‘No one is above the law’: Trump lawsuits involving 2 women accusers proceed

U.S. President Donald Trump faced legal challenges from women on two fronts on Tuesday as a defamation lawsuit brought by a former Apprentice TV show contestant moved forward and a former Playboy model who said she had an affair with Trump sued to undo a confidentiality agreement.

The developments increased legal pressure on Trump, who during and after the 2016 presidential campaign was accused of sexual misconduct by more than a dozen women, allegations he denied.

A New York state judge on Tuesday denied a bid by Trump to toss a defamation lawsuit by Summer Zervos, a former contestant on NBC’s The Apprentice, raising the prospect that he might have to answer questions about his behaviour in court.

Justice Jennifer Schecter in Manhattan rejected Trump’s claim that he was immune from being sued, finding “absolutely no authority” to dismiss litigation related “purely to unofficial conduct” solely because he occupied the White House.

“No one is above the law,” the judge wrote in her ruling.

Playboy model Karen McDougal, meanwhile, sued a media company that she said paid her $150,000 US to keep quiet about an affair that she said she had with Trump.

That lawsuit was the second time this month that a woman challenged legal arrangements to prevent discussions about affairs women said they had with Trump. Both involved payments that legal experts have said could equate to in-kind contributions to Trump’s campaign in violation of federal election laws.

The White House did not immediately respond to a request for comment.

Trump has denied all accusations of misconduct, and called his accusers “liars.”

Zervos met Trump when she became a contestant on “The Apprentice” in 2005. She said Trump kissed her against her will at a 2007 meeting in his New York office, and later groped her in a Beverly Hills hotel at a meeting about a possible job.

Zervos said Trump’s denials amounted to defamation and that being branded a “liar” caused diners to stay away from her restaurant in California.

John Diamond, a professor at the University of California Hastings College of the Law, said Trump would have to testify under oath if he has to defend himself.

Claims Enquirer killed story to benefit Trump

McDougal filed her lawsuit in Los Angeles Superior Court against American Media Inc, publisher of the National Enquirer, whose head, David Pecker, has described Trump as a “personal friend.”

McDougal said American Media paid her $150,000 in 2016 for the rights to her story that she had an affair with Trump in 2006 and 2007 and then never published it.

McDougal said her lawyer at the time, Keith Davidson, secretly negotiated with Michael Cohen, Trump’s personal lawyer, and that Cohen was in consultations with American Media on the agreement.

Cohen has acknowledged arranging to pay to silence another woman, porn performer Stormy Daniels. That payment was also made during the election campaign.

Davidson said on Tuesday that he never had contact with Cohen during the McDougal negotiations.

“False allegations have been levied against me and I look forward to responding to them in an appropriate forum,” he told Reuters.

Karen McDougal is shown at a 2004 event in Hollywood, Calif. McDougal is looking to speak about her interactions with Trump, and claims she has that right since the National Enquirer never published her interview. (Cherie Steinberg/Getty Images)

McDougal is asking the court to declare the agreement null and void. She said she was tricked into signing it, that it was intended to illegally influence the election and because it violates public policy against using threats of legal action to get someone to stay silent on issues of public concern.

She also called the agreement an illegal donation from AMI to the Trump campaign in violation of federal election law.

American Media said in a statement the company has a valid contract with McDougal and looks forward to reaching an amicable resolution. It said she has been free to respond to press inquiries about her relationship with Trump since 2016 and that the suggestion that American Media silenced her is without merit.

Davidson declined to comment, citing attorney-client privilege. Cohen did not respond to a request for comment.

Daniels, whose real name is Stephanie Clifford, sued the president on March 6, stating Trump never signed an agreement for her to keep quiet about an “intimate” relationship between them. Daniels received $130,000 under that agreement.

Neither Trump nor the White House have commented on the subject of the payment to Daniels.

Trump’s election hopes appeared to be threatened in October 2016 after Access Hollywood production footage was released in which he bragged about sexually assaulting women. But rival Hillary Clinton was soon confronted with her own challenges as the FBI publicly announced it was taking a look at new information surrounding her use of a private email server while Secretary of State, an investigation that had been closed months earlier.

Ottawa Senators captain Erik Karlsson and wife Melinda reveal son was stillborn

Ottawa Senators captain Erik Karlsson and his wife Melinda say their son, who they named Axel, was stillborn.

In a statement shared by Karlsson on his Twitter account Wednesday, the couple thanked supporters for the outpouring of condolences they received and for respecting their privacy after news of the loss of their son spread on social media.

“At this extremely difficult time it’s hard to see the light at the end of the tunnel, but we know one day we’ll get there. We would like to thank everyone for the love and support we have received and also for respecting our privacy and the process that we need to go through,” the statement read. 

“We feel very lucky to be Axel’s parents. Even though he was stillborn, we know we will hold him again one day under different circumstances and the joy he gave us will be with us forever.”

The Ottawa Senators revealed Tuesday that the couple had lost their baby. 

In November 2017, the couple announced they were expecting.

Facebook, Cambridge Analytica sued in U.S. by users over data harvesting

Facebook Inc. and the political consulting firm Cambridge Analytica have been sued in the United States for obtaining information belonging to 50 million of the social media company’s users without permission.

The proposed class-action complaint filed late Tuesday night by Lauren Price, a Maryland resident, is the first of what could be many lawsuits seeking damages over Facebook’s ability to protect user data, and Cambridge Analytica’s exploitation of that data to benefit President Donald Trump’s 2016 campaign.

“Every Facebook user has an interest in this lawsuit, and the enforcement of their privacy rights,” John Yanchunis, a lawyer for Price, said in a phone interview on Wednesday.

The complaint was filed in the U.S. District Court in San Jose, California, several hours after Facebook was blamed in a shareholder lawsuit filed in nearby San Francisco for the drop in its stock price after the data harvesting was revealed. Nearly $50 billion US of market value was wiped out in two days.

Facebook and Cambridge Analytica did not immediately respond on Wednesday to requests for comment.

Price accused Facebook and London-based Cambridge Analytica of negligence and violating a California unfair competition law.

She said the harvesting contravened Facebook’s privacy policy, in which the Menlo Park, Calif.-based company said user trust was “important to us” and that it would not share information without permission and notice.

“Our client saw a tremendous uptick in political messaging during the campaign on her Facebook page, which she had never seen,” Yanchunis said. “She had a glimmer of understanding at the time, but now sees there was an attempt to influence her vote.”

The complaint seeks unspecified damages, including possible punitive damages.

Yanchunis, who has also been suing Verizon Communications Inc. over data breaches at its Yahoo Internet business affecting 3 billion accounts, said it should be a “fairly easy exercise” to identify potential Facebook class members.

He said cybersecurity experts can assist with the case, and that Facebook “leaves a footprint of what was taken that cannot be erased.”

The case is Price v Facebook Inc. et al, U.S. District Court, Northern District of California, No. 18-01732. The shareholder case is Yuan v Facebook Inc. et al in the same court, No. 18-01725.

Bombing suspect kills himself in Austin, Texas, police chief says

Police in Texas say a suspect in a recent spate of bombings in the state capital and other areas is dead.

Austin Police Chief Brian Manley, speaking at a news conference just before 4 a.m. local time, said in the previous 36 hours the pursuit of the suspect developed rapidly. The suspect’s vehicle was identified near a hotel early Wednesday, and while under surveillance and being followed, he detonated a device in the stopped vehicle, killing himself.

An officer was injured as a result of the explosion, Manley said, while another fired his weapon at the vehicle.

It was unclear if the suspect was prepared to deliver that explosive, or had retained it so as not to be taken alive into custody. 

NBC News and the Associated Press, both citing an unnamed law enforcement official briefed on the investigation, identified the dead man as Mark Anthony Conditt. The official spoke on the condition of anonymity because the official wasn’t authorized to discuss the case publicly. 

Texas bombing suspect dead after police confrontation1:51

Manley was not prepared yet to identify the suspect at an earlier news conference, but said he was a 24-year-old old white male.

The SUV where he blew himself up was hauled away just before noon local time. Crews loaded the red vehicle and two large white vans — that apparently forced the SUV off the road — onto flat-bed trucks, which then drove away.

Bomb squads subsequently began checking the ground where the vehicles had been parked.

Texas Gov. Greg Abbott told Austin television station KXAN that Conditt was unemployed and that he had been observed making some purchases while wearing a disguise that included a blond wig and gloves.

Pflugerville Mayor Victor Gonzales told the AP that the bombing suspect lived in his city, which is a suburb of Austin not far from the site of the first of four bombings.

Pflugerville police, at the direction of the FBI, evacuated an the area around the suspect’s home where federal authorities were preparing to deploy an anti-explosives robot.

Authorities reiterated their previous warnings for residents to be vigilant and report any suspicious packages or devices.

FBI agent Chris Combs, head of the agency’s San Antonio office, says, “We are concerned that there may be other packages that are still out there.”

The apparent conclusion in the manhunt for the serial bomber came after the Austin Police Department and the federal Bureau of Alcohol and Tobacco, Firearms and Explosives (ATF) confirmed on social media early Wednesday that an unfolding investigation was occurring in the 1700 block of N. Interstate 35 in the Austin suburb of Round Rock.

Witnesses, video footage helped in hunt

Manley was also not prepared to definitively state the suspect acted alone or had assistance, and the motive for the attacks is unknown. He credited witness statements and video evidence as helping lead to the identification of the man.

President Donald Trump expressed his gratitude for law enforcement on social media soon after the outcome was announced.

Fred Milanowski, an ATF agent, said it was “hard to say” if the bombing suspect had acted alone.

“What we do know is we believe the same person built each one of these devices,” said Milanowski, the agent in charge of the Houston division of the ATF. “We are not 100 per cent convinced there’s not other devices out there.”

Asked if the suspect built bombs before the Austin attacks, Milanowski said: “We know when he bought some of the components. It’s hard to say whether he was building along the way.”

Investigators have been pursuing a suspected serial bomber in Austin since the first explosion on March 2, when a 39-year old man was killed. A 17-year-old boy was killed and two women were injured in two separate blasts on March 12.

Four others were injured, and with the victims black or Hispanic, there had been speculation of a racial motive. The devices discovered in the past three days, however, appeared to be more randomly placed.

Manley said the deceased was a suspect from early in the investigation but police suspicions intensified in the last few days.

On Tuesday, a bomb inside a package exploded around 1 a.m. as it passed along a conveyer belt at a FedEx shipping centre in Schertz, northeast of San Antonio and about 95 kilometres southwest of Austin. One worker reported ringing in her ears and was treated at the scene.

Later in the morning, police sent a bomb squad to a FedEx facility outside the Austin airport to check on a suspicious package. Federal agencies and police later said that package had indeed contained an explosive that was successfully intercepted and that it, too, was tied to the other bombings.

Members of law enforcement are shown in Round Rock. Authorities said they couldn’t discount the possibility not all suspicious packages originating from the suspect are accounted for. (Eric Gay/Associated Press)

Authorities also closed off an Austin-area FedEx store where they believe the bomb that exploded in Schertz was shipped. They roped off a large area around the shopping centre in the enclave of Sunset Valley and were collecting evidence.

The Schertz blast came two days after a bombing wounded two men Sunday night in a quiet Austin neighborhood about five kilometres from the FedEx store. It was triggered by a nearly invisible tripwire, suggesting a “higher level of sophistication” than agents saw in three package bombs previously left on doorsteps.

Service Canada moves away from calling Canadians Mr., Mrs., or Ms.

Service Canada employees who interact with the public are being asked to stay away from terms like Mr., Mrs., father and mother, and to use gender-neutral terms in their place, CBC News has learned.

According to documents obtained by Radio Canada, the French-language arm of CBC, front-line staff must now “use gender-neutral language or gender-inclusive language.”

“This avoids portraying a perceived bias toward a particular sex or gender,” says a copy of speaking notes prepared for managers and team leaders.

“It is important that Service Canada, as an organization, reflects Canada’s diverse population and ensures that the views and interests of Canadians are taken into account when we develop policies, programs, services and initiatives,” says the directive.

The new guidelines also rule out using terms such as mother and father because they are “gender specific” and say the neutral word “parent” should be used instead.

The same goes for honorifics such as Mr., Mrs., and Ms., and in both languages. Instead, employees are being directed to address customers by their full names or ask them what they want to be called.

Social Development Minister Jean-Yves Duclos, whose department oversees Service Canada, took to Twitter Wednesday to clarify that agents can still call people Mr. or Ms. if that’s what the caller prefers.

“We are only confirming how people want to be addressed as a matter of respect,” he said.

Service Canada helps Canadians connect with a variety of government programs, including Employment Insurance, the Canada Pension Plan and Old Age Security.

Updating government forms

According to an official — who asked to remain anonymous because they are not authorized to speak on the issue — the new directive is already in place and has led to some difficult situations for civil servants.

“It happens that we talk to people and we ask, ‘What is the name of parent number one?’ People do not understand,” said the official.

Helen Kennedy, executive director of the LGBT rights group Egale Canada, said her group is “very pleased” to hear about the changes. She said people who don’t fit into “neat boxes” often have uncomfortable and negative experiences accessing government programs.

She also urged the government to provide staff with training on why it’s important to properly gender people.

“Otherwise there will be a state of confusion,” she said.

Conservative MP and Treasury Board critic Gérard Deltell said there are more important issues for the government to concentrate on right now.

“Maybe one day this government will decide to cancel each and every Mother’s Day or a Father’s Day,” he said.

In addition to the changes in how staff interact with the public, the directive indicates that Service Canada is also in the process of amending some service forms, including the Social Insurance Number application form.

Canadians are already able to identify as gender ‘X’ on their passports.

The new directive also includes a warning that agency employees will be observed to ensure they are following the protocols.

“Going forward, the proper use of gender-neutral language will also be added to the observations in the In-Person Quality Monitoring Program,” the directive said.

Earlier this year, a same-sex couple from Nova Scotia called for Service Canada to update its forms so men don’t have to declare a “maiden name” in order to get social insurance numbers for their children.

Nick Bonnar and Graham MacDonnell said they ran into a roadblock when an agent told them they had to provide a maiden name to complete and process the electronic form.

Last summer, the Liberal government passed a law enshrining protections for transgender Canadians. The bill updates the Canadian Human Rights Act and the Criminal Code to include the terms “gender identity” and “gender expression.”

Amazon is now second most valuable U.S.-listed company, tops Alphabet

(Reuters) – Amazon.com (AMZN.O) became the second most valuable publicly listed U.S. company on Tuesday, surpassing Google parent Alphabet Inc (GOOGL.O) for the first time.

Amazon shares finished up 2.69 percent at $1,586.51, for a market capitalization of $768 billion, underscoring Wall Street’s confidence in its relentless expansion into cloud computing, groceries and other new businesses.

Alphabet lost 0.39 percent, trimming its stock market value to $762 billion, as Wall Street fretted about regulatory fallout following revelations that a political consulting firm had improperly obtained personal data on 50 million Facebook Inc (FB.O) users.

(GRAPHIC: Race for $1 trillion market cap – reut.rs/2FWeWZK)

Together, Alphabet and Facebook dominate online advertising. They have previously faced government criticism for how they employ their user data.

Amazon’s stock has surged 81 percent over the past year, through Monday, bolstered by scorchingly fast revenue growth as more shopping moves online and businesses shift their computing operations to the cloud, where Amazon Web Services leads the market.

“They’re using their cash flow to develop new businesses,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “They could have Apple in their sights at some point.”

Seattle-based Amazon dislodged Microsoft Corp (MSFT.O) as the No. 3 U.S. company by market capitalization in February. Apple (AAPL.O) is the world’s most valuable publicly listed company, with a market capitalization of $889 billion.

Obviously, past stock gains are not a reliable predictor of future performance, and the surge in Amazon shares in recent years has been exceptional by most standards. But if Amazon’s stock were to keep growing on the trajectory seen over the past year, its market capitalization would hit $1 trillion in late August.

Apple’s market cap would reach $1 trillion around a month later if its stock price continued to rise at the 25 percent pace seen over the past year.

Alphabet’s stock has risen 4 percent so far in 2018 and is up 26 percent in the past year.

The median of analyst price targets for the three companies put Amazon’s market capitalization at $823 billion, Alphabet’s at $914 billion and Apple’s at $989 billion, according to Thomson Reuters data.

Reporting by Noel Randewich; Editing by Leslie Adler

Exclusive: Kaspersky Lab plans Swiss data center to combat spying allegations

MOSCOW/TORONTO (Reuters) – Moscow-based Kaspersky Lab plans to open a data center in Switzerland to address Western government concerns that Russia exploits its anti-virus software to spy on customers, according to internal documents seen by Reuters.

Kaspersky is setting up the center in response to actions in the United States, Britain and Lithuania last year to stop using the company’s products, according to the documents, which were confirmed by a person with direct knowledge of the matter.

The action is the latest effort by Kaspersky, a global leader in anti-virus software, to parry accusations by the U.S. government and others that the company spies on customers at the behest of Russian intelligence. The U.S. last year ordered civilian government agencies to remove the Kaspersky software from their networks.

Kaspersky has strongly rejected the accusations and filed a lawsuit against the U.S. ban.

The U.S. allegations were the “trigger” for setting up the Swiss data center, said the person familiar with Kapersky’s Switzerland plans, but not the only factor.

“The world is changing,” they said, speaking on condition of anonymity when discussing internal company business. “There is more balkanisation and protectionism.”

The person declined to provide further details on the new project, but added: “This is not just a PR stunt. We are really changing our RD infrastructure.”

A Kaspersky spokeswoman declined to comment on the documents reviewed by Reuters.

In a statement, Kaspersky Lab said: “To further deliver on the promises of our Global Transparency Initiative, we are finalizing plans for the opening of the company’s first transparency center this year, which will be located in Europe.”

“We understand that during a time of geopolitical tension, mirrored by an increasingly complex cyber-threat landscape, people may have questions and we want to address them.”

Kaspersky Lab launched a campaign in October to dispel concerns about possible collusion with the Russian government by promising to let independent experts scrutinize its software for security vulnerabilities and “back doors” that governments could exploit to spy on its customers.

The company also said at the time that it would open “transparency centers” in Asia, Europe and the United States but did not provide details. The new Swiss facility is dubbed the Swiss Transparency Centre, according to the documents.


Work in Switzerland is due to begin “within weeks” and be completed by early 2020, said the person with knowledge of the matter.

The plans have been approved by Kaspersky Lab CEO and founder Eugene Kaspersky, who owns a majority of the privately held company, and will be announced publicly in the coming months, according to the source.

“Eugene is upset. He would rather spend the money elsewhere. But he knows this is necessary,” the person said.

It is possible the move could be derailed by the Russian security services, who might resist moving the data center outside of their jurisdiction, people familiar with Kaspersky and its relations with the government said.

Western security officials said Russia’s FSB Federal Security Service, successor to the Soviet-era KGB, exerts influence over Kaspersky management decisions, though the company has repeatedly denied those allegations.

The Swiss center will collect and analyze files identified as suspicious on the computers of tens of millions of Kaspersky customers in the United States and European Union, according to the documents reviewed by Reuters. Data from other customers will continue to be sent to a Moscow data center for review and analysis.

Files would only be transmitted from Switzerland to Moscow in cases when anomalies are detected that require manual review, the person said, adding that about 99.6 percent of such samples do not currently undergo this process.

A third party will review the center’s operations to make sure that all requests for such files are properly signed, stored and available for review by outsiders including foreign governments, the person said.

Moving operations to Switzerland will address concerns about laws that enable Russian security services to monitor data transmissions inside Russia and force companies to assist law enforcement agencies, according to the documents describing the plan.

The company will also move the department which builds its anti-virus software using code written in Moscow to Switzerland, the documents showed.

Kaspersky has received “solid support” from the Swiss government, said the source, who did not identify specific officials who have endorsed the plan.

Reporting by Jack Stubbs in Moscow and Jim Finkle in Toronto; Editing by Jonathan Weber

Caution the watchword as Fed ponders rate pace

SYDNEY (Reuters) – A hush settled over financial markets on Wednesday as investors counted down to a likely hike in U.S. interest rates and guidance on how many more to expect this year, while trade war fears kept export nations’ currencies on edge.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.5 percent after a run of losses, tracking overnight gains on Wall Street.

Chinese shares were a bit more buoyant with Hong Kong’s Hang Seng index .HSI gaining 1.2 percent as real estate firms posted stellar profits.

E-Mini futures for the SP 500 ESc1 inched up 0.1 percent, while FTSE futures FFIc1 were off a fraction.

Markets are convinced the Federal Reserve will announce a quarter point hike at 1800 GMT, but are less sure if it will signal three or four for the year as a whole.

“A significant weighting toward four hikes this year may well cause both equity and bond markets to sell off,” Jonathan Sheridan, analyst at FIIG Securities in Sydney, said.

“The concerns here are that the Fed overshoots with raising rates into a faltering economy,” Sheridan added.

“If this opinion takes hold then we may well see falling longer term rates and a flatter yield curve, and it would also be negative for equities as it increases the chances of a recession.”

The Fed has raised rates five times since it began tightening policy in late 2015. Yet the dollar has not really responded, ending 2017 down about 10 percent against a basket of currencies. .DXY

“We remind readers that every single FOMC rate hike this cycle has been a ‘dovish hike’ and the USD has declined on the day(s) post the rise,” Richard Grace, chief currency strategist at Commonwealth Bank of Australia wrote in a note to clients.

On Wednesday, the dollar index held near three-week highs around at 90.267 .DXY. Against the Japanese yen JPY=, the greenback hovered near a one-week top at 106.46.

(GRAPHIC: Developed market currencies against the Dollar – reut.rs/2FYAg0X)


Another major overhang for financial markets is the specter of a global trade war.

U.S. President Donald Trump is expected to unveil up to $60 billion in import duties on Chinese goods by Friday. The move comes after Trump imposed tariffs on imported steel and aluminum earlier this month.

Investors are worried Trump’s actions could escalate into a full-blown trade war if China and other countries retaliate with similar or harsher measures, threatening global growth.

To add to these concerns, a meeting of finance ministers and central banks of the world’s 20 biggest economies this week failed to diffuse the threat.

The so-called G20 agreed only to stand by an ambiguous declaration on trade from 2017 and “recognized” the need for more “dialogue and actions”.

The currencies of export-heavy nations such as the Australian, New Zealand and Canadian dollars were on the defensive after being knocked down to multi-month lows.

The Aussie AUD=D4 fell to a three-month trough of $0.7679 overnight while the kiwi dollar NZD=D4 hit the lowest since early January. The Canadian dollar CAD=D4 held at $1.3029 from Monday’s low of $1.3124, a level not seen since mid-2017.

Equity analysts have also turned increasingly downbeat.

“Cracks in the bull case are starting to emerge,” said Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, citing the bank’s March fund manager survey.

“The threat of a trade war returns to the top of the list of tail risks most commonly cited by investors, followed by inflation and a slowdown in global growth,” he added.

“Investors have yet to act on these fears, however, as rates and earnings are keeping the bulls bullish.”

Among major commodities, oil prices were lifted by tensions in the Middle East and healthy demand. [O/R]

U.S. crude CLc1 rose 15 cents to $63.69 per barrel. Brent LCOc1 gained 16 cents to $67.58.

Spot gold added 0.2 percent to $1,313.31 an ounce XAU=.

Reporting by Swati Pandey, Editing by Simon Cameron-Moore and Himani Sarkar

Powell’s Fed likely to raise rates, may upgrade 2018 outlook

WASHINGTON (Reuters) – The Federal Reserve is expected to raise interest rates at its first policy meeting under Chairman Jerome Powell and may signal more hikes are coming in response to tax cuts and government spending that could further stoke a robust U.S. economy.

The U.S. central bank projected late last year that it would lift rates three times in 2018, but some investors believe the fiscal stimulus and recent hints of inflation pressures will push policymakers to add an additional increase to the mix.

(Interactive graphic of Fed’s forecasts, dove-hawk divide: tmsnrt.rs/2gsUVwB)

The Fed is scheduled to issue its latest policy statement at 2 p.m. EDT (1800 GMT). Powell is due to hold a press conference half an hour later.

Fed officials have speculated in recent weeks that the stimulus could drive more Americans into an already tight labor market and lift inflation to the central bank’s 2 percent target, or much above that level if the economy gets too hot.

Yet analysts are split over whether the Fed, which is wary of an early misstep under its new leadership, will raise policy tightening expectations until more price pressures are clearly evident, especially given outside risks to the economy such as a possible global trade war.

“A prudent institution would probably give more weight to the facts, at least for the moment,” Roberto Perli, a former Fed economist who is now a partner at Cornerstone Macro, wrote in a note predicting the Fed would stick with three projected rate increases for this year.

The Fed’s drive to stimulate the world’s largest economy in the wake of the 2007-2009 financial crisis and recession is drawing to a close. It raised its benchmark overnight lending rate three times last year, to a range of 1.25 to 1.50 percent, as joblessness fell and economic growth accelerated. It is expected to raise rates by another 25 basis points on Wednesday.

With futures markets anticipating another increase in June, Powell’s Fed could leave its rate outlook unchanged until then to see how the economy absorbs the $1.8 trillion in stimulus expected from the Trump administration tax cuts and planned spending. (Graphic of Fed forecasts: tmsnrt.rs/2gsUVwB)


While recent home sales and retail spending data have been on the weak side, the overall economic picture has brightened this year. Inflation has strengthened after remaining below the Fed’s target for more than five years, and there have been more hints of wage gains.

The central bank is expected on Wednesday to boost its economic growth forecasts for the next few years, and could project that the unemployment rate will fall well below the current 4.1 percent, which is seen as a low but stable level.

The blockbuster U.S. jobs report for February could further convince Powell and his colleagues that the Fed’s stated “gradual” rate hike path could carry on longer than previously thought. A sign of this would be a rise in the Fed’s longer-term, or neutral, expected policy rate, currently at 2.8 percent.

Powell, who took over from former Fed chief Janet Yellen in early February, triggered a brief global market selloff when he told U.S. lawmakers late last month that he had grown more confident in the economic outlook. Yet worries over a new hawkish central bank are likely overblown given Powell’s cautious, consensus-building approach.

Seven of the 15 Fed policymakers who will update their forecasts on Wednesday have recently indicated the fiscal stimulus could boost their expectations for the economy, rate hikes, or for both, according to an analysis of public statements.

New York Fed President William Dudley, one of the most influential policymakers, said four rate increases this year would still be considered “gradual,” noting that fiscal policy is turning “quite stimulative.”

The comments suggested a shift “towards a potentially faster pace of tightening … particularly with tax cuts now implemented and with an additional fiscal boost from federal spending arriving this year,” Jan Hatzius, chief U.S. economist at Goldman Sachs, wrote in a note predicting that the Fed would signal on Wednesday that rates will rise four times this year.

Reporting by Jonathan Spicer; Editing by Paul Simao

Cambridge Analytica CEO claims influence on U.S. election, Facebook questioned

LONDON/SAN FRANCISCO (Reuters) – The suspended chief executive of Cambridge Analytica said in a secretly recorded video broadcast on Tuesday that his UK-based political consultancy’s online campaign played a decisive role in U.S. President Donald Trump’s 2016 election victory.

CEO Alexander Nix’s comments, which could not be verified, are potentially a further problem for Facebook Inc as it faces lawmakers’ scrutiny in the United States and Europe over Cambridge Analytica’s improper use of 50 million Facebook users’ personal data to target voters.

The social media network’s shares fell for a second day, closing down 2.5 percent, as investors worried that its dealings with Cambridge Analytica might damage its reputation, deter advertisers and invite restrictive regulation. The company has lost $60 billion of its stock market value over the last two days.

Cambridge Analytica’s board of directors suspended Nix on Tuesday, shortly before the second part of British broadcaster Channel 4’s expose of the firm’s methods.

In the program Nix describes questionable practices used to influence foreign elections and said his firm did all the research, analytics and targeting of voters for Trump’s digital and TV campaigns. He also boasts he met Trump when he was the Republican presidential candidate “many times”.

Nix’s comments “do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation,” Cambridge Analytica said in a statement on Tuesday.

Cambridge Analytica has denied all the media claims and said it deleted the data after learning the information did not adhere to data protection rules.

Brad Parscale, the 2016 Trump campaign’s main digital adviser who dealt regularly with Cambridge Analytica, did not immediately respond to a request for comment on Nix’s claims.

Jared Kushner, Trump’s son-in-law and now senior adviser, oversaw the Trump campaign’s digital operations. One former Trump adviser said Kushner brought Cambridge Analytica into the 2016 campaign effort. Kushner’s lawyer did not immediately respond to a request for comment.

Cambridge Analytica whistleblower Christopher Wylie told the Washington Post on Tuesday that in 2014 conservative strategist Steve Bannon, who would go on to be Trump’s White House adviser, oversaw the firm’s early efforts to collect Facebook data to build detailed profiles on millions of American voters. (wapo.st/2HOTQNu)

Bannon approved spending nearly $1 million to acquire data, including Facebook profiles, in 2014, Wylie told the Post. It is unclear whether Bannon knew how Cambridge Analytica was obtaining the Facebook data, the Post reported.

Bannon, who served on Cambridge Analytica’s board, did not immediately respond to a request for comment from Reuters.

U.S. law bans foreigners from making contributions or spending money on behalf of a U.S. election campaign but it was not illegal for the Trump campaign to retain Cambridge Analytica’s services, according to Bradley Smith, a former Republican member of the U.S. Federal Election Commission.

“The fact that they are a British company doesn’t add anything to the analysis unless they were giving their services away for free or charging below-market rates,” said Smith, now a professor at the Capital University Law School in Columbus, Ohio.


U.S. and European lawmakers have demanded an explanation of how Cambridge Analytica gained access to user data in 2014 and why Facebook failed to inform its users, raising broader industry questions about consumer privacy.

Facebook said it had been told by the Federal Trade Commission (FTC), the leading U.S. consumer regulator, that it would receive a letter this week with questions about the data acquired by Cambridge Analytica. It said it had no indication of a formal investigation.

“The entire company is outraged we were deceived,” Facebook said in a statement on Tuesday. “We are committed to vigorously enforcing our policies to protect people’s information and will take whatever steps are required to see that this happens.”

The FTC is reviewing whether Facebook violated a 2011 consent decree it reached with the authority over its privacy practices, a person briefed on the matter told Reuters.

If the FTC finds Facebook violated terms of the consent decree, it has the power to fine the company thousands of dollars a day per violation, which could add up to billions of dollars.

Facebook was also hit on Tuesday in a San Francisco court by the first of what could be many lawsuits by shareholders claiming to suffer losses because the company misled them about its ability to protect user data. The company could also soon face lawsuits on behalf of users whose personal information was exposed.

Facebook and its peers Alphabet Inc’s Google and Twitter already face a backlash from users and lawmakers over their role during the U.S. presidential election by allowing the spread of false information that might have swayed voters toward Trump.

Fear of increased regulation hurt other social media firms on Tuesday. Shares of Snap Inc fell 2.5 percent and Twitter Inc fell more than 10 percent.


U.S. Senator Dianne Feinstein, the top Democrat on the Judiciary Committee, called on Tuesday for Facebook CEO Mark Zuckerberg to testify in Congress. Congressional staff said the company would brief U.S. Senate and House aides on Wednesday.

A Congressional official said House Intelligence Committee Democrats plan to interview Cambridge Analytica whistleblower Wylie. The committee interviewed Nix by video teleconference, according to the Congressional official, but a transcript of that interview has not yet been made public.

The Senate Intelligence Committee, which is conducting a long-term investigation of alleged Russian interference in U.S. politics and a detailed examination of U.S. election security precautions, would carry out its own inquiry of Cambridge Analytica, a Congressional official with direct knowledge of the investigation said.

The White House said it welcomed inquiries, and that the president believes that Americans’ privacy should be protected.

  • Social media stocks tumble as Wall Street fears regulation
  • Senate Democrat wants Facebook CEO Zuckerberg to testify
  • Massachusetts, New York send letter to Facebook demanding documents


In Britain, the Information Commissioner’s Office, an independent authority set up to uphold information rights in the public interest, was seeking a warrant from a judge to search the offices of London-based Cambridge Analytica. It was unclear late on Tuesday whether it had obtained it.

Created in 2013, Cambridge Analytica markets itself as a source of consumer research, targeted advertising and other data-related services to both political and corporate clients.

According to the New York Times, it was launched with $15 million in backing from billionaire Republican donor Robert Mercer and a name chosen by Bannon.

Facebook says the data were harvested by a British academic, Aleksandr Kogan, who created an app on the platform that was downloaded by 270,000 people, providing access not only to their own personal data but also data from their friends.

Facebook said Kogan then violated its policies by passing the data to Cambridge Analytica. Facebook has since suspended both the consulting firm and SCL (Strategic Communication Laboratories), a government and military contractor.

Facebook said it had been told that the data were destroyed. Kogan was not immediately reachable for comment.

Reporting by David Ingram in San Francisco, Kate Holton and Paul Sandle in London, David Shepardson, Susan Heavey, Mark Hosenball, Jonathan Landay and Sarah N. Lynch in Washington, Jonathan Stempel in New York; Additional reporting by Munsif Vengattil; Writing by Susan Thomas and Lisa Shumaker; Editing by Nick Zieminski, Bill Rigby and Michael Perry