The daily business briefing: March 23, 2023

1. Fed raises interest rates despite banking crisis

Federal Reserve leaders on Wednesday decided to raise their benchmark short-term interest rate by a quarter-point, matching last month's increase. Fed Chair Jerome Powell said policy makers "considered" pausing their campaign to increase borrowing costs — which is necessary to cool the economy and bring down inflation — because of the need for financial stability as a banking crisis threatens to spread. But he said that strong economic data indicated that the central bank needed to nudge interest rates up again. In their first update since December, Fed officials said they anticipated raising rates to 5.1 percent by the end of 2023, before dropping them to 4.3 percent in 2024. Stocks closed sharply lower after the Fed decision, but futures were up slightly early Thursday.

The New York Times CNBC

2. Moderna CEO defends big COVID vaccine price hike

Moderna CEO Stephane Bancel on Wednesday defended the company's decision to raise the list price of its COVID vaccine by 400 percent when the shots hit the private market later this year. Moderna has been charging $26 per dose, but plans to hike that to $130. Sen. Bernie Sanders, chair of the Senate health committee, pressured Bancel during a hearing to reconsider, and raise the price less. "Quadrupling the price is huge ... It's going to cost taxpayers of this country billions of dollars," Sanders said. Bancel said the higher price was necessary because Moderna expects vaccine demand to drop by 90 percent, and it will be stuck paying the cost of doses it produces but people don't want.

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CNBC

3. Fitch downgrades First Republic again despite cash infusion

Fitch Ratings downgraded First Republic Bank on Wednesday for the second time in two weeks. Fitch cut the struggling bank's long-term issuer default rating three notches to B from BB. Fitch had downgraded First Republic to junk status last week before it received a $30 billion infusion in the form of deposits from 11 of the biggest U.S. banks that gave it increased much-needed cash. "While this injection created necessary headroom from a liquidity perspective," Fitch said, "the bank's new funding profile is relatively costly." Fitch said that as First Republic loses deposits and adds costly debt it is "operating at a net loss that is not sustainable."

Bloomberg MarketWatch

4. Celebrities face SEC charges over crypto promotion

The Securities and Exchange Commission on Wednesday charged several celebrities — including actress Lindsay Lohan, recording artist Lil Yachty, and internet personality Jake Paul — with promoting cryptocurrency investments to their social media followers without disclosing that they were paid to do it. The celebrities agreed to pay $400,000, including fines, and return what they were paid to promote Tronix and BitTorrent, crypto asset securities offered by companies owned by cryptocurrency entrepreneur Justin Sun, a Chinese national. Lohan agreed to pay $30,000 in fines and return the $10,000 she was paid to promote Tronix. Paul agreed to pay $75,000 in fines and return his $25,000 promotional fee. The SEC also is suing Sun.

USA Today CNN

5. TikTok CEO heads to House to defend app against threatened ban

TikTok CEO Shou Zi Chew is scheduled to testify before House lawmakers on Thursday to defend the China-based video-sharing app against claims the Chinese government could use it to access user data or spread misinformation. The Biden administration last week called for TikTok's owner, ByteDance, to sell its stake in TikTok or face a possible U.S. ban. Chew says in prepared remarks posted on the company's website that a ban would be harmful and unnecessary. "We do not believe that a ban that hurts American small businesses, damages the country's economy, silences the voices of over 150 million Americans, and reduces competition in an increasingly concentrated market is the solution to a solvable problem," he says in the remarks.

ABC News