What’s happening? (March 12-18)
After the Federal Deposit Insurance Corporation stepped in last weekend to take over Silicon Valley Bank and Signature Bank, panic spread through the banking sector, triggering government interventions to prop up other suffering banking institutions. On Thursday, 11 of the country’s largest banks combined resources to inject $30 billion in First Republic Bank, the 14th largest bank in the US, which found itself on the brink of collapse. The infusion was the result of a deal struck by Treasury Secretary Janet L. Yellen and Jamie Dimon, chief executive of JPMorgan Chase, whose bank bailed out several rivals during the 2008 financial crisis. But while some hear echoes of 2008 in this banking crisis, the White House would like avoid comparisons. Despite extensive actions by the Federal Reserve, Treasury, and FDIC to protect customer deposits and assets and bolster confidence in the nation’s banks, President Biden is reluctant to use the term “rescue.”
More tech layoffs
Meta announced last week that lay off another 10,000 employees, or 13 percent of its workforce, as it shrinks after a hiring boom that accelerated during the pandemic. The massive dismissal is the second that convulses Meta in recent months: in November the company fired 11,000 workers between departments and regions. Since then, Meta reported that he was taking a $4.2 billion restructuring charge for the fourth quarter and expects an additional $1 billion in restructuring costs in 2023 to account for its plans to terminate some office leases, redesign some data center projects and pay severance payments to employees. Similar efforts to reduce costs have been underway at Amazon, Alphabet, Microsoft and Salesforce, as the boom times in the tech industry come to an end.
Inflation remains stubborn
Data released on Tuesday showed annual inflation had cooled slightly, with the Consumer Price Index rising 6 percent in the year to February, down from 6.4 percent in January. But there are more troubling signs below the surface of the report: Core inflation, which excludes volatile food and fuel prices, rose 0.5 percent from a month earlier, beating analysts’ expectations and rallying. fastest monthly since September. Federal Reserve officials were awaiting this data to inform their decision on interest rate hikes at their next meeting this week.
Whats Next? (March 19-25)
A giant in the spotlight
Shou Zi Chew, the chief executive of TikTok, will testify again before Congress on Thursday as the app comes under increasing scrutiny from President Biden and other lawmakers in Washington. Last week, TikTok said the Biden administration wanted its Chinese owner, ByteDance, to to sell the app, threatening a ban in the United States if he couldn’t complete a deal. At the heart of Washington lawmakers’ concerns is the fear that Beijing could request the data of the 100 million Americans who use the app. But a sale could be hard to get out: TikTok’s price tag of $50 billion or more would be too high for all but a tech giant like Meta or Google, but those companies would probably want to avoid the antitrust battle that could ensue from trying to acquire the social media giant.
What will the Federal Reserve do?
As the Federal Reserve prepares to meet on Tuesday and Wednesday, central bankers are facing a more complicated calculation than they expected a few weeks ago. There’s new economic data, including employment and inflation reports, to factor into your decision about how much to raise interest rates, or whether to raise them at all. But officials are also looking at the collapse of three banks that were caught off guard by the previous jump in rates, which significantly affected the market value of their holdings. So while a relatively active job market and persistent inflation give Fed officials a reason to continue on a path of aggressive rate hikes, the turmoil in the banking sector has made analysts uncertain about the Fed’s next move.
Dominion vs. Fox, continued
On Tuesday, attorneys for Dominion Voting Systems and Fox News will present oral arguments for summary judgment in Dominion’s lawsuit accusing Fox of defaming it by portraying the company as a villain while the network amplified false claims about the 2020 presidential election. . requested domain summary judgment, which is a process for deciding a case without going to trial. The company has argued that Fox has not provided any new evidence to support its election conspiracies and that the news network has already admitted that it knew the on-air statements were false. His court file includes many of the recently released private messages that Fox News anchors and other staff exchanged, expressing skepticism about the narrative the network was promoting in its broadcasts.
What other thing?
Emmett Shear, chief executive of the live streaming site Twitch, said Thursday that he was quit after 16 years. A federal regulator last week approved a $31 billion rail company merger, paving the way for the creation of a railway that will unite Canada, the United States and Mexico. And CNN’s primetime audience has fallen since the network revised its 9 p.m.