Don’t check your 401(k) for a while. We will also look at the shutdown of Senate leader Charles Schumer (DN.Y.) and the easing of sanctions to improve Internet access in Iran.
But first, Tom Brady could become Florida’s state gym teacher.
Welcome to On The Money, your nightly guide to everything related to your bills, bank account and bottom line. For The Hill we are Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Did someone forward this newsletter to you? Subscribe here.
Dow at lowest point since 2020 as recession fears mount
Markets are plunging as they process the Federal Reserve’s latest rate hikes in its battle to combat 40-year high inflation.
- The Dow Jones Industrial average fell nearly 500 points, reaching 29,590 at the close of business on Friday – its lowest point in nearly two years. Since the Fed started raising rates in March, the index has lost more than 13 percent of its value and is down more than 19 percent year-on-year.
Other indices followed.
- The S&P 500 fell 65 points to close at 3,693 Friday, down more than 15 percent since March and nearly 23 percent on the year.
- The tech-heavy Nasdaq fell nearly 200 points, or 1.8 percent, to close at 10,867, down nearly 20 percent since March.
The background: The Fed increased its base rate margin by 3.25 percentage points from nearly zero in March. Consumer inflation declined slightly in the summer from 8.5 percent in July and 9.1 percent in June from 8.3 percent in August.
But the small progress the Fed has made in fighting inflation comes at the cost of slowing the economy and possibly even into a recession, a trade-off that some market commentators say isn’t worth it.
The Hill’s Tobias Burns has more here.
LEAD THE DAY
Schumer seeks way out of the box at Manchin deal
Senate Majority Leader Charles Schumer (DN.Y.) is looking for a way to avoid a government shutdown next week, while also keeping his promise to Senator Joe Manchin (TUSEN.Va.) to to implement reforms before October.
- Most Senate Republicans say they will vote against the government funding measure if it includes Manchin’s reform bill, and a group of Democrats are urging Schumer to separate the ongoing resolution and allow reforms.
- That means Schumer probably won’t get the 60 votes he needs to overcome an expected filibuster for a short-term government resolution that also includes Manchin’s state reform provisions, which would change the federal approval process for energy projects.
But Schumer has promised Manchin that he will include allowing reforms in the emergency financing measure, which must be passed by Sept. 30 to avoid a government shutdown.
The Hill’s Alexander Bolton has the latest here.
Biden administration eases sanctions to improve Iranian people’s internet access
The finance ministry on Friday announced exceptions to Iran’s sanctions to allow companies to provide more online services in the country after the Iranian government cut internet access for most of the country amid protests.
The guidance authorized tech companies to provide Iranian people with more options for secure, remote platforms and services, the department said in an announcement.
- The update aims to modernize existing sanctions exemptions for businesses to provide internet access by adding exceptions for social media platforms, video conferencing services and cloud-based services.
- The cut in sanctions comes after the Iranian government has shut down the internet to most of its citizens following a violent crackdown on peaceful protests in the country. The protests were sparked by the death of Mahsa Amini, a 22-year-old woman, in custody.
The Hill’s Rebecca Klar has more details here.
California first state to ban natural gas heaters and ovens
A new proposal passed by the California Air Resources Board (CARB) confirms the state as the first to ban natural gas heaters and furnaces. Good to know
The decision, which was passed unanimously, aims to phase out the sale of the space heaters and boilers by 2030.
- The commitment is part of a wider range of environmental efforts the board passed this week to meet the federal 70 parts per billion, 8-hour ozone standard over the next 15 years.
- Residential and commercial buildings in California account for about five percent of the state’s total nitrogen oxide emissions from the combustion of natural gas, according to the originally proposed plan, released in August 2022. In addition, space and water heating account for almost 90 percent of all building-related natural gas demand.
Read more from The Hill’s Gianna Melillo here.
Good to know
The US military innovation agency is launching an effort to assess cryptocurrency threats to national security and law enforcement, as well as helping authorities prevent illegal use of digital assets.
“The program underway here involves mapping out the cryptocurrency universe in great detail,” said DARPA program manager Mark Flood.
Here’s what else we have in mind:
- The US and Pfizer will cut their numbers of vaccine donations worldwide in response to “reduced demand,” although the company says it is still committed to delivering the roughly 1 billion doses the US has pledged to provide.
- The largest online forum of the ‘incel’ movement has seen an increase in calls for violence, according to a new report released Friday.
That’s it for today. Thanks for reading and check out The Hill’s finance page for the latest news and coverage. We’ll see you next week.
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