Interest rate chipper, office compulsion and the collapse of the tipping company – HS times the most important financial news of the week

The Fed made a big rate cut

The US central bank (Fed) cut its key interest rate by 0.50 percentage points on Wednesday.

The decision of the Open Market Committee, which decides on monetary policy, was not unanimous, but one of the members would have been satisfied with an interest rate cut of 0.25 percentage points.

The decision means that the key interest rate range will be changed from 5.25 to 5.50 percent to 4.75 to 5.00 percent. At the same time, the Fed gave a strong hint that interest rate cuts will continue during the fall. When the central bank lowers its key interest rate, it tends to increase household consumption and business investment.

After the decision, shares rose in price in various parts of the world on Thursday. Many investors believe that a larger-than-usual interest rate cut by the US Federal Reserve will prevent a recession.

Of the three main US stock indexes, the S&P 500 strengthened on Thursday by 1.7 percent, the Dow Jones Industrial Average by 1.3 percent and the Nasdaq by 2.5 percent. Such large changes in the most important stock indices are remarkably large.

“Director general Jerome Powell said well at the press conference that if the same information as Wednesday had been used in the previous meeting [heinäkuussa]the policy rate would have been cut then. I would believe that this message specifically convinced the market that the central bank will not start interest rate cuts in the latter train and that the fear of recession has decreased”, says the chief strategist of the financial company SEB Jussi Hiljanen.

Amazon is ending remote work

The e-commerce giant Amazon is ending the remote work of its office workers.

The staff is asked to return to the office for five days a week after the turn of the year.

“When we look back at the last five years, we believe that the benefits of being together in the office are significant”, CEO Andy Jassy wrote in a public message on Amazon’s website.

According to him, cooperation, ideation and teaching are easier when we are in the same space. Jassy painted a picture of working methods that were valid before the outbreak of the corona pandemic.

Already a year ago, Jassy wrote to his employees a long list of things that he thinks are in favor of close work. Jassy pointed out that in attendance meetings, people are “committed, attentive and tuned in”.

Before the most recent decision, there was a three-day office requirement per week. According to Jassy, ​​the experiences of this partial escape confirmed the need to return to offices completely.

According to the Reuters news agency, the company’s strict line has not pleased all employees, and people have reportedly already been fired because of the three-day escape.

In his message, Jassy gave a delay until the second day of January.

“We understand that some of our teammates may have arranged their personal lives so that returning to the office five days a week requires arrangements.”

Olkiluoto’s second unit will only start producing electricity in October

The repair schedule for the second unit of the Olkiluoto nuclear power plant will be delayed by a week, the nuclear power company Teollisuuden Voima said on Tuesday. Now the company estimates that OL2 will start producing electricity on the sixth of October.

Just over a week ago, it was reported that the electricity production of the second unit of the nuclear power plant will be suspended for approximately three weeks. The reason is a fault in the rotor of the water-cooled generator.

The damaged rotor is replaced with a spare rotor in Olkiluoto.

The failure of the second unit affects the electricity market in Finland. Recently, high prices have been seen in electricity on the stock market, and one of the reasons has been cited as the repair work on the second unit of Olkiluoto. The power of the reactor is 890 megawatts.

Finland’s economic recovery is getting sticky

The recovery of the Finnish economy from the recession will be delayed, predicts the research institute Labore. According to its new forecast, the economy will contract by 0.2 percent this year, but grow by 1.7 percent next year and 1.8 percent in 2026.

Economic growth is boosted by slowed inflation and falling interest rates, which support private consumption and exports.

“Based on the data from the beginning of 2024, it would seem that the downturn in the Finnish economy is behind us. However, we cannot yet speak of a sharp turn in the economic cycle. The good news for households and wage earners is that inflation has slowed significantly from the peak readings of recent years. We expect the development to continue in the coming years,” says Labore’s Forecasting Manager Juho Koistinen in the bulletin.

According to Labore, investments will develop favorably thanks to housing construction and public defense investments.

Earlier in the week, the Bank of Finland also predicted that economic recovery would be sticky, as private consumption and investments have developed weakly. The fragile economic growth at the beginning of the year has mainly been supported by the slow growth of exports and public demand.

According to the new forecast, the economy will contract by 0.5 percent this year and grow by 1.1 percent next year and 1.8 percent in 2026.

Tupperware for business restructuring

The traditional American plastic product company Tupperware and some of its subsidiaries have applied for corporate restructuring.

Sales of the company, known for its plastic food storage containers, have declined in recent years. Last year, Tupperware reported serious difficulties in continuing its business due to its poor financial situation.

The company said on Tuesday that it plans to ask for permission to continue operating during the restructuring.

“The challenging economic environment has seriously affected the company’s financial position in recent years,” said Tupperware’s CEO Laurie Ann Goldman in a company statement.

“For this reason, we went through numerous different options and concluded that this is the best way forward. The purpose of the restructuring process is to give us the necessary flexibility as we pursue strategic alternatives to support our transformation into a technology-led company that operates ahead of digital. This way we are able to serve our stakeholders better.”