The Recap: Janet Yellen says full economic recovery could take hold by 2016

April 19

Janet L. Yellen, in her first monetary policy speech as Fed chair, said that the nation’s economic recovery will be nearly complete within two years but cautioned that the economy still needs the central bank’s support. ¶ The Fed’s forecasts project that the jobless rate will bottom out and inflation will pick up by the end of 2016, marking the first time in nearly a decade that the economy is running close to full steam. ¶ “If the economy obediently followed our forecasts, the job of central bankers would be a lot easier and their speeches would be a lot shorter,” Yellen said. ¶ She framed the Fed’s decision on tightening its easy-money policies on the labor market’s health, inflation expectations, risks from fiscal policies such as federal spending cuts and turmoil in areas such as Europe.

Business

Yahoo’s final bill for Henrique de Castro’s 15 months at the company: $58 million.

General Motors is replacing executives for human resources and communications as the automaker struggles with recalls over faulty ignition switches that have been linked to at least 13 deaths.

A federal judge rejected a bid to compel GM to tell customers to stop driving the 2.6 million cars that have been recalled, deferring to the National Highway Traffic Safety agency.

The Mt. Gox bitcoin exchange in Tokyo is headed for liquidation after the Tokyo District Court rejected its bankruptcy protection application. After Mt. Gox went offline in February, its chief executive, Mark Karpeles, said 850,000 bitcoins worth several hundred million dollars were unaccounted for.

Weibo, of China, priced its initial public offering at $17 per American Depositary Share — the bottom of its planned range. The Twitter-like microblogging service, owned by Web portal Sina, sold 16.8 million ADSs in the offering, raising $285.6 million.

T-Mobile, which has taken up the mantle of being the “uncarrier” — the company that knows what mobile customers hate — is ending domestic overage charges. But users who go over data limits will see Web traffic speeds throttled back.

The Pentagon will cut 17 of the 343 F-35 fighters it planned to buy from Lockheed Martin unless Congress repeals automatic budget cuts. The move would save $1.7 billion in planned spending for the F-35, the costliest U.S. weapons program.

The European Union’s parliament passed laws to minimize the risks and costs posed by failing banks. It created a European authority with the power to unwind or restructure failing banks, as well as a system that will see banks’ creditors — not governments — take losses first when lenders fail.●●

A Canadian cybercrime unit arrested and charged a ­19-year-old Ontario man for allegedly hacking into the country’s tax agency using the Heartbleed Internet security bug. It was the first known case of a hacker taking advantage of the security flaw for malicious purposes.

Michaels Stores said 3 million debit and credit cards may have been affected by a security breach.

Facebook’s cautious rollout of the “Nearby Friends” app, which allows users’ locale to be tracked in real time, reflects a shift in its approach to privacy concerns.

Google Glass wearable devices went on sale online for one day for $1,500 plus tax. Wannabe owners had to be U.S. residents with a U.S. shipping address.

Deals

Google bought drone maker Titan Aerospace, in a bid to supplement its efforts to connect parts of the world that do not have Internet access. The terms were not disclosed.

Twitter bought its data partner Gnip, which analyzes the more than 500 million tweets its users share each day — to advertisers, academic institutions, politicians and other customers. Terms were not disclosed.

Earnings

American Express first-quarter profit climbed to $1.43 billion, as customer spending increased 6 percent.

Bank of America posted an unexpected loss of $514 million after it took a $6 billion charge to cover litigation expenses, a figure that far exceeded the legal settlements the No. 2 U.S. bank had announced.

Capital One Financial profit climbed 9.3 percent, to $1.15 billion, even as revenue slipped 3 percent.

Coca-Cola profit dipped to $1.62 billion as the amount of soda it sold globally fell for the first time in 15 years. The drop was offset by stronger sales of noncarbonated drinks, which include Minute Maid, Powerade and Dasani bottled water.

General Electric profit slid 18 percent, to $3.3 billion, dragged down by its year-ago NBC Universal sale.

Goldman Sachs profit was $1.95 billion, down from $2.19 billion a year ago. It posted its best investment banking revenue since 2007.

Google profit climbed 2.9 percent to $3.45 billion, hurt by rising costs.

IBM profit shrank 21 percent, to $2.38 billion, as it struggles to keep up with changes in the market for business technology such as cloud computing.

Intel profit dropped 4.8 percent, to $1.95 billion, hurt by fewer PC sales.

Johnson & Johnson profit rose 8 percent, to $4.4 billion, as prescription drug sales surge.

Morgan Stanleyprofit climbed 18 percent, to $1.45 billion, compared with $936 million a year ago, boosted by its wealth management and bond underwriting.

PepsiCo posted a $1.22 billion profit (vs. $1.08 billion a year ago) as the company sold more snacks around the world and increased prices, including on its drinks.

Yahoo profit fell to $312 million, from $390 million a year ago — but its quarterly report offered a glimpse of the value of Alibaba, the private Chinese online commerce company that is expected to go public at a valuation of $200 billion, which would make it the biggest IPO in U.S. history. Yahoo owns a 24 percent stake in the company.

Economy

Russia’s holdings of U.S. government securities fell in February to the lowest level since 2011, Treasury data showed. Russian holdings were $126.2 billion in February, down from $131.8 billion in January in the fourth consecutive decline. Russia may have sold Treasurys in an effort to limit a decline in the ruble.

Businesses boosted their stockpiles 0.4 percent in February after a similar 0.4 percent increase in January. Inventories held by manufacturers rose the most in February, a gain of 0.7 percent.

Washington

The Congressional Budget Office lowered ­estimates of the federal health-care law’s cost by $104 billion over the next decade.

A federal appeals court said the Environmental Protection Agency can force power plants to cut mercury emissions without considering the cost.

The Obama administration reportedly told mutual-fund and hedge-fund managers that it was planning more sanctions against Russia over the conflict in Ukraine.

Transitions

China set out to “sweep out porn” and “strike at rumors” on the Internet, a move critics said stifles dissent.

— From news services and staff reports

7.4%
China’s economic growth

China’s economy slowed to a 24-year low in the first quarter. That was down from the fourth quarter’s 7.7 percent and came in below the full-year official growth target of 7.5 percent. After a decade of explosive economic expansion, Beijing is trying to guide China to slower, more sustainable growth based on domestic consumption rather than trade and investment.

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