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Fed says no rate hikes until at least late 2014
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The U.S. Federal Reserve on Wednesday said it will not raise interest rates until at least late 2014, even later than investors expected, in an effort to support a sluggish economic recovery.
Without making major shifts to its outlook for the economy, the central bank described the unemployment rate as still elevated and said it expects inflation to remain at levels consistent with stable prices.
It depicted business investment as having slowed, dowgrading its assessment from the December meeting.
Economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014," the central bank said in a statement.
Richmond Fed President Jeffrey Lacker, an inflation hawk who rotated into a voting seat this year, dissented against the decision. He preferred to omit the description of the time period for ultra-low rates.
As part of an effort to provide more insight on its thinking to financial markets and the public, the Fed later on Wednesday will begin publishing individual policymakers' projections for the appropriate path of the benchmark federal funds rate. That release is scheduled for 2 p.m. (1900 GMT)
If the Fed can convince financial markets it will be on hold longer than they had anticipated, long-term interest rates could drop as investors price in the new information.
"A significant contingent of the committee views this exercise not so much as a process improvement but more as an opportunity to ease again via the forward rate communications channel," Stephen Stanley, an economist at Pierpoint Securities, said ahead of the Fed's announcement.
There is also the possibility that officials will announce an explicit inflation target, perhaps a hard marker of 2 percent or a range of 2 percent or a bit below. The Fed has been debating a statement on its long-run goals, but whether one will be released on Wednesday is unclear.
While forecasters expect the U.S. economy grew at a 3 percent annual rate in the last three months of 2011, they look for growth of just around 2 percent this year.
Fed officials appear likely to bide their time in determining whether more monetary stimulus is needed. Many economists expect they will eventually decide on another spurt of Fed bond buying - probably one focused on mortgage debt.
In response to the deepest recession in generations, the Fed slashed the overnight federal funds rate to near zero in December 2008. It has also more than tripled the size of its balance sheet to around $2.9 trillion through two separate bond purchase programs.
The policy is credited with having prevented an even more devastating downturn, but it has been insufficient to bring unemployment down to levels considered normal during good economic times.
In December, the U.S. jobless rate stood at 8.5 percent, and some 13 million Americans were still actively looking for work but could not find it.
Analysts said the Fed's shift in communications will put an even greater emphasis on a post-meeting news conference by Fed Chairman Ben Bernanke set for 2:15 p.m. (1915 GMT).
"The chairman is likely to remain non-committal to any additional policy easing, but he is likely to reinforce the Fed's commitment to 'review the size and composition of its securities holdings' and be 'prepared to adjust those holdings as appropriate,'" said Millan Mulraine, senior macro strategist at TD Securities.
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Apple Passes Exxon as #1 Company-and May Still Be Cheap
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Apple surged past Exxon Mobil as the world's biggest company-and many investors believe it's still cheap.
Apple reported earnings on Tuesday that blew past analysts' expectations as the tech juggernaut sold an astounding 37 million iPhones during the last quarter.
At its intraday high price Wednesday, Apple's (NASDAQ: AAPL - News) market value reached $423.7 billion, up eight percent from $391.9 billion a day earlier.
That pushed it past Exxon Mobil's (NYSE: XOM - News) market capitalization , which was $416.5 billion at its high during the session.
Apple has "$98 billion in cash, 116 percent EPS growth, and a depressed valuation," wrote Goldman Sachs analyst Bill Shope, who raised his 12-month forecast on the shares to $600 from $550. "Our target price continues to be based on a 15 multiple on our revised 2012 EPS estimate."
Along with sporting a quite reasonable price-earnings ratio, analysts and investors also expect Apple to declare a dividend for the first time this year, making the shares even more attractive.
After Apple and Exxon, there is a big drop off in size for the biggest publicly-traded companies in the world.
Beijing-based PetroChina (NYSE: PTR - News) comes in third at about $270 billion, followed by Microsoft (NASDAQ: MSFT - News), worth $245 billion.
Fourth-quarter iPhone shipments topped even the highest estimate on Wall Street: a 33 million estimate from Jefferies. iPad, Mac, iPod sales all exceeded consensus analysts' expectations, along with the company's gross margin, coming in at almost 45 percent.
"The company trades at 11 times this year earnings, which are expected to grow more than 40 percent," said Paul Hickey of Bespoke Investment Group. "It's certainly hard to take the other side of the argument."
Apple surpassed Exxon in market value briefly last August, only to fall back as investors worried about the future of the company in the wake of Steve Jobs' death. Others simply sold the stock to raise funds amid a breakout in the European credit crisis.
It could come down to the wire today as to whether Apple can hold the top spot. As of this writing, Apple's market value stood at $417 billion, compared to $413 billion for Exxon.
For the best market insight, catch 'Fast Money' each night at 5pm ET, and the 'Halftime Report' each afternoon at 12:00 ET on CNBC. Follow @CNBCMelloy on Twitter.
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Cruise survivors: 'There was so much chaos' and Scorned cruise ship captain not alone in history
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CURRY:So I want to get your response to the CEO of the company in his discussion in calling the -- about the cruise saying he's grateful for the skill and behavior of the crew, that the crew performed very well. What is your reaction to that?Ms. GODUTI:My reaction is that the crew was never informed and I can't blame the crew because they were never -- they did not know anything. When we -- everything happened they just were telling us to go back to our room. I was trying to find out where are the life boats, does anyone speak English? They did not give us any information whatsoever. They just kept telling us to go back to our room. What...CURRY:And this was particularly frightening for you, Maria, because as I understand it you don't know how to swim.Ms. PAPA:Correct, I do not know how to swim. And there was no direction whatsoever. [Read the full article]
The captain of the ill-fated cruise liner that ran aground off the coast of Italy is being arraigned on criminal charges, including manslaughter, causing a shipwreck and abandoning ship. NBC's Michelle Kosinski reports.What will likely never be forgotten about the Italian cruise liner disaster is the quickness with which the captain of the Costa Concordia allegedly abandoned the sinking ship.According to investigators, captain Francesco Schettino maneuvered the ship, which was carrying more than 4,200 passengers and crew, too close to shore of the Tuscan Island of Giglio to "make a bow" to the locals. The "significant human error," as described by the ship's owner, Costa Cruises, caused the 114,500-ton liner to capsize just 500 feet from the shore, killing at least 11 people, while 24 remain missing. [Read the full article]
British Airways passengers were mistakenly told that the plane may need to make an emergency landing on water. NBC's Brian Williams reports.It was about 3 a.m. on a British Airways transcontinental flight when passengers heard an announcement that the plane was about to crash into the sea, The Telegraph reports.But the automated message was a mistake, as crew members quickly reassured passengers."It was about 3 a.m. An alarm sounded and we were told we were about to land in the sea. I thought we were going to die," one passenger onboard told The Telegraph. “My wife was crying and passengers were screaming. Then they played an announcement telling us to just ignore the warnings."The Friday night incident occurred as Flight 206 was over the Atlantic Ocean enroute from Miami to London's Heathrow Airport. [Read the full article]
Beginning Jan. 23, major Chinese New Year celebrations will be held in Hong Kong, Singapore, Sydney and many other cities around the world, including these five U.S. cities."People will buy the ticket without knowing this, and they won't even look at it before they step on the cruise ship," said Joseph Goldberg, a Harrisburg, Pa.-based consumer attorney who reviewed the ticket contract posted on the Carnival Cruise Lines website for Reuters.Carnival dominates about half of the cruise market, and its contract, which runs almost 8,000 words and mentions "liability" 20 times, could be considered typical for the industry.Something did happen, of course. The Costa Concordia, operated by a company owned by Miami-based Carnival, ran aground in Italian waters on Friday, leaving at least 11 passengers dead and some 24 more missing. [Read the full article]
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Paris vs. NYC: An artist's take and Where to get married like a star
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(CNN) -- Vahram Muratyan's personal tale of two cities began with a serious case of the travel bug.Born in Paris, he started flying to New York with his family as a child -- the frequent trans-Atlantic trips made possible in part by his mother's job at the now-defunct airline TWA."I think I grew up with an obsession with the city," Muratyan said, vowing to one day move to the Big Apple.The graphic designer finally came to live in New York for three months in fall 2010 and found himself doing lots of people watching, sketching and thinking of home."The idea of comparing the differences between the two cities came because I was starting to miss Paris," Muratyan said. [Read the full article]
(CNN) -- The approach of Valentine's Day may have you entertaining thoughts of love, perhaps even marriage.You'll remember the place you exchange vows forever, for sure, but where on Earth should you go to make it extra special?Here is a sample of some of the hotels, resorts and castles that celebrities found romantic enough to say "I do."Ben Affleck and Jennifer Garner chose secluded luxury when they tied the knot at this resort on a private island in 2005.Known for its soft white sand beach and first-class spa, Parrot Cay has a no-fly zone so that famous guests -- such as Bruce Willis and Donna Karan -- don't have to worry about photographers snapping pictures of them from the air.If relaxing in a private tropical paradise isn't enough, you can go diving, deep-sea fishing, windsurfing or catamaran sailing. The resort also offers yoga retreats and private cruises.Rooms start at $450 a night for stays through April. [Read the full article]
(CNN) -- Gas prices have edged up a few cents over the past two weeks despite a drop in crude oil prices, according to a survey published Sunday.The average price is 3 and a half cents higher than what the survey found two weeks earlier, said publisher Trilby Lundberg.Crude oil prices slipped during that time, but mostly on the same day as the survey, so any effect on gas prices would not have showed up, she said.And that drop in crude oil prices might not indicate a drop in gas prices anytime soon, Lundberg said, because it is too soon to say whether a downward trend in crude oilp rices is coming. "Crude oil has been very skittish," particularly over growing conflicts surrounding Iran and unrest in Nigeria, Lundberg said."And even if crude oil stays put, we may see a few more pennies up at the pump," she said. [Read the full article]
Editor's note: Columnist Brett Snyder is the founder of air travel assistance site Cranky Concierge, and he writes the consumer air travel blog The Cranky Flier.(CNN) -- When you look to buy airline tickets later this week, it might seem like prices have shot up. For once, that's not actually the case.Higher advertised fares are the result of new Department of Transportation rules that are going into effect under the banner "Enhancing Airline Passenger Protections #2."Higher prices shown up front is one of the four main changes that you'll see when the the new rules go into effect starting Tuesday, so let's talk about what will happen.On some airline websites and in ads, you've probably seen fares displayed as a certain amount plus taxes and fees. That's a pretty common thing throughout society, but the DOT has decided that it's unacceptable for airline travelers. [Read the full article]
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