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What to Expect From Powell’s First Fed Meeting: DealBook Briefing

Credit...Erin Schaff for The New York Times

Good Tuesday. Here’s what we’re watching:

• What to expect from Powell’s first Fed meeting.

• Trump, tariffs and the G20.

• Pressure continues to mount on Facebook.

• Facebook had a terrible day.

• So did Uber.

• Leaders at the G-20 summit are still trying to avert a trade war.

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Federal Reserve policymakers conclude their March rate-setting meeting on Wednesday. It is the first such session with Jerome H. Powell as the central bank’s new chairman.

With the job market tight and inflation picking up only gradually, the Fed is widely expected to raise rates by a quarter of a percentage point in what is likely to be the first of three rate increases this year.

After the meeting, Mr. Powell will hold his first news conference in his new role, where observers will be listening closely for any suggestion that the Fed might depart from its anticipated path, and, if so, why.

Here’s a look at what economists and money managers are expecting:

Jan Hatzius, Goldman Sachs: “Public remarks by Fed officials suggest a broad shift in the committee’s outlook towards a potentially faster pace of tightening, and we expect the median dot to show four hikes in 2018, up from three at the December meeting. Additional hawkish changes—a move to three hikes in 2019 or an increase in the longer-run funds rate estimates—are also possible but not our base case.”

Michelle Meyer, Bank of America Merrill Lynch: Ms. Meyer says she expects the Fed raise rates this meeting, but “unlike December where there were two dissents, we expect this decision to be unanimous given the shift in voters this year in the hawkish direction. The focus will be on the evolution of the dots: we look for the median to hold at three hikes for this year, but to shift up from two to three hikes in 2019. We also think the long-run dot will edge up to 2.875%. This would show a Fed that is more confident about its ability to deliver rate hikes, but without an urgency to front-load the tightening.”

Ian Shepherdson, Pantheon Macroeconomics: Mr. Powell “is bound to be faced with questions along the lines of “Why are you not raising the dots in the wake of the substantial, unfunded fiscal easing?”. His reply, we suspect, will be something like: “It’s not our job to tell Congress how to conduct fiscal policy, and it’s too soon to assess the impact of the tax cuts and spending increases. Much of the easing of policy could be saved rather than spent, and there are encouraging signs that productivity is picking up, so any upturn in wage growth as a result of fiscal loosening need not necessarily generate higher inflation. In any event, with inflation well below target, gradual normalization is the best way to balance the risks of both future inflation and the premature ending of the cycle via excessive tightening.”

Stephen Stanley, Amherst Pierpont: “The bulk of the interest in this week’s F.O.M.C. meeting will come from the updated dot and economic projections as well as any meaningful tweaks to the key elements of the F.O.M.C. statement. Any changes to the dots and statement language are likely to be in the hawkish direction, though I would expect that the new information will be more evolutionary than a radically different.”

Steve Rick, CUNA Mutual Group: There is “a very strong case for not only raising rates this week, but potentially doing so in a more aggressive manner than previously forecasted at the end of 2017. I think we could see projections get updated to call for four hikes instead of three, with plans for lifting rates more in coming years as well.”

Chris Zaccarelli, Independent Advisor Alliance: “Whether we have 3 or 4 rate hikes this year shouldn’t be that big of a difference to the economy, but it WILL have a big impact on market prices and market psychology. Every statement – whether spoken or written – will be highly scrutinized looking for clues as to whether the Fed Funds rate will be 1% higher (or only 75 bps) a year from now.”

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Steven Mnuchin last month in Washington. As the United States prepares to impose tariffs on steel and aluminum imports, Mr. Mnuchin, the Treasury secretary, has been peppered with requests from foreign counterparts about securing exemptions.Credit...Eric Thayer for The New York Times

President Trump’s plan to hit countries around the world with stiff tariffs on imports of steel and aluminum has dominated a gathering of world economic leaders amid fears that the United States is on the cusp of starting an international trade war.

On Monday, Steven Mnuchin, the United States Treasury secretary, was peppered with requests from several countries for exemptions from the tariffs, which are being imposed in the name of national security.

In an interview on the sidelines of the meeting, Mr. Mnuchin suggested exemptions to the tariffs could be announced “relatively quickly.”

Mr. Mnuchin said:

“I think we’ve been very transparent in describing our positions; I don’t think anything should be a surprise. This is all about free and fair and reciprocal trade.”

Mr. Trump has already said he would exempt Canada and Mexico from the tariffs upon a successful renegotiation of the North American Free Trade Agreement, and he has indicated that other countries could also get exemptions. But the United States has yet to detail exactly what would qualify a country for an exemption, other than a vague reference to protecting the United States’ national security and reducing bilateral trade deficits.

Countries including France, Argentina and South Korea pressed Mr. Mnuchin on Monday about being freed from the metals tariffs, arguing that, as United States allies, they should not be penalized on national security grounds. Mr. Mnuchin said that decisions were being made on a case-by-case basis and that there was not a one-size-fits-all approach to deciding which countries would be exempt. The tariffs go into effect on Friday.

— Alan Rappeport

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Facebook shares dropped nearly 7 percent Monday, and its chief information security officer, Alex Stamos, plans to leave over a dispute over transparency.Credit...Beck Diefenbach/Reuters

The Federal Trade Commission has opened an investigation into whether Facebook violated an agreement with the agency on data privacy, reports Cecilia Kang of the NYT.

The probe comes after reports that information on 50 million users was improperly obtained by the political consulting firm Cambridge Analytica, according to a person with knowledge of the inquiry.

The investigation, started in recent days, adds to the mounting pressureagainst Facebook in the United States and in the United Kingdom about its handling of the data. Cambridge Analytica used the information to help President Trump’s presidential campaign profile voters during the 2016 election.

The F.T.C. and Facebook reached a settlement in 2011 after the agency accused the company of deceiving customers “by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public,” according to a statement at the time.

Facebook could face fines of thousands of dollars a day per violation if the commission finds Facebook violated terms of the settlement, Bloomberg reports.

Shares of Facebook are down 2.5 percent in early trading.

Exhibit A: Its stock closed down nearly 7 percent, its worst performance in four years.

Exhibit B: Its chief security officer, Alex Stamos, plans to leave after disagreements about how much the company should share about misuse of its platform. (He favored disclosure.)

The overall problem: Reports about how the data firm Cambridge Analytica improperly harvested information from 50 million Facebook users are highlighting just how much governments itch to regulate the tech giant.

And Facebook’s previous laissez-faire attitude toward data collection by apps has gone from feature to bug, Kevin Roose writes in his latest column.

Peter Eavis’s take: Mark Zuckerberg’s unusually powerful position at the company may have played a role:

Through his holding of special voting shares, Mr. Zuckerberg has an especially powerful position at Facebook that might shield him from the normal forces of accountability. C.E.O.s without that protection might do more to tackle a big problem because it more directly threatens their job security.

More on Cambridge Analytica: An undercover investigation by Channel 4 News of Britain captured the firm’s C.E.O., Alexander Nix, suggesting the entrapment of a potential client’s political opponents with women and bribes. Britain’s information commissioner is now seeking a warrant to examine the firm’s data. And Facebook has hired a forensics firm to audit it.

Critics’ corner

Jeff Goldfarb of Breakingviews writes, “Ten years ago, Zuckerberg hired Sheryl Sandberg to help turn his start-up into a serious corporation. It may be time for more adult supervision.”

The academic Zeynep Tufekci writes, “This wasn’t informed consent. This was the exploitation of user data and user trust.”

Cass Sunstein of Bloomberg View writes, “It would be a mistake to take the fiasco as a reason to keep treasure troves of information out of the hands of people who can provide immensely valuable services with it.”

Dan Gallagher of Heard on the Street writes, “Facebook’s immense scale also has made it virtually impossible for alternatives to catch on. That, in turn, makes abuse of the platform more urgent for lawmakers.”

Public service announcements: How to protect yourself on Facebook. Oxford Analytica, an advisory group, wants you to know it’s not like that. And a little joke for those steeped in the British university system:

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A self-driving Uber car at the scene of a fatal accident in Tempe, Ariz.Credit...ABC-15, via Associated Press

Uber has suspended its autonomous vehicle testing in four cities after a car in self-driving mode struck and killed a woman in Tempe, Ariz. Until now, regulators had been increasingly open to testing: Just this month, California said it would start letting self-driving cars operate without anyone behind the wheel. Arizona already had.

The head of Carnegie Mellon’s self-driving car lab has urged a halt to testing, telling Axios, “The technology is not there yet.”

The virtual currencies corner: The White House banned Venezuela’s virtual currency in a new round of sanctions. Morgan Stanley analysts said Bitcoin looked like the dot-com boom and bust, only way faster. How Zug, Switzerland, became a hotbed for digital money. And the Hong Kong and Australia stock exchanges are working to share blockchain information.

Shares of Oracle are down 9.3 percent this morning

The reason? The software giant reported that its sales missed Wall Street expectations and its guidance disappointed after the close Monday. The lackluster results led analysts to downgrade the stock.

Perhaps more concerning for investors was the slowdown in Oracle’s cloud-computing business last quarter.

Here’s a look at Oracle’s slowing cloud computer growth via Therese Poletti of MarketWatch:

• Fiscal fourth-quarter guidance: up 19 percent to 23 percent.

• Fiscal third quarter: up 32 percent from a year ago.

• Fiscal Second quarter: up 44 percent.

• Fiscal first quarter: up 51 percent

• Fiscal fourth quarter: up 58 percent

The tech flyaround

• Larry Ellison and David Agus, who was Steve Jobs’s doctor, have unveiled a start-up, Sensei, that promises more nutritious food through hydroponic farming. (DealBook)

• Europe’s plans to change how tech companies are taxed could exacerbate tensions with the U.S. (NYT)

• Amazon and Snapchat are chipping away at Google and Facebook’s digital ad duopoly. (The big two are still expected to control well over half the market in 2018.)

• Tech giants ask a lot of Wikipedia — see YouTube’s plans to use its text alongside controversial content — without always giving much back. (NYT)

• Amazon has reportedly considered buying Toys “R” Us stores, for the real estate. (Bloomberg)

• The Israeli historian Yuval Noah Harari worries that tech will transform humanity for the worse within decades. (NYT)

Expect the White House to impose tariffs on some $60 billion worth of Chinese goods this week over what it says are unfair trade practices. But leaders at the G-20 summit meeting continued to push for free trade. More from Andrea Thomas and Paul Kiernan of the WSJ:

“We must ensure that protectionism doesn’t become the dominant force in the world but that we continue to promote open markets. The prosperity of all of us depends on this,” German Finance Minister Olaf Scholz told reporters Monday.

And some critics say that Mr. Trump is missing the bigger picture, including the U.S.’s trade surplus in services.

The budget corner: Lawmakers are still trying to finalize a $1.3 trillion spending bill ahead of Friday’s deadline. T hey disagree on health care and immigration.

• Gary Cohn as C.I.A. director? It was apparently considered. And the White House named Chris Liddell, the former Microsoft and G.M. executive, as deputy chief of staff for policy coordination.

• The White House added Joseph diGenova, a lawyer who argued the F.B.I. was out to get President Trump, to its legal team. Mr. Trump has also mused about whether to fire another lawyer, Ty Cobb, and a third, John Dowd, has considered resigning.

• Exploring why some Democrats voted for a Dodd-Frank rollback. (WaPo)

• The dangers facing the continued boom. (NYT)

• The Kochs urged Mr. Trump to accept the Democrats’ compromise on immigration. (Politico)

• The race to find loopholes in the new tax law. (WaPo)

• How that law may end up taxing sports teams’ player trades. (NYT)

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Credit...Katie Paul/Reuters

Bloomberg interviewed the Saudi royal shortly after his release from the Ritz-Carlton, where Saudi Arabia detained hundreds of businessmen in the name of an anti-corruption campaign.

Mr. bin Talal wouldn’t comment on the deal for his release, but said that he has “forgiven and forgotten” the process, and continues to talk with Crown Prince Mohammed bin Salman, the cousin who jailed him. More from the interview:

You have to wonder how comfortable CEOs will be investing in Saudi Arabia after seeing the Ritz-Carlton method of dealing with disputes.

They have to decide that. But I can speak on my own behalf, and I can tell you it’s business as usual: We’re going to invest in Saudi Arabia.

Elsewhere in Saudi Arabia: Behind the bromance between Jared Kushner and the crown prince. Aramco looks increasingly likely to postpone an international listing, focusing on an I.P.O. on its home stock market, the WSJ says. And why the kingdom wants to enrich its own uranium.

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Credit...Ryan Lowry

Michael Ferro, who is also the media company’s biggest shareholder, stepped down hours before Fortune published an article in which two women accused him of inappropriate advances. Neither worked for him, but both said they had been interacting with him professionally. Mr. Ferro declined to comment on the allegations.

A recap of his tenure: Tribune became “Tronc.” Management opposed a newsroom unionization effort. The company sold its crown jewel, The L.A. Times, after controversies led to the replacement of senior executives.

Weinstein Company news: The troubled film studio finally filed for bankruptcy protection. And New York state is looking into how the Manhattan district attorney handled 2015 assault allegations against Harvey Weinstein.

Elsewhere in misconduct: A loose coalition of Silicon Valley companies like Airbnb, Dropbox and Stitch Fix are pressuring venture capital firms to diversify their ranks. Female employees at Nike circulated a survey about improper conduct by male colleagues. And a former employee of the celebrity chef Mike Isabella sued him for sexual harassment.

• The Long-Term Stock Exchange and IEX took a step to spread new standards for I.P.O.s. (DealBook)

• Boeing dropped its objection to Rockwell Collins’s sale to United Technologies. (WSJ)

• Bloom Energy has reportedly restarted its I.P.O. planning. (WSJ)

• Cheddar, the CNBC for the Snapchat generation, has raised $22 million from Raine Ventures, Liberty Global and the C.E.O. of the N.Y.S.E.’s parent company. (WSJ)

• Greenhill & Company has hired Neil Augustine from Rothschild as vice chairman and co-head of its of North American financing advisory & restructuring. (Greenhill)

• Germany has named Jörg Kukies, the co-head of Goldman Sachs’s operations in Germany and Austria, as its deputy finance minister. (FT)

Paul Fishman, the former U.S. attorney for New Jersey, has joined the law firm Arnold & Porter as a partner and the head of its crisis management practice. (Arnold & Porter)

• The S.E.C.’s chairman pressed exchanges to end a standoff that has delayed a massive database of stock and options trading. (WSJ)

• David Calhoun, a senior managing director at Blackstone, will give $20 million to Virginia Tech. (Bloomberg)

• Larry Fink finally threw his lot in with the machines. Will BlackRock’s algorithms beat the fund managers? (FT)

• The jewelry chain Claire’s has filed for Chapter 11 bankruptcy protection. (NYT)

• A case being tried before a National Labor Relations Board court could upend McDonald’s franchise business model by letting unions deal directly with the parent company — if it gets to a verdict. (NYT)

• A court fight in London between two Russian billionaires is testing the Kremlin’s patience. (Bloomberg)

• Federal prosecutors are investigating the fast-growing business of cash advances to plaintiffs in personal injury and other lawsuits, according to five lawyers. (NYT)

• British and E.U. negotiators agreed on the terms of a 21-month transition period to keep Britain inside Europe’s economic structures. It depends on a broader agreement on Britain’s withdrawal, which is by no means certain. (NYT)

• White boys who grow up rich are likely to remain that way. That’s not the case for black boys. (NYT)

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

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