1 US interest rates to rise again (Jana Kasperkevic
in The Guardian) Federal Reserve chair Janet Yellen had a message for Wall
Streeters anxiously wanting to depart for the long weekend: interest rate hikes
are coming.
The US central bank is expected to announce two to
three interest rate hikes this year after it increased rates in December for
the first time in nearly a decade. Yellen said that the economy is continuing
to improve despite the weak growth reported in the first quarter.
Before Yellen’s statement, the US commerce
department revised up its gross domestic product figured for the first quarter.
US GDP – the broadest measure of the health of the economy – rose at 0.8%
instead of the 0.5% reported last month. The Atlanta Federal Reserve is
currently estimating second-quarter GDP rising at a 2.9% rate.
Yellen, too, said that she expects GDP to pick up
and the labor market to continue to improve. The Fed will continue to monitor
incoming data and will assess the risks to the outlook, she said. While she did
not mention what those risks are, the Fed had previously focused on risks posed
by Britain’s potential exit from the European Union, “Brexit”, and by the
lingering uncertainty over China’s economy.
Yellen also pointed out that the unemployment rate
is nearing full employment, labor participation has increased in the past few
months, and that oil prices and dollar depreciation, which can influence
inflation, have both stabilized.
“It’s appropriate for the Fed to gradually and
cautiously increase our overnight interest rate over time,” said Yellen,
adding: “Probably in the coming months such a move would be appropriate.”
2 High minimum wages may cost South Africa dear
(Johannesburg Times) Ratings agency Fitch has warned the ANC to avoid
introducing populist measures such as a minimum wage in the run-up to local
elections, while Cosatu has threatened to strike over the government's slow
implementation of the proposed policy.
Fitch, which rates South Africa at BBB-, one notch
above speculative grade, is expected to publish a review of the country's debt
rating on June 3. The government is mulling the implementation of a national
minimum wage but has not set a date for its introduction.
"The authorities may see a need to react to the
discontent about insufficient improvement to living standards by pushing costly
social programmes," Fitch head of EMEA sovereign ratings Jan Friederich
told a banking conference, referring to the upcoming elections.
"Authorities may feel, if they have a poor
showing, that there is a need for quick fixes like the introduction of a high
minimum wage that would appear to help the poor but may also discourage
investment," he said.
3 ‘FB will track non-users, too’ (Khaleej Times) In a
bid to expand its user base, social media giant Facebook has announced it will
begin displaying ads to web users who are not members of its social network.
"Facebook will use cookies, 'like' buttons and
other plug-ins embedded on third-party sites to track members and non-members
alike," a report in The Wall Street Journal said. The company said it will
be able to better target non-Facebook users and serve relevant ads to them.
"Publishers and app developers have some users
who are not Facebook users. We think we can do a better job powering those
ads," Andrew Bosworth, vice president of Facebook's ads and business
platform, was quoted as saying.
Meanwhile, Facebook's practices have come under
criticism from regulators in Europe over privacy concerns. Facebook began
displaying a banner notification at the top of its News Feed for users in
Europe, alerting them to its use of cookies as mandated under an EU directive.
Facebook believes that targeted advertising can more
accurately target non-members using the vast amounts of data it already has on
the nearly 1.7 billion people who use the site, the report said. The company
said that "it can use that data to make inferences about the behaviour of
non-members, an approach known as "lookalike" targeting".
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