Business Live: Janet Yellen outlines Fed rate decision

Getty ImagesCopyright: Getty Images

Luxottica and Essilor have not offered any concessions to allay EU competition regulators' concerns over their proposed 46bn euro merger, according to a filing on the European Commission website.

Italian eyewear maker Luxottica and French lens manufacturer Essilor had until 19 September to do so after the regulator expressed reservations about the deal to the companies last week.

Unless they manage to appease the Commission, they are likely to face a full-scale investigation of about four months after a preliminary review ends on 26 September.

Wall Street's three major indexes fell but, then recovered, after the Federal Reserve signaled that it expects another rate hike by year end and disclosed timing for reducing its balance sheet.

The Fed left interest rates unchanged but signaled it still expects one more increase by the end of the year despite recent weak inflation readings.

The Dow Jones Industrial Average gained 11.56 points, or 0.05%, to 22,382.36, the S&P 500 lost 1.59 points, or 0.06%, to 2,508.24 and the Nasdaq Composite dropped 5.28 points, or 0.08%, to 6,456.04.

"The Fed took another step on its path of beautiful normalisation". Mohamed El-Erian, chief economic adviser, Allianz.

"The Fed did a good job telegraphing what they were going to do and then they followed through with it, so I'm not sure the market (had) all that much of a reaction to it." Michael Arone, chief investment strategist, State Street Global.

"If you want to build the case for why this is hawkish, the path you can go down was that they were dismissive of hurricane impacts, basically saying that it's going to inflict hardship but net net it's going to levy a modest negative impact. Maybe the reality is starting to sink in for the market that they really do want to [raise rates] in December." Tom Porcelli, chief US economy, RBC Capital Markets.

"Today's announcement definitely is an important milestone for the Fed, obviously making the announcement to begin reducing the balance sheet." Charlie Ripley, strategist Allianz.

Getty ImagesCopyright: Getty Images

Asked about her future as Federal Reserve chairwomen Janet Yellen said she would serve out her current term. Beyond that, though, she remained guarded.

President Donald Trump has said he "respects" Yellen, but has made no decision on her reappointment.

At the press conference, the central bank chief said: "I have said that I intend to serve out my term as chair and that I'm really not going to comment on my intentions beyond that.

"I will say that I have not had a further meeting with President Trump. I met with him early in my term and I've not had a further meeting with him."

Janet Yellen is pretty upbeat about the US economy, hence the decision to signal an end to the massive stimulus programme.

So, what would it take for the Fed to resume re-investment? Yellen suggests it would have to be a high bar, saying: "A material deterioration in the economic outlook where we thought we might face a situation where we might have to lower the (interest) rate."

Getty ImagesCopyright: Getty Images

Federal Reserve chairwoman Janet Yellen told a press conference that the US economy is "on a strong track... The economy is performing well".

However, if there are any big shocks the central bank won't hesitate to resume further stimulus measures if needed, she said.

Wall Street's three major indexes turned lower after the Federal Reserve signaled that it expects another rate hike by year's end and disclosed timing for reducing its stimulus programme.

As expected, the central said it would begin in October to reduce its approximately $4.2 trillion in holdings of US Treasury bonds and mortgage-backed securities by initially cutting up to $10bn each month.

The Dow Jones fell 0.21% to 22,323.7 points, the S&P 500 lost 0.36% to 2,497.5, and the Nasdaq fell 0.66% to 6,418.4.

The S&P's financial sector rose after the Fed's news as banks benefit from higher rates, while rate-sensitive utility companies fell. The major indexes hit record highs this week.

Kully Samra, UK managing director of brokers Charles Schwab, says there are reasons the Fed could be more aggressive on interest rates than many people think.

“The recent jump in consumer price inflation was not enough to prompt even hawkish Fed officials to raise rates. Inflation over the past few months has fallen short of expectations and may be being subdued by larger economic factors.

"The Federal Reserve has been playing its own internal cat and mouse game with some officials citing low inflation as a reason to delay further tightening; while others want to stay on the steady path toward normalisation, due to the tightening labour market.

"Given the tightness of both the labour and housing markets, inflation could begin to surprise on the upside, perhaps pushing the Fed to act more aggressively than the consensus anticipates.”

The Fed, as expected, also said it would in October begin to reduce its approximately $4.2 trillion in holdings of US Treasury bonds and mortgage-backed securities by initially cutting up to $10bn each month from the amount of maturing securities it reinvests.

That action will start a gradual reversal of the three rounds of quantitative easing the Fed pursued between 2008 and 2014 to stimulate the economy after the 2007-2009 financial crisis and recession.

The Fed's latest verdict on the economy? "The labor market has continued to strengthen... economic activity has been rising moderately so far this year," the central bank said in its policy statement. It added that the near-term risks to the economic outlook remained "roughly balanced" but that inflation was being watched "closely".

The interest rate outlook for next year remained largely unchanged, with three hikes envisioned. But the Fed slowed the pace of projected monetary tightening from there.

ReutersCopyright: Reuters

The US Federal Reserve has left interest rates unchanged, but signaled it still expects one more increase by the end of the year despite recent weak inflation readings.

New economic projections released after the Fed's two-day policy meeting showed 11 of 16 officials see the "appropriate" level for the federal funds rate, the central bank's benchmark interest rate, to be in a range between 1.25% and 1.5% by the end of 2017. That is one-quarter of a point above the current level.

All eyes now turn to a press conference that Fed chair Janet Yellen will hold later.

Getty ImagesCopyright: Getty Images

Italy's antitrust regulators have opened a probe into thousands of flight cancellations by Ryanair, saying the low-cost airline could have prevented the chaos.

Ryanair is bracing for reputational damage and up to €20m in compensation claims after suddenly scrapping flights across Europe over staffing issues.

Ryanair has a huge operation in Italy, and investigators will look into whether the Dublin-based airline broke consumer laws.

The cancellations may have been "largely due to foreseen organisational and management reasons... not random, external causes outside of (Ryanair's) control," the antitrust agency said in a statement.

PACopyright: PA

Thomas Cook pilots will strike on Saturday after five days of talks failed to resolve a dispute over pay, the Balpa union has announced.

The strike will last for 24 hours, with further industrial action threatened. The pilots staged a 24-hour strike earlier this month.

Silicon Valley tech group Western Digital has hit out at Toshiba's sale of its computer chip division.

"Disappointed" and "troubling" is how Western describes the $18bn sale to Bain Capital in a statement just released.

Western, Toshiba's joint venture partner in the US, had wanted to buy the business itself, even going to court in pursuit of its aim.

But earlier on Wednesday Toshiba announced the sale - vital for the troubled Japanese company's survival - to Bain.

Western, which works with Toshiba via its SanDisk subsidiary, still hopes to block the sale via the courts.

Getty ImagesCopyright: Getty Images

Remember Bernie Madoff? He was sentenced in 2009 to 150 years in prison for defrauding investors via a Ponzi scheme.

Now his 35,508 victims may finally be about to get some compensation.

Assistant Attorney General Stephen Boyd says in a letter to a Florida Congressman that payouts from a $4bn fund will start this year, according to Reuters.

Getty ImagesCopyright: Getty Images

YouTube has announced the end of paid channels, which were launched in 2013 as one of the site's first attempts at charging for content.

The facility let people pay a monthly fee to access individual YouTube channels from providers such as National Geographic and Sesame Street.

However, the service was not popular with viewers and will end in December.

"It never achieved popularity with creators or users," Google admitted in a blog post.

In December, videomakers who currently host their videos on a paid subscription-only channel will have the option of hiding them or making them available free.

The FTSE 100 drifted between positive and negative territory during the day, eventually finishing just 3.3 points down at 7,272.

Defence firm Babcock rose 5.8% on the back of a trading update. Drinks giant Diageo was the biggest loser, also after a trading report. The shares fell 2.8%.

The FTSE 250 rose 5.3 points to 19,540.

PACopyright: PA

The former owner of BHS has been refused a court adjournment over allegations he failed to hand information to a probe into the sale of the collapsed retailer.

Dominic Chappell, appearing in court in Brighton, had said he had not seen a summons from The Pensions Regulator because he had been away on a boat and without internet access.

After he was refused an adjournment, the 50-year-old pleaded not guilty to three charges of neglecting or refusing to provide information and documents, without a reasonable excuse, contrary to the Pensions Act 2004.