The daily business briefing: July 28, 2022
The Fed aggressively raises interest rates again, JetBlue reaches deal to buy Spirit Airlines after Frontier bid collapses, and more
- 1. Fed announces another big interest-rate hike to fight inflation
- 2. JetBlue reaches deal to acquire Spirit Airlines
- 3. Hulu, facing complaints from Democrats, says it will accept political ads
- 4. Stock futures retreat after a big post-Fed rally
- 5. One America News loses access to last major TV provider
1. Fed announces another big interest-rate hike to fight inflation
The Federal Reserve announced Wednesday that it would raise interest rates by three-quarters of a percentage point for the second straight month as it continues to aggressively fight the highest inflation in four decades. The 12-member Federal Open Market Committee unanimously approved the unusually large increase, and signaled in a statement issued after its two-day meeting that it expected to make "ongoing increases." The central bank's statement noted that "spending and production have softened" since June's three-quarter-point rate hike, but that strong job gains have continued and prices have continued to rise, "reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures."
2. JetBlue reaches deal to acquire Spirit Airlines
JetBlue Airways on Thursday agreed to buy Spirit Airlines for $3.8 billion shortly after Spirit scrapped its proposed merger with Frontier Airlines. Spirit on Wednesday called off the Frontier deal moments before it was set to announce the results of a shareholder vote on it. The discount carrier delayed the vote several times, hoping to get shareholders to support it over JetBlue's more lucrative proposal. Based on Wednesday's closing stock price, Frontier's cash-and-stock deal was worth $2.8 billion. JetBlue's acquisition of Spirit would create the nation's fifth largest airline, making it better able to compete with bigger rivals American, Delta, Southwest, and United. The deal could face challenges from antitrust regulators.
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3. Hulu, facing complaints from Democrats, says it will accept political ads
The Disney-backed Hulu streaming service said Wednesday it will start accepting political ads, reversing a policy that had angered Democrats after Hulu rejected two of its ads on abortion and guns this month. Hulu will now apply the standards Disney uses for its sports and entertainment cable networks. Hulu said the decision to bring its policy in line with Disney's other networks and the streaming service ESPN Plus came "after a thorough review." "Hulu will now accept candidate and issue advertisements covering a wide spectrum of policy positions, but reserves the right to request edits" or other changes, "in alignment with industry standards," the statement said. Mosaic Communications, a Democratic advertising firm, had announced a day earlier it would stop buying candidate ads with Hulu until it changed the policy.
4. Stock futures retreat after a big post-Fed rally
U.S. stock futures fell early Thursday after Wednesday's rally, which came after the Federal Reserve announced another unusually large three-quarter-point interest rate hike to fight inflation. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.2 percent and 0.3 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were down 0.6 percent. The Dow and the S&P gained 1.4 percent and 2.6 percent, respectively, on Wednesday, while the tech-heavy Nasdaq shot up by 4.1 percent. DoubleLine Capital's CEO Jeffrey Gundlach told CNBC's Closing Bell Overtime the surge showed increased market confidence in the Fed's effort to contain inflation. Meta shares fell 3 percent overnight after the Facebook parent reported disappointing quarterly results.
5. One America News loses access to last major TV provider
One America News' future is in doubt after major carriers decided to drop the conservative cable network, which promoted bogus information about the 2020 election. Verizon will stop carrying OAN on its Fios television service, which has 3.5 million subscribers, starting Saturday. AT&T's DirecTV, which has about 15 million subscribers, dropped OAN in April. OAN will soon be available to just a few hundred thousand subscribers on smaller providers, said Scott Robson, a senior research analyst at S&P Global Market Intelligence. OAN also sells its programming directly through its OAN Live and KlowdTV streaming platforms, but they generate far less revenue than major providers. "I really think this is the death blow for the network," Robson said.
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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
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