PacWest in trouble

The Fed raises interest rates again, PacWest considers sale and other options as regional bank pain spreads, and more [What makes a subscription to The Week so valuable now? Click here.]( [The Week Logo]( [Subscribe to The Week magazine]( [Subscribe to The Week magazine]( Daily business briefing 1. [Fed hikes interest rates for 10th time but indicates pause]( The Federal Reserve on Wednesday raised interest rates a quarter of a percentage point and suggested it might pause its aggressive campaign to fight inflation to assess whether the damage from recent bank failures will get worse. The indication this 10th-straight hike might be the last marked a significant shift in the central bank's effort to bring down inflation and steer the recovery from the COVID-19 crisis. Fed Chair Jerome Powell said another issue currently creating anxiety for markets, the fear that Congress will fail to raise the debt ceiling and allow a catastrophic default on federal debt, shouldn't even be considered a possibility. "We shouldn't even be talking about a world in which the U.S. doesn't pay its bills," Powell told reporters. [[Reuters]( [The Hill]( [Share to Facebook]( [Share to Twitter]( [Send in email](mailto:?Subject=Fed+hikes+interest+rates+for+10th+time+but+indicates+pause&body=Read the story here: utm_campaign=business_briefing_newsletter_20230504&utm_source=business_briefing_newsletter) 2. [PacWest bank considers sale as regional lenders struggle]( Regional bank PacWest Bancorp. is "teetering" and considering options including a sale, Bloomberg reported Wednesday, citing people familiar with the matter. The Beverly Hills-based bank is working with a financial adviser to consider its next move in the wake of the collapse of three other regional lenders. Other options include breaking up the bank, or a campaign to raise capital, according to Bloomberg. A lack of potential buyers could make it hard to sell PacWest outright. PacWest shares fell 58 percent in late New York trading on Wednesday, after falling 28 percent Tuesday as regional bank stocks came under pressure following JPMorgan Chase's purchase of failed First Republic Bank. [[Bloomberg]( [Share to Facebook]( [Share to Twitter]( [Send in email](mailto:?Subject=PacWest+bank+considers+sale+as+regional+lenders+struggle&body=Read the story here: utm_campaign=business_briefing_newsletter_20230504&utm_source=business_briefing_newsletter) Advertisement from Wisebread [Spend $500 And Earn $200]( [Advertisement from Wisebread]( 3. [TikTok to give publishers 50 percent ad cut for top posts]( TikTok is launching a product called Pulse Premiere that will let publishers sell ads accompanying their posts on the video-sharing app. The new program will give an elite group of content creators half the revenue from ads that come up after their short videos. The product, which evolved from TikTok's Pulse program, will be available only to the top four percent of posts, as determined by such metrics as likes, watch time, and comments, but TikTok will sell ads on all of the creators' videos, The Wall Street Journal reported Wednesday. The change opens up a new revenue opportunity, and could help the company build relationships with advertisers and publishers as TikTok contends with U.S. concerns about security related to its Chinese ownership. [[The Wall Street Journal]( [Share to Facebook]( [Share to Twitter]( [Send in email](mailto:?Subject=TikTok+to+give+publishers+50+percent+ad+cut+for+top+posts&body=Read the story here: utm_campaign=business_briefing_newsletter_20230504&utm_source=business_briefing_newsletter) 4. [FDA approves drug giant GSK's RSV vaccine]( The Food and Drug Administration on Wednesday approved a shot developed by pharmaceutical giant GSK as the first vaccine to prevent the respiratory ailment RSV, respiratory syncytial virus. The move marked a milestone in the six-decade search for a way to protect vulnerable people from the virus. RSV is little more than a typical cold for most healthy people, but every year it lands more than 60,000 older adults in hospitals and sickens so many babies, leaving them gasping for air, that it overloads some pediatric intensive care units. A Pfizer vaccine is close to being approved, too, for older adults and pregnant women as protection for newborns. Regulators also are reviewing a monoclonal antibody treatment for babies developed by Sanofi and AstraZeneca. [[The Washington Post]( [Share to Facebook]( [Share to Twitter]( [Send in email](mailto:?Subject=FDA+approves+drug+giant+GSK's+RSV+vaccine&body=Read the story here: utm_campaign=business_briefing_newsletter_20230504&utm_source=business_briefing_newsletter) Advertisement from Wisebread [Earn $200 After Spending $500]( [Advertisement from Wisebread]( 5. [Stock futures mixed after Fed's latest rate hike]( U.S. stock futures struggled early Thursday after the Federal Reserve's 10th straight interest rate hike to fight inflation. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.3 percent at 7 a.m. ET. Nasdaq futures were up 0.1 percent. The Dow and the S&P 500 fell 0.8 percent and 0.7 percent, respectively, on Wednesday. The tech-heavy Nasdaq fell 0.5 percent. The Fed announced another quarter-point rate increase but indicated it would likely pause now amid fears of contagion in the regional banking crisis. "I believe with a very high degree of probability there's going to be further regional bank failures," Jeffrey Gundlach, CEO of DoubleLine, said on CNBC's Closing Bell Wednesday. [[CNBC]( [Share to Facebook]( [Share to Twitter]( [Send in email](mailto:?Subject=Stock+futures+mixed+after+Fed's+latest+rate+hike&body=Read the story here: utm_campaign=business_briefing_newsletter_20230504&utm_source=business_briefing_newsletter) [Read more business stories at theweek.com]( MOST POPULAR [Related image]( [Asteroid set to pass by Earth about as close as the moon]( Devika Rao [Related image]( [Vermont removes residency requirement for assisted suicide law]( Theara Coleman [Related image]( [Missy Elliott, Sheryl Crow, and Kate Bush among Rock & Roll Hall of Fame's 2023 inductees]( Brendan Morrow [Related image]( [What has Kamala Harris done as vice president?]( Theara Coleman [Related image]( [The Supreme Court's surprising blow to oil companies]( Devika Rao [Speed reads banner] [Article image]( [How the Democrats' push to make the IRS more efficient accelerated the debt limit crisis]( May 4, 2023 [Article image]( [Rep. 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