller said.

    Both prosecutors and Greenberg’s defense attorney filed documents under seal and out of the public eye, saying they were part of ongoing investigations being conducted by federal authorities in Florida and Washington, as well as state investigators.

    Greenberg’s cooperation could play a role in the ongoing probe into Gaetz, who is being investigated over whether he paid a 17-year-old for sex. Gaetz has denied the allegations and previously said they were part of an extortion plot. Gaetz, a Republican, represents a large part of the Florida Panhandle. No charges have been brought against the congressman.

    Greenberg has been linked to a number of other Florida politicians and their associates. So far, none of them has been implicated by name in the sex trafficking probe.

    In his sentencing memo asking for leniency, Scheller noted that other potential co-conspirators that Greenberg has named, “including public figures,” haven’t yet faced criminal charges. If prosecutors want to use Greenberg as an example to deter crime, then those others should face justice too, he said.

    “Unfortunately, at the time of Greenberg’s sentencing, many of these individuals have not been held to account,” Scheller said.

    ———

    Follow Mike Schneider on Twitter: @MikeSchneiderAP

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  • US job openings fell in October to still-high level

    US job openings fell in October to still-high level

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    WASHINGTON — U.S. job openings dropped in October but remained high, a sign that businesses became slightly less needy for workers as the Federal Reserve ramps up interest rates in an effort to cool the economy.

    Employers posted 10.3 million job vacancies in October, down from 10.7 million in September, the Labor Department said Wednesday. Even with the drop, openings were slightly lower in August, when they dipped below 10.3 million before rebounding the following month.

    The number of people quitting their jobs also slipped in October, to 4 million from 4.1 million.

    The Federal Reserve is closely monitoring the figures on job openings and quits for signals about the strength of the job market. The Fed is seeking to pull off a delicate task by slowing hiring and the broader economy to cool inflation, but not so much as to cause a recession.

    While more job openings are a benefit for those seeking work, Fed officials would like to see the number of openings fall. That’s because fewer openings would indicate less competition between businesses to find and keep workers, reducing pressure on them to raise wages.

    The number of open jobs dropped last month in construction, manufacturing, professional services such as architecture and engineering, and health care. They rose in financial services and remained high for restaurants, bars, and hotels.

    “The labor market is cooling (what the Fed wants) but it is far from cold,” Jennifer Lee, an economist at BMO Capital Markets, said in an email.

    Fed officials would also like to see the number of people quitting decline. When workers quit, they typically do so for a new, higher-paying job. Since the pandemic, people who have left one job for a new one have been getting historically large wage increases.

    Many businesses then pass on the higher labor costs to customers through price increases, fueling inflation.

    The Fed would like to slow — though not eliminate — wage gains, so it is hoping that its rate hikes will bring down the number of jobs that companies advertise.

    Fed Chair Jerome Powell is scheduled to speak about inflation and the labor market in a highly-anticipated speech Wednesday afternoon. Wall Street traders in particular will watch his speech closely for any signs he may give of how much further the Fed will raise interest rates.

    Powell’s appearance comes two days before the U.S. releases critical employment data for November.

    The Fed has hiked its benchmark interest rate six times this year to a range of 3.75% to 4%, the highest in about 15 years, in a bid to quell rampant inflation. Prices have soared 7.7% in the past year, near the highest in four decades. The Fed typically seeks to slow price increases by weakening the economy and pushing up unemployment, which reduces spending and often brings down inflation.

    However, with job openings so high — they hit a two-decade record of 11.9 million in March — many Fed officials hope they can bring down wage increases and inflation by sharply reducing openings, without causing layoffs to rise significantly. Many economists are skeptical that such an approach can succeed, because historically layoffs have also risen when job openings have gone down.

    Wednesday’s report — known as the Job Openings and Labor Turnover Survey — provides greater detail about the labor market, while the monthly jobs report on Friday includes the unemployment rate and the number of jobs added or lost each month.

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  • Congress prepares to take up bill preventing rail strike

    Congress prepares to take up bill preventing rail strike

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    WASHINGTON — Congress is moving swiftly to prevent a looming U.S. rail workers strike, reluctantly intervening in a labor dispute to stop what would surely be a devastating blow to the nation’s economy if the transportation of fuel, food and other critical goods were disrupted.

    The House was expected to act first on Wednesday after President Joe Biden asked Congress to step in. The bill lawmakers are considering would impose a compromise labor agreement brokered by his administration that was ultimately voted down by four of the 12 unions representing more than 100,000 employees at large freight rail carriers. The unions have threatened to strike if an agreement can’t be reached before a Dec. 9 deadline.

    Lawmakers from both parties expressed reservations, but the intervention was particularly difficult for some Democratic lawmakers who have traditionally sought to align themselves with the politically powerful labor unions.

    Sen. Bernie Sanders, a Vermont independent who caucuses with Democrats, announced that he would object to fast-tracking the president’s proposal until he can get a roll-call vote on an amendment that would guarantee seven paid sick days for rail workers. Some of the more liberal lawmakers in the House such as Reps. Jamaal Bowman of New York and Cori Bush of Missouri tweeted that they couldn’t support the measure.

    Still, the bill was expected to receive a significant bipartisan vote. That show of support began when the Republican and Democratic leaders of the House and Senate met with Biden on Tuesday at the White House.

    “We all agreed that we should try to avoid this rail shutdown as soon as possible,” Senate Majority Leader Chuck Schumer, D-N.Y., said as he returned to the Capitol.

    A letter from House Speaker Nancy Pelosi to Democratic colleagues promised two votes, reflecting the consternation she was hearing from members. The first vote will be on adopting the tentative labor agreement. The second will be on a measure to add seven days of paid sick leave for railroaders to the agreement.

    “It is with great reluctance that we must now move to bypass the standard ratification process for the Tentative Agreement,” Pelosi wrote. “However, we must act to prevent a catastrophic strike that would touch the lives of nearly every family: erasing hundreds of thousands of jobs, including union jobs; keeping food and medicine off the shelves; and stopping small businesses from getting their goods to market.”

    The compromise agreement that was supported by the railroads and a majority of the unions provides for 24% raises and $5,000 in bonuses retroactive to 2020 along with one additional paid leave day. The raises would be the biggest rail workers have received in more than four decades. Workers would have to pay a larger share of their health insurance costs, but their premiums would be capped at 15% of the total cost of the insurance plan. But the agreement didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and the lack of paid sick time.

    Lawmakers from both parties grumbled about stepping into the dispute, but they also said they had little choice.

    “The bottom line is we are now forced with this kind of terrible situation where we have to choose between an imperfect deal that has already been negotiated or an economic catastrophe,” said Rep. Jim McGovern, D-Mass.

    “This is about whether we shut down the railroads of America, which will have extreme negative effects on our economy,” said Rep. Steny Hoyer of Maryland, the No. 2 Democrat in the House. “We should have a bipartisan vote.”

    Republicans needled the Biden administration and Democrats for Congress being asked to step in now to avert an economic crisis. But many indicated they were ready to do so.

    “This has got to be tough for Democrats in that they generally kowtow to unions,” said Sen. Mike Braun, R-Ind.

    “At this late hour, it’s clear that there is little we can do other than to support the measure,” said Rep. Tom Cole, R-Okla.

    Business groups including the U.S. Chamber of Commerce and the American Farm Bureau Federation said earlier this week in a letter to congressional leaders they must be prepared to intervene and that a stoppage of rail service for any duration would represent a $2 billion per day hit to the economy.

    On several past occasions, Congress has intervened in labor disputes by enacting legislation to delay or prohibit railway and airline strikes.

    Railroad unions on Tuesday decried Biden’s call for Congress to intervene in their contract dispute, saying it undercuts their efforts to address workers’ quality-of-life concerns.

    Conductor Gabe Christenson, who is co-chairman of the Railroad Workers United coalition that includes workers from all the rail unions, said Biden and the Democrats are siding with the railroads over workers.

    “The ‘most labor-friendly president in history’ has proven that he and the Democratic Party are not the friends of labor they have touted themselves to be,” Christenson said.

    ———

    Associated Press writers Farnoush Amiri in Washington and Josh Funk in Omaha, Nebraska, contributed to this report.

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  • El Salvador to repurchase more of its debt

    El Salvador to repurchase more of its debt

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    SAN SALVADOR, El Salvador — El Salvador’s government announced Tuesday that it will make a second buyback of its sovereign debt bonds maturing in 2023 and 2025 as it tries to calm market concerns that it could default on its debt.

    The government set the maximum for the repurchase at $74 million. The 2023 and 2025 bond offerings were $800 million each.

    In September, the government bought back $565 million of those bonds.

    President Nayib Bukele said via Twitter that the September repurchase “was so successful that we have decided to launch ANOTHER OFFER for the remainder of the 2023 and 2025 bonds.”

    The debt was issued by previous administrations in 1999 and 2004.

    El Salvador last year became the first country to make the cryptocurrency bitcoin legal tender, drawing criticism from international lenders. The International Monetary Fund asked the government to reverse that decision, but Bukele dismissed the request and said the country would issue bonds denominated in bitcoin, something that has still not happened a year later.

    Bukele’s government has also invested heavily in bitcoin, which has since plummeted in value.

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  • Landmark trial over Arkansas youth gender care ban resumes

    Landmark trial over Arkansas youth gender care ban resumes

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    LITTLE ROCK, Ark. — A psychiatrist called to the stand by Arkansas as the state defends its ban on gender-affirming care for children said Monday he was concerned about the impact the law could have on some transgender youth who would see their treatments cut off.

    Dr. Stephen Levine, a psychiatrist at Case Western Reserve University School of Medicine in Ohio, testified as the nation’s first trial over such a ban continued before a federal judge after a five-week break.

    Arkansas’ law, which was temporarily blocked last year, would prohibit doctors from providing gender-affirming hormone treatment, puberty blockers or surgery to anyone under 18 years old. It also would prohibit doctors from referring patients elsewhere for such care.

    Levine criticized the use of gender-affirming medical treatment for minors, but under cross examination acknowledged his concerns about the psychological impacts of cutting off such care for some trans youth already receiving it. Levine said it could be “shocking and devastating” for some youth receiving the care.

    “My concern with the law, the way it was originally written, is it seemed to leave out what you’re talking about,” Levine testified.

    Republican lawmakers in Arkansas enacted the ban last year, overriding a veto by GOP Gov. Asa Hutchinson. Hutchinson, who leaves office in January, also said that the law went too far by cutting off treatments for children currently receiving such care. Arkansas was the first state to enact such a ban.

    Multiple medical groups, including the American Medical Association and the American Academy of Pediatrics, oppose the bans and experts say the treatments are safe if properly administered. The American Psychiatric Association has supported the ruling blocking Arkansas’ ban, saying denying such care to adolescents who need it could harm their mental health.

    But Levine said he recommends psychotherapy over gender-affirming care for the treatment of gender dysphoria, criticizing the current standard of care as using psychotherapy as “cheerleading” for such treatments.

    Levine, however, testified that he wasn’t aware of what protocols are followed by doctors who provide such care in Arkansas.

    The state has argued that the prohibition is within its authority to regulate the medical profession. People opposed to such treatments for children argue they are too young to make such decisions about their futures.

    Levine echoed that argument, saying minor patients “really have very little concept of what their future holds.”

    A similar ban has been blocked by a federal judge in Alabama, and other states have taken steps to restrict such care. Florida medical officials earlier this month approved a rule banning gender-affirming care for minors, at the urging of Republican Gov. Ron DeSantis.

    A judge in Texas has blocked that state’s efforts to investigate gender-confirming care for minors as child abuse. Children’s hospitals around the country have faced harassment and threats of violence for providing gender-confirming care.

    The families of four transgender youth sued challenging Arkansas’ ban. Last month, a 17-year-old testified that his life has been transformed by the hormone therapy he’s been receiving and said ending the treatments could force his family to leave the state.

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  • Biden calls on Congress to head off potential rail strike

    Biden calls on Congress to head off potential rail strike

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    OMAHA, Neb. — President Joe Biden on Monday asked Congress to intervene and block a railroad strike before next month’s deadline in the stalled contract talks, and House Speaker Nancy Pelosi said lawmakers would take up legislation this week to impose the deal that unions agreed to in September.

    “Let me be clear: a rail shutdown would devastate our economy,” Biden said in a statement. “Without freight rail, many U.S. industries would shut down.”

    In a statement, Pelosi said: “We are reluctant to bypass the standard ratification process for the Tentative Agreement — but we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”

    Pelosi said the House would not change the terms of the September agreement, which would challenge the Senate to approve the House bill without changes.

    The September agreement that Biden and Pelosi are calling for is a slight improvement over what the board of arbitrators recommended in the summer. The September agreement added three unpaid days off a year for engineers and conductors to tend to medical appointments as long as they scheduled them at least 30 days in advance. The railroads also promised in September not to penalize workers who are hospitalized and to negotiate further with the unions after the contract is approved about improving the regular scheduling of days off.

    Hundreds of business groups had been urging Congress and the president to step into the deadlocked contract talk and prevent a strike.

    Both the unions and railroads have been lobbying Congress while contract talks continue. If Congress acts, it will end talks between the railroads and four rail unions that rejected their deals Biden helped broker before the original strike deadline in September. Eight other unions have approved their five-year deals with the railroads and are in the process of getting back pay for their workers for the 24% raises that are retroactive to 2020.

    If Congress does what Biden suggests and imposes terms similar to what was agreed on in September, that will end the union’s push to add paid sick time. The four unions that have rejected their deals have been pressing for the railroads to add that benefit to help address workers’ quality of life concerns, but the railroads had refused to consider that.

    Biden said that as a “a proud pro-labor president” he was reluctant to override the views of people who voted against the agreement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

    Biden’s remarks and Pelosi’s statement came after a coalition of more than 400 business groups sent a letter to congressional leaders Monday urging them to step into the stalled talks because of fears about the devastating potential impact of a strike that could force many businesses to shut down if they can’t get the rail deliveries they need. Commuter railroads and Amtrak would also be affected in a strike because many of them use tracks owned by the freight railroads.

    The business groups led by the U.S. Chamber of Commerce, National Association of Manufacturers and National Retail Federation said even a short-term strike would have a tremendous impact and the economic pain would start to be felt even before the Dec. 9 strike deadline. They said the railroads would stop hauling hazardous chemicals, fertilizers and perishable goods up to a week beforehand to keep those products from being stranded somewhere along the tracks.

    “A potential rail strike only adds to the headwinds facing the U.S. economy,” the businesses wrote. “A rail stoppage would immediately lead to supply shortages and higher prices. The cessation of Amtrak and commuter rail services would disrupt up to 7 million travelers a day. Many businesses would see their sales disrupted right in the middle of the critical holiday shopping season.”

    A similar group of businesses sent another letter to Biden last month urging him to play a more active role in resolving the contract dispute.

    On Monday, the Association of American Railroads trade group praised Biden’s action.

    “No one benefits from a rail work stoppage — not our customers, not rail employees and not the American economy,” said AAR President and CEO Ian Jefferies. “Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the twelve unions.”

    Business groups that have been pushing for Congress to settle this contract dispute praised Biden’s move.

    “The Biden administration’s endorsement of congressional intervention affirms what America’s food, beverage, household and personal care manufacturers have been saying: Freight rail operations cannot shut down and imperil the availability and affordability of consumers’ everyday essentials,” said Tom Madrecki, vice president of supply chain for the Consumer Brands Association. “The consequences to consumers if a strike were to occur are too serious, especially amid continued supply chain challenges and disruptions.”

    Clark Ballew, a spokesman for the Brotherhood of Maintenance of Way Employes Division, which represents track maintenance workers, said before Biden’s announcement that the union was “headed to D.C. this week to meet with lawmakers on the Hill from both parties. We have instructed our members to contact their federal lawmakers in the House and Senate for several weeks now.”

    The U.S. Chamber of Commerce’s Neil Bradley said Biden was correct in advocating for the deal already reached. “Congress must do what it has done 18 times before: intervene against a national rail strike,” Bradley said in a statement, and he called Congress enforcing the deal agreed to by railroads and union leaders the “only path to avoid crippling strike.”

    The railroads, which include Union Pacific, BNSF, Norfolk Southern, CSX and Kansas City Southern, wanted any deal to closely follow the recommendations a special board of arbitrators that Biden appointed made this summer that called for the 24% raises and $5,000 in bonuses but didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and other working conditions. That’s what Biden is calling on Congress to impose.

    ———

    Associated Press writer Colleen Long in Washington contributed to this report.

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  • Biden calls on Congress to head off potential rail strike

    Biden calls on Congress to head off potential rail strike

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    OMAHA, Neb. — President Joe Biden on Monday asked Congress to intervene and block a railroad strike before next month’s deadline in the stalled contract talks, and House Speaker Nancy Pelosi said lawmakers would take up legislation this week to impose the deal that unions agreed to in September.

    “Let me be clear: a rail shutdown would devastate our economy,” Biden said in a statement. “Without freight rail, many U.S. industries would shut down.”

    In a statement, Pelosi said: “We are reluctant to bypass the standard ratification process for the Tentative Agreement — but we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”

    Pelosi said the House would not change the terms of the September agreement, which would challenge the Senate to approve the House bill without changes.

    The September agreement that Biden and Pelosi are calling for is a slight improvement over what the board of arbitrators recommended in the summer. The September agreement added three unpaid days off a year for engineers and conductors to tend to medical appointments as long as they scheduled them at least 30 days in advance. The railroads also promised in September not to penalize workers who are hospitalized and to negotiate further with the unions after the contract is approved about improving the regular scheduling of days off.

    Hundreds of business groups had been urging Congress and the president to step into the deadlocked contract talk and prevent a strike.

    Both the unions and railroads have been lobbying Congress while contract talks continue. If Congress acts, it will end talks between the railroads and four rail unions that rejected their deals Biden helped broker before the original strike deadline in September. Eight other unions have approved their five-year deals with the railroads and are in the process of getting back pay for their workers for the 24% raises that are retroactive to 2020.

    If Congress does what Biden suggests and imposes terms similar to what was agreed on in September, that will end the union’s push to add paid sick time. The four unions that have rejected their deals have been pressing for the railroads to add that benefit to help address workers’ quality of life concerns, but the railroads had refused to consider that.

    Biden said that as a “a proud pro-labor president” he was reluctant to override the views of people who voted against the agreement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

    Biden’s remarks and Pelosi’s statement came after a coalition of more than 400 business groups sent a letter to congressional leaders Monday urging them to step into the stalled talks because of fears about the devastating potential impact of a strike that could force many businesses to shut down if they can’t get the rail deliveries they need. Commuter railroads and Amtrak would also be affected in a strike because many of them use tracks owned by the freight railroads.

    The business groups led by the U.S. Chamber of Commerce, National Association of Manufacturers and National Retail Federation said even a short-term strike would have a tremendous impact and the economic pain would start to be felt even before the Dec. 9 strike deadline. They said the railroads would stop hauling hazardous chemicals, fertilizers and perishable goods up to a week beforehand to keep those products from being stranded somewhere along the tracks.

    “A potential rail strike only adds to the headwinds facing the U.S. economy,” the businesses wrote. “A rail stoppage would immediately lead to supply shortages and higher prices. The cessation of Amtrak and commuter rail services would disrupt up to 7 million travelers a day. Many businesses would see their sales disrupted right in the middle of the critical holiday shopping season.”

    A similar group of businesses sent another letter to Biden last month urging him to play a more active role in resolving the contract dispute.

    On Monday, the Association of American Railroads trade group praised Biden’s action.

    “No one benefits from a rail work stoppage — not our customers, not rail employees and not the American economy,” said AAR President and CEO Ian Jefferies. “Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the twelve unions.”

    Business groups that have been pushing for Congress to settle this contract dispute praised Biden’s move.

    “The Biden administration’s endorsement of congressional intervention affirms what America’s food, beverage, household and personal care manufacturers have been saying: Freight rail operations cannot shut down and imperil the availability and affordability of consumers’ everyday essentials,” said Tom Madrecki, vice president of supply chain for the Consumer Brands Association. “The consequences to consumers if a strike were to occur are too serious, especially amid continued supply chain challenges and disruptions.”

    Clark Ballew, a spokesman for the Brotherhood of Maintenance of Way Employes Division, which represents track maintenance workers, said before Biden’s announcement that the union was “headed to D.C. this week to meet with lawmakers on the Hill from both parties. We have instructed our members to contact their federal lawmakers in the House and Senate for several weeks now.”

    The U.S. Chamber of Commerce’s Neil Bradley said Biden was correct in advocating for the deal already reached. “Congress must do what it has done 18 times before: intervene against a national rail strike,” Bradley said in a statement, and he called Congress enforcing the deal agreed to by railroads and union leaders the “only path to avoid crippling strike.”

    The railroads, which include Union Pacific, BNSF, Norfolk Southern, CSX and Kansas City Southern, wanted any deal to closely follow the recommendations a special board of arbitrators that Biden appointed made this summer that called for the 24% raises and $5,000 in bonuses but didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and other working conditions. That’s what Biden is calling on Congress to impose.

    ———

    Associated Press writer Colleen Long in Washington contributed to this report.

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  • Fidelity Charitable launches NFT raffle amid crypto downturn

    Fidelity Charitable launches NFT raffle amid crypto downturn

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    NEW YORK — Fidelity Charitable is getting into NFTs, the digital images that are registered on the blockchain, despite a torrent of bad news from the adjacent world of cryptocurrencies.

    The nation’s largest grantmaker is sponsoring a raffle that ends Tuesday, where participants can claim one of the NFTs, which stands for nonfungible token, and 50 will win $1,000 to donate through a donor advised fund at Fidelity.

    “The reason we’re doing this is we really believe there’s a whole new generation of givers and philanthropists out there,” said Amy Pirozzolo, head of donor engagement for Fidelity Charitable. “We want to be where they are and the channels they use and the formats they use and further encourage their generosity.”

    Around 16% of Americans say they invested in cryptocurrencies, according to a poll from Pew Research Center last year. The demographic most likely to invest were men between the ages of 18 and 29, with 43% reporting that they had invested.

    The blockchain is the technology that underlies the trading of cryptocurrencies, but it can also record the ownership of digital items like images, videos or Tweets. Fidelity said that 50,000 different wallets, potentially representing that many individuals, have already registered to create an NFT and potentially win the money to donate.

    Contributions in cryptocurrency to donor advised funds at Fidelity exploded last year, growing from the equivalent of $28 million in 2020 to $331 million in 2021, Fidelity has said.

    Speaking of the NFT project, Jacob Pruitt, president of Fidelity Charitable, said, “I think it’ll be a unique way to engage with next gen investors. It’s another way that I think Fidelity is innovating and leaning into a new space.”

    Donor advised funds allow donors to claim a tax credit for charitable donations, but do not require them to give those funds away within any specific timeframe. Organizations that host DAFs, like Fidelity Charitable, also handle more complex donations, which includes exchanging the assets for cash and producing receipts for donors for tax purposes.

    “Many of the nonprofits either can’t take on these assets or they have to hire outside counsel or people to staff to do it,” Pirozzolo said.

    One reason for the jump in cryptocurrency donations is that until recently, their value had appreciated significantly. The cryptocurrency market saw a huge boom in 2021 with the price of Bitcoin, the first cryptocurrency, rising to an all time high of around $68,000 in November last year.

    But the meltdown of Terra — a stablecoin, or a type of cryptocurrency that tries to peg its value to an asset like the U.S. dollar — in May brought down a series of major cryptocurrency businesses. Then, earlier this month, one of the largest cryptocurrency exchanges, FTX and related entities, suddenly filed for bankruptcy leaving both American and international users unable to access assets they held on the exchange.

    James Lawrence, co-founder and CEO of Engiven, which facilitates cryptocurrency to nonprofits, including Christian ministries, observed that many people giving cryptocurrencies are making major gifts and that often those happen in the last quarter of the year. That means it’s too early to say how the cryptocurrency market’s fluctuations may impact donations this year. He said he doesn’t see people donating cryptocurrencies as that different from other donors.

    “They just have a different asset to give and they’re going to give the most appreciated asset they can,” Lawrence said.

    Of the more than 1.5 million nonprofits registered with the Internal Revenue Service in the U.S., Lawrence estimated that only four or five thousand could receive cryptocurrency donations directly.

    “That’s a huge market that still doesn’t,” he said. He also has observed that many giving large donations in cryptocurrency (they facilitated one donation of $10 million in cryptocurrency assets) are the same types of people who give large donations in general, and not necessarily the younger demographics that are more likely to invest in cryptocurrency.

    “Many of the largest gifts we’ve processed have been from an older demographic who have a tradition of giving large gifts in multiple asset classes,” he said.

    Another organization, Endaoment, also facilitates cryptocurrency donations to nonprofit organizations as well as hosting pooled funds to benefit certain types of nonprofits. Robbie Heeger, the organization’s president and CEO, said besides that fact that nonprofits may receive donations from cryptocurrency donors that they wouldn’t otherwise, cryptocurrency proponents are also eager to draw in new users.

    “This is a leapfrog opportunity for nonprofit organizations to move from paper checks” to cryptocurrency Heeger said. “And the crypto space is very focused on adoption flywheels, on ways to incentivize or encourage the traditional economy to migrate into the crypto economy.”

    He encouraged newcomers to the cryptocurrency space to carefully research projects they might get involved with and to look for ones that have gotten outside audits from professional auditors.

    Pirozzolo argued that the Fidelity Charitable promotion using NFTs is separate from the cryptocurrency ecosystem.

    “This is really about the blockchain and having a fun way to celebrate with digital art the generosity of giving,” she said.

    The company is paying for the cost of creating the NFTs, which includes a “gas” fee that pays for the creation and registration of the item, and also said that it has compensated the artists who made the images.

    People who claim the NFTs will need to sign up for a cryptocurrency wallet that has access to the Polygon blockchain. The Fidelity Charitable NFTs will be hosted on the platform OpenSea.

    Participants will see the NFT in their wallet when they sign up, but the art itself and the winners of the $1,000 tickets won’t be revealed until Giving Tuesday, Nov, 29.

    ———

    Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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  • Asian shares fall as China protests, lockdowns cloud outlook

    Asian shares fall as China protests, lockdowns cloud outlook

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    BANGKOK — Shares skidded in Asia on Monday, with Hong Kong briefly dipping more than 4% following weekend protests in various cities over China’s strict zero-COVID lockdowns.

    U.S. futures were lower after a mixed, shortened session Friday on Wall Street. Oil prices fell more than $2 a barrel.

    The unrest in China is the boldest show of public dissent against the ruling Communist Party in years. It followed complaints that policies aimed at eradicating the coronavirus by isolating every case might have worsened the death toll in an apartment fire in Urumqi in the northwestern Xinjiang region.

    China’s infection rate has been lower than in the United States and other countries, but the authorities are facing rising resentment over the economic and human costs of the approach known as “zero-COVID” as businesses close and families are isolated for weeks with limited access to food and medicine.

    “For investors, when it comes to China, trying to predict with any degree the reopening certainty that has no certainty, basis, or track record to go by is looking like a dangerous game in the context of the disquietening protests and the colossal challenge China’s leaders now have on their hands,” Stephen Innes of SPI Asset Management said in a commentary.

    By midday Monday, Hong Kong’s Hang Seng was 2% lower at 17,225.41 and the Shanghai Composite index had declined 1% to 3,069.66.

    On Friday, China’s central bank sought to boost the economy by easing its reserve requirement ratio, the proportion of assets banks must hold in reserve, by a quarter percentage point to 7.8%.

    “The cuts are a bid to support weakening economic growth dragged down not only by COVID restrictions but also a deeper property market rout,” Mizuho Bank noted in a report. However, it said, that news was overshadowed by rising numbers of virus cases and the protests.

    Tokyo’s Nikkei 225 index shed 0.5% to 28,131.00 and the Kospi in Seoul lost 1.1% to 2,411.34. In Sydney, the S&P/ASX 200 shed 0.4% to 7,230.30 following the release of weaker than expected retail sales data.

    Bangkok’s SET was 0.1% lower while the Sensex in Mumbai added 0.2%.

    On Friday, when markets closed at 1 p.m. Eastern following the Thanksgiving day holiday on Thursday, the S&P 500 fell less than 0.1% to close at 4,026.12.

    Nearly 70% of stocks in the benchmark index gained ground, but the broader market was dragged lower by technology companies, whose high valuations give them more heft in pushing the market higher or lower.

    The Dow Jones Industrial Average rose 0.5% to 34,347.03. The Nasdaq fell 0.5% to 11,226.36.

    Long-term bond yields were relatively stable but still hovered around multi-decade highs. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.70% from 3.69% late Wednesday.

    Investors remain concerned about whether the Federal Reserve can tame the hottest inflation in decades by raising interest rates without going too far and causing a recession.

    The central bank’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March. It has warned it may have to ultimately raise rates to previously unanticipated levels to rein in high prices on everything from food to clothing.

    Wall Street gets several big economic updates this week. The Conference Board business group will release its November report on consumer confidence and the U.S. government will release its closely watched monthly employment report.

    In other trading Monday, U.S. benchmark crude oil lost $2.24 to $74.04 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.66 on Friday to $76.28 per barrel.

    Brent crude, which is used to price oil for international trading, sank $2.37 to $81.34 per barrel.

    The dollar fell to 138.57 Japanese yen from 139.28 yen. The euro slipped to $1.0358 from $1.0379.

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  • EU, US edging toward trade spat when both want unity instead

    EU, US edging toward trade spat when both want unity instead

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    BRUSSELS — The European Union and the United States are treading precariously close to a major trans-Atlantic trade dispute at a time when the two Western giants want to show unity in the face of challenges from Russia and China.

    EU trade ministers on Friday insisted they would be forced to respond if Washington stuck to all the terms of its Inflation Reduction Act, which is favorable to local companies through subsidies and, according to the EU, will unfairly discriminate against its firms that want to compete for contracts.

    “Nobody wants to get into a tit-for-tat or subsidy race. But what the U.S. has done really isn’t consistent with the principles of free trade and fair competition,” Irish Trade Minister Leo Varadkar said.

    Even though the allies have stood shoulder to shoulder by imposing strict sanctions against Russia since the Feb. 24 invasion of Ukraine, they cannot gloss over the trade differences.

    “What we are asking for is fairness. We want and expect European companies and exports to be treated in the same way in the U.S. as American companies and exports are treated in Europe,” EU Commission Vice President Valdis Dombrovskis said.

    And beyond the European Commission, which negotiates on behalf of the 27 member nations on trade issues, the concerns are largely shared in EU national capitals, too.

    “All the member states are concerned,” said Czech Trade Minister Jozef Sikela, who chaired the emergency meeting.

    The Czech minister said the EU still hopes divergences can be solved during a Dec. 5 meeting of the task force that the U.S. and EU have set up, with the possibility that the bloc would be treated like Canada and Mexico and be exempted from the subsidy conditions.

    Trade disputes have been a red line for decades in trans-Atlantic relations, highlighted by fights over aircraft subsidies and steel exports and affecting everything from hormone-treated beef to liquor exports.

    Planned subsidies under the Inflation Reduction Act passed by the U.S. Congress in August, are especially grating for the EU. For example, electric car buyers are eligible for a tax credit of up to $7,500 as long as the vehicle runs on a battery built in North America with minerals mined or recycled on the continent.

    The EU believes that the measure is a potential trans-Atlantic trade barrier discriminating against foreign producers. Potential actions the EU can take are complaints before the World Trade Organization, trade sanctions or upping subsidies for their own companies.

    Those considerations have to weighed against the need to cooperate on the geopolitical stage and the essence of showing a united front.

    “We see that the parts from the East actually are trying to divide us,” Estonian Trade Minister Kristjan Jarvan said. “And of course economy plays a huge role in that.”

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  • EXPLAINER: What’s the effect of Russian oil price cap, ban?

    EXPLAINER: What’s the effect of Russian oil price cap, ban?

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    FRANKFURT, Germany — Western governments are aiming to cap the price of Russia’s oil exports in an attempt to limit the fossil fuel earnings that support Moscow’s budget, its military and the invasion of Ukraine.

    The cap is set to take effect on Dec. 5, the same day the European Union will impose a boycott on most Russian oil — its crude that is shipped by sea. The EU was still negotiating what the price ceiling should be.

    The twin measures could have an uncertain effect on the price of oil as worries over lost supply through the boycott compete with fears about lower demand from a slowing global economy.

    Here are basic facts about the price cap, the EU embargo and what they could mean for consumers and the global economy:

    WHAT IS THE PRICE CAP AND HOW WOULD IT WORK?

    U.S. Treasury Secretary Janet Yellen has proposed the cap with other Group of 7 allies as a way to limit Russia’s earnings while keeping Russian oil flowing to the global economy. The aim is to hurt Moscow’s finances while avoiding a sharp oil price spike if Russia’s oil is suddenly taken off the global market.

    Insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most of the insurers are located in the EU or the United Kingdom and could be required to participate in the cap. Without insurance, tanker owners may be reluctant to take on Russian oil and face obstacles in delivering it.

    HOW WOULD OIL KEEP FLOWING TO THE GLOBAL ECONOMY?

    Universal enforcement of the insurance ban, imposed by the EU and U.K. in earlier rounds of sanctions, could take so much Russian crude off the market that oil prices would spike, Western economies would suffer, and Russia would see increased earnings from whatever oil it can ship in defiance of the embargo.

    Russia, the world’s No. 2 oil producer, has already rerouted much of its supply to India, China and other Asian countries at discounted prices after Western customers shunned it even before the EU ban.

    One purpose of the cap is to provide a legal framework “to allow the flow of Russian oil to continue and to reduce the windfall revenue for Russia at the same time,” said Claudio Galimberti, a senior vice president of analysis at Rystad Energy.

    “It is essential for the global crude markets that Russian oil still finds markets to be sold, after the EU ban is operative,” he added. “In the absence of that, global oil prices would skyrocket.”

    WHAT EFFECT WOULD DIFFERENT CAP LEVELS HAVE?

    A cap of between $65 and $70 per barrel could let Russia keep selling oil and while keeping its earnings to current levels. Russian oil is trading at around $63 per barrel, a considerable discount to international benchmark Brent.

    A lower cap — at around $50 per barrel — would make it difficult for Russia to balance its state budget, with Moscow believed to require around $60 to $70 per barrel to do that, its so-called “fiscal break-even.”

    However, that $50 cap would be still be above Russia’s cost of production of between $30 and $40 per barrel, giving Moscow an incentive to keep selling oil simply to avoid having to cap wells that can be hard to restart.

    WHAT IF RUSSIA AND OTHER COUNTRIES WON’T GO ALONG?

    Russian has said it will not observe a cap and will halt deliveries to countries that do. A lower cap of around $50 could be more likely to provoke that response, or Russia could halt the last of its remaining natural gas supplies to Europe.

    China and India might not go along with the cap, while China could form its own insurance companies to replace those barred by U.S., U.K. and Europe.

    Galimberti says China and India are already enjoying discounted oil and may not want to alienate Russia.

    “China and India get Russia’s crude at a huge discount to Brent, therefore, they don’t necessarily need a price cap to continue to enjoy a discount,” he said. “By complying with the cap set by the G-7, they risk alienating Russia. As a result, we do believe that the compliance with the price cap would not be high.”

    Russia could also turn to schemes such as transferring oil from ship to ship to disguise its origins and mixing its oil with other types to skirt the ban.

    So it remains to be seen what effect the cap would have.

    WHAT ABOUT THE EU EMBARGO?

    The biggest impact from the EU embargo may come not on Dec. 5, as Europe finds new suppliers and Russian barrels are rerouted, but on Feb. 5, when Europe’s additional ban on refinery products made from oil — such as diesel fuel — come into effect.

    Europe will have to turn to alternative supplies from the U.S., Middle East and India. “There is going to be a shortfall, and this will result in very high prices,” Galimberti said.

    Europe still has many cars that run on diesel. The fuel also is used for truck transport to get a huge range of goods to consumers and to run agricultural machinery — so those higher costs will be spread throughout the economy.

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  • EXPLAINER: What’s the effect of Russian oil price cap, ban?

    EXPLAINER: What’s the effect of Russian oil price cap, ban?

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    FRANKFURT, Germany — Western governments are aiming to cap the price of Russia’s oil exports in an attempt to limit the fossil fuel earnings that support Moscow’s budget, its military and the invasion of Ukraine.

    The cap is set to take effect on Dec. 5, the same day the European Union will impose a boycott on most Russian oil — its crude that is shipped by sea. The EU was still negotiating what the price ceiling should be.

    The twin measures could have an uncertain effect on the price of oil as worries over lost supply through the boycott compete with fears about lower demand from a slowing global economy.

    Here are basic facts about the price cap, the EU embargo and what they could mean for consumers and the global economy:

    WHAT IS THE PRICE CAP AND HOW WOULD IT WORK?

    U.S. Treasury Secretary Janet Yellen has proposed the cap with other Group of 7 allies as a way to limit Russia’s earnings while keeping Russian oil flowing to the global economy. The aim is to hurt Moscow’s finances while avoiding a sharp oil price spike if Russia’s oil is suddenly taken off the global market.

    Insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most of the insurers are located in the EU or the United Kingdom and could be required to participate in the cap. Without insurance, tanker owners may be reluctant to take on Russian oil and face obstacles in delivering it.

    HOW WOULD OIL KEEP FLOWING TO THE GLOBAL ECONOMY?

    Universal enforcement of the insurance ban, imposed by the EU and U.K. in earlier rounds of sanctions, could take so much Russian crude off the market that oil prices would spike, Western economies would suffer, and Russia would see increased earnings from whatever oil it can ship in defiance of the embargo.

    Russia, the world’s No. 2 oil producer, has already rerouted much of its supply to India, China and other Asian countries at discounted prices after Western customers shunned it even before the EU ban.

    One purpose of the cap is to provide a legal framework “to allow the flow of Russian oil to continue and to reduce the windfall revenue for Russia at the same time,” said Claudio Galimberti, a senior vice president of analysis at Rystad Energy.

    “It is essential for the global crude markets that Russian oil still finds markets to be sold, after the EU ban is operative,” he added. “In the absence of that, global oil prices would skyrocket.”

    WHAT EFFECT WOULD DIFFERENT CAP LEVELS HAVE?

    A cap of between $65 and $70 per barrel could let Russia keep selling oil and while keeping its earnings to current levels. Russian oil is trading at around $63 per barrel, a considerable discount to international benchmark Brent.

    A lower cap — at around $50 per barrel — would make it difficult for Russia to balance its state budget, with Moscow believed to require around $60 to $70 per barrel to do that, its so-called “fiscal break-even.”

    However, that $50 cap would be still be above Russia’s cost of production of between $30 and $40 per barrel, giving Moscow an incentive to keep selling oil simply to avoid having to cap wells that can be hard to restart.

    WHAT IF RUSSIA AND OTHER COUNTRIES WON’T GO ALONG?

    Russian has said it will not observe a cap and will halt deliveries to countries that do. A lower cap of around $50 could be more likely to provoke that response, or Russia could halt the last of its remaining natural gas supplies to Europe.

    China and India might not go along with the cap, while China could form its own insurance companies to replace those barred by U.S., U.K. and Europe.

    Galimberti says China and India are already enjoying discounted oil and may not want to alienate Russia.

    “China and India get Russia’s crude at a huge discount to Brent, therefore, they don’t necessarily need a price cap to continue to enjoy a discount,” he said. “By complying with the cap set by the G-7, they risk alienating Russia. As a result, we do believe that the compliance with the price cap would not be high.”

    Russia could also turn to schemes such as transferring oil from ship to ship to disguise its origins and mixing its oil with other types to skirt the ban.

    So it remains to be seen what effect the cap would have.

    WHAT ABOUT THE EU EMBARGO?

    The biggest impact from the EU embargo may come not on Dec. 5, as Europe finds new suppliers and Russian barrels are rerouted, but on Feb. 5, when Europe’s additional ban on refinery products made from oil — such as diesel fuel — come into effect.

    Europe will have to turn to alternative supplies from the U.S., Middle East and India. “There is going to be a shortfall, and this will result in very high prices,” Galimberti said.

    Europe still has many cars that run on diesel. The fuel also is used for truck transport to get a huge range of goods to consumers and to run agricultural machinery — so those higher costs will be spread throughout the economy.

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  • Turkish central bank cuts rates again despite high inflation

    Turkish central bank cuts rates again despite high inflation

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    ANKARA, Turkey — Turkey’s central bank delivered another outsized interest rate cut Thursday despite inflation running at more than 85% and other countries moving the opposite way to ease the pain of soaring prices.

    The central bank said its Monetary Policy Committee decided to lower the benchmark policy rate by 1.5 percentage points to 9%, following a series of similar jumbo cuts.

    The move is in line with President Recep Tayyip Erdogan’s unorthodox economic views that high borrowing costs cause high inflation, even though traditional economic thinking says raising interest rates help tame inflation.

    Erdogan had called for a single-digit interest rate by the end of the year. He is counting on lower borrowing costs to propel the economy as Turkey gears up for presidential and parliamentary elections next June.

    The bank had similarly cut borrowing costs by 1.5 points last month and by 1 point each in August and September. The Monetary Policy Committee announced, however, that the easing cycle would now come to a halt.

    “Considering the increasing risks regarding global demand, the Committee evaluated that the current policy rate is adequate and decided to end the rate cut cycle that started in August,” it said in a statement.

    Inflation hit a raging 85.51% in October, according to official statistics, making even basic necessities unaffordable for many. Independent researchers estimated, however, that actual price increases are much higher than the official figures.

    The European Central Bank, U.S. Federal Reserve and other central banks around the world have taken the reverse course of Turkey, rapidly raising interest rates to clamp down on soaring consumer prices. Sweden raised its key rate by three-quarters of a percentage point on Thursday.

    Their inflation rates are far below Turkey’s, running at 10.6% in the 19 countries using the euro currency, 9.3% in Sweden and 7.7% in the U.S. last month.

    The Turkish lira has lost some 28% of its value against the U.S. dollar since the beginning of the year — on top of taking an even worse battering in 2021.

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  • Sweden’s big interest rate hike follows other central banks

    Sweden’s big interest rate hike follows other central banks

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    STOCKHOLM — Sweden’s central bank followed other central banks in undertaking a big increase to its key interest rate to combat inflation, saying Thursday that high prices are undermining people’s purchasing power and making it tough for households and companies to plan their finances.

    Riksbanken said the hike of three-quarters of a percentage point pushes the key rate to 2.5% — the highest in 14 years, according to Swedish news agency TT — and is meant “to bring down inflation and safeguard the inflation target.”

    Consumer prices rose 9.3% in October from a year earlier in the European Union country, lower than the 9.7% seen in September.

    The big rate increase in Sweden, which does not use the euro currency so it is not part of the European Central Bank’s decision-making, builds on the jumbo full percentage point hike made in September.

    It comes as the ECB, U.S. Federal Reserve and other central banks also have made large rate increases to fight inflation that has been squeezing people around the world.

    In Sweden, the forecast “shows that the policy rate will probably be raised further at the beginning of next year and then be just below 3%,” the bank said.

    “It is still difficult to assess how inflation will develop and the Riksbank will adapt monetary policy as necessary to ensure that inflation is brought back to the target within a reasonable time,” the bank said in a statement.

    The decision on the policy rate will apply with effect from Nov. 30.

    ———

    This story has been corrected to show that the rate of 2.5%, not the rate increase, is the highest in 14 years.

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  • New Zealand hikes interest rate to 4.25% to fight inflation

    New Zealand hikes interest rate to 4.25% to fight inflation

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    WELLINGTON, New Zealand — New Zealand’s central bank hiked interest rates Wednesday by a record amount as it tries to get inflation under control.

    The Reserve Bank of New Zealand increased its benchmark rate by three-quarters of a point to 4.25%.

    It’s the first time the bank has raised rates by more than a half-point since introducing the Official Cash Rate in 1999. The new rate is the highest in New Zealand since early 2009.

    New Zealand’s inflation rate is currently 7.2%, well above the bank’s target of 1% to 3%. The nation’s unemployment rate is 3.3%.

    The bank also sharply revised upwards its projected peak for its benchmark rate, which it now expects it to reach 5.5% next year before it decreases. It predicted a sharp rise in unemployment next year and for the economy to dip briefly into a shallow recession.

    The New Zealand dollar rose on the news and was trading at around 62 U.S. cents.

    The U.S. Federal Reserve and other central banks around the world have been aggressively hiking interest rates to battle inflation. The Fed’s key short-term rate is now set at 3.75% to 4%, up from near zero as recently as last March.

    New Zealand Reserve Bank Governor Adrian Orr had a message for consumers.

    “Think harder about your spending. Think about saving rather than consuming, I know that’s a strange concept,” he said. “Just cool the jets.”

    Orr said the bank’s monetary policy committee had agreed that interest rates needed to go higher, and sooner than previously indicated, to ensure inflation returned to its target level.

    “Core consumer price inflation remains too high, employment is beyond its maximum sustainable level, and near-term inflation expectations have risen. So this is quite a heightened inflation environment,” Orr told reporters.

    He said the committee had considered raising rates even more on Wednesday, by a full 1%, before settling on the 0.75% hike.

    He said inflation was “no-one’s friend” and that a small recession might be needed to get it down.

    “In order to rid the country of inflation we need to reduce spending levels. That means that we will have a period of negative GDP growth, we think to the tune of around 1 percent of GDP,” Orr said. “So in that sense it’s a shallow period and at the moment, we’re saying that’s around the second half of next year.”

    Orr said he expects house prices to decrease by a total of 20% by the middle of next year from their peak last November. House prices are currently down by about 11% from their peak.

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  • Supreme Court OKs handover of Trump tax returns to Congress

    Supreme Court OKs handover of Trump tax returns to Congress

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    WASHINGTON — The Supreme Court on Tuesday cleared the way for the imminent handover of former President Donald Trump’s tax returns to a congressional committee after a three-year legal fight.

    The court, with no noted dissents, rejected Trump’s plea for an order that would have prevented the Treasury Department from giving six years of tax returns for Trump and some of his businesses to the Democratic-controlled House Ways and Means Committee.

    Alone among recent presidents, Trump refused to release his tax returns either during his successful 2016 campaign or his four years in the White House, citing what he said was an ongoing audit by the IRS. Last week, Trump announced he would run again in 2024.

    It was the former president’s second loss at the Supreme Court in as many months, and third this year. In October, the court refused to step into the legal fight surrounding the FBI search of Trump’s Florida estate that turned up classified documents.

    In January, the court refused to stop the National Archives from turning over documents to the House committee investigating the Jan. 6 insurrection at the Capitol. Justice Clarence Thomas was the only vote in Trump’s favor.

    In the dispute over his tax returns, the Treasury Department had refused to provide the records during Trump’s presidency. But the Biden administration said federal law is clear that the committee has the right to examine any taxpayer’s return, including the president’s.

    Lower courts agreed that the committee has broad authority to obtain tax returns and rejected Trump’s claims that it was overstepping and only wanted the documents so they could be made public.

    Chief Justice John Roberts imposed a temporary freeze on Nov. 1 to allow the court to weigh the legal issues raised by Trump’s lawyers and the counter arguments of the administration and the House of Representatives.

    Just over three weeks later, the court lifted Roberts’ order without comment.

    The Trump campaign did not immediately respond to a request for comment.

    The House contended an order preventing the IRS from providing the tax returns would leave lawmakers “little or no time to complete their legislative work during this Congress, which is quickly approaching its end.”

    Had Trump persuaded the nation’s highest court to intervene, he could have run out the clock on the committee, with Republicans ready to take control of the House in January. They almost certainly would have dropped the records request if the issue had not been resolved by then.

    The House Ways and Means panel and its chairman, Democrat Richard Neal of Massachusetts, first requested Trump’s tax returns in 2019 as part of an investigation into the Internal Revenue Service’s audit program and tax law compliance by the former president. A federal law says the Internal Revenue Service “shall furnish” the returns of any taxpayer to a handful of top lawmakers.

    The Justice Department under the Trump administration had defended a decision by then-Treasury Secretary Steven Mnuchin to withhold the tax returns from Congress. Mnuchin argued that he could withhold the documents because he concluded they were being sought by Democrats for partisan reasons. A lawsuit ensued.

    After President Joe Biden took office, the committee renewed the request, seeking Trump’s tax returns and additional information from 2015-2020. The White House took the position that the request was a valid one and that the Treasury Department had no choice but to comply. Trump then attempted to halt the handover in court.

    Then-Manhattan District Attorney Cyrus Vance Jr. obtained copies of Trump’s personal and business tax records as part of a criminal investigation. That case, too, went to the Supreme Court, which rejected Trump’s argument that he had broad immunity as president.

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  • China anti-virus curbs spur fears of global economic impact

    China anti-virus curbs spur fears of global economic impact

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    BEIJING — More than 253,000 coronavirus cases have been found in China in the past three weeks and the daily average is rising, the government said Tuesday, adding to pressure on officials who are trying to reduce economic damage by easing controls that confine millions of people to their homes.

    The ruling Communist Party promised earlier this month to reduce disruptions from its “zero- COVID” strategy by making controls more flexible. But the latest wave of outbreaks is challenging that, prompting major cities including Beijing to close off populous districts, shut stores and offices and ordered factories to isolate their workforces from outside contact.

    That has fueled fears a downturn in Chinese business activity might hurt already weak global trade.

    The past week’s average of 22,200 daily cases is double the previous week’s rate, the official China News Service reported, citing the National Bureau of Disease Prevention and Control.

    “Some provinces are facing the most severe and complex situation in the past three years,” a bureau spokesman, Hu Xiang, said at a news conference, according to CNS.

    China’s infection numbers are lower than those of the United States and other major countries. But the ruling party is sticking to “zero COVID,” which calls for isolating every case, while other governments are relaxing travel and other controls and trying to live with the virus.

    On Tuesday, the government reported 28,127 cases found over the past 24 hours, including 25,902 with no symptoms. Almost one-third, or 9,022, were in Guangdong province, the heartland of export-oriented manufacturing adjacent to Hong Kong.

    Global stock markets fell Monday as anxiety about China’s controls added to unease about a Federal Reserve official’s comment last week that already elevated U.S. interest rates might have to rise further than expected to cool surging inflation. Shares were mixed on Tuesday.

    Investors are “worried about falling demand as a result of a less mobile Chinese economy amid fears there will be more COVID-related lockdowns,” said Fawad Razaqzada of StoneX in a report.

    China is the world’s biggest trader and the top market for its Asian neighbors. Weakness in consumer or factory demand can hurt global producers of oil and other raw materials, computer chips and other industrial components, food and consumer goods. Restrictions that hamper activity at Chinese ports can disrupt global trade.

    Hu, the government spokesman, said officials were traveling around China and holding video meetings to ensure compliance with a list of 20 changes to anti-virus controls announced on Nov. 11. They include shortening quarantines for people arriving in China to five days from seven and narrowing the definition of who counts as a close contact of an infected person.

    Despite that, the Guangdong provincial capital, Guangzhou, suspended access Monday to its Baiyun district of 3.7 million residents. Residents of some areas of Shijiazhuang, a city of 11 million people southwest of Beijing, were told to stay home while mass testing is carried out.

    Economic growth rebounded to 3.9% over a year earlier in the three months ending in September, up from the first half’s 2.2%. But activity already was starting to fall back.

    Retail spending shrank by 0.5% from a year earlier in October, retreating from the previous month’s 2.5% growth as cities re-imposed anti-virus controls. Imports fell 0.3% in a sign of anemic consumer demand, a reverse from September’s 6.7% rise.

    Chinese exports shrank by 0.7% in October after American and European consumer demand was depressed by unusually large interest rate increases by the Fed and other central banks to cool inflation that is at multi-decade highs.

    Businesspeople and economists see the changes in anti-virus controls as a step toward lifting controls that isolate China from the rest of the world. But they say “zero COVID” might stay in place until as late as the second half of next year.

    Guangzhou announced plans last week to build quarantine facilities for nearly 250,000 people. It said 95,300 people from another district, Haizhu, were being moved to hospitals or quarantine.

    Factories in Shijiazhuang were told to operate under “closed-loop management,” a term for employees living at their workplaces. That adds costs for food and living space.

    Entrepreneurs are pessimistic about the current quarter, according to a survey by Peking University researchers and a financial company, Ant Group Ltd. It said a “confidence index” based on responses from 20,180 business owners fell to its lowest level since early 2021.

    The ruling party needs to vaccinate millions of elderly people before it can lift controls that keep out most foreign visitors, economists and health experts say.

    “We do not think the country is ready yet to open up,” said Louis Loo of Oxford Economics in a report. “We expect the Chinese authorities will continue to fine-tune COVID controls over the coming months, moving toward a broader and more comprehensive reopening later.”

    ———

    AP news assistant Caroline Chen contributed.

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  • Asian stocks down after Wall St weekly loss on rate fears

    Asian stocks down after Wall St weekly loss on rate fears

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    BEIJING — Asian stock markets sank Monday after Wall Street ended with a loss for the week amid anxiety about Federal Reserve plans for more interest rate hikes to cool inflation.

    Hong Kong’s benchmark fell more than than 2%. Shanghai, Seoul and Sydney also retreated, while Tokyo was little-changed. Oil prices declined.

    U.S. stock indexes ended with a weekly loss after a Fed official, James Bullard, rattled investors by suggesting the central bank’s base lending rate might have to be raised to as much as almost double its already elevated level.

    “Bullard dimmed the light on rallies,” said Tan Boon Heng of Mizuho Bank in a report.

    The Hang Seng in Hong Kong was off 2.1% at 17,616.06 after the territory’s leader, John Lee, tested positive for the coronavirus after returning from an Asia-Pacific meeting in Bangkok.

    The Shanghai Composite Index lost 0.8% to 2,072.08 and the Nikkei 225 in Tokyo lost less than 0.1% to 27,904.69.

    The Kospi in South Korea fell 1.2% to 2,414.20 and Sydney’s S&P-ASX 200 lost 0.1% to 7,141.50.

    India’s Sensex opened down 0.7% at 61.212.75. New Zealand gained while Southeast Asian markets declined.

    On Friday, Wall Street’s benchmark S&P 500 index rose 0.5% to 3,965.34. The Dow Jones Industrial Average added 0.6% to 33,745.69. The Nasdaq composite lost less than 0.1% to 11,146.06.

    All the major U.S. indexes ended with a loss for the week after Bullard, president of the St. Louis Federal Reserve Bank, gave a presentation that indicated the Fed’s benchmark rate might have to rise to between 5% and 7%. That would be up from its current level of 3.75% to 4% following four hikes of 0.75 percentage points, three times the Fed’s usual margin.

    Investors worry repeated rate hikes by the Fed and central banks in Asia and Europe this year to cool surging inflation might tip the global economy into recession.

    Traders hope signs economic activity is slowing and inflation pressures are easing might prompt the Fed to ease off its plans. Fed officials including chair Jerome Powell have warned rates might need to stay high for an extended period to extinguish inflation.

    Traders expect the Fed to raise its key rate again at its December meeting but by a smaller margin of 0.5 percentage points.

    Big U.S. retailers gained after they reported strong quarterly results and gave investors encouraging financial forecasts. Discount retailer Ross Stores surged 9.9% for the biggest gain among S&P 500 stocks. Shoe seller Foot Locker climbed 8.7% after raising its profit and revenue forecast for the year.

    U.S. retail sales rose 1.3% in October in a sign of consumer confidence ahead of Christmas shopping. Still, with inflation high, major retailers say Americans are holding out for sales and refusing to pay full price.

    Health care and financial stocks also gained. UnitedHealth Group rose 2.9% and Charles Schwab added 2.5%.

    Energy and communications companies declined. Marathon Oil fell 1.6% amid a broad pullback in energy prices. U.S. crude oil settled 1.9% lower. Live Nation, an entertainment promoter and venue operator, slumped 7.8%.

    In energy markets, benchmark U.S. crude lost 61 cents to $79.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.56 to $80.08 on Friday. Brent crude, the price basis for international oil trading, sank 79 cents to $86.83 per barrel in London. It slumped $2.16 to $87.62 the previous session.

    The dollar rose to 140.41 yen from Friday’s 140.36 yen. The euro fell to $1.0283 from $1.0331.

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