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Fed's Yellen sees gradual rate hikes starting this year

SAN FRANCISCO/WASHINGTON (Mar 28): Federal Reserve Chair Janet Yellen signaled that the U.S. central bank will likely start raising borrowing costs later this year, even before inflation and wages have returned to health, but emphasized the return to normal interest rates will be gradual. A downturn in core inflation or wage growth could force the Fed to delay the first increase to borrowing costs since 2006, the central bank's chief said on Friday, but policymakers should not wait for inflation to near the Fed's 2-percent goal before tightening monetary policy. The Fed has held short-term borrowing costs near zero since December 2008. After the first rate increase, Yellen said, a further, gradual tightening in monetary policy will likely be warranted. If incoming data fails to support the Fed's economic forecast, the path of policy will be adjusted, she said. "With continued improvement in economic conditions, an increase in the target range for that rate

Israel Releasing Impounded Palestinian Tax Revenue

JERUSALEM —  Israel  announced on Friday that it would release three months’ worth of tax revenue to the Palestinian Authority  that has accrued since  Israel suspended the payments  in response to the  Palestinian move to join the International Criminal Court. The announcement appeared to partly reflect a desire by Prime Minister  Benjamin Netanyahu  of Israel to ease tensions with the  Palestinians  and the United States. But it also was a response to a recommendation by Israel’s security establishment amid fears that the impoundment of the revenue was undermining stability in the area and endangering Israel’s own well-being. Mr. Netanyahu approved the recommendation of his defense minister, Moshe Yaalon, and of the Israeli military and Shin Bet internal security agency to transfer the withheld funds “based on humanitarian concerns and in overall consideration of Israel’s interests at this time,” according to a statement from Mr. Netanyahu’s office.  The departing  United

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Mad Mike, the homeless blogger who became a millionaire overnight

Missing the Austin ditch in which he’d slept most nights for the last two years, Mike Wille curled up on the front lawn of the large house his mother had just left him via her suicide note. Her death meant that Mike – known to fans of his street music and his homelessness blog,  The Ground Score , as Mad Mike the Hippy Bum – would soon be a millionaire. Mad Mike worried that, given his love of drink and drugs, he could not survive such a lifestyle shift. At birth, Mike’s left leg was shorter than his right by an inch, with no defined calf muscle and an under-formed foot  sans  big toe. When I visited his mother’s former home near  New Orleans  recently, he showed me a box of family papers he’d unearthed regarding the lengthening of his leg by the famous doctor Gavriil Ilizarov ,  who invented the procedure. Still, the bum leg helped Mike nurture a negative outlook that, once he became teenager, fractured his relationship with his already volatile parents. “My mother was a

Why Silicon Valley Loves Wall Street

Some Wall Street stars are decamping for Silicon Valley, corralled by tech giants and tech start-ups looking for financial expertise, marquee talent and bragging rights. Morgan Stanley announced Tuesday that Ruth Porat, its chief financial officer and a 28-year veteran of the firm, will become the CFO of Google  at the end of April. (She replaces CFO Patrick Pichette, who  quit this month  before his successor had been chosen.) Porat is a big get for Google, which has had issues with analysts and regulators over  slowing growth  and concerns that it  bullies competitors  on the Web. Porat has a sterling reputation on Wall Street and in Washington, where's she's regarded as an executive who has a deft hand with regulators and investors. During the financial crisis that began in 2008, Porat  advised the Treasury Department  on the bailout of the foundering government-sponsored lenders Fannie Mae and Freddie Mac. She helped rebuild Morgan Stanley’s reputation with inv

Give China a Reserve Currency

As former U.S. Secretary of State Colin Powell famously advised, China favors " overwhelming force " in its campaigns, military or otherwise. Most recently, in a direct challenge to the global economic architecture established by the U.S. and its allies after World War II, Beijing has pledged nearly $200 billion to various new lending institutions and funds -- to bolster trade with Europe, establish a footprint in the Indian Ocean, build infrastructure across Asia and generally increase the mainland's influence worldwide. A new push to establish the renminbi as one of the world's reserve currencies adds to this campaign. The move would confer prestige, take America down a peg and attract more investment. Viewed that way, Washington should fear the yuan joining the ranks of the dollar, euro, yen and British pound, right? Wrong. Increased use of the yuan internationally will force China to restructure more radically than its leaders may realize. It also could st

Obama Snubs Nato Chief as Crisis Rages

President Barack Obama has yet to meet with the new head of the North Atlantic Treaty Organization, and won't see Secretary General Jens Stoltenberg this week, even though he is in Washington for three days.  Stoltenberg’s office requested a meeting with Obama well in advance of the visit, but never heard anything from the White House, two sources close to the NATO chief told me.  The leaders of almost all the other 28 NATO member countries have made time for Stoltenberg since he took over the world's largest military alliance in October. Stoltenberg, twice the prime minister of Norway,  met Monday  with Canadian Prime Minister Stephen Harper in Ottawa to discuss the threat of the Islamic State and the crisis in Ukraine, two issues near the top of Obama's agenda. Kurt Volker, who served as the U.S. permanent representative to NATO under both President George W. Bush and Obama, said the president broke a long tradition.  “The Bush administration held a firm line tha