Business
Rising Fuel Prices Could Force Excruciating Choices on Economic Policies
With the flow of energy through the Middle East still mostly blocked and oil prices rising, policymakers in Europe are confronting the immediate impact of higher costs and trying to decipher the potential economic damage of a prolonged conflict.
On Thursday, officials at the European Central Bank and Bank of England are expected to hold interest rates steady, but investors are betting that each central bank will raise rates at least twice later this year. Economists and lawmakers will be watching closely for signs about how the central banks will respond to jumps in inflation.
The effective closing of the Strait of Hormuz, a vital waterway for fuel and other commodities off Iran’s southern coast, has sharply increased energy prices. Brent crude, the international benchmark, has pushed well above $100 a barrel, while European natural gas prices are nearly 40 percent higher since the United States and Israel attacked Iran at the end of February.
The war had an almost immediate impact on European inflation, increasing gasoline prices at the pump, airfares and other fuel-intensive activities. In Britain, the annual inflation rate climbed to 3.3 percent in March and is expected to stay around 3 percent through the second quarter, a percentage point above the central bank’s target. For the 21 countries that use the euro, inflation averaged 2.6 percent in March, up from 1.9 percent a month earlier.
But for the central banks, the question is whether higher prices will ripple through the economy and eventually push up wages, potentially setting off a spiral of escalating prices that would warrant aggressive rate increases like those in 2022. For now, analysts say there isn’t enough information on how the war, seemingly in a holding pattern, will affect the economy. While President Trump has extended a cease-fire in the region, traffic through the strait remains sparse.
At the same time, the concern about inflation is being weighed against the possibility that the war damages economic growth. In that scenario, policymakers wouldn’t want to tighten financial conditions. Consumer sentiment in Germany, the eurozone’s largest economy, dropped to its lowest level in three years, data this week showed. This month, the International Monetary Fund said the bloc’s economy would grow 1.1 percent this year, but that assumed a relatively quick resolution to the war and the recovery of global energy markets.
“The E.C.B. will stay in ‘wait and see’ mode, at least for now,” analysts at HSBC wrote in a note. But “the risk of prolonged energy supply disruption, coupled with risks of second-round effects on inflation,” increase the probability of the central bank’s raising interest rates later.
It’s a dilemma facing central banks farther afield as well. This week, the Bank of Japan voted to hold interest rates steady, but it was a split decision with several officials preferring an increase in rates. The central bank raised its inflation forecast while warning that economic growth is likely to slow this year.
On Wednesday, the Federal Reserve also held interest rates steady. It acknowledged the war’s effect on the economy, saying inflation had ticked up because of the “recent increase in global energy prices.”
Business
The FBI serves a search warrant at the Garden Grove chemical plant
Federal Bureau of Investigation officers served a search warrant Wednesday at the Garden Grove chemical plant, where a compromised tank containing toxic chemicals threatened to leak or explode, resulting in the evacuation of nearby residents in May.
“We are cooperating with authorities at our Garden Grove facility and will continue to do so,” a spokesperson of GKN Aerospace, which operates the facility, said in an email statement.
Laura Eimiller, an FBI spokesperson, said FBI agents are serving a search warrant as part of an ongoing investigation into the Garden Grove aerospace business.
GKN Aerospace is a division of Melrose Industries, a U.K.-based aerospace company that manufactures aircraft parts.
In May, at the manufacturing facility, which stores thousands of gallons of toxic chemicals in pressurized tanks used to produce materials such as plexiglass for fighter jet and commercial aircraft windows, one tank threatened to leak or explode.
Over 50,000 residents were temporarily evacuated as officials investigated the potential for an explosion for days. They found that a crack in the compromised tank released the pressure buildup inside the storage unit, which ruled out the possibility of an explosion, and allowed residents to return to their homes.
The compromised tank threatened to blow up, affecting adjacent tanks also containing the toxic chemical methyl methacrylate which could have caused a large-scale public safety emergency. Still, plans to remove the remaining MMA chemical tanks from the facility have been postponed, and no new date has been announced yet.
Residents who were impacted by the evacuation have already filed multiple class action lawsuits against the company, alleging negligence at the manufacturing facility and seeking compensation for loss of use of homes and diminished property value. Now, federal officials will investigate possible violations and factors that could have contributed to the incident.
According to the FBI warrant, the officers will seize items in violation of measures to prevent the accidental release of hazardous substances into the air.
The warrant allows FBI officers the discretion to search digital devices or seize and transport them as part of the investigation.
Business
Rivian begins deliveries of cheaper electric vehicles
Electric-vehicle maker Rivian began delivery of a cheaper SUV on Tuesday as it aims to take customers from Tesla and others.
The long-anticipated R2, which will eventually be available for less than $45,000, could help boost the market share of the Irvine company better known for vehicles priced around $77,000.
The first R2s to roll off the company’s production line in Normal, Ill., are the performance version, starting at $57,990. Rivian said the R2 Premium will arrive in late 2026 for around $54,000, followed by an R2 Standard version in 2027 priced at $44,990.
“Rivian is really trying to prove its worth,” said Ivan Drury, director of insights at Edmunds. “They’ve gone past that initial stage and are hoping to move on to mass market products.”
The R2 Performance is still an expensive vehicle for many Americans, but it’s a step down from Rivian’s nearly $77,000 R1S. It’s typical for an automaker to launch the most expensive version of a new vehicle first, experts said.
Whether the R2 will be the success Rivian is hoping for won’t become clear until late 2027, once the standard versions are widely available. Chief Executive RJ Scaringe said the company is aiming to compete with not just other EV makers, but also traditional auto companies such as Jeep and Subaru.
“More mainstream people are going to be in on the R2, especially for the lower-priced models,” auto analyst Brian Moody said. “You’re always going to have early adopters, but there’s a lot more customers to go around in the $45,000 to $55,000 range.”
According to Cox Automotive, the average transaction price for a new EV in the U.S. is $55,000, compared with $49,000 for a gas-powered vehicle. Used EV sales have been surging lately because of their value, with an average transaction price of around $36,000.
Though there’s significant hype surrounding the launch of R2, investors have been unimpressed. Rivian shares fell 7% on Tuesday.
There has been a broad cooling of the EV market. Major automakers including Honda and Ford have cut back their EV options as excitement for the vehicles has fallen under the Trump administration. A $7,500 EV tax credit for new vehicles expired in September.
Drury added that an announcement of a new product would generally generate more buzz than the first deliveries of a vehicle that’s already been in the public eye.
“This is simply them delivering on a promise, and the market itself is not what it was when they had first conjured up the vehicle,” Drury said.
Rivian lost $3.6 billion last year and hasn’t been profitable since its founding in 2009. Scaringe said the company will reach profitability on a per-unit production basis with the R2 this year, but estimated that the company won’t turn an overall profit until closer to 2030.
Karl Brauer, an auto industry expert at ISeeCars.com, said the premium and standard versions of the R2 probably will sell in much higher volumes than the performance version.
“It’s in theory an exciting moment, because they’re launching this new version, but it’s the expensive one,” Brauer said. “There’s no indication in my mind that there will be huge, high-volume sales.”
Business
Primm is a spooky shell of its former self. But the gambling oasis may have found a savior
A month away from its closure, onetime gambling oasis Primm, Nev., located along the state border with Southern California, has a new lease on life.
The Primm family, owners of the land that includes three casino resorts and other businesses along the 15 Freeway, announced Tuesday a partnership intended to save the struggling state-line strip and hundreds of jobs.
The deal allows Las Vegas-based Terrible’s, owned by the Herbst family and perhaps most famous for a string of gas stations and convenience stores, to operate the properties.
“What we saw with them is the same energy that we had in rebuilding Primm,” said Cory Clemetson, describing the new deal with Terrible’s in an interview with The Times. Clemetson is president of Primm South Real Estate Co. and a grandson of Primm founder Ernie Primm, who made a name for himself in Southern California in the 1930s and ’40s with his Gardena card rooms.
In the summer of 2025, signage blocks an entrance at Primm Mall, a once-popular site along with the trio of casinos at the California-Nevada state line.
(Bridget Bennett / For The Times)
“Primm has long been one of Nevada’s most recognizable destinations,” said Tim Herbst, president of Terrible’s, in a statement. “This partnership reflects our commitment to preserving that legacy while creating new opportunities for growth, investment, and tourism for decades to come.”
Terrible’s takes over for Affinity Gaming, owned by private equity company Z Capital Partners, in the full-circle world of southern Nevada gaming. In 2010, Herbst Gaming declared bankruptcy and saw Primm taken over by Z Capital Partners.
An email to representatives for Affinity Gaming was not immediately returned.
The process for the return of Terrible’s to Primm kick-started May 5, when Affinity confirmed the closure of Primm Valley Casino Resorts.
Affinity’s subsidiary, Primadonna Co. LLC, sent termination notices to more than 300 employees effective July 4.
The closure was devastating, Clemetson said.
“It felt like a gut punch,” he said. “I mean, you’ve got to be kidding me that they would announce something like that for the Fourth of July. Laying off in excess of 300 Nevadans who are mostly paycheck to paycheck with nowhere to go didn’t sit well with my family.”
Primm Valley was the last of three resorts built between 1977 and 1994 at the site that remained in full operation.
Buffalo Bill’s, the largest of the three resorts, closed 24-7 operations in July 2025, after Whiskey Pete’s, the original casino, shuttered in December 2024.
Affinity Gaming declined multiple requests from The Times to speak about Primm’s struggles.
In a letter presented at a Clark County Board of Commissioners meeting, Erin Barnett, Affinity’s vice president and general counsel, wrote in October 2024 that “traffic at the state line has proved to be heavily weighted towards weekend activity and is insufficient to support three full-time casino properties.”
Scott Butera, Affinity’s chief executive and president, offered a few comments about the closure at the May 21 Nevada Gaming Commission meeting.
“As a tenant with a difficult lease and an expensive property and increased competition every day in California … it just became a very difficult thing,” he said, “and we’ve been losing money for years there.”
Clemetson said that Affinity asked for help over the years, such as potential rent reductions, but that the Primm family was unaware of Affinity’s finances.
As for the future, Clemetson said Terrible’s was in the process of reacquiring a gaming license for Primm, which he hoped would happen in the next three weeks.
He also said it was the goal of the Herbst and Primm families to try to keep all workers who received a termination notice employed.
Clemetson said he was excited about Primm’s future under Terrible’s and chalked up its bankruptcy in 2010 to the Great Recession.
“They suffered a similar fate of many big brands like MGM and Caesar’s,” Clemetson said.
“They’re very well thought of in Nevada and they’re a very successful family who’s done well,” he added.
Speaking of Primm’s chances of regaining its former glory, Clemetson reached back into his own past as a young sports agent for players on the L.A. Galaxy soccer team.
“I can’t tell you how many people told me I was dumb to get involved representing soccer players because soccer would never make it here,” he said. “Now, Major League Soccer has a few franchises over a billion dollars.”
As for Tim Herbst and his family, “we believe Primm’s best days are still ahead.”
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