Federal Reserve expected to boost rates again Tuesday
Washington – The Federal Reserve is expected to boost rates again this week, but it’s a mystery whether policymakers will extend their 18-month credit-tightening campaign beyond Alan Green span’s tenure.
The central bank has gradually increased rates for 18 months to control inflation. At Tuesday’s meeting, the Fed is expected to add one-quarter of a percentage point to an important short-term interest rate known as the federal funds rate. That would mark the 13th such increase since June 2004 and would put the rate at 4.25 percent, the highest in more than four years.
Economists are divided about what will happen after that, saying the Fed could:
Boost rates by one-quarter of a percentage point at its next meeting, on Jan. 31, and then stop.
Vote for an increase in January and at the following meeting, on March 28, and then move to the sidelines.
Commit to the campaign until the funds rate, the interest banks charge each other on overnight loans, reaches 5 percent.
The January meeting will be Greenspan’s last. Ben Bernanke, President Bush’s choice to succeed Greenspan, is expected to take over Feb. 1, after Senate confirmation hearings, and preside over his first meeting as Fed chief in March.
LOS ANGELES
Paramount purchasing DreamWorks studio
Paramount Pictures on Sunday agreed to buy independent film studio DreamWorks SKG Inc. for nearly $1 billion cash in a deal designed to help both companies reverse their troubled fortunes.
The sale marks the end of an 11-year dream for Hollywood moguls Steven Spielberg, Jeffrey Katzenberg and David Geffen, who had ambitious goals for DreamWorks that once included television, music, films and the Internet.
Moreover, the DreamWorks acquisition is seen as a critical gambit for Paramount, which has been under orders from parent company Viacom Inc. to improve the quality of its movies and earnings.
Paramount will pay $775 million in cash and assume $825 million in debt and other obligations, the company said.
BREWSTER, Mass.
33 stranded dolphins, whales die on cape
At least 33 whales and dolphins became stranded on the shores of Cape Cod Bay last week, and experts say a snowstorm may have contributed to their deaths.
In all, at least nine pilot whales and 24 dolphins died. Five of the whales and seven of the dolphins were euthanized, while the rest were found dead, according to Kristen Patchett of the Cape Cod Stranding Network, a group that works to free stranded animals.
Officials suspect that high winds and strong tidal fluctuations from Friday’s storm caused the dolphins and whales to become trapped in shallow water.
PORT HARCOURT, Nigeria
Four more deaths in Nigerian jet crash
Four people died after being pulled from the wreckage of a Nigerian jetliner that crashed while landing in a storm, state television said Sunday, raising the number killed to 107, most of them schoolchildren coming home for Christmas.
The victims included an American who worked for Paris- based aid agency Medecins Sans Frontieres (Doctors Without Borders).
Airport officials directed frantic family members to morgues in this southern oil center as a Roman Catholic cleric in Abuja said 71 schoolchildren from that city’s Jesuit school died in Saturday’s crash of the Sosoliso Airlines DC-9.
MEXICO CITY
Volcano spews small stream of steam, gas
Central Mexico’s Popocatépetl volcano was emitting a small but steady stream of steam and gas Sunday, one of 19 low-intensity emissions it had given off in the previous 24 hours, officials said.
Scientists have noted recent activity, including the formation of a small dome of lava, inside the crater of the 17,886-foot volcano, and began recording clouds of steam and gas floating into the sky early Saturday, according to a statement from Mexico’s National Disaster Prevention center.
Popocatépetl, 40 miles southeast of Mexico City, has been erupting intermittently since December 1994.
AMBAE ISLAND, Vanuatu
Flu, diarrhea strike volcano evacuees
Isolated cases of flu and diarrhea have broken out in an evacuation center for villagers ordered from their homes after a volcano began erupting on this remote South Pacific island.
Morris Harrison, a Vanuatu geophysicist, said low-level earthquakes continued to shake Ambae Island on Sunday, “and if they continue or increase in size, we will be worried.”
Several thousand people were evacuated a week earlier after Mount Manaro began spewing steam, sulfur gas and ash up to 10,000 feet above this island of 10,000 villagers in northern Vanuatu.
NEW YORK
Findings on Hariri killing handed over
The lead U.N. investigator into the assassination of Lebanon’s former prime minister delivered his latest findings to Secretary-General Kofi Annan on Sunday.
Detlev Mehlis, who is stepping down from his post but expects the probe to continue, refused to comment about the report’s contents as he met Annan at the U.N. chief’s residence.
An interim report from Mehlis’ team delivered in October implicated top Syrian and Lebanese security officials in Rafik Hariri’s Feb. 14 assassination, in which 20 others also were killed.
