What’s Up? (March 12-18)
Financial Panic
After the Federal Deposit Insurance Corporation stepped in last weekend to take over Silicon Valley Bank and Signature Bank, panic rippled through the banking sector, touching off government interventions to prop up other suffering banking institutions. On Thursday, 11 of the country’s biggest banks combined resources to inject $30 billion into First Republic Bank, the 14th-largest U.S. bank, which found itself on the brink of collapse. The infusion was the result of an agreement reached by Treasury Secretary Janet L. Yellen and Jamie Dimon, the JPMorgan Chase chief executive, whose bank saved several rivals during the 2008 financial crisis. But though some hear echoes of 2008 in this banking crisis, the White House would like to avoid comparisons. Despite sweeping actions by the Federal Reserve, Treasury and F.D.I.C. to protect clients’ deposits and assets and shore up confidence in the country’s banks, President Biden is loath to use the term “bailout.”
More Tech Layoffs
Meta announced last week that it would lay off another 10,000 employees, or 13 percent of its work force, as it pares down after a hiring boom that accelerated during the pandemic. The mass layoff is the second to roil Meta in recent months: In November, the company let go 11,000 workers across departments and regions. In the time since, Meta reported that it was taking a $4.2 billion restructuring charge for the fourth quarter and expecting an additional $1 billion in restructuring costs in 2023 to account for its plans to terminate some office space leases, redesign some data center projects and pay out severance for laid-off employees. Similar efforts to cut costs have been underway at Amazon, Alphabet, Microsoft and Salesforce, as boom times in the tech industry come to an end.
Inflation Remains Stubborn
Data released on Tuesday showed that annual inflation had cooled slightly, with the Consumer Price Index climbing 6 percent over the year through February — down from 6.4 percent in January. But more troubling signs lay beneath the surface of the report: Core inflation, which strips out volatile food and fuel prices, climbed 0.5 percent from the previous month, exceeding analysts’ expectations and making for the fastest monthly pickup since September. Officials at the Federal Reserve had been awaiting this data to inform their decision about interest-rate increases at their next meeting this week.
What’s Next? (March 19-25)
A Juggernaut 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 policymakers in Washington. Last week, TikTok said the Biden administration wanted its Chinese owner, ByteDance, to sell the app, threatening a ban in the United States if it could not complete a deal. The crux of Washington lawmakers’ concerns is fear that Beijing could request the data of the 100 million Americans who use the app. But a sale could be difficult to pull off: TikTok’s price tag of $50 billion or more would be too steep for all except a tech giant like Meta or Google — but those companies would probably want to avoid the antitrust battle that could arise from trying to acquire the social media juggernaut.
What Will the Fed Do?
As the Federal Reserve prepares to meet on Tuesday and Wednesday, central bankers face a more complicated calculus than they may have expected a few weeks ago. There are new economic data, including job and inflation reports, to factor into their decision on 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 flat-footed by the previous jump in rates, which significantly dinged the market value of their holdings. So while a relatively hot job market and persistent inflation provide Fed officials with reason to continue on a path of aggressive rate increases, the turmoil in the banking sector has made analysts uncertain about the Fed’s next move.
Dominion v. Fox, Continued
On Tuesday, lawyers for Dominion Voting Systems and Fox News will present their oral arguments for summary judgment in Dominion’s suit accusing Fox of defaming it by casting the company as a villain as the network amplified false claims about the 2020 presidential election. Dominion requested the 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 conceded that it knew the on-air statements were bogus. Its court filing 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 on its broadcasts.
What Else?
Emmett Shear, the chief executive of the livestreaming site Twitch, said on Thursday that he was resigning after 16 years. A federal regulator last week approved a $31 billion rail company merger, paving the way for the creation a railroad that links Canada, the United States and Mexico. And CNN’s prime-time audience has fallen since the network overhauled its 9 p.m. programming.
Marie Solis
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