The daily business briefing: March 18, 2021
The Fed says the economy is growing but it won't hike rates, the IRS plans to delay the tax filing deadline, and more
Fed says economy growing but it won't hike rates
The Federal Reserve said Wednesday its economic growth projections had increased, but it did not expect to raise interest rates through 2023. As expected, the central bank's Federal Open Market Committee voted to keep interest rates unchanged near zero at the end of a two-day policy meeting. Fed policy makers also agreed to continue buying at least $120 billion worth of bonds per month, as the Fed has been doing to help the economy recover from the damage of the coronavirus pandemic. "Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak," the committee said in its post-meeting statement.
IRS to delay tax filing deadline
The Internal Revenue Service plans to delay this year's tax filing deadline by about a month from April 15 to the middle of May, Bloomberg reported on Wednesday, citing two senior House Democrats. White House Press Secretary Jen Psaki said the plans had not been finalized, but The Washington Post reported the new filing deadline will be May 15. Last year's tax filing deadline was delayed from April 15 to July 15 due to the COVID-19 pandemic. Lawmakers recently called for the date to be pushed back this year, too, writing that "taxpayers will need additional time to fully understand how" their tax liability might be affected by Congress' recent COVID-19 relief bill. The Post also reported that the IRS was facing "a massive backlog that has left it unable to fully process" about 24 million tax filings.
Dow closes above 33,000 for 1st time
The Dow Jones Industrial Average closed above 33,000 for the first time in history after rising by 0.6 percent with a boost from an optimistic statement by the Federal Reserve. The record came just five days after the blue-chip stock index first closed above 32,000. The S&P 500 rose by 0.3 percent, also setting a record. Investors have expressed concerns recently that economic improvement and the reopening of businesses as coronavirus infection rates fall could prompt the Fed to hike rates sooner than previously predicted. But with unemployment remaining high after months of damage from the pandemic, the Fed is being cautious, said George Catrambone, head of Americas trading at asset manager DWS Group. "Investors are taking some solace in that," he said. Stock futures were mixed early Thursday.
Toyota, Honda cut production due to supply chain problems
Toyota and Honda have announced that they were cutting vehicle production in North America due to problems with their supply chains. Toyota said Wednesday that it was cutting back at four plants in Kentucky, West Virginia, and Mexico because of "a shortage of petrochemicals" and "recent severe weather conditions." The models affected include the popular Camry and Camry Hybrid, and several other vehicles. Honda said it was halting production at most of its U.S. and Canadian plants next week because of "the impact from COVID-19, congestion at various ports, the microchip shortage, and severe winter weather." Separately, Volvo Cars, which is owned by China's Geely Holding, said it was temporarily adjusting production in the U.S. and China due to a semiconductor chip shortage.
Morgan Stanley becomes 1st bank offering bitcoin-fund access
Morgan Stanley revealed Wednesday that it would offer management clients access to bitcoin funds, CNBC reported Wednesday, citing an internal memo the investment bank sent to its financial advisers. The move will make Morgan Stanley the first big bank to take such a step toward accepting the cryptocurrency. It came in response to demands from clients. The bank said it was giving clients access to three funds giving them a way to own bitcoin, saying the investments are suitable for those with "an aggressive risk tolerance." The digital currency has surged by 90 percent this year, intensifying pressure on Wall Street to accept it as an asset class. Morgan Stanley is starting out by offering the funds only to clients who have at least $2 million in assets at the bank.