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Fed says taxes, cuts have hurt

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The Federal Reserve cautioned America’s political leaders Wednesday that their policies are hurting the economy.

The Fed stood by its aggressive efforts to stimulate the economy and reduce unemployment. But it sent its clearest signal to date that tax increases and spending cuts that kicked in this year are slowing the economy.

“Fiscal policy is restraining economic growth,” the Fed said in a statement after a two-day policy meeting.

The Fed maintained its plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent. And it said it will continue to buy $85 billion a month in Treasury and mortgage bonds. The bond purchases are intended to keep long-term borrowing costs down and encourage borrowing and spending.

The minutes of the previous policy meeting in March showed that many Fed officials were open to reducing the bond purchases before year’s end, so long as the economy improved. But Wednesday’s statement indicated that Fed officials are also open to expanding the bond buying if the economy needs it.

Kodak likely to exit bankruptcy by fall

Eastman Kodak plans to emerge from bankruptcy protection by the end of September after shedding most of the businesses that turned it into an American icon.

The reorganized Kodak will focus instead on commercial imaging and printing, where it believes it can once again become profitable, according to its bankruptcy reorganization plan.

Founded in 1880, Kodak filed for bankruptcy protection at the beginning of 2012. It had survived for years on the remnants of its old business – particularly its early patents for consumer digital cameras that eventually replaced the film business.

It has been selling bits of the company through most of the past year.

The company said Monday it was selling its personalized and document-imaging businesses.

PepsiCo quickly pulls Mountain Dew ad

PepsiCo is once again learning the risks of celebrity partnerships after an ad for Mountain Dew was criticized for portraying racial stereotypes and making light of violence toward women.

The soda and snack food company said it immediately pulled the 60-second spot after learning that people found it offensive. The ad was part of a series developed by black rapper Tyler, The Creator, and depicted a battered white woman on crutches being urged to identify a suspect out of a lineup of black men.

A goat character known as Felicia is included in the lineup and makes threatening comments to the woman, such as “Ya better not snitch on a playa” and “Keep ya mouth shut.”

DreamWorks buying teen video network

DreamWorks Animation SKG Inc. is buying AwesomenessTV, a YouTube teen network, for about $33 million in cash as it looks to tap into the popularity of online content.

DreamWorks said Wednesday that AwesomenessTV founder and CEO Brian Robbins will continue to direct growth at that company while also developing a DreamWorks-branded digital family channel.

The deal includes the possibility of additional cash payments of up to $117 million if certain earnings targets are reached in 2014 and 2015. The deal is expected to close this month.

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