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California Inc.: Explaining the Fed's key rate -- and the week ahead

Welcome to California Inc., the weekly newsletter of the Los Angeles Times Business section.

I'm Business columnist David Lazarus, and here's a rundown of upcoming stories this week and highlights from last week.

Looking Ahead

Rate hike: Federal Reserve policymakers will meet Tuesday and Wednesday to consider the first increase of its key short-term interest rate since 2006. The Fed has set the stage to raise its benchmark rate at any time, but many analysts think that despite an improving economy, the Fed won’t act until later this year.

Game show: North America's largest video game trade show, the Electronic Entertainment Expo, opens a three-day run at the Los Angeles Convention Center on Tuesday — and you can go. E3, as it's known, typically attracts more than 40,000 industry-only attendees. For the first time, the event is opening the show to 5,000 members of the public.

Blocking robo-calls: A proposal to make it easier for consumers to block robo-calls will be taken up Thursday by the Federal Communications Commission. A key change would allow phone companies to offer customers products that automatically block robo-calls and spam text messages.

Tesla tax break: A state committee is scheduled to vote Thursday on whether to give automaker Tesla a $15-million tax credit. If the California Competes Tax Credit Committee approves, Tesla would get the full amount by creating 4,426 jobs in California by 2019.

Fitbit IPO: The maker of wearable activity-tracking devices plans to sell stock to the public for the first time Thursday. Fitbit Inc. is looking to raise up to $358 million in its initial public offering.

Jobs report: California will unveil its closely watched monthly jobs report Friday. The state has posted job gains every month for nearly four years — since June 2011 — and the unemployment rate has been falling steadily as well, reaching 6.3% in April.

The Agenda

Monday’s Business section explains the ins and outs of the federal funds rate. That's the name for the benchmark rate that the Federal Reserve manipulates to try to keep the economy under control. We look at how it works, why it's important and how it affects other interest rates — from mortgages to certificates of deposit. The central bank has kept the fed funds rate near zero since late 2008 to help spur a sluggish recovery from the Great Recession. With a stronger economy now, the rate is ripe to rise.

Story Lines

Here are some of the stories that ran in The Times' Business section in recent days that we're continuing to follow:

Trade bill: President Obama's trade agenda unraveled Friday as the House rejected an important part of a package aimed at fast-tracking a controversial trade pact he's pursuing with 11 other Pacific Rim nations. Democrats and Republicans united to defeat one of two measures, both of which needed to pass to send the legislation to the president.

Fox transition: It's one of the world's biggest media companies, but Rupert Murdoch reminded everyone that it's still a family business — and his two sons, James and Lachlan, will be running it soon. Murdoch, 84, plans this week to ask the 21st Century Fox board to name James as the company's new chief executive and Lachlan as executive co-chairman. Murdoch would retain the chairman title.

Twitter turnover: A changing of the guard also is in the works at Twitter, where Dick Costolo is stepping down as chief executive, effective July 1. Despite the shortcomings of the company's strategy, co-founder Jack Dorsey said he won't be changing its direction as he takes over as the interim chief.

Net neutrality: Tough new regulations for Internet traffic went into effect Friday after federal judges declined to stop them, beginning a new era of oversight that already has reverberated through the online ecosystem.

Health law's fate: The head of California's Obamacare exchange said the U.S. Supreme Court risks setting a "horrible moral precedent" if it strikes down the law's subsidies across much of the country.

Apple music: Apple's iTunes made its mark as the place to buy music downloads, but it left the fast-growing streaming business to rivals such as Spotify, Pandora, Rhapsody and others. Now Apple will take them on with a one-stop shop of digital music, including on-demand streaming and online radio.

What We're Reading

And some recent stories from other publications that caught our eye:

No Mickey Mouse fees: Since Walt Disney World opened in 1971, there have been 41 price increases, the Washington Post reports. "For America's middle-income vacationers, the Mickey Mouse club, long promoted as 'made for you and me,' seems increasingly made for someone else."

CalPERS cuts back: The nation's biggest public pension plan sent a chill through Wall Street by announcing that it will cut back on the number of outside money managers, says Marketplace. The California Public Employees' Retirement System, which manages some $300 billion in pension money, believes it has way too many people managing its money, charging way too much.

Pimco holds steady: The dust is settling at Pimco, eight months after co-founder Bill Gross' abrupt departure from the Newport Beach company, according to Morningstar. Withdrawals from its Total Return fund, once the world's largest, have slowed. And fears that Pacific Investment Management Co. would suffer mass defections in its investment staff have not materialized.

Mansplaining: Jamie Dimon, chief executive of JPMorgan Chase, thinks Sen. Elizabeth Warren (D-Mass.) could use some remedial education on how Wall Street works, according to Bloomberg. "I don’t know if she fully understands the global banking system," he said at an event in Chicago.

Chinese home buyers: When you look at the world's priciest housing markets, Quartz says, you'll find one common denominator: Chinese buyers. The Chinese housing rush for foreign property is part of an important shift in the global economy.

Not that into you: In the New York Times, Vanessa Friedman writes that she's decided to break up with her Apple Watch. "I wanted it to work. I wanted to fall in love," she says. But the relationship never worked out. Bottom line: She doesn't like being defined by what she wears on her wrist.

Today's Cool Consumer Tip

Is that baby stroller or power tool safe? Find out before you buy. The federal Consumer Product Safety Commission maintains a public database of safety complaints lodged by consumers. It allows you to see what others are saying about various goods and whether any recall notices have been issued. You can find the searchable database at www.SaferProducts.gov.

For the latest money news, go to www.latimes.com/business.

Until next time, I'll see you in the Business section.

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