This week in money news: US inflation continues to drop, albeit slowly. But anxiety is growing around the current debt crisis.
Tighter regulations have forced Binance to close shop in Canada. Elon Musk announces new Twitter CEO, even as Bitcoin and Disney post their worst weekly performance for the year.
Here's a rundown of the biggest financial news in the past week.
The biggest cryptocurrency exchange in the world, Binance, has chosen to depart Canada as a result of new rules governing the sector.
The company tweeted that it was leaving Canada as a result of the new regulations the Canadian Securities Administrators (CSA) have put in place for cryptocurrency trading platforms.
The Canadian Securities Administrators (CSA) issued a notice in February requiring all cryptocurrency platforms doing business in Canada to register with the appropriate securities authorities within 30 days or halt operations.
Additionally, the notice specified that platforms have to adhere to tighter regulations regarding the approval of:
Binance claimed that despite looking for a solution, it was unable to continue serving its Canadian customers. The corporation apologized and thanked the authorities for their cooperative efforts.
Additionally, Binance expressed its desire to return to Canada if the legal climate was more favorable to the development of the cryptocurrency industry.
President Biden and House Speaker Kevin McCarthy remained at loggerheads after a meeting at the White House on Tuesday, making little progress in averting the first-ever default by the federal government, but setting plans for a new round of talks.
House Republicans have demanded deep spending cuts in exchange for raising the debt ceiling. Mr. Biden and Democrats in Congress maintain that the federal borrowing limit should be raised without preconditions and have called the GOP stance irresponsible, as a June deadline looms.
Neither side has presented a path forward that could win enough support to pass both chambers of Congress.
In remarks after the meeting, Mr. Biden insisted the nation wouldn’t default while adding that the “politics, posturing and gamesmanship” will continue in coming weeks. He said negotiators should discuss, “how to lower the deficit to put our fiscal house in order, but…we need to take the threat of default off the table.”
Elon Musk on Friday announced Linda Yaccarino, as Twitter's new chief executive.
Musk will continue serving Twitter as CTO and executive chairman.
Yaccarino left her job as head of advertising at NBCUniversal on Friday morning to take on the job of helping Musk. HIs goal is to transition Twitter into X, his envisioned “everything app" that will incorporate social media and payments (possibly including crypto) along the lines of China’s WeChat.
Former US president Donald Trump urged Republican lawmakers to let the US default on its debts unless Democrats capitulate to demands for “massive” spending cuts, a significant intervention by the former president as Washington contends with a looming fiscal crisis.
Trump made the comments in a hotly anticipated primetime televised town hall from New Hampshire, the critical early voting state.
When asked about the fight in Washington over the debt ceiling, Trump shrugged off concerns about a default. The US Treasury has warned that this poses a “catastrophic” risk to the global economy.
“It’s really psychological more than anything else. And it could be really bad, it could be maybe nothing, maybe it’s a bad week, or a bad day, who knows?” Trump said.
Walt Disney posted its biggest percentage fall for the year after its stock plummeted by almost 13% on Thursday.
Disney stock had the worst performance for the day after they disclosed that revenue from its traditional television business had sharply decreased and its streaming section is still far from becoming profitable.
Disney's streaming service, Disney+, has been on the decline. Higher subscription pricing saw revenues go up, but this was insufficient to prevent losses.
The platform also lost roughly 300,000 subscribers in the United States and Canada, while its global subscriber count was reduced as a result of cancellations in India, where Disney lost the license to stream a well-liked cricket competition last year, which fueled new sign-ups.
The expansive student loan forgiveness program of the Biden administration and the legal issues surrounding it have garnered the majority of media attention. Yet the U.S. Department of Education has already forgiven more than $66 billion in student loan debt under existing programs.
Over the past couple of years, that relief has been received by more than two million borrowers, including students who were deceived and those who work in the public sector.
Advocates are nevertheless concerned about the administration's proposal to quickly begin federal student loan payments. These have been on hold since March 2020, but without further debt forgiveness.
One in four student loan borrowers were delinquent on their payments or in default, even before the Covid-19 pandemic.
First-quarter earnings season continues this week with retailers making up a larger share of reports in the coming week. Economic releases will include retail sales and housing-market data.
Home Depot reports earnings on Tuesday, followed by a busy Wednesday which includes reports from Cisco Systems, Target, and TJX.
Walmart, Alibaba and Ross Stores publish their results on Thursday, while Deere closes the week on Friday.
Earnings reports of big retailers would provide inside on consumer spending and how inflation has affecting Americans. This will be highlighted by the inflation data report that would also be released this week.
The largest cryptocurrency by market cap, Bitcoin, experienced a weekly loss of 11.25%, the lowest level since November.
Since it reached that mark a little over a month ago, Bitcoin has found it difficult to rise beyond $30,000 and has experienced repeated drops. The losses on Friday were accompanied by Bitcoin trading not seen since March. The weekly decline in Ether was 10.84%.
This week's negative news for cryptocurrency included reports of:
The speculation sparked a wave of sell-offs, which forced Binance to temporarily block customer withdrawals.
The consumer price index (CPI), the metric which is used by economists to gauge inflation gauge, climbed 0.4% for the month.
However, that translated to a 4.9% annual growth rate, which was slightly below the 5% expectation and the slowest rate since April 2021. In March, the yearly rate was 5%.
Core CPI increased by 5.5% from a year ago when volatile food and energy categories were excluded, both in line with predictions. The index rose as prices for housing, petrol and used cars rose; however, these increases were largely offset by falls in the cost of fuel oil, new cars and domestic food.
Since reaching a peak of 9% in June 2022, the CPI measurement has decreased significantly. Inflation has nevertheless continued to remain substantially above the Fed's 2% yearly target.
The US central bank has raised interest rates 10 times in a row, totaling 5 percentage points, since March 2022, bringing benchmark borrowing rates to their highest level in nearly 16 years.
Photo by Roman Kraft on Unsplash
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