The world this week
Following heavy hints that it would do so, the Federal Reserve lifted the range for its benchmark interest rate by a quarter of a percentage point to between 0.75% and 1%, and said there would be more rises to come this year. Solid jobs data sealed the decision for Fed officials. Employers created 235,000 jobs last month; wages were up by 2.8%.
The European Central Bank tinkered with the guidance it issues at its policy meeting, which markets interpreted as a signal that it was pondering a pull-back on quantitative easing. Mario Draghi, the ECB’s president, said the bank no longer had a “sense of urgency” to take more action on stimulus because the battle against deflation had been won. But any increase in interest rates is not likely to happen until next year.
After just two weeks in the job, Charlotte Hogg resigned as a deputy governor of the Bank of England for not revealing that her brother is a senior executive at Barclays, a potential conflict of interest. An initial offer to step down by Ms Hogg was rejected by the governor, Mark Carney, but a damning report on the matter by a committee in Parliament made her position untenable.
Four men were charged in America with hacking 500m Yahoo accounts in 2014, one of the biggest breaches of internet security to date. Two of the men are agents of Russia’s intelligence service. They are accused of conspiring with the other two men, one of whom is on the list of the FBI’s most-wanted cyber-criminals.
Donald Trump nominated Chris Giancarlo as chairman of the Commodity Futures Trading Commission. The CFTC regulates the $700trn derivatives market. Mr Giancarlo supports the broad thrust of the Dodd-Frank reforms, though he has been critical of certain aspects of the law and has opposed tighter regulations for high-frequency trading firms.
Hancock’s last hour
American International Group started the search for a new chief executive—its seventh since 2005—following the resignation of Peter Hancock in the wake of a bigger-than-expected quarterly loss.
Oil prices fell by 10% over a week, dropping to where they were before OPEC agreed to curtail production (in order to boost prices) late last year. A build-up of American crude supplies fed concerns that the oil glut will not ease soon.
Anil Agarwal, an Indian mining tycoon, revealed plans to buy shares worth $2.4bn in Anglo American, making him its second-biggest shareholder. Last year Mr Agarwal tried and failed to engineer a merger of his mining group with Anglo. He insists his latest move is just a family investment.
Last year’s rally in commodity prices helped to push Antofagasta’s annual headline profit up by 79%, to $1.6bn. The Chilean copper-mining group reckons that a rebound in demand from China and tighter supply because of the scarcity of new supplies will keep copper prices buoyant.
The scandal in South Korea that has led to the removal of the country’s president and charges being laid against the de facto head of Samsung spread to SK Group, as prosecutors questioned three people with links to the chaebol.
The Musk challenge
Elon Musk offered to solve an energy crisis in South Australia that has led to blackouts. Prior to talks with the government, the founder of Tesla and SpaceX said he could install a battery-storage system that connects to the grid within 100 days, and would not charge for the project if he failed to meet his deadline.
EON, a German utility, registered an annual net loss of €16bn ($18bn) because of costs associated with spinning off its fossil-fuel assets and funding the storage of nuclear waste. EON noted that the loss meant it was “freed from past burdens”, leaving it to focus on its business in networks, consumer retail and renewables.
With its core chipmaking business slowing down, Intel accelerated its drive into the market for autonomous cars by agreeing to pay $15.3bn for Mobileye, an Israeli company. Mobileye’s systems enable autonomous cars to recognise pedestrians, traffic and road signs, though last year it had a very public falling out with Tesla after one of the electric-carmaker’s vehicles was involved in a fatal crash. See article.
Iceland withdrew the last of the capital controls it imposed when its banking industry imploded during the financial crash in 2008. The krona recorded its biggest one-day decline in eight years after the lifting of capital controls was announced. A surge in tourism has bolstered GDP, which grew by 11.3% in the fourth quarter of 2016, prompting some to fret that Iceland’s economy is now overheating. See article.
This article appeared in the The world this week section of the print edition under the headline "Business this week"