this is nightly business report with tyler mathisen and sue herrera. >> the committee wants to see some further progress before feeling that it will all be appropriate to raise rates. >> not just yet. federal resee c janet yellen says the central bank isn't ready to raise rates. but when it does the focus should be on what happens next. >> dealt a blow. a california ruling could force big changes to uber. potent the $40 billion company's business model. s with what you know. if that is a secret to success, then why do so in companies expand beyond their core.

all that and more for wednesday h. >> we begins with the the appears to be on track to raise interest ras some time this year. janet yellen provided feint clues. didn't say when or by how much. but the central bank did upgrade its view of the economy. everything from housing to consumer spending. stocks rose e at the news conference this afternoon. the dow jones average rose 31 points. the nasdaq 9 points higher and the s&p 500 rose 4 points. yeeltds or interest rates meantime turned lower with the 10-year noth at 2.3%. more on what ms. yellen said about the first potential rate hike in nearly a decade. >> federal reserve monetary po makers see an economy that has recovered since the beginning of the year but wants to see stronger gains in the job

markets and higher inflation before raising interest rates for the first time in nine years. the com continues to judge that the first increase in the federal funds rate will be appropriate when it has seen further improvement in the labor market is is reasonably confident that inflation will move back to its 2% objective term. at our meeting that ended today, the committe concluded that these conditions have not yet been achieved. >> while the fed gave no timetable for a rate hike all but two of 17 policy makers think the central bank will raise key short-term rates sometime this year. with the first hike coming most likely in september. >> on the one hand waiting too long to begin normalization can risk significantly overshooting our inflation objective, given the lags in the operation of

monetary policy. and on the other hand beginning too early could risk a derailing recovery that we've worked for a very long time to try to achieve. and so we're trying to assess those risks. >> beyond job growth the fed still sees inflation as too low. which in the long run holds back economic growth. business investm is slowed due to declining energy prices. american exp expensive because of the rising value of the dollar all impacting the timing of that rate hike. in hopes of preparing investors and heading mar volatility the fed chairman emphasized whenever those rate hikes begin they will happen graduay depending on future academic data. for nightly business report i'm hampton pearson in washington. >> and joining us to talk more about today's fed action, or nod what it may mean for

the u.s. economy is allen blinder. former vice chairman of board of governors at the fed and now at princeton. professor, au with us. i gather that one of the things that you saw in the data today was that the members of the committee are saying that the economy is growing, or their forecast for it is slower and lower than previously thought. does that do anything to your view as to when the fed may move to raise rates? >> yeah. i think fed has been saying consistently and where he should believe them because it is true. is their decisions are data dpu saw among other things in the forecast or the statement was a weaker outlook for the year. and not just because of the first quarter. they don't give you quarter by quarter forecast. but it looks like they are pretty mediocre on the second half of this year.

and soy pushes the da pushes at all. >> given what you heard from the fed chief, when they do eventually move on interest rates, what will subsequent rate hikes look like? how extreme will they be? gradual? month by month? what is your read. >> they won't be month by month. but i've been thinking for some time and this statement, the accompanyi dots diagram very speaking 100 basis points a year. if they are going in 25 basis point increments that means four rate hikes a year unless something happens to derail that plan. do you thk that the fed broadly, and chair yellen more narrowly are moved at all by the cautions expressed by the imf and the world bank? >> i don't. i think the cautions they are

getting are coming from the data not from the world bank and not from the imf. >> but if indeed the fed do on rate what are the implications for the global economy? the imf warning or perhaps, you the shot across the bow there was implying that the global economy may not be strong enough to withstand an interest rate hike here at home. >> yeah one of the ironies is that fed rate hike when they come often have more do at home. which is kind of an unfortunate circumstance gets its instructions from the u.s. congress. and nothing in those instructions says anything about taking account the corollary effects on other countries. so the fed is focused on the united staeconomy, period full stop. and there are times and this may be one of them where it would be

better for the whole world econ wouldn't raise interest rates so early or even so quickly. but that is not going to move the fed. the fed is focused on the u.s. >> all right. professoblinder, always great to see you. thank you fo welcome. and now an issue the markets are watching closely. greece. the deadline to reach agreement with creditors is fast approachin and today greece's finance minister said a deal was unlikely to be reached as the euro group meeting scheduled for tomorrow. meanwhile in athens protesters to the streets for the government and against changers. fed ex reported disappoint fourt quarter results today, coming in below wall street estimates. and disappointing current

qu guidance. despite the muted growth outlook, the company does plan to increase capital spending by 7% to keep up with rising demand for online shopping. shares dropped today about 3%. >> tie a record fine for at&t. 100 million dollars. the federal communications commission said the tele com company misled customers about unlimited data plans. they slowed speeds for customers with those plans and failed to notify them of that practice violating an fcc rule. the of the trans pacic partn remains tonight in limbo. john harwood speak to house minority lea nance pelosi against her argument -- >> -- rally against his trade

package but said it wasn't a betrayal of the her president. e says pelosi knives obama. >> that's not fair. i've not been a big supporter of fasttrack. i don't think it's necessary. it's a convenience for the administrati. advantage for the business community. but it is a hardship for workers because it just isn't fair. this has reached like a tipping point. but you don't trust him in his assertion that this deal is good for middle class economics. s this. i certainly trust the presidek all of our members trust the president. we disagree with the president on that because this tpp has not even been completed in terms of it. and people can reserve the right to take a look at that when we see that and make an -- >> what we're going through now wouldn't allow it to be completed. completed without it. i have great confidence in our

country to negotiate. are you concerned that blocking the president on this front weakens him and could weaken u.s. leadership in the world? >> no. what you saw on the floor on friday was an expression of american people. we are representatives. that is our title and that is our job description. >> and tyler, with news that has broken late this afternoon, it appears that the president is going to get his way on trade promotion autho and not have to negotiate that deal without the mitch mcconnell and john boehne they ha a path to get it to the president's desk through a new series of votes that are not susceptible to the same democratic blocking tactic of last week. >> so what you said it looks like his allies on this the deal being saved, he is going to owe it to the republicans, not congressio democrats. >> funny how things change

doesn't it tyler. john boehner and mitch mcconnell in fact have president's this is also an agenda they share so t a favor. >> john thanks very much. why a ruling in california would potentially spell trouble for uber's business model..

>> kate rogers has more. >> a ruling could have big ramificati uber and the sharing economy as the whole. the ruling sides with an uber driver saying she is an employee not an independent burrwik sued the company for costs re her work. the plaintiff was awarded $4,000 in expenses including mileage and bridge tolls. the ruling is non binding and applies to only unone driver they say. and the driver performed services as an independent bona fide employee. and drivers choose to use uber because they have complete flexibility and control. the majority can and do earn their living from multiple sources including other ride sharing companies. >> the labor commissioner ruling is important because the fact

that uber and lyft consider their drivers independent and not employees is a key part of their business models. this could stand to impact big cases against both uber and lyft in the state that are making y flu through the courts over whether drivers are in fact empl previous interview one of the plaintiffs attorneys in those cases said that contractor classificatis to boost bottom lines. >> companies like to use what they call independent s instef employees because they get to save all kind of costs. they don't have to worry about wage laws or unemployment or p or other protections tha employees get. >> wednesday, the labor commission ruling is a positive development f cases. action is expected on the big cases in august. for nightly business report, i'm kate rogers. >> a big miss from oracle.

a software company blamed the strong dollar after earnings and revenue fell short. the board did claim dividend of 15 cents a share. so it's not all bad. still the stock dropped by as much as 7% after the close. before the bell the stock was a fraction higher at 44.91. executive shake up announced that microsoft ceo tod said four senior executives including the former chief executive of nokia, will leave the company. related to his decision to organize the company's engineering efforts into to three groups. shares rose a fraction to 45.97. >> the maker of botox is buying the company called bithera pharmaceutic he stride to say. they are a fraction higher at

close at 289.79. kycera to 74.11. and tripp adviser and marriott allowing to book rooms without leaving the site. >> here is something few ever expected to happen. the quality of new japanese brand vehicles has slipped below the auto industry average. that is according to a new study by j.d. power. so what is t autos? and who builds the top autos now? phil has more. >> if you are looking into buying a new car or trucks and wondering wil reliable when they leave the showroom. j.d. power says the korean brand ar head and shoulders above everyone. in fact a new study of problems found in the first three months

of ownership showed korean brands with far fewer. the results validate the strategy of 00 day and kia to slow down expansion and concentrate on improving quality. meanwhile japan auto makers ru cut problems in the new models as quickly as the koreans. for the first time new japanese vehicles are less reliable than the industry as the whole. in particular the new study finds many japane models are among the worst when it comes to pr systems. that is also the biggest problem buyers find in new vehicles from all auto makers infotainment systems are still improving. >> what about the big three? j.d. power says ford and gm have

improved and cut the number of problems in their new mode continuo lag the industry. 3 of the 5 lowest rated brands in fact in this study are owned by fiat chrysler. >> in> target ceo says the deal he reached earlier this week will help the company refocus on its core business. >> talk about the focus on signature categories d dna. the focus on style, important apparel, home and beauty categories. and baby and kids. and more and more our commitment to wellness and the great partnership we put together with cvs is part of that focus on bu i wellness offering. cvs will buy about 1700 target pharmacies and operate them through a store within a store format. >> and starbuck's known for

coffee ventured into the not long ago. but today starbuck's says it is closing those locations. jane wells has more. >> i had no idea. do you know why? >> why? well starbuck's is closing all stand alone la bo loon stores by december because the company says they are not sustainable long term. >> kind thought it would happen eventually. >> and it's disappointing news for those in san francisco where star bucks bought it for 100 million dollars. >> this is totally san francisco. to see it going a travesty. >> a year after starbuck's expanded stores to los angeles, including a fast casual concept where people could order duck

confit hash for breakfast. and others in the evening. >> competition will be interesting. apparently the competition was a littleinteresting. starbuck's has praised how well the products sold inside its own stores. and that is the only place you will be able to buy them after september. i like the chocolate croissants. and they are better than -- >> is company expanding beyond the core business good or bad for them? bill is here to discuss with us. good to see you. >> good to be back. >> let's talk about starbuck's. i guess it comes down to the execution in the way the company expands. is t correct? >> it sure is in this case. i think starbuck's should stick to its coffee. i love that store. i think it is great but it is a totally different concept.

starbuck's is trying to make the starbuck's name ubiquitous. they have been very well. there are plenty of expansion opportunit right within the store. i think they should stay to what they are. frankly instead o shutting it out, they got to sell it to a entreprene who can build it. but that is what they are doing. is focusing on core business and building around that to become great companies rather than a diversifie conglomerate. saw in the case of target bill they think cvs can do pharmacy better than they can. inside a company, on a board for example, to expand in ways that go a little beyond the company's core competency? whether it's target whether it's google going into the driverless cars and other -- and space and things like that?

>> i think you hav to look at ways that expand and extend your core and keep up with the latest technology like a google is doing and a facebook and others. but i think if you go away from if core competency then you are going to lose it. and starbuck's is coffee. and s being fashion forward and very current with the trends. and i think they see an opportunity in cvs to build up their pharmacy business so they can build up everything around it. health and beauty aids which is more their strength. otc. and i think you will see that work well and find partners and grow well for them. that is the key but you can't abandon your cor strengths. you to build on that. because you can't be good at everything. colleague says stick to your core strengths. bill how much pressure do companies face especially large companies, from shareholders maybe from board members, to be viewed as current, to as

growing, to be viewed as c edge? there must be some of that pressure that makes companies k outside their core competency. never been greater. wet had 34 ceos at a program i did in harvard. and the number one issue is growth profitable growth. they are all look energy new opportunits but there a ment of opportunities within your strengths. the ones that get you in trouble are adding in growth out profitabilit and the both cases with starbuck's and target they weren't making a lot of money. they were losing. and continuing to build strengths is what you a looking for today. and wall street wants to know it too. >> absolutely. bill good to see you again. thanks so much for joining us. >> thanks for having me on. >> bill george with harvard business school. ty. >> and fit bit, the wearable company is facing increased

competition and fighting lawsuits too. so why is it going public no tomorrow a read on the labor market with jobless claims and the philadelphia fed will release its business outlook survey. fit bit was an established market leader. but now as the company prepares to go public it is facing competition from lots of sides. so why go ipo now? >> the c counting your steps is counting down to its

first trade as the public company. fit bit known for its ss ubiquitous health tracking devices. an ipo set to value $3.7 billion. capitalizing on crazes that exploded and fueled the growth. revenues growing to 75 million from 14 million in 2011 selling nearly 11 million devices in 2014 up from just 200,000 and turning a profit just last year a key mile stone for the company. it's got the lion share of the healthcare device market but competitio is heating up and fanatics wonder whether it is the future or a fad. >> i'm a big fan. i carry one in my pocket. i'm a believer. the question is long-term is there a role for a stand alone

tracker? or is it all going to end up in a wearable or in an app on a smart phone. the field is crowded for now. misfit garmin android devices, pebble. jawbone. fit bit has denied allegations of wrong doing but that doesn't even address the biggest potential wearable threat -- apple. the big question is apple watch going to be the category killer actually raises awareness. d a lot of people are going to think oh let me go buy this fit bit. let me buy the apple watch. at some point does apple buy these guys or someone similar and bring the functionality in-house? do know. >> stepping out and going solo e of strong demand. here's some t company can keep it that way.

>> the surest way to make sure they are out of business three or four years from now is to react to the quarter. >> and that does it for nightly business rt for tonight. i'm sue herrera. >> and i'm tyler mathisen. have a great evening everybody. and hope to see you right here .

i'm laura linney, and this is masterpiece classic. previously on the paradise... katherine: in the past, the paradise has been all about you. now it is about us. if it is success here that you want, then i shall give it to you, my darling. always so easily shocked, dudley. i can't believe that even you have not watched a man drink away his troubles. denise: tollgate street traders: competitively priced tradition and quality. katherine: an absolute outrage! that is my fabric. the only thing they've done wrong is beating you at your own game. denise: my dream is that i'll make my own mark on the world as you have. i see that i've lost my little champion. linney: the paradise on masterpiece classic. captioning sponsored by viewers like you