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 point of collapse. The infusion was the results of an agreement reached by Treasury Secretary Janet L. Yellen and Jamie Dimon, the JPMorgan Chase chief executive, whose bank saved several rivals in the course of the 2008 financial crisis. But though some hear echoes of 2008 on this banking crisis, the White House would love to avoid comparisons. Despite sweeping actions by the Federal Reserve, Treasury and F.D.I.C. to guard clients’ deposits and assets and shore up confidence within the country’s banks, President Biden is loath to make use of the term “bailout.”
More Tech Layoffs
Meta announced last week that it could lay off one other 10,000 employees, or 13 percent of its work force, because it pares down after a hiring boom that accelerated in the course of the pandemic. The mass layoff is the second to roil Meta in recent months: In November, the corporate let go 11,000 employees across departments and regions. Within the time since, Meta reported that it was taking a $4.2 billion restructuring charge for the fourth quarter and expecting a further $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 chop costs have been underway at Amazon, Alphabet, Microsoft and Salesforce, as boom times within the tech industry come to an end.
Inflation Stays Stubborn
Data released on Tuesday showed that annual inflation had cooled barely, with the Consumer Price Index climbing 6 percent over the 12 months 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 on the Federal Reserve had been awaiting this data to tell their decision about interest-rate increases at their next meeting this week.
What’s Next? (March 19-25)
A Juggernaut within the Highlight
Shou Zi Chew, the chief executive of TikTok, will testify again before Congress on Thursday because 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 USA if it couldn’t complete a deal. The crux of Washington lawmakers’ concerns is fear that Beijing could request the information of the 100 million Americans who use the app. But a sale could possibly be difficult to tug off: TikTok’s price tag of $50 billion or more can be too steep for all except a tech giant like Meta or Google — but those corporations would probably need to avoid the antitrust battle that would arise from trying to accumulate the social media juggernaut.
What Will the Fed Do?
Because the Federal Reserve prepares to satisfy on Tuesday and Wednesday, central bankers face a more complicated calculus than they might have expected a number of weeks ago. There are recent economic data, including job and inflation reports, to factor into their decision on how much to boost rates of interest — or whether to boost them in any respect. But officials are also taking a look 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 comparatively hot job market and protracted inflation provide Fed officials with reason to proceed on a path of aggressive rate increases, the turmoil within the banking sector has made analysts uncertain in regards to 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 corporate as a villain because the network amplified false claims in regards to the 2020 presidential election. Dominion requested the summary judgment, which is a process for deciding a case without going to trial. The corporate has argued that Fox has not provided any recent 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 lots of the recently released private messages that Fox News anchors and other staff exchanged, expressing skepticism in regards to 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 in which for the creation a railroad that links Canada, the USA and Mexico. And CNN’s prime-time audience has fallen because the network overhauled its 9 p.m. programming.
