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After three weeks of urgent negotiations with the interim government in Kiev and in an atmosphere of great power competition, the International Monetary Fund announced on Thursday an agreement to provide Ukraine up to $18 billion in loans over two years to prevent the country’s default. The agreement, announced in Kiev, the Ukrainian capital, will hinge on the country taking steps to let the value of its currency float downward, to cut corruption and red tape, and, crucially, to reduce huge state subsidies for the consumption of natural gas. The energy subsidies alone make up some 8 percent of Ukraine’s gross domestic product.
The U.S. economy grew at a 2.6 percent annual rate in the October-December quarter, slightly more than previously estimated, as consumer spending rose at the fastest pace in three years. The Commerce Department says the fourth-quarter growth rate was a bit stronger than its 2.4 percent estimate made last month. The revision reflected stronger consumer spending, which rose at an annual rate of 3.3 percent — its best quarterly pace since 2010. Even with the upward revision, growth in the overall economy slowed from a 4.1 percent pace in the July-September quarter.
Utilities that rely on nuclear fleets and speculative coal plants are most vulnerable to the solar-powered “death spiral” roiling the electric industry. Utilities like Exelon and Dynegy will suffer most as centralized power generation loses value to competitive solar installed by customers at home, according to Morningstar’s “Utilities Observer” report for February. Heavily regulated utilities like Pinnacle West, parent of Arizona Public Service, are also vulnerable in places where regulators have only begun to address the competitive threat from distributed generation.
A week after Janet Yellen unnerved financial markets in her first press conference as Fed chair, markets have settled down. The Dow , which fell 114 points after she suggested the Fed could raise interest rates "something on the order of six months” after ending its asset purchases, has made up for close to half its losses that day. And the 10-Year Treasury yield has dropped slightly, to 2.7% from 2.78%, raising Treasury prices, which move inversely to yields.