Fed pledges cautious path forward with interest rate decision
The Federal Reserve left interest rates unchanged Wednesday while leaving the door open to a future increase, a cautious stance at a time when rapid inflation is retreating but is not yet vanquished.
Rates have been on hold in a range of 5.25% to 5.5% since July, up from near zero as recently as March 2022. Policymakers think that borrowing costs are now high enough to weigh on economic growth if they are kept at this level over time.
By cooling demand, the Fed is hoping to prod companies to raise prices less quickly. Though the economy has held up so far growth was unusually strong this summer inflation has come down since 2022. Overall price increases decelerated to 3.4% as of September, down from above 7% at their peak.
Fed policymakers now are trying to wrestle inflation the rest of the way back to the central bank's 2% target. The combination of economic resilience and moderating inflation has given officials hope that they might be able to pull that off, slowing the economy gradually and relatively painlessly in a rare soft landing. But at the same time, continued economic momentum is forcing the Fed to question whether it has done enough to weigh on growth and crush price increases.
“The full effects of our tightening have yet to be felt,” Jerome Powell, the Fed chair, said after the decision.
Recall says 1.9 million RAV4s need shifting batteries fixed
Toyota said Wednesday it is recalling nearly 1.9 million RAV4 small SUVs in the U.S. to fix a problem with batteries that can move during forceful turns and potentially cause a fire.
The recall covers certain RAV4s from the 2013-2018 model years. Toyota said in a statement that some replacement 12-volt batteries used in the SUVs have smaller top dimensions than others. If the holddown clamp is not tightened properly, the battery could move, allowing the positive terminal to contact the clamp and short circuit, the company said.
Toyota said it is still preparing a fix. When the remedy is ready, dealers will replace the hold-down clamp, battery tray and positive terminal cover with improved ones. The company said it will notify owners by late December.
The automaker declined to say if the problem had caused any fires, crashes or injuries.
Owners can check to see if their RAV4s are involved by going to nhtsa.gov/recalls and entering their vehicle identification number.
The RAV4 recall announced Wednesday was the second one announced by Toyota in a week. On Oct. 26, the company recalled 814,000 Highlander sport utility vehicles because the front bumper could fall off.
California says electric cars now make up one-fifth of auto sales
One out of every 5 cars sold in California is now powered by a battery, registration data released Wednesday by the California New Car Dealers Association shows.
In the first nine months of 2023, electric vehicles accounted for 21.5% of cars sold in California, a figure that has more than doubled in the past two years. When combined with hybrid, plug-in hybrid and fuel-cell vehicles, the year-to-date figure is 35.4%.
The state long has been a champion of electric cars, with the sale of new, gasoline-powered cars being phased out by 2035 as part of its fight against climate change.
Battery-powered cars make up only 7.4% of the overall U.S. auto market, the report said.
That's helped California defy some of the gloom now facing the broader EV market. Both Tesla and conventional automakers have said they'll slow their investments in battery-powered cars for now, warning that high interest rates and prices are affecting demand.
Tesla's lead in the California electricvehicle market has slipped this year, according to the state registration data. Its overall market share fell to 62.9% in the first nine months of 2023, compared with its 71.8% share the year before. MercedesBenz Group AG and BMW both gained ground among EV sellers.
Gasoline- and diesel-powered vehicles known as ICE, for their internal combustion engines, made up 62.3% of new vehicle registrations in California during the period. That's a drop from 71.6% in 2022.
Toyota Motor Corp. remains the bestselling brand in California overall, with 15% market share year to date. Tesla is second with 13.5%, thanks to strong sales of the Model Y.