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Stocks slide as US central bank signals slower pace of rate cuts

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US share prices slumped after the central bank cut interest rates for the third time in a row but its economic projections signalled a slower pace of cuts next year.
In a widely expected move, the Federal Reserve set its key lending rate in a target range of 4.25% to 4.5%.
That is down a full percentage point since September, when the bank started lowering borrowing costs, citing progress stabilising prices and a desire to head off economic weakening.
Reports since then indicate that the number of jobs being created has been more resilient than expected, while price rises have continued to bubble.
Stocks in the US fell sharply as Federal Reserve chairman Jerome Powell warned the situation would likely result in fewer rate cuts than expected next year.
“We are in a new phase of the process,” he said at a press conference.
“From this point forward, it’s appropriate to move cautiously and look for progress on inflation.”
The Dow Jones Industrial Average closed 2.58% lower, suffering its 10th session of declines in a row and marking its longest streak of daily losses since 1974.
The S&P 500 lost almost 3% and the Nasdaq Composite fell 3.6%.
In morning trade in Asia on Thursday, Japan’s Nikkei 225 was around 1.2% lower, while the Hang Seng in Hong Kong was down by 1.1%.
Inflation, which measures the pace of price increases, has proven stubborn in recent months, ticking up to 2.7% in the US in November.
Analysts have also warned that policies backed by president-elect Donald Trump, including plans for tax cuts and widespread import tariffs, could put upward pressure on prices.
Analysts say lowering borrowing costs risks adding to that pressure by making it easier to borrow and encouraging businesses and households to take on credit to spend.
If demand rises, higher prices typically follow.
Mr Powell defended the cut on Wednesday, pointing to cooling in the job market over the last two years.
But he conceded that the move was a “closer call” on this occasion and acknowledged there is some uncertainty as the White House changes hands.
Olu Sonola, head of US economic research at Fitch Ratings, said it felt like the Fed was signalling a “pause” to cuts as questions about White House policies make it more unsure about the path ahead.
“Growth is still good, the labour market is still healthy, but inflationary storms are gathering,” he said.

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A billion laser points helped bring Notre Dame back to life

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After a catastrophic fire five years ago, the Notre Dame Cathedral de Paris reopened this month looking almost the same as it did when it was first constructed in 1163.

The massive reconstruction project was a testament not just to the hard work of the French people – but also to the lasers, drones and other advanced technology that gave rebuilders a window into the building’s past.

“The time frame wouldn’t have been possible without the record of what existed,” Amy Bunszel, executive vice president of architecture, engineering and construction at 3D-software company Autodesk, told CNN. Her company was a major part of creating a model of the building as it existed before the fire, giving the reconstruction effort a sort of guide for what to do. “It would’ve required a lot more guesswork. Imagine taking millions of tourist photographs (as a reference point) versus having one consolidated perfect representation.”

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Inflation was the cause, not the result, of the ‘hot’ labor market, research shows

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Back in 2022, when the labor market was so hot that Beyoncé even released a song about it, Americans were job hopping in large numbers, boosting their salary in the process.

The Great Resignation was in full swing.

That fueled fears of a “wage-price spiral” — where wages and prices perpetually rise and feed off each other.

But what appeared to be a hot job market was actually a symptom — not the cause — of the recent bout of inflation, according to new research that explored the consequences of unexpected rising prices on the labor market.

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The Container Store files for bankruptcy

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The Container Store has filed for bankruptcy. It is the latest well-known retailer to fall victim to customers cutting back on discretionary spending.

The 46-year-old company said in a statement late Sunday that filing for Chapter 11 bankruptcy protection will help it “bolster its financial position, fuel growth initiatives, and drive enhanced long-term profitability.” The Container Store revealed in court documents that it has about $230 million in debt and just $11.8 million in cash on hand, but will receive $40 million in fresh financing.

The chain’s 102 locations and website will remain open for orders during the process, which is expected to take 35 days to complete.

“The Container Store is here to stay,” said CEO Satish Malhotra in a statement. “Our strategy is sound, and we believe the steps we are taking today will allow us to continue to advance our business, deepen customer relationships, expand our reach, and strengthen our capabilities.”

Payments to vendors and suppliers will be made as normal and all customer deposits and orders will be honored and delivered, the company said. The Container Store plans to emerge as a private company when the Chapter 11 process is complete.

The company’s Sweden-based Elfa brand, described as a “premium customizable storage system,” isn’t included in the bankruptcy.

The filing comes a few weeks after a deal with Beyond, the parent company of Bed Bath & Beyond and Overstock.com. The Container Store was expected bring Bed Bath & Beyond-branded products to some stores, but that deal appears to be in jeopardy. Beyond previously said that the financing deal was in doubt because the Container Store was struggling to reach an agreement with its lenders.

The Container Store’s stock has already been delisted by the New York Stock Exchange because it failed to meet the exchange’s financial standards.

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