An announcement from the Fed, an out-of-court settlement from Apple, and pretzel burgers from Wendy's top our roundup of the day's business news stories.
Investors Waiting on Fed Message Following Meeting
The Federal Reserve ends its two-day policy meeting Wednesday, and analysts do not expect the central bank to issue a clear signal on when it will start raising short-term interest rates from their present record lows. Analysts anticipate the Fed will approve a fifth cut in its monthly bond purchases because the job market has steadily strengthened. The Fed will issue a statement outlining its plans following the meeting and update its economic forecasts. Janet Yellen will hold a news conference, her second since becoming Fed Chair in February. Analysts forecast that the Fed could accelerate its first rate increase should inflation continue to rise. The consumer price index rose 0.4 percent in May, and over the past year has risen 2.1 percent, roughly at the level of the Fed's target rate.
Apple Reaches Out-of-Court Settlement
Avoiding a trial in which it faces up to $840 million in claims, Apple Inc. announced Tuesday it has reached an out-of-court settlement with U.S. states and other complainants in an e-book price-fixing class action lawsuit, Reuters reports. U.S. District Judge in Manhattan Denise Cote ordered the parties to submit a filing seeking approval of their settlement within 30 days.The terms of the settlement, which still need court approval, have not been revealed. The plaintiffs sued Apple and five publishers in April 2012, accusing them of collusion in working together illegally to increase e-book prices and claiming that Apple had overcharged consumers by $280 million. A trial to determine the amount of damages was originally scheduled for July, but had been recently pushed back to August. Apple is appealing Cote's decision, and Monday's settlement is contingent on the outcome of that appeal.
Michael Jordan Judge Cries Foul, Walks
A week after basketball Hall of Famer Michael Jordan’s attorneys called for U.S. District Judge Milton Shadur to step down from Jordan’s long-running multi-million dollar lawsuit against Dominick’s food stores, the judge removed himself from the case. Shadur blasted Jordan’s attorney for the “groundless and unwarranted attack” on his integrity. Jordan’s team claimed the judge had shown bias against Jordan, who is suing Dominick’s for using Jordan’s name without permission in a 2010 Sports Illustrated ad. Shadur, who turns 90 later this month, vehemently denied he was biased, noting ironically that he’d ruled in favor of Jordan on the merits of the lawsuit and only disagreed with the $5 million in damages he was originally planning to seek from a jury, The Chicago Tribune reports.
YouTube Launching Paid Streaming Music Service
Google-owned YouTube, the world’s most popular online video website, announced Tuesday that it plans to launch a paid streaming music service, in partnership with “hundreds of major and independent” music labels, Reuters reports. The site has drawn criticism from music trade groups for its plans to potentially block the content of certain labels from appearing on the site’s free, ad-supported website unless they sign deals to participate in the new, subscription streaming music service. YouTube has reportedly already signed deals for the paid service with 95 percent of the music labels that it previously had deals with for its existing, ad-supported music video website. The new YouTube service is expected to launch at the end of the summer.
Weight, Weight, Don’t Tell Me
Celebrity doctor Mehmet Oz gave a U.S. Senate panel a peek at the man behind the curtain on Tuesday during its probe of bogus diet products. Missouri Democratic Senator Claire McCaskill, the chairwoman of the Commerce subcommittee on consumer protection, said Oz, who touts weight loss products on his syndicated television show, had a role in perpetuating weight-loss fraud. She said Oz's promotion tended to boost sales and prompted scam artists to sell questionable products using deceptive ads.
"I don't get why you need to say this stuff because you know it's not true," McCaskill said at the hearing. "I actually do personally believe in the items that I talk about on the show," Oz, a Columbia University professor, countered that he believed in the items he talks about on his show, even though many times they don’t pass “scientific muster.” A 2011 FTC survey of consumer fraud showed more consumers were victims of bogus weight-loss products than any other frauds covered by the survey.
Wendy’s Announces Relaunch of Pretzel Burger
After a six-month absence, Wendy's will bring back its phenomenally popular Pretzel Bacon Cheeseburger and Pretzel Pub Chicken Sandwich over the Fourth of July weekend. Industry analysts credit Wendy’s with starting the pretzel bread sandwich trend. Wendy’s customers bought more than 50 million pretzel bread sandwiches last year, driving 3 percent sales jumps in the third and fourth quarters, The Chicago Tribune reports. The burger, which is aimed at Millennials, will be $4.99, about 30 cents more than last year. Consumers now will be able to request a pretzel bun with any other Wendy's sandwich for an additional 30 cents. Is the relaunch for only a limited time or will the sandwiches become permanent menu items? “Time will tell,” CEO Emil Brolick teased