The daily business briefing: September 22, 2022

The Federal Reserve announced Wednesday that it will raise its benchmark short-term interest rate by three-quarters of a percentage point in its ongoing effort to fight high inflation. It was the third unusually large rate increase in a row by the Fed, after 0.75-point increases in June and July. Wednesday's increase lifted the rate to a range of 3 percent to 3.25 percent, the highest since early 2008. The central bank's policy makers indicated they are likely to raise the rate to 4.4 percent by the end of the year, and to about 4.6 percent in 2023. The higher rates increase borrowing costs, such as with mortgages and business loans. The goal is to get consumers and businesses to borrow and spend less to ease inflation, but the Fed acknowledged that could come with significant costs to the economy.

New York Attorney General Letitia James filed a lawsuit Wednesday against former President Donald Trump and his company, the Trump Organization, for alleged fraud. The civil suit also names three of Trump's children — Donald Trump Jr., Ivanka Trump, and Eric Trump. The suit, which follows a three-year investigation, details how Trump and his company "repeatedly and consistently manipulated the value of assets" to engineer better loans from banks and lower tax bills. Trump responded on his Truth Social media site, calling the lawsuit "another witch hunt" and James "a fraud who campaigned on a 'get Trump' platform." James is seeking $250 million in penalties and a ban on the Trumps running a business in the state.

Facebook parent company Meta Platforms has quietly started cutting staff as part of an effort to reduce expenses by 10 percent within months, The Wall Street Journal reported Wednesday, citing people familiar with the plans. The social media giant is reorganizing some departments, offering a narrow window for affected employees to apply for other jobs, with deeper cuts to follow. Meta is also looking for ways to reduce overhead and consulting costs as it tries to offset the impact of sputtering growth and rising competition. For weeks, Meta executives have been publicly acknowledging the business is in for some "ruthless prioritization" that would require hiring freezes, although they didn't mention layoffs.

U.S. stock futures made modest gains early Thursday after the Federal Reserve's latest interest rate hike fueled big losses on Wednesday. Dow Jones Industrial Average futures were up 0.3 percent at 6:45 a.m. ET. S&P 500 and Nasdaq futures were up 0.2 percent. The three main U.S. indexes closed down on Wednesday after the Fed announced a third straight 0.75-point increase to its benchmark short-term interest rate as it continues to fight high inflation. The Dow, which was up more than 300 points during the day, closed down 1.7 percent, as did the S&P 500, and the Nasdaq dropped 1.8 percent, continuing a recent selloff spurred by fears that rising borrowing costs could tip the economy into a recession.

Home sales fell sharply for the seventh straight month in August, according to a Wednesday report from the National Association of Realtors. Existing home sales fell 19.9 percent from a year earlier, and 0.4 percent compared to July. The decline put sales at their weakest level since May 2020 as rising mortgage rates and high home prices pushed some buyers out of the market. The median home price was up 7.7 percent from a year ago at $389,500, but down from a record high of $413,800. The average 30-year fixed-rate mortgage hit 6 percent last week, the highest since 2008 and about double what it was a year earlier. "The softness in home sales reflects this year's escalating mortgage rates," said Lawrence Yun, NAR's chief economist.