Summary Box: Consumer inflation remains no-show

CONSUMER PRICES: Consumer inflation rose a small 0.2 percent in January, led by a jump in gasoline and other energy products.

FALLING CORE: Consumer prices, excluding food and energy, actually fell 0.1 percent in January, the first monthly decline since a similar drop in December 1982.

FED REACTION: Economists believe the benign inflation numbers will give the Federal Reserve more leeway to keep a key interest rate for consumer and business loans at a record low for many more months and possibly the entire year. [Read the full article]

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Fitch Ratings assigns an ‘AA-‘ rating to the following State of New York general obligation (GO) bonds:

–New York’s economy is broad, with substantial wealth and resources, although the health of the state’s economy and finances is closely linked to the cyclical financial services industry.

–Strong financial planning and reporting practices, including quarterly financial plan updates, allow the state to stay abreast of changing conditions, although this credit strength is offset by the state’s historical reliance on nonrecurring measures rather than sustainable budget solutions to address revenue weakening in downturns. The state’s current financial position is strained.

–The Stable Outlook reflects the expectation that the state will continue to act to address budget shortfalls in an environment of weak revenue performance and slow expected recovery. [Read the full article]

The Federal Reserve seems likely to keep interest rates at record lows for several more months after news Friday that consumer prices excluding food and energy fell in January.

The tame report on consumer prices sent a positive signal to investors and borrowers. It suggested that short-term rates can remain low to strengthen the economic recovery without triggering inflation.

Some have worried that a Fed rate increase affecting consumers and businesses might be imminent, especially after it just raised the rate banks pay for emergency loans.

Friday’s news helped reassure financial markets. The Dow Jones industrial average rose about 9 points, or 0.1 percent. Broader stock averages also gained modestly. Bond prices rose, pushing yields lower.

The Fed has kept a key bank lending rate at a record low near zero since December 2008. [Read the full article]

A law-enforcement official with knowledge of the case says the FBI has opened a criminal investigation into a Pennsylvania school district accused of activating webcams inside students’ homes without their knowledge.

The official, speaking to The Associated Press on condition of anonymity, says the FBI will explore whether Lower Merion School District officials broke any federal wiretap or computer-intrusion laws.

Lower Merion officials say they remotely activated webcams 42 times to find missing student laptops in the past 14 months, but never did so to spy on students, as a recent lawsuit claims.

The Montgomery County district attorney also is gathering information to determine whether to open an investigation.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below. [Read the full article]

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