Fed raises key rate in bid to tame inflation
The Federal Reserve intensified its fight against the worst inflation in 40 years by raising its benchmark interest rate by a half-percentage point Wednesday — its most aggressive move since 2000 — and signaling further large rate hikes to come.
The increase in the Fed’s key shortterm rate raised it to a range of 0.75% to 1%, the highest point since the pandemic struck two years ago.
The Fed also announced that it will start reducing its huge $9 trillion balance sheet, made up mainly of Treasury and mortgage bonds. Reducing those holdings will have the effect of further raising loan costs throughout the economy.
With prices for food, energy and consumer goods accelerating, the Fed’s goal is to cool spending — and economic growth — by making it more expensive for individuals and businesses to borrow. The central bank hopes that higher costs for mortgages, credit cards and auto loans will slow spending enough to tame inflation yet not so much as to cause a recession.
Speaking at a news conference Wednesday, Chair Jerome Powell made clear that further large rate hikes are coming. He said that additional half-point increases in the Fed’s key rate “should be on the table in the next couple of meetings” in June and July.
Intuit to pay $141M to settle lawsuits over ‘free’ TurboTax ads
The company behind the TurboTax taxfiling program will pay $141 million to customers across the United States who were deceived by misleading promises of free tax-filing services, New York’s attorney general announced Wednesday.
Under the terms of a settlement signed by the attorneys general of all 50 states, Mountain View-based Intuit will suspend TurboTax’s “free, free, free” ad campaign and pay restitution to nearly 4.4 million taxpayers, New York Attorney General Letitia James said.
James said her investigation into Intuit was sparked by a 2019 ProPublica report that found the company was using deceptive tactics to steer low-income tax filers away from the federally supported free services for which they qualified — and toward its own commercial products instead.
Until last year, Intuit offered two free versions of TurboTax. One was through its participation in the Internal Revenue Service’s Free File Program, geared toward taxpayers earning roughly $34,000 and members of the military. Intuit withdrew from the program in July 2021, saying in a blog post that the company could provide more benefits without the program’s limitations.
The company also offers a commercial product called “TurboTax Free Edition” that is only for taxpayers with “simple returns,” as defined by Intuit.
Rules aimed at curbing summer parties are back at Airbnb
Airbnb said Wednesday it will impose special restrictions over the Memorial Day and July 4 holidays to prevent parties at rented houses, bringing back measures that the company claims worked last summer.
Renters who don’t have a “history of positive reviews on Airbnb” will be barred from making one-night reservations for houses, and there will also be limits on who can make two-night bookings, the company said.
Airbnb said it will require renters to confirm that they understand the company’s ban on parties and that Airbnb could take legal action against violators.
The company said guests who have received positive marks in the past won’t be affected by the changes.
San Francisco-based Airbnb said similar measures prevented 126,000 people from renting properties over the July 4 holiday last year because they lacked positive reviews from hosts.