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March 18 (UPI) — The Federal Reserve announced that it is leaving its benchmark interest rate untouched Wednesday in its first Federal Open Market Committee statement since the start of the war with Iran.

The Fed’s benchmark interest rate remains at a 3.5% and 3.75% range as the committee held on to its projection of at least one rate cut coming this year.

“Available indicators suggest that economic activity has been expanding at a solid pace,” the FOMC statement said. “Job gains have remained low and the unemployment rate has been little changed in recent months. Inflation remains somewhat elevated.”

As for the war in Iran, the statement said its impact on the U.S. economy is “uncertain.”

The Fed continues to pursue monetary policies it believes will bring the rate of inflation down to 2%. In its statement it said it is “committed to supporting maximum employment,” in pursuit of its target.

Economic reports that inform the Fed’s decision have indicated pressures from inflation remain and economic growth has slowed.

Wednesday’s announcement comes on the heels of a producer price index report earlier in the day that showed the largest increase to the index for final demand goods since August 2023.

Last week, the U.S. Bureau of Labor Statistics reported that nonfarm payrolls fell by 92,000 in February. The unemployment rate increased to 4.4%.

These reports have economists and traders cooling on the potential for interest rate cuts. Eugenio Aleman, chief economist at Raymond James, said in a statement that the wholesale inflation report on Wednesday, “likely reinforces a hold decision.”

Data from the producer price index report predates the beginning of the war with Iran.

Los Angeles cannabis businesses that owe back taxes wouldn’t have to pay late fees and interest under an “amnesty” program proposed by the City Council.

To qualify, the businesses would have to pay their city taxes within three years.

The council’s unanimous vote on Tuesday, asking the Office of Finance to draft language creating the program, comes at a time when city leaders are searching for money to cover basic services after closing a $1-billion budget gap.

More than 500 of the roughly 700 licensed cannabis businesses in the city collectively owed about $400 million in taxes — an amount that includes $100 million in penalties and $35 million in interest, according to an October report from the Office of Finance.

The total amount owed increased to $417 million as of December, according to Matthew Crawford, the office’s assistant director.

But only about $150 million is collectible, since some tax debts are outside of the three-year statute of limitations and some cannabis businesses are no longer operating.

Based on a projection that about half of eligible cannabis businesses would take part in the program, the city would collect about $30 million in back taxes while waiving about $25 million in penalties, the October report said.

Under the amnesty program, about 20% of the revenue would go to the city’s general fund and the Office of Finance. The Los Angeles Police Department and the city attorney’s office would receive about 40% for illegal cannabis enforcement, and the remaining 40% would fund social equity grants to cannabis operators, particularly members of low-income and minority communities that have been subject to disparate enforcement of criminal cannabis laws.

“The city finds itself with a unique opportunity to bring businesses into compliance and, at the same time, properly fund cannabis industry-centric programming,” City Councilmember Imelda Padilla said during Tuesday’s meeting.

Owners of cannabis businesses say the 10% city tax rate on their gross sales is exorbitant, at the same time that illegal cannabis businesses have carved out a chunk of the market.

“Not only are we competing against the illicit market, we’re competing against licensed dispensaries that the city is allowing to stay open who have made it their business model to not pay tax,” Daniel Sosa, who owns four cannabis dispensaries in the city, told the council on Tuesday.

The amnesty program should be mandatory for businesses that are behind on their taxes, and those who default on their payments should have their licenses stripped, Sosa said.

Sosa said that the tax on cannabis sales should be “just like every other business pays in the city: guns, tobacco, alcohol, major, major billion dollar corporations.”

Other business tax rates in the city range from 0.11% to 0.425%, according to Crawford.

Last month, the council placed a cannabis-related measure on the June 2 ballot that, if approved by voters, would close a tax loophole for illegal cannabis businesses and open them up to the threat of civil collection.

WASHINGTON — A trio of Senate Democrats is calling for the government to start refunding roughly $175 billion in tariff revenues that the Supreme Court ruled were collected because of an illegal set of orders by President Trump.

Sens. Ron Wyden of Oregon, Ed Markey of Massachusetts and Jeanne Shaheen of New Hampshire are unveiling a bill on Monday that would require U.S. Customs and Border Protection to issue refunds over the course of 180 days and pay interest on the refunded amount.

The measure would prioritize refunds to small businesses and encourages importers, wholesalers and large companies to pass the refunds on to their customers.

“Trump’s illegal tax scheme has already done lasting damage to American families, small businesses and manufacturers who have been hammered by wave after wave of new Trump tariffs,” said Wyden, stressing that the “crucial first step” to fixing the problem begins with “putting money back in the pockets of small businesses and manufacturers as soon as possible.”

The bill is unlikely to become law, but it reveals how Democrats are starting to apply public pressure on a Trump administration that has shown little interest in trying to return tariff revenues after the Supreme Court announced its 6-3 ruling on Friday.

Because of the ruling, going into November’s midterm elections for control of Congress, Democrats have begun telling the public that Trump illegally raised taxes and now refuses to repay the money back to the American people.

Shaheen said that repairing any of the damage caused by the tariffs in the form of higher prices starts with “President Trump refunding the illegally collected tariff taxes that Americans were forced to pay.” Markey stressed that small business tend to have ”little to no resources” and a “refund process can be extremely difficult and time consuming” for companies.

The Trump administration has asserted that its hands are tied, because any refunds should be the responsibility of further litigation in court.

That message could put Republicans on the defensive as they try to explain why the government isn’t proactively seeking to return the money. GOP lawmakers had planned to try to preserve their House and Senate majorities by running on the income tax cuts that Trump signed into law last year, saying that tax refunds this year would help families.

Treasury Secretary Scott Bessent told CNN on Sunday that it’s “bad framing” to raise the question of refunds because the Supreme Court ruling did not address the issue. The administration’s position is that any refunds will be decided by lawsuits winding their way through the legal system, rather than by a president who has repeatedly stressed to voters that he has the ability to act with speed and resolve.

“It is not up to the administration — it is up to the lower court,” Bessent said, stressing that rather than offer any guidance he would “wait” for a court opinion on refunds.

Trump has defended his use of the 1977 International Emergency Economic Powers Act to impose broad tariffs on almost every U.S. trading partner, saying that his ability to levy taxes on imports had helped to end military conflicts, bring in new federal revenues and apply pressure for negotiating trade frameworks.

The University of Pennsylvania’s Penn Wharton Budget Model released estimates that the refunds would total $175 billion. That’s the equivalent of an average of $1,300 per U.S. household. But determining how to structure reimbursements would be tricky, as the costs of the tariffs flowed through the economy in the form of customers paying the taxes directly as well as importers passing along the cost either indirectly or absorbing them.

The president has previously claimed that refunds would drive up U.S. government debt and hurt the economy. On Friday, he told reporters at a briefing that the refund process could be finished after he leaves the White House.

“I guess it has to get litigated for the next two years,” Trump said, later amending his timeline by saying: “We’ll end up being in court for the next five years.”

Boak writes for the Associated Press.