WASHINGTON (AP) – In a major shift, the Federal Reserve will start updating the public four times a year on how long it plans to keep short-term interest rates at record lows, according to minutes from its December policy meeting.
The first forecast will be included in the central bank’s economic projections after its Jan. 24-25 meeting, the minutes, or written records, said.
The change is the Fed’s latest move to make its communication more open and explicit. It could help assure investors, companies and consumers that rates won’t rise before a specific time. This might help lower long-term yields further — in effect providing a kind of stimulus.
The Fed has left its key short-term rate near zero for the past three years. In August, it that it plans to leave it there until at least mid-2013, unless the economy improves.
After its Dec. 13 meeting, the Fed issued a policy statement that portrayed the U.S. economy as improving slightly. The central bank declined to take any additional steps to boost growth.
In January, the Fed will release an interest rate forecast for the fourth quarter of 2012 and for the next few calendar years, the minutes show. It will update that forecast four times a year.
The minutes also suggest the Fed could be poised to launch a new step to invigorate the economy. Some members favored bolder action but said they wanted to wait until the more explicit communication policy was in place.
The plan to forecast interest rates follows a historic decision last year to have Fed Chairman Ben Bernanke hold news conferences four times a year. Bernanke has also done a number of interviews and sought other changes to make the Fed’s decision-making process more transparent.

Bloomberg – Federal Reserve Chairman Ben S. Bernanke said the central bank is concentrating “intently” on reducing unemployment and projects inflation to stay under control for the “foreseeable future.”
“For a lot of people, I know, it doesn’t feel like the recession ever ended,” even with the economy growing for two years, Bernanke said today in prepared remarks for a town hall- style meeting with soldiers at Fort Bliss in El Paso, Texas.
The event is part of Bernanke’s effort to explain to Americans his rationale for the central bank’s unprecedented bailouts of financial firms and efforts to spur economic growth. Bernanke and his colleagues are struggling to reduce unemployment stuck near 9 percent or higher for more than two years after lowering interest rates almost to zero and using unconventional tools to ease credit.
Joblessness is “painfully high,” with more than two- fifths of unemployed people out of work for longer than six months, “by far the highest ratio since World War II,” Bernanke said in comments before taking questions. “These problems are very serious, and we at the Federal Reserve have been focusing intently on supporting job creation.”
The Fed chief reinforced points made in his press conference last week, saying today that “inflation appears to be moderating” after “spikes in oil and food prices” helped accelerate price increases earlier this year.
“We expect, based on the best information that we have today, that it will remain reasonably close to our objective of 2 percent or a bit less for the foreseeable future,” Bernanke said.
Third Round
Last week, Bernanke signaled additional monetary stimulus may be needed to lower U.S. joblessness, saying potential actions including a third round of securities purchases are “on the table.” He warned in a Nov. 2 press conference that economic improvement will probably be “frustratingly slow,” with policy makers forecasting a 1 percentage-point drop in the jobless rate to about 8 percent over two years.
The Fed is trying to keep borrowing costs low to support consumer purchases of homes and cars and business investment in equipment, software and facilities, Bernanke said today. The central bank will return a “substantial” amount of earnings on its securities holdings to the U.S. Treasury Department this year after $125 billion of payments in the last two years helped reduce the federal budget deficit, he said.
‘Entire Burden’
Bernanke reiterated his view that the Fed “was never intended to shoulder the entire burden of promoting economic prosperity,” calling on other economic policy makers to help through spending and tax policy as well as labor, housing, trade and regulatory efforts.
The public’s view of Bernanke, 57, has declined in recent months, according to Bloomberg polls. Twenty-nine percent said in September they have a favorable view of the central banker against 35 percent who have an unfavorable view. That compares with the June poll, when 30 percent had a favorable view, and 26 percent had an unfavorable view.
Bernanke has also drawn fire from Republican presidential candidates, with former Massachusetts Governor Mitt Romney, businessman Herman Cain, Texas Governor Rick Perry, former Speaker of the House Newt Gingrich and Congressman Ron Paul all indicating they’d appoint a new Fed chair if they won the presidency in 2012. Bernanke’s term as Fed chief ends in January of 2014.
Town-Hall Discussion
Since mid-2009 the Fed chief has also held a town hall- style discussion on PBS television and met with students and business executives for question-and-answer sessions. He began in April holding televised press conferences.
“You may be wondering why the chairman of the Federal Reserve would travel to Texas to speak at a military base,” Bernanke said today. He said he meets with a “wide range” of groups to listen, learn and explain the Fed’s actions. “I’m here because the men and women in military service, like all Americans, are profoundly affected by the economic challenges our nation has faced these past several years.”
Bernanke’s visit took place one day before Veterans Day, the U.S. holiday honoring war veterans and which previously marked the end of World War I.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net; Steve Matthews in El Paso at smatthews@bloomberg.net.
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

DealB%k – LONDON – Kweku M. Adoboli, the UBS trader accused of costing the bank $2.3 billion in losses, is to remain in custody until a hearing next month after his lawyer said he would not apply for bail.

Authorities also amended the allegations against Mr. Adoboli, adding a fraud charge for activities from October 2008 through 2010. Mr. Adoboli also faces two charges for false accounting. The prosecutor, David Levy, said Mr. Adoboli “acted improperly” and that “he carried out reckless and inappropriate trades which he hid.”

Mr. Adoboli’s lawyer, Patrick Gibbs, did not enter a plea but said Mr. Adoboli was “sorry beyond words for what had happened.”

“He stands now appalled at the scale of the consequences of his disastrous miscalculations,” Mr. Gibbs said.

Wearing a dark gray suit, crisp white shirt and dark blue tie, Mr. Adoboli briefly bowed toward the visitors’ gallery in the court with his hands crossed over his chest. In his second brief court appearance since his arrest a week ago, Mr. Adoboli — who looked tense sitting behind a glass wall in a packed room at the City of London Magistrates Court — spoke only to confirm his name, address and date of birth.

Mr. Adoboli, 31, was arrested last Thursday at 3.30 a.m. on suspicion of fraud by abusing his position after UBS had alerted the police, with authorities levying fraud and false accounting charges the following day. UBS, in a statement on Sunday, said that it had lost $2.3 billion as the result of unauthorized trades in equity index futures. Mr. Adoboli, according to the financial firm, masked those activities from internal risk controls with fictitious trades. Mr. Adoboli worked at the bank’s Delta One desk, focusing on exchange-traded funds.

The next court hearing will be on Oct. 20. Prosecutors met with Mr. Adoboli’s legal team Thursday morning, agreeing to move up the court date.

While Mr. Adoboli attended court in London, UBS’s chief executive, Oswald J. Grübel, attended a board meeting in Singapore. The executives discussed the future of the investment banking business and how to improve earnings by restoring investor and client confidence.

Guardian – James Murdoch and News Corp could face corporate legal battles on both sides of the Atlantic that involve criminal charges, fines and forfeiture of assets as the escalating phone-hacking scandal risks damaging his chances of taking control of Rupert Murdoch’s US-based media empire.

As deputy chief operating officer of News Corp – the US-listed company that is the ultimate owner of News International (NI), which in turn owns the News of the World, the Times, the Sunday Times and the Sun – the younger Murdoch has admitted he misled parliament over phone hacking, although he has stated he did not have the complete picture at the time. There have also been reports that employees routinely made payments to police officers, believed to total more than £100,000, in return for information.

The payments could leave News Corp – and possibly James Murdoch himself – facing the possibility of prosecution in the US under the Foreign Corrupt Practices Act (FCPA) – legislation designed to stamp out bad corporate behaviour that carries severe penalties for anyone found guilty of breaching it – and in the UK under the Regulation of Investigatory Powers Act 2000 which outlaws the interception of communications.

Tony Woodcock, a partner at the City law firm Stephenson Harwood, said section 79 of the 2000 Act enabled criminal proceedings to be brought against not only a company, but also a director or similar officer where the offence was committed with their “consent or connivance” or was “attributable to any neglect on their part”. Woodcock said: “This could embrace a wide number of people at the highest level within an organisation, such as a chief executive – not just the individual who ‘pushed the button’ allowing the intercept to take place or someone (perhaps less senior) who encouraged or was otherwise an accessory to the offence, such as an editor.”

While the UK phone-hacking scandal has been met with outrage in the US, the hacking itself is unlikely to prompt Washington officials into action. But because NI is a subsidiary of the US company, any payments to UK police officers could trigger a justice department inquiry under the FCPA.

The 1977 Act generally prohibits American companies and citizens from corruptly paying – or offering to pay – foreign officials to obtain or retain business.

The Butler University law professor Mike Koehler, an FCPA expert, said: “I would be very surprised if the US authorities don’t become involved in this [NI] conduct.”

He said the scandal appeared to qualify as an FCPA case on two counts. First, News Corp is a US-listed company, giving the US authorities jurisdiction to investigate allegations. “Second, perhaps more importantly, the act requires that payments to government officials need to be in the furtherance of ‘obtaining or retaining’ business. If money is being paid to officials, in this case the police, in order to get information to write sensational stories to sell newspapers, that would qualify,” he said.

Koehler said the US justice department was increasingly keen to bring cases against individuals as well as companies, because prosecuting people brought “maximum deterrence”. He added: “Companies just pay out shareholders’ money. There’s not much deterrence there.” Tom Fox, a Houston-based lawyer who specialises in FCPA cases and anti-corruption law, said most corporate cases were settled before going to court. But for individuals who are successfully prosecuted the penalties are severe.

In 2009 the former Hollywood movie producer Gerald Green and his wife, Patricia, were jailed for six months in the first criminal case under the FCPA. The Greens, whose credits included Werner Herzog’s Rescue Dawn, were convicted of paying $1.8m in bribes to a government official in Thailand in exchange for contracts to manage the Bangkok international film festival.

FCPA charges can carry up to five years in jail for each charge but the Greens’ short prison sentence was not the harshest element of their sentencing. The “biggest hammer” prosecutors hold is forfeiture of assets, said Fox. “The Greens lost everything. Their house, savings, retirement plan. They are destitute now.”

Bringing an FCPA case against the company would be far easier than bringing an action against James Murdoch. As yet there appears to be no evidence that he was directly linked to authorising the police payments. “If you don’t know about it, that is a valid defence for an individual,” said Koehler. In New York, media executives believe that with or without an FCPA case James Murdoch has already fatally damaged his chances of taking his father’s crown.

One said: “There has been a sense of unravelling at News Corp for a while. The Daily, MySpace, Project Alesia – they look like News is chasing rainbows. [Rupert] Murdoch is looking old. It affects his ability to appoint an heir and I don’t think James even has the backing of his family any more.” Speculation is that Chase Carey, the chief operating officer, is most likely to take the top slot when and if the media mogul steps aside. “He is the ultimate Murdoch operative. He is not interested in the trappings of the media business. What would he do? Close the New York Post, sell the Times. Why not? It’s a rational thing to do.”

NEW YORK (MarketWatch) — It’s probably the most asked question to come out of the financial crisis: why aren’t any Wall Street CEOs in jail?

It’s asked on the message boards, over dinner, in the media, in Washington and in schools. Most people shrug and agree, someone important — Lloyd Blankfein at Goldman Sachs (NYSE: GS – News), Stan O’Neill, formerly of Merrill Lynch & Co., or Dick Fuld, the former CEO of Lehman Brothers — should go to jail, right?

A lot of us have tried to answer this question. Joe Nocera at the New York Times wrote in February that prosecutions were unlikely because “delusion is an ironclad defense.” .

More recently, Roger Lowenstein, writing for Bloomberg BusinessWeek, concluded “risk-taking and stupidity aren’t criminal.” Lowenstein’s argument won praise from the Times’ Andrew Ross Sorkin who tweeted that Lowenstein was “probably right.”

Finally, Bill Black, the University of Missouri at Kansas City law school professor, and one of clearest-thinking minds on culpability in the financial crisis, wrote a blistering takedown of both Lowenstein and Sorkin on The Big Picture blog by quoting their previous writing on Wall Street against them. In Sorkin’s case:

“If the government spent half the time trying to ferret out fraud at major companies that it does tracking pump-and-dump schemes, we might have been able to stop the financial crisis, or at least we’d have a fighting chance at stopping the next one.”

Taking down the ‘Don’

The upshot of these assessments of legal culpability seems to be that while a successful prosecution may have long odds, it’s probably worth doing. Indeed, the Financial Crisis Inquiry Commission and the Senate Investigations Subcommittee report on Wall Street, the Levin-Coburn report, both suggest further investigations are in order.

“It is possible for certain senior executives at major financial firms and banks to be held liable for the credit crisis,” said Michael Chester, a partner at Skarzysnki Walsh & Black. “However, putting together a successful case will likely be much more problematic than most realize.”

For one, regulators just haven’t been keeping up, Chester said.

“Traditionally, these agencies have always amassed large amounts of information to use in subsequent criminal prosecutions. However, statistics show that these agencies have referred fewer financial cases to the U.S. Department of Justice in recent years.”

Also, a ruling in the case against former Enron Chief Executive Jeff Skilling about the “honest services” statute now strictly applies to bribes and kickbacks, Chester said.

Moreover, the statute of limitations has run out on a lot of securities law claims, said Max Gardner, a consumer advocacy lawyer who’s been working in the foreclosure space. He adds that it’s difficult to pursue claims against securities sold by the banks these CEOs ran, because common-law fraud claims require a showing of intent.

“There’s also the representations and warranties in the securitization documents themselves, including that there is good title to the mortgages and that they’re not in default,” he said. “”It’s important to emphasize, however, that there could be suits against mortgage-backed securities sponsors, MBS servicers, and MBS trustees.”

But those targets are admittedly below the executive suite for which we’re aiming. It’s hard, but not impossible, to believe those CEOs didn’t know how reckless their standards had become on the mortgage and securitization front. Again, the Coburn-Levin report suggests there are some smoking guns that could link high-level executives who testified that they just didn’t know what was happening.

Even if there was evidence enough to build a case, it probably wouldn’t satisfy us.

“For those who sold financial products that misrepresented their credit worthiness, how far up the chain do you want to go?” asked Brian Greenberg, an accountant and investor based in Marlton, N.J. “Do you want to take down the ‘Don’?

“In that case start with the Federal Reserve that made credit plentiful and cheap without any regard to creditworthiness of the buyer. If their excessive policy of pushing cheap money did not exist, then Wall Street would not have been able to push the ‘junk’ to the kids — er, public.”

Greenberg makes a fair point. There’s a lot of blame to go around.

It’s the ability to mete out punishment that has its limits.

David Weidner covers Wall Street for MarketWatch.

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WASHINGTON (Dow Jones) – The U.S. Supreme Court voiced ambivalence Monday about Microsoft Corp.’s (MSFT) bid to make it easier for companies to challenge the validity of patents, in a significant case for technology firms and drug makers that has divided the business community.

Members of the court questioned whether Microsoft’s position would weaken important patent protections for inventors, but they also appeared to share the software giant’s concern that poor-quality patents were a drag on innovation.

“It’s a bad thing not to give protection to an invention that deserves it, and it is just as bad a thing to give protection to an invention that doesn’t deserve it,” Justice Stephen Breyer said. “Both can seriously harm the economy.”

Microsoft, in a case involving its popular Word program, attacked longstanding court precedent that requires a defendant in a patent-infringement case to prove by clear and convincing evidence that a plaintiff’s patent is invalid. Instead, it argued for a lower standard in which a patent could be declared invalid if a preponderance of the evidence supports doing so.

Microsoft lawyer Thomas Hungar said the current high standard “ensures the enforcement of invalid patents.”

“It makes no sense to have a heightened standard of proof,” Hungar said. The lower standard should at least apply in cases where the defendant is offering new evidence of invalidity that the U.S. Patent and Trademark Office never considered when it chose to issue a patent, he said.

The case centers on a 2007 lawsuit by Toronto-based technology company i4i Inc., which convinced a jury that Microsoft Word infringed one of its patents related to document editing. I4i obtained a $290 million judgment against Microsoft, as well as an injunction that barred sales of certain versions of Word that infringed the patent.

A federal appeals court upheld the judgment, rejecting Microsoft’s argument that the patent was invalid because the i4i invention was not new.

Businesses that are often targets of patent-infringement lawsuits, including tech companies, banks and financial firms, are supporting Microsoft. But the company also has many critics, particularly brand-name drug makers that rely on their patent portfolios and don’t want to see patent protections weakened.

I4i lawyer Seth Waxman said the current high standard is based on long-settled law and is supported by Congress’s intent that patents be presumed to be valid. Congress has been well aware of the clear-and-convincing standard and “has done nothing whatsoever to change it,” he said.

Waxman said that if a defendant in a patent-infringement lawsuit truly has new evidence that a patent is invalid, then that evidence will have a persuasive effect on juries even under the high standard.

Justice Department lawyer Malcolm Stewart, representing the government, also argued in favor of i4i. He said Microsoft was asking to make it easier to overturn decisions of an expert government agency, that being the Patent Office.

Justice Ruth Bader Ginsburg was among those who asked tough questions of both sides.

Ginsburg suggested that the higher burden of proof made sense in light of Congress’s instruction that patents are presumed to be valid. But she also questioned whether that heightened standard should apply in cases involving new evidence that the Patent Office did not consider.

Ginsburg, Breyer and Justice Sonia Sotomayor all suggested that the issue could be addressed by better jury instructions in patent cases without lowering the burden of proof that defendants are required to meet.

Chief Justice John Roberts is not taking part in the case. According to recent financial disclosure forms, Roberts continues to own shares of Microsoft stock.

For the company to prevail, it will need to win the votes of five of the eight remaining members of the court.

The case is Microsoft Corp. v. i4i Limited Partnership, 10-290. A decision is expected by the end of June.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

WASHINGTON (AP) — The $38 billion in spending cuts agreed to last week won’t prevent this year’s budget deficit from setting another record high, estimated at $1.5 trillion.

Most of the agreed-to spending cuts either affect future budgets or amount to accounting gimmicks that won’t reduce actual spending.

The Treasury Department reported Tuesday that the deficit already totals $829.4 billion through the first six months of the budget year — a figure that until 2009 would have been the biggest ever for an entire year. For March alone, the government ran a deficit of $188 billion.

President Barack Obama and congressional Republicans averted a government shutdown last week by agreeing to the largest-ever spending cuts for a single year. But David Wyss, chief economist at Standard & Poor’s in New York, said those cuts amount to a “rounding error” in this year’s deficit.

The cuts include unspent money from the 2010 census, which is completed, and $2.5 billion from the most recent repeal of highway programs that can’t be spent because of restrictions set by other legislation. They also include $3.5 billion in unused bonuses for states that enroll more children in a health care program for lower-income families.

Wyss expects the deficit will surpass the record of $1.41 trillion hit in 2009. The nonpartisan Congressional Budget Office raised its estimate earlier this year from $1.1 trillion to $1.5 trillion. A tax-cut package negotiated in December by Obama and Republicans, which includes a one-year reduction in the Social Security payroll tax, prompted the CBO to raise its estimate.

The ballooning deficit is certain to give Republicans leverage in future spending debates, starting with the upcoming vote to raise the government’s borrowing authority above $14.3 trillion.

The Treasury has told Congress that it must vote to raise the debt limit by summer. Without an increase, the government would not be able to meet its current debt payments, resulting in an unprecedented default on its debt.

Republicans hope to use vote on the debt limit to force Obama to accept long-term deficit-reduction measures. A big fight looms over the 2012 budget, which will center on House Republicans’ plan to cut $5.8 trillion over 10 years by making sweeping changes to Medicare and Medicaid.

Obama is scheduled to deliver a speech Wednesday in which he will outline his own goals to achieve long-term deficit reductions.

Some analysts see the House spending plan, put forward by House Budget Chairman Paul Ryan, R-Wis., and Obama’s speech as the opening salvos in a battle that will likely extend through the 2012 presidential campaign. There is little expectation that major changes in the government’s entitlement programs will occur until after the upcoming election. However, both parties will likely stake out their ground and seek to convince voters that they have the best formula for getting the country out of its current deficit malaise.

The outcome of that debate could set the country’s budget course for many years to come.

“I think the debate has shifted and there is significant momentum now for making real progress in addressing our fiscal problems,” said Mark Zandi, chief economist at Moody’s Analytics.

Other analysts are not as optimistic that the government’s deficit problems are any closer to being resolved.

“Nobody wants to face the facts,” Wyss said. “We can’t continue promising people more government spending than we are willing to pay for.”

USA Today – President Obama argued today that military action in Libya, unrest in the Middle East, and the Japanese nuclear disaster could all have a profound effect on Americans — at the gas pump and beyond.

“In an economy that relies so heavily on oil, rising prices at the pump affect everybody,” Obama said today in what aides billed as a major energy address. “Workers, farmers, truck drivers, restaurant owners … Businesses see rising prices at the pump hurt their bottom line. Families feel pinched when they fill up their tank.”

The recent string of foreign crises is yet another reminder that the U.S. has to develop alternatives to imports of foreign oil, Obama said as he sought to revive interest in an energy program that has stalled on Capitol Hill.

Speaking at Georgetown University in Washington, D.C., Obama also set an ambitious goal: “When I was elected to this office, America imported 11 million barrels of oil a day. By a little more than a decade from now, we will have cut that by one-third.”

This requires an array of alternatives, Obama said, promoting programs on biofuels, natural gas, electric vehicles, wind and solar power, more fuel efficient cars and trucks, and energy efficient programs.

And also nuclear power, Obama said, despite Japan’s problems.

“America gets one-fifth of our electricity from nuclear energy,” Obama said. “It has important potential for increasing our electricity without adding carbon dioxide to the atmosphere. But I’m determined to ensure that it’s safe.”

Domestic oil production also has to be part of the strategy, Obama added — and he chided companies to “take advantage of the opportunities they already have.”

“Right now, the industry holds tens of millions of acres of leases where it’s not producing a drop, sitting on supplies of American energy just waiting to be tapped,” Obama said.

Oil company executives and congressional Republicans said those spots are idle because Obama administration regulation has blocked drilling there.

“The facts are the White House has been consistently working to prevent and delay exploration of American-made energy,” said Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio.

Erik Milito, a director with the American Petroleum Institute, said, “this is like leasing an apartment from the government for $20 million dollars and the government refuses to give you the keys to the apartment.”

“Then the government proceeds to complain because you are not occupying the premises,” Milito added.

ABC News – When Christine Kwapnoski of Concord, Calif., told her boss at a division of Walmart that she wanted a job promotion, she said, he told her to “blow the cobwebs off your make up” and to “doll up” in order to advance.

Instead, she joined five other female employees and filed a sexual discrimination suit against the company 10 years ago alleging that women had been paid less than men in comparable positions in violation of Title VII, the federal law that prohibits sex discrimination.

As word of the suit spread, dozens and dozens of women joined in and a lower court ruled that the case could go forward on behalf of all current and former female employees since 1998.

Kwapnoski will be at the Supreme Court Tuesday when the justices hear arguments on whether the lower court was correct in allowing the women to band together to file their lawsuit, or whether they must file as individuals.

If the court rules in favor of the women and grants them “class certification,” it will most likely become the largest employment class-action suit in history, involving potentially millions of women and billions of dollars.

A decision is likely to come in early summer.

Kwapnoski said she would never have been able to file the suit alone against the world’s largest corporation. “My voice against Walmart?” Kwapnoski asked. “Are you kidding me. They would sweep me under the carpet real fast. When we band together, then Walmart has to listen to us.”

Walmart has dismissed the claims of sex discrimination. Gisel Ruiz, the executive vice president of human resources at the Bentonville, Ark.-based company, said the company has a long history of providing advancement opportunities for women.

“Thousands of women began their careers at Walmart,” Ruiz said,” and have risen to leadership roles.”

Walmart has also argued that the lower court was wrong to allow the women to join together in their lawsuit because they don’t satisfy the “commonality requirement” that is required to prove that the women have enough in common to proceed as a class.

Walmart has 3,400 U.S. stores and 170 different job classifications.

The plaintiffs cannot fairly represent “over 1.5 million other women who worked for thousands of different stores with thousands of different managers in multiple states throughout the country,” Ruiz said.

Businesses Worry About Potential Fallout
The case is being carefully watched by the business community, which fears that it could lead to an increase of similar suits and force big business into premature settlements out of fear of exposure to gigantic monetary awards in the billions of dollars.

The Chamber of Commerce has issued a brief on the side of Walmart, arguing that the lower court ruling that allowed the case to go forward as a class action “will likely encourage an avalanche of new class-action litigation on a broad array of subject matters, beyond employment issues.”

But lawyers for the women say such fears of an avalanche are absurd. “The reality is that we haven’t even had a few snowflakes” said Joseph Sellers, who will argue on behalf of the women.

The district court heard months of evidence in the case and properly found that the women had met the standards of class certification, he said.

“The Supreme Court and the lower courts have set very demanding standards for class certification,” he said.

Sellers and civil rights groups supporting the women have said that class-action certification is essential to giving anti-discrimination laws the force and intent they were meant to have. They argue that the women, forced to file individually, would have neither the means nor the incentive to bring their cases against such a large company.

Although the justices won’t wade into the merits of the case regarding gender discrimination, Sellers said, the question of whether the women can proceed as a class action is of equal importance.

“Technically, this case is not a ruling on the merits, but the ability to pursue claims like this is vital to the private enforcement of civil rights laws,” Sellers said.

Lawyers for the women say that besides the anecdotal evidence, statistical analysis demonstrated that hourly and salaried retail female employees received lower pay and less advancement opportunities than their male counterparts.

Plaintiffs Stand by Their Statistics
“The patterns are inescapable,” Sellers said. “This is not simply a case where you group together a bunch of independent decision makers. It shows a pattern that is stunning in its consistency showing that women were uniformly disadvantaged.”

He said Walmart managed its operations and employment practices in a centralized manner, despite doing business in stores across the country. But company lawyers say the statistical analysis provided by the plaintiff’s experts is wrong.

“In Walmart’s retail stores, women made up two-thirds of all employees and two-thirds of all managers,” Theodore J. Boutrous Jr., who will argue the case for Walmart Tuesday, said. “The record actually shows that the number of women who were promoted at Walmart was equal to or greater than the number who applied for the jobs.

“Plaintiffs’ data is deeply flawed and highly misleading. Where the data runs counter to their theory, they simply disregard it or relabel it to obscure the major gaps in their case.”

Timothy Sandefur of the Pacific Legal Foundation, who submitted a brief in support of Walmart, disagrees with the lower court’s reliance on statistical analysis provided by the plaintiffs to document what they say is widespread discrimination at the company. “There’s all sorts of reasons why people might choose to work in other jobs, or choose to not work as managers or stay out of the work place for a long time that are not proof of discrimination,” he said.

But Sandefur’s argument enrages some of the women’s rights group supporting the Walmart plaintiffs.

“Statistical evidence demonstrates that even if you control for job performance and seniority, pay discrepancies existed at all the major job groups within Walmart,” Sarah Crawford of the National Partnership for Women and Families said.

“These women are seeking to vindicate their civil rights, their rights to fair pay and promotions at Walmart in the face of a great deal of evidence that systemic discrimination was standing in their way. We are still trying to get our day in court.”

-ABC News’ Susanna Kim contributed to this report.

The Washington Post – WASHINGTON — The Federal Reserve will “respond as necessary” if rising prices for oil and other commodities seem to trigger more broad-based inflation, Chairman Ben Bernanke said Tuesday, for the first time raising the possibility that soaring fuel prices could provoke a response from the central bank.

“My sense is that the increases we’ve seen so far … do not yet pose a significant risk,” Bernanke said.

In his twice-a-year testimony on monetary policy before the Senate Banking Committee, Bernanke addressed the steep hike in oil — including a surge last week amid turmoil in Libya — and the costs of other globally traded items in recent months.

He said he does not expect a major impact on consumer prices in the United States but also made clear that if oil prices continue to rise and cause fears of permanent high inflation, the Fed could act.

Concerns about inflation can become self-fulfilling: When consumers expect prices to rise, they may buy more goods in the short term, increasing demand and triggering higher prices.

Business owners, also, could raise prices to account for expected inflation.

Bernanke did not specify how the Fed would act, but members would probably consider raising interest rates or otherwise tightening the money supply to try to regain credibility as inflation fighters. Such a move, however, would come at the cost of further slowing an already weak economy.

Modest inflation rise

The Fed chief said the surge in oil prices could lead, at most, to a temporary and relatively modest increase in U.S. inflation.

But sustained increases for oil or other commodities, he said, would threaten both economic growth and overall price stability.

The Fed will continue to carefully monitor developments in commodity markets and is “prepared to respond as necessary” to keep prices stable as the economy grows, he said.

Bernanke also threw cold water on recent studies by two leading economic-forecasting groups that suggested Republicans’ proposed $60 billion budget cut would be a major drain on the economy.

Democrats have cited studies from Goldman Sachs and Moody’s Analytics on the impact of the cuts. The Goldman study suggests the Republican proposal would reduce gross domestic product growth by 2 percentage points in the second and third quarters of 2011.

The Moody’s research by chief economist Mark Zandi estimated the cuts would slash the number of jobs by 700,000 at the end of 2012.

Responding to questions from Sen. Jack Reed, D-R.I., Bernanke said the Fed’s analysis suggests smaller economic losses from the spending cuts, reducing GDP by several tenths’ of a percent and the number of jobs by “certainly much less than 700,000.”

Last week, oil prices broke $100 a barrel, and some financial-market analysts have argued the Fed’s easy-money policies have helped spur the run-up. The Fed has kept interest rates near zero and announced in November it is buying $600 billion in Treasury bonds as a way to boost growth.

But during his testimony, Bernanke rejected the notion that Fed policy is a major driver of the higher prices He argued that rising global demand for raw materials, particularly in fast-growing emerging markets, and restraints on global supply have raised the costs of goods.

Those costs have increased in terms of all major currencies, he noted, suggesting that the dollar’s exchange rate has not been much of a factor.

Guarded optimism

As for the U.S. economic outlook, Bernanke maintained a tone of guarded optimism, echoing his other recent comments.

“We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold,” he said in written testimony. But “job growth remains relatively weak, and the unemployment rate is still high.”

The battle in Congress over the federal budget dominated questions at a hearing that ostensibly was about the Fed’s semiannual report on monetary policy.

Bernanke was asked repeatedly about GOP proposals to trim anywhere from $60 billion to $100 billion in government spending during the fiscal year that ends Sept. 30. These cuts would do little to bring down long-term budget deficits but would slow the economic recovery, he cautioned.

“That would be ‘contractionary’ to some extent,” Bernanke said, projecting that “several tenths” of a percentage point would be shaved off growth, and it would mean fewer jobs.

“That’s why I have been trying to emphasize the need to think about the budget issue not as a current-year issue.”

Material from McClatchy Newspapers is included in this report.