Federal Reserve officials agreed at their meeting last month they would have to raise interest rates faster and to levels high enough to slow economic growth because of the worsening inflation picture. Officials voted to raise their benchmark rate by 0.75 percentage point in June, a bigger increase than their half-point move in May and the largest hike since 1994. Officials expected they would raise rates by either a half percentage point or 0.75 point at their gathering later this month, according to minutes from the Fed's June 14-15 meeting, released Wednesday. Officials last month agreed rates needed to rise to a so-called restrictive stance, high enough to slow growth, and that this would position them to lift rates to still-higher levels if inflation didn't abate. "They recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist," the minutes said. The overall tone of the minutes suggests "the Fed upgraded the inflation problem to a five-alarm fire," said Omair Sharif, an economist and the head of the advisory firm Inflation Insights LLC. As a result, the minutes also revealed officials' growing acceptance that fighting inflation might lead to higher risks of a recession, but they saw that as "a cost they're willing to pay," said Michael Feroli, chief U.S. economist at JPMorgan Chase.

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The stock exchange in Zurich recovered significantly on Wednesday. The SMI gained 1.3 per cent to 10,841 points. Among the 20 SMI stocks, there were 17 price gainers and 3 price losers. 35.25 (Tuesday: 39.49) million shares were traded. The only SMI loser apart from Swisscom (-1.0%), which is considered defensive, and Swiss Re (-0.3%) was Holcim, which, however, only fell minimally. The building materials group had reported an acquisition. Holcim is taking over Cantillana in Belgium, a company specialising in facades and insulation materials. A price was not mentioned. Bank stocks lagged a bit, with UBS gaining 0.3 percent and Credit Suisse minimally higher. Jefferies lowered price targets on both stocks in view of the upcoming second-quarter figures. In addition, RBC also lowered the price targets of some banking stocks, including those of UBS and Credit Suisse. Fees in investment banking were weak across all products and countries in the past quarter and the weaker capital market environment is likely to have affected wealth management results, it said.

The European stock markets erased much of their sharp decline on Wednesday, benefiting from cheap buying as investors awaited the minutes of the latest Federal Reserve (Fed) monetary policy meeting, scheduled for 8pm (Paris time). The Stoxx Europe 600 index closed up 1.7% at 407.3 points. In Paris, the CAC 40 and the SBF 120 both gained 2%. In Frankfurt, the DAX 40 gained 1.6%, while the FTSE 100 in London advanced 1.2%. The French government said it would nationalize power company EDF SA, saying the step is needed to manage the transition away from fossil fuels at a time of energy crisis and the war in Ukraine. Prime Minister Élisabeth Borne, addressing the National Assembly for the first time since President Emmanuel Macron appointed her to the role, said Wednesday that the government intended to hold 100% of EDF’s shares, compared with the 84% it owns currently. Amazon.com Inc. agreed to add Grubhub to its suite of Prime services in the U.S., in a deal that also gives the e-commerce giant the option to acquire a small stake, the parent of the food-ordering company said. Grubhub's parent, Netherlands-based Just Eat Takeaway.com NV, said Amazon has an initial option to take a 2% stake in U.S.-based Grubhub, and U.S. Prime members can have their delivery fees waived from select restaurants. Amazon could bump up its total stake to 15% of Grubhub based on performance terms focused on adding new customers, Just Eat said.

U.S. stocks rose after minutes from the Federal Reserve indicated how the central bank's efforts to tame inflation through interest-rate increases may progress. The S&P 500 gained 0.4%, or 13.69 points, to 3845.08 on Wednesday. The Dow Jones Industrial Average picked up 0.2%, or 69.86 points, to 31037.68. The Nasdaq Composite Index also added 0.3%, or 39.61 points, to 11361.85. Fed officials concluded at their meeting last month that they needed to pick up the pace of interest-rate increases because of an increasingly worrying inflation outlook. Some investors believe that signals the Fed will stick with previously telegraphed plans to keep raising rates -- and they fear that will tip the economy into a recession. American Airlines Group Inc. will pay pilots triple their normal wages to work flights that were mistakenly dropped because of a computer glitch, the union that represents American’s pilots said. The Allied Pilots Association union said Wednesday that its board ratified an agreement with the airline that includes the extra pay for trips affected by an issue with an airline scheduling platform over the weekend. The system had mistakenly allowed pilots to drop thousands of future trips early Saturday morning, leaving as many as 12,075 July flights without a captain or first officer, or both, the union had said. GameStop Corp. declared a 4-for-1 stock split Wednesday, sending shares of the videogame retailer higher in after-hours trading.

The stock markets in East Asia and Australia are mostly up on Thursday. In Tokyo, the Nikkei 225 index is showing 1.3 per cent higher. After the recent drop in oil prices, fears of rising fuel costs have eased somewhat despite the uncertain economic outlook, they say. Shares of retailers and food manufacturers are sought after in Tokyo. The share price of supermarket chain Aeon jumps almost 10 per cent after the company more than tripled its profit in the first fiscal quarter. The Kospi (+1.9%) in Seoul is also up sharply.

A well-known recession indicator flashed in the bond market on Wednesday as the U.S. yield curve inverted. That happens when shorter-dated yields such as for the two-year bond are higher than for longer-dated debt such as the 10-year. The two-year Treasury yield rose to 2.961% Wednesday, while the 10-year climbed to 2.911%. Yields rise as bond prices fall.

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