What’s Up? (April 23-29)
Pink Slips for Cable News Stars
In a matter of hours on Monday, cable news underwent a seismic shift. First, Fox News announced that it had ousted Tucker Carlson, its most popular prime-time host. The move came less than a week after the company paid $787.5 million to settle a defamation suit with Dominion Voting Systems. A focus of the case had been Mr. Carlson’s texts, showing him denigrating Donald J. Trump after the 2020 presidential election. But it wasn’t until the day before the defamation trial was to begin that Fox leadership discovered private messages sent by Mr. Carlson that had been redacted in previous legal filings showing him making highly offensive and crude remarks. Those messages served as a catalyst for his firing, several people with knowledge of Fox’s discussions said. Soon after Mr. Carlson was fired, CNN announced that it had “parted ways” with Don Lemon, a longtime star on the network who most recently was a morning show co-host. Mr. Lemon met backlash in February when he made comments about women and aging that many considered sexist.
Federal regulators were racing over the weekend to seize and sell the troubled First Republic Bank before financial markets open on Monday. First Republic, a midsize bank in San Francisco, reported a staggering deposit flight over last month. Last Monday, the bank’s executives said it had a quarterly loss of $102 billion in customer deposits, more than half of the $176 billion it held at the end of last year, not taking into account the $30 billion lifeline it received in March from the country’s biggest banks. First Republic’s troubles are part of a wider banking crisis that began with the collapse of Silicon Valley Bank in mid-March. In a report released on Friday on the failure of SVB, the Federal Reserve blamed itself for failing to prevent SVB’s collapse. Michael S. Barr, the Fed’s vice chair for supervision, said overseers at the central bank had failed to “take forceful enough action” and said regulatory standards for SVB “were too low.”
Slowing Economic Growth
The U.S. economy was still growing in the first three months of the year, according to preliminary data released on Thursday, as consumers continued to spend on goods and services like travel and dining out. Gross domestic product in the United States rose at a 1.1 percent annual rate, a deceleration from the 2.6 percent rate in the last three months of 2022 but still the third straight quarter of growth. The robust consumer spending helped offset slowdowns elsewhere: The housing sector and business investment in equipment — two areas of the economy sensitive to changes in interest rates — both continued to shrink. But how long will consumers continue to open their wallets? Analysts are not sure.
What’s Next? (April 30-May 6)
A Highly Anticipated Fed Meeting
These days, aren’t all meetings of the Federal Reserve highly anticipated? Well, yes. But even in the era of closely observed Fed moves, the meeting this Wednesday is notable. With signs of an economic slowdown, some analysts now believe there is a slim possibility that Fed officials will pause their streak of interest rate increases. At their last meeting in March — squarely in the midst of the banking turmoil — officials raised rates by a quarter-point, matching the previous month’s increase. But the Fed signaled that much uncertainty lay ahead as it sought a narrowing path to a soft landing, made narrower by the collapses of Silicon Valley Bank and Signature Bank. Still, many analysts expect the central bank to approve another quarter-point increase, continuing its fight to tame cooling but persistent inflation.