Fed Chair Jerome Powell signaled that the central bank might raise the interest rate higher at its next meeting than previously expected as it continues to fight inflation. While addressing the Senate Banking, Housing, and Urban Affairs Committee, Powell said the ultimate interest rate level would likely be higher than anticipated due to the latest economic data. More: - In December, Fed officials had projected they would raise rates to a range between 5% and 5.5% and hold it at that level into 2024.
- As the economy and the job market have remained strong, the Fed plans to submit its new interest rate projects at its March 21-22 meeting.
- Powell said the central bank would pay close attention to Friday’s February jobs report and next week’s February inflation report.
- Last month, the Fed raised its benchmark interest rate by 25 basis points to bring the rate to a range between 4.5% and 4.75%.
- U.S. stocks fell on Tuesday following Powell’s remarks; the Dow lost 575 points or 1.72%.
- The S&P 500 fell 1.53%, and the Nasdaq fell 1.25%.
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The Justice Department has filed a lawsuit to block JetBlue Airways' proposed $3.8B acquisition of Spirit Airlines, noting the deal would stifle competition and make airfare costlier for consumers. The DOJ said the merger between the two airlines would eliminate the nation's largest budget airline competitor to major carriers. More: - On Monday, JetBlue said it expected the DOJ to file an antitrust lawsuit this week to the deal and was prepared to fight it.
- The airline said it accounted for the possibility of a lawsuit when it set the timeline to complete the deal for H1 2024.
- U.S. Attorney General Merrick Garland said the deal would limit choices and drive up ticket prices for passengers across the country if allowed to close.
- The lawsuit was filed in Massachusetts federal court.
- Washington D.C., New York, and Massachusetts joined the suit.
- If allowed to close, the JetBlue-Spirit merger would create the fifth largest airline in the U.S. after American, United, Delta, and Southwest.
- Those four together account for roughly 80% of the airline market in the U.S.
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TikTok launched a new feature on its platform called Series, which allows select creators to share videos as long as 20 minutes. The longer videos will be available for purchase behind a paywall, and creators will be able to choose the price of their paywalled content. A Series can have up to 80 videos. More: - Creators can charge between $0.99 and $189.99 for their paywalled content.
- TikTok plans to open the feature to more users in the coming months.
- Currently, TikTok allows users to post 15-second, one-minute, three-minute, or 10-minute videos on the platform.
- The move heightens TikTok’s competition with YouTube, known for its long-form video content.
- TikTok has been facing growing concerns about user data and privacy due to the app’s Chinese origins.
- On Tuesday, a dozen U.S. Senators introduced legislation that would allow the President to ban foreign-linked makers of software or electronics that the Commerce Department declares a national security risk.
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FTX sister firm Alameda has sued crypto investment firm Grayscale and its owner, Digital Currency Group, over the structure of their large Bitcoin and Ethereum trusts. Alameda owns over 22 million shares in Grayscale’s Bitcoin trust and 6 million shares in its Ethereum trust. More: - According to Alameda, the shares are worth $290M on secondary markets.
- Alameda claims the shares would be worth twice as much if Grayscale reduced its fees and allowed investors to redeem their shares for the equivalent value in the underlying crypto assets.
- Grayscale’s Bitcoin trust is trading at a 45% discount on the price of Bitcoin.
- Grayscale does not allow investors to redeem their shares for the coins held in the trusts.
- The only way investors can exit their investments is by selling their shares in the trusts in the secondary market, where shares are trading at a fraction of their proportionate interest in trust assets.
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Germany has launched a review of its 5G high-speed mobile telecommunications networks as part of a broader review of its relationship with China. The move suggests that the German government may be moving closer to banning Chinese suppliers like Huawei from German networks. More: - The German government had for years resisted U.S. calls for its EU partners to ban the use of equipment made by Huawei and Chinese state-owned ZTE Corp. in their critical infrastructure.
- The U.S. warned that using Chinese components in ally 5G networks made them vulnerable and could compromise intelligence sharing between Washington and Berlin.
- The German Interior Ministry said the probe could lead to operators having to remove unsafe equipment from their networks.
- The review plans to focus on existing components in the nation’s telecommunications networks that may pose a risk to national security.
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EV startup Rivian Automotive plans to raise $1.3B in cash by selling convertible notes. The company intends to use the new funds to develop its upcoming R2 series vehicles, expected to launch in 2026. Investors buying the notes will have the option to purchase additional notes worth up to $200M. More: - According to Rivian’s Q4 earnings, the company had $12.1B at the end of 2022.
- The automaker raised nearly $12B when it went public in November 2021.
- Rivian noted that it had enough to fund its operations through 2025.
- Last month, the company laid off 6% of its workforce.
- The EV maker plans to produce 50,000 vehicles in 2023, about 10,000 below share analysts’ expectations.
- Rivian shares closed at $14.64 on Tuesday, down ~14.5%.
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- Chinese foreign minister Qin Gang has warned that U.S.’s strategy toward China risks plunging both countries into conflict and confrontation.
- A coalition of Republican attorneys general has asked a federal court in West Virginia to dismiss a lawsuit filed by GenBioPro, a manufacturer of abortion pill mifepristone.
- Georgia Power has started the Vogtle Unit 3 nuclear reactor, the first new reactor in the U.S. in nearly seven years. The company said the reactor would be fully operational in May or June.
- The yield on the 2-year Treasury note crossed 5% on Tuesday, its highest level since 2007.
- Salesforce plans to release software incorporating AI to help salespeople, customer service agents, and marketers do their jobs.
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 |  | Vanessa Omeokachie writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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