Morning Business Memo…
Is it finally time to kiss goodbye to record low interest rates? The cost of borrowing money fell for 30 years, but in recent weeks the cost of mortgages and other loans have been rising. There’s open debate among policy makers at the Federal Reserve over “tapering” – just when should the Fed should ease off, or taper its aggressive bond buying program, which is designed to keep borrowing rates very low. But his morning the 10-year Treasury note, which is the benchmark for many consumer loans, hit 2.2 percent, the highest level in 14 months.
“I think you all should be ready, because rates are going to go up,” Jamie Dimon, CEO of JPMorgan Chase bank, told a financial industry conference this week. The flurry over bonds and Federal Reserve policies are a big reason for the recent volatility on global financial markets. In 10 out of the past 30 trading days the Dow Jones index has moved up or down more than 100 points.
Chrysler is facing a June 18 deadline and a possible court showdown. That’s when the company must formally respond to a request by the National Highway Traffic Safety Administration to recall 2.7 million Jeep SUVs. So far Chrysler is refusing to comply. The firm’s U.S. sales chief is defending Chrysler’s refusal to recall 2.7 million Jeeps to replace fuel tanks that federal safety regulators say are unsafe. “Our vehicles are safe and we have said why,” Reid Bigland told a conference of suppliers, according to The Detroit Free Press. Unless NHTSA or Chrysler backs down there could be a very expensive and lengthy court battle. The Transportation Department has been investigating the Jeep SUVs for more than two years.
Shares in the athletic wear company LuLuLemon plunged 17 percent. The firm’s CEO Christine Day is stepping down. Under her leadership over the past five years, LuLuLemon has achieved meteoric growth by attracting people willing to shell out $100 for yoga pants. In a call to investors, Day didn’t elaborate about why she was leaving, but said she will stick around until a successor is named.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc