The daily business briefing: September 21, 2023

The Fed leaves rates unchanged, Biden cancels debts for University of Phoenix borrowers, and more

Fed Chairman Jerome Powell
Fed Chairman Jerome Powell
(Image credit: Chen Mengtong / China News Service / VCG via Getty Images)

1. Fed leaves rates unchanged but keeps door open to another hike

The Federal Reserve left its benchmark short-term interest rate unchanged on Wednesday, but kept the door open to another hike later this year to continue fighting inflation. The central bank has raised rates 11 times since March 2022, the fastest pace in four decades. The Fed also indicated at the end of its two-day policy meeting that it would likely keep rates high for longer than previously hoped to prevent prices from rising too much, indicating that households shouldn't expect relief from high borrowing costs anytime soon. The Fed projected that inflation should fall below 3% next year and return to its 2% target by 2026, suggesting that a "soft landing" for the economy is possible, Bloomberg reported. CNBC, Bloomberg

2. Biden administration cancels debt for University of Phoenix borrowers

The Biden administration announced Wednesday it would cancel nearly $37 million of federal student loan debt for more than 1,200 people who borrowed money to attend the University of Phoenix. The decision came after the Department of Education found that the for-profit school misled students about its graduates' job prospects. The Biden administration is continuing to cancel student debt for narrow groups of borrowers under existing programs after the Supreme Court blocked its broad proposal to forgive up to $20,000 for low- and middle-income borrowers, CNN reported. In August, the Education Department canceled $72 million in debt for 2,300 borrowers from another for-profit school, Ashford University in California. CNN

3. US provides $600 million to Covid test manufacturers

The Biden administration announced Wednesday that the federal government would offer Americans a fifth round of free Covid-19 tests ahead of the viral season. The program will help Americans spot infections but also boost a domestic testing industry struggling with plummeting demand. The federal government will release the tests from the Strategic National Stockpile and invest $600 million to help 12 domestic test manufacturers increase capacity for rapid test production for Covid and other potential health threats. Demand for rapid tests was high early in the pandemic but manufacturers scaled back production starting in 2021 as vaccines became widely available. Stat News

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4. Report: Writers, producers near deal to end strike

Hollywood writers and producers met Wednesday and neared a deal to end the Writers Guild of America strike, CNBC reported, citing people close to the negotiations. The two sides will meet again Thursday and hope to reach a final agreement, CNBC reported, but the strike could continue through the end of the year if the union and the Alliance of Motion Picture and Television Producers fall short of a deal. More than 11,000 film and TV writers have been on strike for more than 100 days. Actors joined them in July. The strikes have halted production on high-profile shows, from Netflix's "Stranger Things" to Marvel's "Blade." Warner Bros. Discovery warned earlier this month that the strike was chipping away at its expected earnings. CNBC

5. Stock futures fall after Fed meeting

U.S. stock futures fell early Thursday and Treasuries rose after the Federal Reserve held interest rates steady but indicated it expected to keep rates higher for longer to contain stubborn inflation. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.5% and 0.6%, respectively, at 7 a.m. ET. Nasdaq futures were down 0.8%. The three major indexes all closed lower on Wednesday after the Fed released its statement following a two-day policy meeting. The Dow and the S&P 500 dropped 0.2% and 0.9%, respectively, while the tech-heavy Nasdaq plunged 1.5%. The 10-year Treasury yield rose by several basis points to 4.43%, a 16-year high. Investor's Business Daily

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