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Hope Fades for Fed Rate Cuts
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Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, April 26. In today's briefing, the rate cuts that investors hoped for from the Federal Reserve this year seem to be less likely. And operators of Ted Baker clothing stores in the U.S. and Canada filed for bankruptcy, blaming its owner.
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Fed Chair Jerome Powell has dialed back expectations on interest-rate cuts. PHOTO: SAMUEL CORUM/BLOOMBERG NEWS
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The dream of Fed rate cuts is slipping away. Thursday’s report on economic activity delivered the latest in a series of rude awakenings to investors and Federal Reserve policymakers who have held their breath in anticipation that lower inflation would allow interest-rate cuts to begin in earnest this summer.
Individual readings on growth and prices so far this year haven’t been enough on their own to dramatically change the outlook for the Fed. But the cumulative effect of those serial disappointments has been notable.
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In particular, inflation data has consistently been firmer than expected, with recent months getting revised somewhat higher in subsequent reports. This trend has led investors and Fed officials to rethink whether rate cuts will be appropriate this year.
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Jerome Powell’s term as Fed chair ends in 2026. PHOTO: MORIAH RATNER/BLOOMBERG NEWS
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Trump allies challenge Fed's independence. Supporters of the presumptive GOP nominee have in recent months discussed a range of proposals, from incremental changes to the Fed's independence to a long-shot assertion that the president himself should play a role in setting interest rates.
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Authentic Brands’ partners stopped making payments to Ted Baker’s suppliers after the brand’s U.K. business filed its own insolvency proceedings in March, according to a court filing.
PHOTO: PETER NICHOLLS/GETTY IMAGES
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Ted Baker’s North American arm follows U.K. business into bankruptcy. The operators of Ted Baker clothing stores in Canada and the U.S. filed for insolvency proceedings on Wednesday, saying the operating partners of Authentic Brands Group failed to pay the brand’s suppliers.
Operating partners of Authentic Brands failed to make payments to Ted Baker’s suppliers, creating delays in merchandise shipments for the North American businesses’ important winter season and resulting in cancellation of orders by some of the businesses’ wholesale partners, according to the company's court papers.
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Joann approved for prepackaged reorganization. Arts and crafts retailer Joann on Thursday said it expects to emerge from bankruptcy in the coming days after a court approved its reorganization plan.
The company said that the U.S. Bankruptcy Court for the District of Delaware confirmed its Prepackaged Joint Plan of Reorganization. The Hudson, Ohio-based, seller of fabrics, sewing supplies and other products filed for bankruptcy in March.
During the court-supervised process, Joann's stores remained open and the company was able to preserve the jobs of more than 18,000 of its team members, it said. Joann will emerge from bankruptcy as a private company. —Stephen Nakrosis
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