The daily business briefing: May 25, 2017
OPEC members agree to extend oil output cuts, Fed minutes suggest a June rate hike is possible, and more
OPEC members back extension of output cuts
Members of the Organization of Petroleum Exporting Countries agreed Thursday to extend output cuts by nine months, continuing them to March 2018, according to an OPEC delegate. The original deal to reduce production by 1.8 million barrels a day has been credited with helping to bring oil prices back to around $50 a barrel, after months of falling prices due to oversupply. Major non-OPEC producers, including top oil producer Russia, are expected to agree to go along with the deal to extend the cuts when they meet with OPEC later in the day.
Fed minutes suggest June rate hike possible
Federal Reserve policy makers agreed in May that they should wait for signs that a recent economic slowdown was over before raising interest rates again, according to minutes of the meeting released Wednesday. The Fed leaders were nearly unanimous in favoring reductions to the central bank's massive holdings in Treasury debt and mortgage back securities, which it bought up to stimulate the economy and help speed the recovery from the Great Recession. Markets and analysts are predicting a likely rate hike at the Fed's next meeting in June, but the minutes indicated that the decision would depend on whether economic data indicated the economy was gaining strength after the first-quarter slowdown. U.S. stocks closed with modest gains after the minutes were released, with the S&P 500 index reaching a record high.
CBO says 23 million would lose health coverage under GOP bill
The Congressional Budget Office said Wednesday that the bill repealing and replacing key elements of the Affordable Care Act that narrowly passed the Republican-controlled House would increase the number of uninsured Americans by 14 million next year and by 23 million in 2026. The number of people projected to lose health coverage over a decade due to insurance reforms and Medicaid cuts was slightly lower than previous estimates. The CBO said the bill would result in a $119 billion reduction in the federal budget deficit between 2017 and 2026, smaller than the $150 billion in savings over a decade under an earlier version of the health-care reform bill that GOP leaders withdrew when they failed to muster enough support to pass it. "Premiums would vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums," the CBO concluded.
Companies pull advertising from Hannity
Several companies, including Peloton, Ring, and Cars.com, pulled their advertising from conservative talk-show host Sean Hannity's Fox News show after his pushing of a conspiracy theory regarding the murder of Democratic National Committee staffer Seth Rich. A Fox affiliate recently reported that a private investigator linked to Rich's family had said things supporting the conspiracy theory that Rich had sent DNC information to WikiLeaks, and that was why he was killed. Police have said they found no evidence any of this was true, and that they believe Rich was fatally shot in a botched robbery. Fox News retracted the story, pulling it from its website and saying the account did not meet its journalistic standards. Hannity said on his Wednesday show that he would stop talking about the story "for now" out of respect for Rich's family's wishes, but that he would not stop trying to get to "the truth."
Bitcoin price soars
Bitcoin rose by 10 percent on Wednesday to an all-time high of $2,537 after the Digital Currency Group made a statement easing concerns some investors had about the future of the cryptocurrency. "I think it's mostly to do with the fact they may have ended the ongoing political stalemate over scaling," Andrew Keys, head of global business development at blockchain software developer ConsenSys, told CNBC. The Wednesday rise pushed Bitcoin's gains to more than 160 percent this year. It has risen by more than $500 since Saturday, when it first broke $2,000. A smaller rival digital currency, ether, has risen by more than 2,300 percent this year.