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In our news wrap Wednesday, there are fresh signs that inflation is easing as U.S. wholesale prices slowed again, some major California roadways remained closed after weeks of storms and flooding and Israeli Prime Minister Benjamin Netanyahu's right-wing coalition suffered a setback when the nation's supreme court ruled he must fire a key ally.
In the day's other headlines: There are fresh signs tonight that inflation is easing. The growth in U.S. wholesale prices slowed again in December. New federal data show producer prices were up 6.2 percent from a year earlier. But that rate of increase has now fallen for six months in a row, after peaking back in March. At the same time, retail sales fell 1.1 percent in December, as higher prices prompted Americans to cut spending.
The inflation news wasn't enough to rally Wall Street. Instead, stocks sank after a Federal Reserve Board member said there's still not enough reason to stop raising interest rates. The Dow Jones industrial average lost nearly 614 points, or 1.8 percent, to close under 33297. The Nasdaq fell 138 points, or 1.2 percent. The S&P 500 dropped 1.5 percent.
U.S. law enforcement officials have made another major federal bust and a crackdown on cryptocurrency exchanges. Last night, they arrested the Russian national who co-founded the exchange Bitzlato based in China. Officials say the exchange was a notorious haven for illicit transactions and money laundering.
In Washington today, Justice Department officials made clear they're serious about going after crooked crypto outlets.
Lisa Monaco, U.S. Deputy Attorney General:
Operating offshore or moving your servers out of the continental U.S. will not shield you. And whether you break our laws from China or Europe or abuse our financial system from a tropical island, you can expect to answer for your crimes inside a United States courtroom.
Just last month, Sam Bankman-Fried was arrested in the Bahamas on charges of defrauding investors in his cryptocurrency exchange FTX.
In California, some major roadways remain shut today and damage assessments worsened after weeks of storms. Flooded streets across the state left cars stranded this past week. Officials also are estimating that several thousand homes were seriously damaged. The damage is spread across 41 of California's 58 counties.
In Israel, Prime Minister Benjamin Netanyahu's right-wing coalition suffered a setback today, when the nation's Supreme Court ruled that he must fire a key ally. The court barred Aryeh Deri from serving in the Cabinet because he was convicted last year of tax fraud. Deri leads the ultra-orthodox Shas party. Netanyahu had no immediate response, but opposition leader Yair Lapid insisted that he comply.
Yair Lapid, Leader, Yesh Atid Party (through translator):
If Aryeh Deri is not fired, the Israeli government is breaking the law and they can no longer demand that citizens obey the law. Israel will be plunged into an unprecedented constitutional crisis.
The high court's decision comes as the new government is trying to lessen the power of Israeli courts.
The head of the United Nations sounded a grim warning today that the world is in — quote — "a sorry state." Secretary-General Antonio Guterres addressed the World Economic Forum in Davos, Switzerland. He cited challenges ranging from climate change to the pandemic to the war in Ukraine.
Antonio Guterres, United Nations Secretary-General:
We can't confront problems unless we look them squarely in the eye. And we are looking into the eye of a Category 5 hurricane. Our world is plagued by a perfect storm on a number of fronts.
Guterres also emphasized the importance of a U.N.-brokered deal to help Ukraine resume grain exports from its ports along the Black Sea.
And back in this country, the federal government says it's launching a targeted investigation of nursing homes over the abuse of antipsychotic drugs in patients, pointing to evidence that some facilities administer the drugs as a way to sedate patients, despite the dangerous side effects.
Officials say they're also looking into the misdiagnosis of schizophrenia. A government report last fall found the number of nursing home patients labeled as schizophrenic without an official diagnosis skyrocketed between 2015 and 2019, though less than 1 percent of the population is believed to have the disorder.
And still to come on the "PBS NewsHour": several recent incidents raise concerns over children's access to guns; mayors from across the country gather in D.C. to talk about the common issues affecting their communities; and a revealing new book details the inner workings of the Biden White House.
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