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Bank of Israel holds interest rates, eyes turn to possible end of governor’s tenure

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Bank of Israel holds interest rates, eyes turn to possible end of governor's tenure
© Reuters. FILE PHOTO: Bank of Israel Governor Amir Yaron attends a cabinet meeting at the Prime Minister’s office in Jerusalem, February 23, 2023. REUTERS/Ronen Zvulun/Pool/File Photo

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By Steven Scheer and Ari Rabinovitch

JERUSALEM (Reuters) -The Bank of Israel left interest rates unchanged on Monday citing signs inflation is easing, but its decision was overshadowed by a report – denied by the central bank – that its governor was set to announce he would not seek a second term.

As expected, policymakers kept the benchmark rate at 4.75% for the second meeting in a row, its highest level since late 2006. It had paused at its July 10 meeting after raising short term borrowing costs at 10 consecutive meetings from April 2022, an aggressive tightening cycle that took the main rate from 0.1%.

The central bank had earlier denied a report by one of Israel’s two main radio channels that Governor Amir Yaron would say on Monday that he will not seek to stay on when his current term expires at the end of the year.

“The report this morning by Army Radio that the governor will deliver his decision today regarding the extension of his term is incorrect,” the Bank of Israel said. “As he has said until now, the governor will deliver his decision on extending his term around the (Jewish) holiday season.”

The high holiday season this year is Sept. 16 to Oct. 7.

The issue of whether Yaron will seek or be reappointed for a second term has loomed over financial markets for months.

Them Israeli-born U.S. finance professor, who was nominated by Prime Minister Benjamin Netanyahu in 2018, has been critical of the economic impact of a plan by Netanyahu’s government to overhaul Israel’s judicial system.

He has also clashed with lawmakers over sharp interest rate increases that have boosted bank profits while hurting mortgage holders.

After keeping rates steady – a break with the U.S. Federal Reserve which raised rates in July – the central bank said economic activity remains strong, with a tight labour market. Inflation is broad and high but appears to be slowing.

Many economists believe the hiking cycle is over and that the Bank of Israel will start rate cuts in 2024. The central bank said on Monday, however, that it still saw a real possibility of having to raise in the future “if the inflation environment does not continue to moderate as expected”.

Israel’s annual inflation rate dropped to 3.3% in July from 4.2% in June, its lowest rate since March 2022 but above a government target range of 1-3%.

“The tone of the statement was overall neutral but with one hawkish element: the ‘real possibility’ of further rate hikes reference was not yet removed,” said Citi economist Michel Nies, who sees a rate cut in early 2024.

Part of the path of inflation depends on the shekel, which is at a 3-1/2 year low versus the dollar. The exchange rate, which the central bank has said has a pass through of up to 20% on inflation, has weakened more than 8% so far in 2023.

It was down 0.5% to a rate of 3.815 per dollar in late afternoon trading.

“The shekel’s depreciation in recent months is contributing to the increase in the inflation rate and the path of the exchange rate in the coming months will have an impact on the dynamics of inflation,” the central bank said.

Israel’s economy meanwhile grew at a faster than expected 3.0% annualised rate in the second quarter from the prior three months.

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New Jersey fines Walmart over in-store pricing practices

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By Jonathan Stempel

(Reuters) – Walmart (NYSE:), the world’s largest retailer, agreed to pay $1.64 million to settle regulatory charges that its 64 New Jersey stores employed illegal pricing practices that made it hard for consumers to comparison-shop.

Matthew Platkin, New Jersey’s attorney general, said on Tuesday that the settlement includes a $1.62 million civil fine, and is the largest obtained by the Office of Weights and Measures of the state Division of Consumer Affairs.

New Jersey is one of nine U.S. states that requires grocery retailers to display prices using standard, easy-to-understand measurements such as pounds and quarts.

Platkin said Walmart store inspections in the first quarter of 2023 found more than 2,000 incorrect measurements, sometimes in the same category: coffee, for example, could be priced by the pound, the can or the number of pods.

“As the price of grocery items continues to rise,” Platkin said, “this settlement sends a clear message that New Jersey will not allow retailers to engage in unlawful pricing practices that deny shoppers the ability to easily compare prices to figure out which product is a better buy.”

Walmart did not immediately respond to requests for comment.

The Bentonville, Arkansas-based retailer did not admit wrongdoing, but in a consent order said it “takes seriously its obligations to provide accurate unit prices to enable customers to comparison shop.”

Walmart also agreed to improve employee training and randomly screen items to ensure it displays proper measurements.

© Reuters. FILE PHOTO: View of Walmart's newly remodeled Supercenter, in Teterboro, New Jersey, U.S., June 7, 2023. REUTERS/Siddharth Cavale/File Photo

In November, discount retailer Dollar General (NYSE:) agreed to pay $1.2 million, including a $1.18 million fine, to settle New Jersey charges that it scanned higher prices at checkout than it posted on merchandise displays thousands of times.

That settlement had been the largest obtained by the state’s weights and measures office.

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Meta must face Australian billionaire Forrest’s US lawsuit over scam Facebook crypto ads

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By Jonathan Stempel

(Reuters) – A U.S. judge rejected Meta Platforms (NASDAQ:)’ bid to dismiss a lawsuit by billionaire Australian mining magnate Andrew Forrest over scam Facebook advertisements that show him promoting fake cryptocurrency and other fraudulent investments.

In a decision on Monday, U.S. District Judge Casey Pitts in San Jose, California said Australia’s second-richest person can try to prove that Meta’s negligence in allowing the ads breached its duty to operate in a commercially reasonable manner.

Forrest can also try to prove that his name and likeness was misappropriated by Meta, and not just by fraudsters behind the bogus ads.

“Dr. Forrest claims that Meta profited more from ads that included his likeness than it would have if the ads had not,” Pitts wrote. “This is enough to adequately plead that the alleged misappropriation was to Meta’s advantage.”

Lawyers for Meta declined to comment on Tuesday.

The Palo Alto, California-based company had argued that Section 230 of the federal Communications Decency Act immunized it from liability as a publisher of third-party content.

But the judge said Forrest’s claims “present a factual dispute regarding whether Meta’s ad systems were neutral tools that anyone could use (or misuse) or whether the tools themselves contributed to the content of the ads.”

Forrest said more than 1,000 of the ads appeared on Facebook in Australia between April and November 2023, leading to millions of dollars in losses for victims.

The 62-year-old is executive chairman of iron ore producer Fortescue Metals Group (OTC:), and with his family is worth US$16.5 billion (AUD$24.8 billion), according to Forbes magazine.

In a statement, Forrest said Pitts’ decision was the first where a social media company was unable to invoke Section 230 immunity in a U.S. civil case over its advertising business.

“This is a crucial strategic victory in the battle to hold Facebook accountable,” he said.

Forrest is seeking compensatory and punitive damages.

In April, Australian prosecutors declined to pursue criminal charges that he brought against Meta in that country over scam cryptocurrency ads.

© Reuters. FILE PHOTO: Fortescue's founder and executive chairman Andrew Forrest speaks during an interview with Reuters, in Beijing, China March 23, 2024. REUTERS/Tingshu Wang/File Photo

Forrest had sued under Australian laws that let individuals criminally prosecute foreign companies upon receiving prosecutors’ consent.

The case is Forrest v Facebook Inc et al, U.S. District Court, Northern District of California, No. 22-03699.

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Justin Timberlake arrested for drunk driving in the Hamptons

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(Reuters) -Pop singer Justin Timberlake was arrested and charged with driving while intoxicated in a neighborhood in the Hamptons on New York’s Long Island, authorities said on Tuesday.

Timberlake was arrested in the town of Sag Harbor on Tuesday morning, according to a statement from the local district attorney’s office.

The 43-year-old was arraigned in Sag Harbor Village Justice Court and released, the statement said. His next court date will be a virtual appearance on July 26, the statement said.

Representatives for Timberlake did not immediately reply to an email seeking comment.

Timberlake was taken into custody after he left a dinner at the American Hotel, People magazine reported.

© Reuters. Justin Timberlake performs during the iHeartRadio Music Awards at Dolby Theatre in Los Angeles, California, U.S., April 1, 2024. REUTERS/Mario Anzuoni/File Photo

Timberlake rose to fame as a member of 1990s boy band ‘N Sync before starting a solo career. His hits include “Can’t Stop the Feeling!,” “Suit & Tie” and “SexyBack.”

He has two concerts scheduled in Chicago this weekend and two shows in New York City next week.

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