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(NEW YORK) — The Jeep Wrangler can ford rivers, crawl over boulders, traverse deserts and blaze through uncharted territory. Fierce yet affordable, the humble 4X4 has long been the go-to vehicle for outdoor enthusiasts.

These days, however, the rugged sport utility vehicle may seem more like a luxury ute than off-roading warrior.

Last month, Jeep executives introduced the redesigned 2024 Wrangler, replete with all the modern necessities: 12-way power adjustable front seats, a 12.3-inch touchscreen, advanced safety features, contrast accent stitching and acoustic front glass and thicker carpeting for a quieter ride.

These updates took a lot of engineering prowess to get right, according to Jim Morrison, senior vice president and head of Jeep North America.

“Drivers can now have water up to their knees and still have a power seat,” he told ABC News.

Morrison, a veteran Jeep executive, knew that to keep Jeep owners happy — and bring in new customers — the Wrangler had to be as good on road as it is off-road.

“The new inclusion of power seats truly speaks to who Jeep’s real customer base is: affluent people,” Ed Kim, president of consulting firm AutoPacific, told ABC News. “These customers want the image and style of a Wrangler. For affluent customers, there has been this long and growing desire for real, rugged off-road vehicles.”

Like Jeep, automakers Rivian and Kia saw the sales potential of adventure-type vehicles, said Kim.

“Even the Kia Telluride has more rugged styling than the typical family crossover and it’s been a success,” he noted.

As the Wrangler’s popularity has risen, so has the price. A base 4-door Wrangler Sport starts at $36,990. The Rubicon 392, with a 6.4L V8 SRT Hemi engine, has an MSRP of $82,495.

The Wrangler 4xe, the top-selling plug-in hybrid in the U.S., starts at $54,735 before a $3,750 federal tax credit is applied.

In February, Jeep introduced two 20th anniversary editions: a Wrangler Rubicon 4xe and a Wrangler Rubicon 392. Jeep execs capped production of the two models to 3,000 units, calling them “the most capable Wranglers yet.” They were priced accordingly: $69,585 for the 4xe model and $90,895 for the 392. A Level II upfit by American Expedition Vehicles (AEV) added more than $20,000 to the price.

Consumers did not care; the 20th anniversary Wrangler Rubicon 392 — with a price tag of $113,820 — sold out within an hour. The $90,895 version was gone in less than 24 hours.

“We are seeing more demand for high-priced Wranglers,” said Morrison. “Wrangler has a high residual value.”

Kim said the high prices can be attributed to two factors: the supply crunch and automakers choosing to produce “more lavishly equipped models” to make up for a loss in volume. Jeep has also started to customize Wranglers at its factory in Ohio, allowing customers to spend even more.

“The Wrangler has long been an aftermarket favorite — you buy it and immediately do a lift kit on it, add big wheels and tires. A whole industry was built around the Wrangler,” Kim said. “Jeep saw an opportunity to do customization at the factory. Rubicons now come with the best off-road gear already installed.”

Jeep’s longtime competitors were Chevrolet and Ford, mainstream automotive brands that middle-income Americans could afford. Now, Jeep competes with upscale brands like Infiniti and Acura, said Kim. More than 200,000 Wranglers were sold last year, making it Jeep’s second most popular model after the Grand Cherokee.

“Jeep executives have talked about pushing the brand into a more premium space,” Kim said. “New Wranglers are street vehicles 99% of the time. Very few customers go off-road in them.”

These days corporate executives and wealthy families are buying the Wrangler. Even Porsche 911 owners are trading in their sports cars for one, according to Tyson Jominy, vice president of data and analytics at J.D. Power.

“The 4-door Wrangler is a family vehicle,” he told ABC News. “Adding four doors expanded its user friendliness and moved the Wrangler upmarket. The Wrangler became the halo SUV.”

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Lofty prices and high interest rates haven’t frightened customers from buying a Wrangler yet, said Jominy.

“It remains to be seen if the prices have become too high,” he said. “The Wrangler has few incentives, if any. But there’s no slowing down the Wrangler. There are so few like it. The only competitor is the Ford Bronco.”

Orlando resident Colin Wallace said his Wrangler Rubicon 4xe is the best Jeep he’s owned. He commutes to and from his office on electric power alone, gassing up maybe once a month. Wallace, a former Volkswagen GTI and Porsche Cayman owner, pays nearly $400 a month to lease the plug-in hybrid though he knows of other Rubicon 4xe owners who pay $800 a month. The sticker price of his 4xe is $66,000 — more than a Porsche Macan SUV he had on order.

Wallace touted the Wrangler’s improved highway handling though he cautioned prospective buyers to temper their expectations.

“A lot of people who are drawn to the Wrangler 4xe are expecting a Prius,” he told ABC News. “It’s not one. It lacks the niceties. It’s at a luxury price point but doesn’t have safety features you’d expect for $60,000.”

Jominy said Americans often overlook the Wrangler’s faults — drifting on the highway, poor fuel economy and rough ride — for the benefits of owning one.

“The Wrangler doesn’t pretend to be something it’s not,” he said. “You can take the doors and windshield off. Kids love them. Wranglers are so much fun because they’re so unique from everything else on the road.”

He added, “You know there’s going to be trade-offs, even at the high prices. You forgive it for things that you normally wouldn’t.”

Morrison said the latest version of the Wrangler solves his one complaint with the SUV.

“I can now drive 80 mph and talk to my mom on the phone,” he said.

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(NEW YORK) — When it comes to the password habits of Americans, there’s some room for improvement. But some tech companies are hoping a new security technology known as a “passkey” may offer a solution.

Passkeys, as they’re known, is a new security technology that works by having a person’s smartphone generate unique cryptographic “key,” which can then be used to unlock that person’s various online accounts – no password required.

“If I had to use one word it would be ‘lazy,'” Patricija Cerniauskaite, a spokesperson for digital security firm Nordpass, told ABC News, describing the habits of some Americans when it comes to their passwords.

A new report from Nordpass finds 83% of the most common passwords globally can be hacked in less than one second. According to Nordpass, the most common password among Americans last year was the word “guest. “123456” was the second most-common password, and in third place was, simply, “password.”

Cerniauskaite says the prominence of weak passwords is nothing new, in part because of the sheer volume of accounts internet users now have to manage.

“For a general person, it’s impossible to learn and remember 80 or 100 different, complicated password[s],” Cerniauskaite said. That’s why, she says, many people resort to words and phrases that are easier to remember, but less secure.

“It’s understandable, but it compromises people’s security,” she said.

Recently, tech companies including Google, Apple, and Microsoft have been rolling out passkeys to offer a solution to Americans’ bad password habits.

“The server will be sending a request to your device which can only be answered by the related passkey stored there,” Cerniauskaite said. “So when the passkeys are paired, you will actually be logged into your account.”

“You’ve confirmed to your device that you are who you say you are,” David Pierce, Editor At Large of The Verge, told ABC News. “And your device now goes to the website and says, ‘yup, it’s David.’ And you’re good to go.”

To set up a passkey, users navigate to the login screen of an account, and select the option to sign in with a passkey (usually the option is accompanied by a small icon that looks like a person standing next to a key). Then, the account will prompt the user to log in to their phone using a face scan, a fingerprint, or other security measure.

“It replaces a password, which is a series of letters and numbers and symbols that you have memorized, with essentially biometric information stored on your device,” Pierce said.

Passkeys are stored on a person’s phone or computer. Experts say this is more secure than having a company oversee a server full of user passwords, which could be vulnerable to hacking.

“Even if your password is good and safe, it can be stored somewhere and often those places are hackable and that’s how passwords get leaked,” Pierce said. “That is much much harder to do in a case like this.”

In addition, Pierce says, passkeys address the problem of “phishing” scams – where malicious actors create fake websites, designed to look like real login pages, with the intention of collecting the usernames and passwords of people who fall for the scam.

“You can’t give a hacker your password anymore, you can’t be socially engineered into giving someone your password,” he said, because “you don’t have a password anymore.”

This week, Google announced that passkeys are now available for Google accounts across most major platforms. Websites like eBay, Shopify, CVS Health, Kayak, and Best Buy all support the technology – but some major players are missing. Popular websites like Amazon, Facebook, and Twitter have yet to announce passkey support. Pierce says that’s likely to change as the technology matures.

“It will happen kind of, account by account, service by service, company by company,” he said. “It would be great if everybody would decide to do it at the same time, but that’s not likely going to happen.”

There are other drawbacks to passkeys as tying authentication to smartphones also ties it to smartphone batteries.

“If I’m out in the world and my battery dies – my password manager just died,” Pierce said.

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(NEW YORK) — A better-than-expected jobs report on Friday defied interest rate hikes that aim to slash inflation by cooling the economy.

Instead, the U.S. added 253,000 jobs in April, marking a slight decline from an average of 290,000 over the previous six months. The unemployment rate fell to 3.4%, matching a 54-year low, government data showed.

The job gains, however, did not accrue evenly across sectors. Some industries posted blockbuster expansions while others lagged far behind.

“There are good signs and there’s broad growth,” William Spriggs, chief economist for the labor federation AFL-CIO, told ABC News. “But many of the sectors didn’t do very much.”

Here’s what to know about which industries are seeing jobs grow the fastest and why:

Business and professional services: 43,000 jobs added

The sector that featured the most job gains covers a wide-reaching set of positions referred to as business and professional services, which includes highly trained employees such as attorneys, accountants, managers and computer engineers, among others.

The sector added 43,000 jobs last month, nearly doubling an average of 25,000 jobs gained over the previous six months.

The major expansion arrives despite high-profile layoffs last month in the media and tech industries, with some cuts involving management at companies such as Disney, Vice Media and Lyft.

The layoffs elsewhere may have driven some of the job growth in this sector, since companies across the economy depend on tech professionals but often face difficulty attracting them, Julia Pollak, a labor economist at ZipRecruiter, told ABC News.

“Their contraction is a boon to the rest of the economy, which almost had no chance recruiting top software engineers before,” Pollak said. “Finally, it stands a chance.”

Health care: 40,000 jobs added

Health care, an industry that has shown strong job growth in recent months, continued at a blistering pace in April.

The performance in this industry owes in large part to the aging U.S. population, Pollak said.

Roughly 17% of Americans are 65 years of age or older, according to a report released in February by the Administration of Aging, a government agency. That share of the population, which counts 55.7 million people, has grown nearly 40% since 2010, the report said.

Employment at nursing and residential care facilities made up almost a quarter of the jobs added in the sector last month, government data showed.

“This is an industry with tremendous long-term prospects,” Pollak said. “Where labor can’t easily be replaced by ChatGPT.”

Despite a bright future, the sector faced major difficulties during the pandemic when an overwhelming need for care led to staffing shortages and burnout, Spriggs said.

“We know that the sector was hurt deeply by the COVID crisis,” he said. “I think this is a very good sign that it’s on its way to recovery.”

Leisure and hospitality: 31,000 jobs added

Leisure and hospitality, an industry decimated by the pandemic, sustained strong growth in April as it continued to climb back toward pre-pandemic employment levels.

More than 80% of the job gains in the sector took place at food service and drinking establishments, which have benefited from the return of dining out and nightlife as coronavirus cases have waned.

But employment in the industry remains 2.4% below the employment level in February 2020, government data showed.

The shortfall of workers leaves room for growth in the sector, no matter how the wider economy fares, said Jeffrey Roach, chief economist at Charlotte-based investment firm LPL Financial.

“We should expect continued job gains in these industries even if the broader economy shrinks,” Roach said.

Disney is the parent company of ABC News.

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(NEW YORK) — Former first lady Michelle Obama has announced her latest venture, PLEZi Nutrition, aimed at creating healthy food and beverage options for parents to give “healthier, great-tasting products” to their kids.

Obama first shared the news of the public benefit company, whose purpose is to “help raise a healthier generation of kids,” during closing remarks on Wednesday at the Wall Street Journal’s Future Of Everything Festival.

“I’ve learned that on this issue, if you want to change the game, you can’t just work from the outside. You’ve got to get inside — you’ve got to find ways to change the food and beverage industry itself,” she said in her speech, addressing thousands of industry leaders in attendance. “I’m proud to announce the national launch of a company designed not just to provide better products, but to jumpstart a race to the top that will transform the entire food industry.”

The first product to launch under the brand is a new kids’ drink, PLEZi, that will come in four flavors and contains 75% less sugar than the average leading fruit juices, with no added sugar, plus fiber and other nutrients. The drinks are currently available nationwide at Target and Sprouts, as well as online at Walmart, with a goal to “ultimately be available anywhere you can buy a soda or sports drink.”

Obama has long been invested in public health, particularly in children’s nutrition. During her time as first lady, she launched the Let’s Move! campaign, the Chef’s Move to Schools program, which paired chefs with interested schools to create healthy meals that meet schools’ dietary guidelines and budgets, and championed the Healthy, Hunger-Free Kids Act that her husband, former President Barack Obama, signed into law in December 2010.

Now, as a co-founder and strategic partner with PLEZi Nutrition, Michelle Obama will work behind-the-scenes to guide the company’s mission as “a driver of change and model for how food and beverage brands can support the health of our next generation,” the company stated.

PLEZi Nutrition is “focused on lowering sugar content and lowering sweetness to help adjust kids’ palates to crave less sweetness overall,” the company said in a press release shared with ABC News. “In addition to reducing the sugar and sweetness, they are adding in nutrients kids need, all with the aim to replace sugary drinks and snacks.”

On average, kids in the U.S. don’t consume the recommended levels of nutrients and instead consume far too much added sugar — 53 pounds of added sugar per year on average, according to the press release.

“Sugar-sweetened beverages, also referred to as sugary drinks, are the leading source of added sugar, and nearly two-thirds of youth consume sugary drinks on a given day,” the statement continued.

In the years ahead, PLEZi has plans to expand beyond beverages and into the healthy snacks space.

The company will also work to provide beyond its product lines with an educational platform for parents and kids. It also plans to dedicate a chunk of its marketing budget to promotional content around what’s best for kids’ health, including the importance of water as a primary beverage for kids.

Obama also announced the PLEZi “Kitchen Cabinet” advisory group, led by food policy expert Debra Eschmeyer, who will guide and advise those educational efforts, marketing approaches and product development. The group includes doctors, professors, bestselling authors and CEOs with combined accolades and experience in public health, school nutrition, parenting, medicine and advocacy.

Eschmeyer previously served as executive director of the Let’s Move! initiative and is a former senior White House policy adviser for nutrition.

PLEZi Nutrition states on its website that it has already made an initial $1 million donation to FoodCorps’ Nourishing Futures initiative, which aims to “ensure all 50 million students across the country have access to nutrition education and free school meals by 2030.”

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(LOS ANGELES) — Shares of PacWest Bancorp plunged more than 50% in early trading on Thursday, marking the latest spasm of financial distress after three of the nation’s 30-largest banks fell within a matter of weeks.

In all, PacWest stock has fallen more than 85% this year, erasing hundreds of millions of dollars in value.

The Los Angeles-based midsized lender is exploring “all options” as it weighs offers from potential investors as well as the sale of a $2.7 billion loan portfolio, PacWest said in a statement on Wednesday.

However, the company rejected concern about a sudden run on deposits, saying it has “not experienced out-of-the-ordinary deposit flows” since the seizure and sale of First Republic on Monday.

Deposits, PacWest said last month, increased nearly 4% over an 11-day period in late March, even after the collapse of Silicon Valley Bank had set off financial uncertainty.

As the Fed aggressively hiked interest rates over the past year, the value of long-term Treasury and mortgage bonds dropped, punching a hole in the balance sheets at some regional banks.

The failure of Silicon Valley Bank in March sent shockwaves through the financial system that days later helped bring down New York City-based Signature Bank. On Monday, First Republic fell under government control before a sale to JPMorgan Chase.

While high interest rates contributed to the collapses, each of the banks also retained a sizable portion of uninsured depositors, who tend to panic without a government backstop for their funds.

PacWest appears to fit the mold, since its balance sheet carries securities vulnerable to high interest rates and a share of its deposits are uninsured, Greg Nini, a finance professor at Drexel University, told ABC News.

“The important ingredients are those fundamentals,” he said. “It sure sounds like collapse is possible.”

PacWest has not responded to ABC News’ request for comment.

The distress at First Republic earlier this week delivered some “knock-on effects” that further destabilized the bank, Nini added.

Addressing concern about deposits that lack government protection, PacWest said on Wednesday that insured deposits make up 75% of its holdings, which marks a sharp increase from the end of last year, when just 48% of its deposits were insured.

Despite rising fear about the fate of PacWest, the significant portion of guaranteed deposits should prevent the bank from sliding into failure, Julian Vogel, a finance professor at San Jose State University, told ABC News.

“I really don’t think it should be on the brink. Those people’s money is absolutely safe,” Vogel said. “Even if the company goes down, they will get their money, period.”

“While I understand that the drop in stock price can be fear-inducing, it’s not necessarily related to the overall performance of the company on a day-to-day basis.”

Stock prices at other regional banks dropped in early trading on Thursday, suggesting that the financial fallout was not limited to PacWest. Phoenix-based Western Alliance Bancorp shares plummeted about 32%; while Salt Lake City-based Zions Bancorp fell 8%.

Since the banking trouble has been largely concentrated at regional lenders located in the Southwest, depositors could be spreading concern through word of mouth, Vogel said.

“They’re all in the same region, which means that the people that have money in PacWest likely know their neighbor or friend or somebody from the gym that has money with banks affected by First Republic or Silicon Valley Bank,” he said.

The outcome at PacWest marks a “very pivotal” moment for the financial system, Vogel said.

“This is the first time that we’re seeing a bank that really shouldn’t have anything to worry about,” Vogel said. “It’s a solid company. Depositors are mostly insured.”

“If consumers keep panicking,” he added. “Then this could be the start of a new phase and there will be a lot more ahead.”

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(WASHINGTON) — The Biden administration will support public assessments of generative AI systems like ChatGPT to educate the public about whether these new systems align with the administration’s “bill of rights” for AI that’s aimed at preventing the new technology’s misuse, The White House announced early on Thursday.

These assessments will take place at a hacker convention in Las Vegas in August, the White House said.

Vice President Kamala Harris on Thursday plans to meet with the CEOs of Alphabet, Anthropic, Microsoft and OpenAI to “underscore” their “responsibility” as they develop AI and to “emphasize the importance of driving responsible, trustworthy, and ethical innovation with safeguards that mitigate risks and potential harms to individuals and our society,” the White House said. This meeting will be closed to the press.

The White House also confirmed that the National Science Foundation will spend $140 million to open seven new national research institutes studying AI, which will expand the number of institutes to 25 across the country.

These institutes will work with institutes of higher education, private companies and the government to “to pursue transformative AI advances that are ethical, trustworthy, responsible, and serve the public good,” the White House said.

“The new Institutes announced today will advance AI R&D to drive breakthroughs in critical areas, including climate, agriculture, energy, public health, education, and cybersecurity,” read the statement from the White House.

The White House’s budget office will also be announcing on Thursday that it plans to make public a draft of the policy guidance it plans to provide federal agencies with regarding the use of AI systems that makes sure its use “centers on safeguarding the American people’s rights and safety.”

The White House Office of Management and Budget plans to release the draft this summer and will open it up for public comment before it’s finalized, the White House said.

With regard to the public assessments of platforms like ChatGPT, the White House said that it has received a commitment “from leading AI developers, including Anthropic, Google, Hugging Face, Microsoft, NVIDIA, OpenAI, and Stability AI, to participate in a public evaluation of AI systems, consistent with responsible disclosure principles.” The assessments will take place at a hacker convention, called DEF CON 31, which is scheduled to be held in Las Vegas this August, according to the White House.

“This will allow these models to be evaluated thoroughly by thousands of community partners and AI experts to explore how the models align with the principles and practices outlined in the Biden-Harris Administration’s Blueprint for an AI Bill of Rights and AI Risk Management Framework,” the White House said. “This independent exercise will provide critical information to researchers and the public about the impacts of these models, and will enable AI companies and developers take steps to fix issues found in those models. Testing of AI models independent of government or the companies that have developed them is an important component in their effective evaluation.”

These are not the first steps the Biden Administration has taken regarding the issue.

In February, President Joe Biden signed an executive order that directed federal agencies to “root out bias in their design and use of new technologies, including AI, and to protect the public from algorithmic discrimination,” said the White House.

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(NEW YORK) — The U.S. Department of Labor (DOL) fined three McDonald’s franchisees after an investigation determined that hundreds of children — including two 10-year-olds — were working there in violation of federal labor law.

The investigation was part of the Wage and Hour Division’s efforts to end child labor abuses in the Southeast, the Labor Department said in a news release on Tuesday.

As part of their investigation, officials found that Louisville, Kentucky-based McDonald’s franchisee operator, Bauer Food LLC, hired two 10-year old’s to work at one of its locations — unpaid — and as late as 2 a.m., with one of the children even permitted to operate a deep fryer, a task for which workers must be at least 16 years old.

“Below the minimum age for employment, they prepared and distributed food orders, cleaned the store, worked at the drive-thru window and operated a register,” the Labor Department said Tuesday.

Under Kentucky’s child labor laws, minors younger than 14 years old are not allowed to work.

“Too often, employers fail to follow the child labor laws that protect young workers,” Louisville, Kentucky, Wage and Hour Division district director Karen Garnett-Civils, said in a statement. “Under no circumstances should there ever be a 10-year-old child working in a fast-food kitchen around hot grills, ovens and deep fryers.”

The three franchisees, Bauer Food LLC, Archways Richwood LLC and Bell Restaurant Group I LLC, run a combined 62 McDonald’s locations in Kentucky, Indiana, Maryland and Ohio.

According to Bauer Food, the 10-year-olds were not employed at the company, but were a night manager’s kids who were visiting them at work.

Bauer Food said that management did not approve of the kid’s being in that part of the restaurant, adding that the company has made it clear to its employees this behavior is against policy, and addressed the policy regarding children visiting their parents at work.

Archways Richwood did not immediately respond to ABC News’ request for comment. Bell Restaurant Group could not be reached for comment.

The investigation concluded that among the three franchisees, 305 minors were employed.

The Department of Labor fined the businesses $212,544 in civil money penalties.

According to federal child labor rules, there are certain types of jobs that minors can work.

Kids who are 14 to 15 years old are limited to working no more than three hours on a school day, eight hours on non-school days. They also can’t work over 18 hours during a school week, and can’t work before 7 a.m. and after 7 p.m., except between June 1 and Labor Day, the Labor Department said.

Archways Richwood LLC, Bauer Food LLC, and Bell Restaurant Group I LLC were in violation of having minors working hours beyond the legal limits, according to the Department of Labor.

According to Garnett-Civils, there has been an uptick in federal child labor violations, including instances where minors are operating equipment or doing dangerous work.

Tiffanie Boyd, senior vice president and chief people officer at McDonald’s USA, called the incidents “unacceptable” and “deeply troubling” and go against the company’s ” high expectations” it has for its brand.

“It is not lost on us the significant responsibility we carry to ensure a positive and safe experience for everyone under the Arches,” Boyd told ABC News. “I know how important it is that every restaurant fosters a culture of safety. As a mother whose teenage son proudly worked at our local McDonald’s, I feel this on a very personal level. We are committed to ensuring our franchisees have the resources they need to foster safe workplaces for all employees and maintain compliance with all labor laws.”

The Wage and Hour Division discovered that in the fiscal year 2022, nearly 700 children were illegally employed in hazardous jobs, which was the highest yearly count since 2011, the DOL said in a news release.

According to the Labor Department, a 15-year-old was hurt while using a deep fryer at a Morristown, Tennessee, McDonald’s last year. The franchisee, Faris Enterprises of TN LLC, was fined over $3,000, DOL said in March.

Faris Enterprises did not immediately respond to a request for comment.

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(WASHINGTON) — The Federal Reserve on Wednesday raised its short-term borrowing rate another 0.25%, escalating the central bank’s attack on inflation just two days after the forced sale of First Republic Bank.

The Fed’s 10th consecutive rate increase arrives less than a week after fresh government data showed that U.S. economic growth slowed over the first three months of this year.

Despite the economic turbulence, the central bank appears dedicated to tightening its grip on prices.

Inflation has fallen significantly from a summer peak though it remains more than double the Fed’s target of 2%.

Speaking in Washington, D.C., on Wednesday, Fed Chair Jerome Powell reasserted the central bank’s commitment to cooling price increases but left open the possibility that the Fed could pause increases at its next meeting.

“Inflation pressures continue to run high,” Powell said. “The process of getting inflation back down to 2% has a long way to go.”

In response to a question about additional rate hikes, Powell noted the removal of a sentence that appeared in the Fed’s previous rate hike announcement in March that said “some additional policy increases might be appropriate.”

Powell described the omission in the announcement on Wednesday as “meaningful,” saying a decision about any additional rate hikes would be “data dependent.”

Increases in the Fed’s benchmark interest rate have contributed to the financial emergency facing U.S. banks.

As the Fed aggressively hiked interest rates over the past year, the value of long-term Treasury and mortgage bonds dropped, punching a hole in the balance sheets at some banks.

Three of the nation’s 30-largest banks have failed since March. While high interest rates contributed to the collapses, each of the banks also retained a sizable portion of uninsured depositors, who tend to panic without a government backstop for their funds.

The announcement on Wednesday raises the benchmark rate to a target range of 5% to 5.25%.

In a statement, the Fed affirmed the stability of the financial system but acknowledged the distress would likely cool the lending environment.

“The U.S. banking system is sound and resilient,” the central bank said. “Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain.”

The Fed has put forward a series of borrowing cost increases as it tries to slash price hikes by slowing the economy and choking off demand. The approach, however, risks tipping the U.S. economy into a recession and putting millions out of work.

Data released last week showed that economic growth slowed at the outset of this year, suggesting the rate hikes have helped put the brakes on business activity.

U.S. gross domestic product grew by a 1.1% annualized rate over the three months ending in March, according to government data released Thursday.

The data marked a slowdown from 2.6% growth in the previous quarter. The slowdown resulted from a decline in business investment and residential fixed investment, which includes money spent on home buying and construction, the data showed.

The U.S. added 236,000 jobs in March, which marks strong job growth, but lower than the average of 334,000 jobs added each month over the previous six months, according to government data.

Meanwhile, U.S. retail sales fell moderately in February but remained solid, suggesting that households still retain some pandemic-era savings.

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(NEW YORK) — Major changes at Twitter under CEO Elon Musk in recent months have elicited some calls for an alternative platform.

One such app, Bluesky Social, has drawn attention as a possible Twitter rival and amassed a waitlist of aspiring users.

Launched by former Twitter CEO Jack Dorsey, Bluesky features some prominent users, including model Chrissy Teigen and Rep. Alexandria Ocasio-Cortez, D-NY.

Access to Bluesky is available on an invite-only basis while the platform undergoes testing.

Neither Bluesky nor Twitter immediately responded to a request for comment from ABC News.

Here’s what to know about Bluesky and how to join:

What is Bluesky?

Bluesky is a text-oriented social media platform on which users can post messages as long as 300 characters. Like Twitter, the messages posted on Bluesky appear on a newsfeed displayed to users. The app is available on iOS and Android.

The platform operates on an open framework, meaning that users can post their messages to a server tailored for specific interests or communities. The system design resembles that used on another text-first app, Mastodon, as well as the decentralized platform Discord.

The site began in 2019 as a venture at Twitter overseen by Dorsey, and spun out as an independent company last year.

Development of the site started after a tweet from Dorsey announcing Twitter’s plans to fund a decentralized social media platform, Bluesky said in a blog post. The eventual leaders at Bluesky were among those who sent direct messages to Dorsey in response to his post, the blog added.

As of last April, Bluesky had received $13 million in funding from Twitter to “ensure freedom and independence,” Bluesky said in a statement last year.

Who owns Bluesky?

The board of directors at Bluesky features Dorsey as well as Jeremie Miller, the founder in the late 1990s of a free instant messaging service called Jabber.

The CEO of Bluesky is Jay Graber, who formerly founded an events-oriented social media site called Happening and worked as a software engineer on a cryptocurrency Zcash, according to LinkedIn. She also serves on the board.

The company is owned by Graber as well as “the Bluesky team,” the Bluesky website says.

While Bluesky has retained a traditional structure featuring a board and chief executive, the company said it aspires to take control of content away from a top-down entity and return it to creators.

“Traditional social networks are often closed platforms with a central authority,” the website says. “There’s a small group of people who control those companies, and they have total control over how users can use the platform and what developers can build.”

The system organization offered at Bluesky “changes this,” the website adds.

Dorsey criticized Musk’s leadership at Twitter on Bluesky last week, saying that “all went south” at the platform after Musk’s acquisition, CNBC reported.

Is Bluesky a viable challenger to Twitter?

Since Bluesky is still in its infancy, whether the app can compete with Twitter remains unclear.

Right now, Bluesky is much smaller than Twitter. The Bluesky app has recorded more than 360,000 downloads in the Apple store as well as over one million inquiring users on its waitlist, Fortune reported last week.

As of last week, more than 40,000 users had been given access to Bluesky, Bloomberg reported.

For context, Twitter reported 41.5 million average daily active users over the three months ending in June, which marked the last earnings report period before Musk took the company private.

The platform’s user data is no longer publicly available but in November Musk said usage had reached “an all-time high.”

How do you get Bluesky invite?

Access to Bluesky is only available to users who receive an invite, since the site is undergoing testing.

A sign-up on the company’s website allows individuals to join a waitlist by sharing their email address.

The company has not offered a timeline for when it plans to make the site public.

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(WASHINGTON) — Millions of Americans who rely on federal payments to make ends meet, could be negatively impacted if the government is unable to pay its bills come June 1.

If allowed to happen, economists agree the first debt default in U.S. history would be an economic catastrophe and could trigger a global financial crisis. Allowing the U.S. to default on its debts would induce “a self-inflicted recession,” Gregory Daco, Chief Economist at EY-Parthenon, wrote in a note to clients this week.

This week Treasury Secretary Janet Yellen put Congress on notice. In a letter to House Speaker Kevin McCarthy, R-Calif., Yellen warned the U.S. could be unable to “continue to satisfy all of the government’s obligations” by June 1 if Congress does not raise or suspend the debt limit before that time.

Yellen wrote that a debt default would “cause severe hardship to American families.”

The federal government would have to make hard decisions, like who gets paid and when, and the consequences would be far-reaching.

Will Social Security be affected by debt ceiling?

Payments to 67 million Social Security beneficiaries could be halted.

However, a 1996 law provides an escape clause that allows the Treasury Department to continue paying Social Security benefits, even if there is a delay in raising the debt ceiling. “There is legal authority, and it arguably should be used to make sure benefits are paid,” Steve Robinson, chief economist for the bipartisan Concord Coalition wrote in a recent paper.

The law allows for the Social Security trust fund to be drawn down to keep those benefits flowing until the debt limit is raised, while prohibiting those funds from being used to pay for any other government programs.

There’s very little Americans can do to prepare for the unprecedented event of a U.S. debt default, “since it’s difficult to know what payment would be made, in full or in part as well as the timing,” Daco wrote.

Analysts say your best defense is to keep your own financial house in order. They say having emergency savings on hand and paying down debt will be more important than ever.

What else could be impacted?

Payments on other U.S. obligations, including for Medicare and Medicaid, SNAP food assistance, Veterans’ benefits, housing assistance, and school lunch programs would also be at risk, inflicting pain on Americans across the country.

The U.S. credit rating would most likely be downgraded, sending interest rates higher and making it more expensive for businesses and consumers to borrow money.

Analysts say a credit market freeze could hurt the ability of U.S. companies to operate effectively.

Yellen also warned that a debt default would “harm our global leadership position,” as world financial markets lose faith in the U.S. and its ability to pay its bills. The government would not have the money to pay back buyers of its bonds and other securities, causing the U.S. dollar to weaken and the stock market to tumble, hurting Americans’ retirement savings and other investments.

Debt limit could hurt jobs, unemployment

The damage would largely depend on how long the impasse lasts.

If the default lasts for about a week, close to 1 million jobs would be lost, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent, according to the financial services company Moody’s.

But if the impasse drags on for six weeks, Moody’s estimates more than 7 million jobs would be lost, the unemployment rate would soar above 8% and the economy would decline by more than 4%.

How did we get here?

The Biden Administration and House Republicans have been deadlocked in debt negotiations for months.

House Republicans passed their own bill that slashes government spending in exchange for raising the debt ceiling, but President Joe Biden has said he will not negotiate with them until spending talks are separated from the debt limit.

A recent ABC News/Washington Post poll finds broad worry about the consequences of default among Americans.

A vast majority of poll respondents, 82%, are very or somewhat worried that a government default would damage the economy. Just 26% of Americans adopt McCarthy’s position that Congress should allow the government to pay its debts only if the administration agrees to cut federal spending, while an overwhelming 65% agree with Biden’s view that the issues of debt payment and federal spending should be handled separately.

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