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Fed holds, EU talks tough and China in Africa

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The Federal Reserve said it believed the recent slowdown in US growth was likely to prove temporary as it stayed on course for a further increase in short-term interest rates as soon as June. The US central bank kept its target range for the federal funds rate at 0.75 per cent to 1 per cent following its latest two-day meeting. In a statement, policymakers led by Janet Yellen, the chair, acknowledged that household spending growth had grown “only modestly” lately, but they emphasised that the “fundamentals” behind consumption growth remained solid. 

Here’s Larry Summers on US Treasury secretary Steven Mnuchin’s crowing about big increases in bank stock prices and how he doubled down on his prediction that the US economy would regularly be growing at over 3 per cent annually. It grew at an annualised 0.7 per cent last quarter. (FT)

In the news

EU gets tough on Brexit The EU raised its opening demand for Britain’s Brexit payment to an upfront gross payment in the region of €100bn, according to a Financial Times analysis of stricter demands driven by France and Germany. Here’s a breakdown of the bill. As Europe’s lead negotiator, Michel Barnier, unveiled the European Commission’s negotiating mandate, he warned that the talks would be both painful and lengthy. Meanwhile, Jean-Claude Juncker’s chief of staff warned that Brexit would “never be a success” and that it was a “sad and sorry event” for both the UK and EU. (FT, EU)

China urges restraint over North Korea Beijing said all parties in the Korean stand-off should stay calm and “stop irritating each other”, as Pyongyang state media issued a rare criticism of China. (Reuters)

EU says US can go it alone on Paris climate deal Amid speculation that the Trump administration will pull out of the landmark accord, the bloc says Washington can “chart its own path”. (FT)

FBI defends handling of Trump and Clinton investigations FBI director James Comey came under bipartisan fire on Wednesday as Republicans and Democrats alike criticised his handling of investigations into Donald Trump’s Russia ties and Hillary Clinton’s email server. Mr Comey said he felt “mildly nauseous” at the thought that his decision to send a letter about Mrs Clinton’s email server just days before the election might have affected the race. Here’s Nate Silver with a long analysis of why the Comey letter probably cost Mrs Clinton the election. (FT, FiveThirtyEight)

Facebook earnings beat on all fronts The social network beat analysts’ expectations on earnings and revenue as the appetite for mobile adverts on the world’s largest social network showed no sign of abating. Shares, which have risen 30 per cent this year, hit a record $153.60 before dipping 1.7 per cent in after hours trading in New York. (FT)

Deutsche’s new largest shareholder is Chinese Conglomerate HNA Group has increased its stake in the German lender to almost 10 per cent, making it Deutsche’s top shareholder. HNA has been on a buying spree, striking deals totalling $40bn in the past 28 months, even as Chinese mergers and acquisitions dropped to a three-year low in the first quarter of 2017. (Bloomberg, FT)

Anbang comes after Chinese journalist The acquisitive insurer has rebutted criticism of its opaque funding structure and confirmed it would sue China’s most respected journalist over her magazine’s exposé alleging deceptive financing practices. Anbang on Wednesday said it would sue Caixin Media and Hu Shuli, its editor in chief, as well as Guo Tingbing, author of a lengthy investigative story on Anbang published in the magazine on Sunday. (FT)

Puerto Rico files for record US debt restructuring The island territory has filed plans in US court to slash its $70bn debt burden after negotiations with creditors failed, triggering the largest debt restructuring by a US state or local government in history. (FT)

Abe unveils new constitution Shinzo Abe unveiled a plan to seek the first-ever change to Japan’s postwar constitution. The prime minister wants to include an explicit reference to the country’s defence forces and envisions the revision going into force in 2020. (NAR)

It’s a big day for

HSBC The bank will report results but all eyes will be on its succession plans: this will be the first opportunity for analysts to quiz executives after the announcement that Mark Tucker will join as chairman from Asian insurer AIA. One of his priorities will be to find a replacement for Stuart Gulliver, who will quit as chief executive next year. (Bloomberg)

Food for thought

China plants its flag in Africa David Pilling on the Chinese spending-spree in Africa, and how its soft-power onslaught is meeting with some success. “Certainly, you don’t have to go far in Africa to hear complaints against China, which is blamed for everything from enriching dictators to wiping out local manufacturing and entrapping governments in a new cycle of debt. Another, more powerful, story is taking hold, however, that sees China as a mostly positive actor with a record — unlike the west — of getting things done.” (FT)

UK tabloids key to understanding Brexit Their circulations may be falling and their reputations besmirched by phone hacking, but Brexit Britain’s raucous tabloid newspapers wield inordinate power over the country’s politicians and are key to support for leaving the EU. (NYT)

Lessons from an ancient Roman bar tab The chance discovery of hundreds of Roman tablets on a construction site across the river from the FT’s London headquarters has yielded a wealth of information about the British capital’s past as a centre of business and commerce. The hoard includes bar bills, IOUs and invoices from the two decades following Rome’s 43AD conquest of Britain. (New Yorker)

Where oil rigs go to die For the first time since the earliest manufacture of seaborne drilling platforms 50 or 60 years ago, decisions are being made about how and where to get rid of them in number. The story of how one drilling platform crashed on to a remote Scottish island shows how risky the business of disposal can be. (Guardian)

Video of the day

Thug nation: Venezuela’s broken revolution Once touted as a beacon of revolutionary socialism, today there are fears that Venezuela is on the cusp of becoming a failed state. In this short documentary, Andres Schipani and Ben Marino report on the spiralling violence and economic, social and political crisis facing the oil-rich nation. (FT) 

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