Raphael Stevens

In his first speech as a governor of the Federal Reserve, Ben Bernanke offered a simple adage to explain a complex topic. The question was if central banks should use monetary policy to tame frothy markets—for example, raising interest rates in order to deflate property bubbles. His answer was that the Fed should “use the right tool for the job”. It ought to rely, he argued, on regulatory and lending powers for financial matters, saving interest rates for economic goals such as price stability.Two decades later, Mr Bernanke’s doctrine is facing a stiff test in the reverse direction—as a framework for dealing with frazzled, not frothy, markets. On one flank the Fed is trying to douse the red-hot embers of a crisis that began with a run on Silicon Valley Bank (svb). On the other officials face stubborn inflation, having failed to wrestle it under control in the past year. The tension between stabilising the financial system, which calls for support from the central bank, and reining in price pressures, which calls for tight policy, is extreme. But with two different sets of tools, the Fed is attempting to do both things. It is an improbable mission. And it is one that other central banks will have little choice but to emulate in forthcoming months.On March 22nd, at the end of a two-day meeting of the central bank’s rate-setting body, Jerome Powell, the Fed’s chairman, laid out the logic of its extensive support for the financial system. “Isolated banking problems, if left unaddressed, can undermine confidence in healthy banks,” he said. Yet he also maintained that the Fed could, and would, bring down inflation. “Without price stability, the economy does not work for anyone,” he said. Putting policy where its mouth is, the Fed opted to lift rates by one-quarter of a percentage point.Before the meeting there was debate about whether officials would follow through with their ninth straight rate rise. Continued tightening had appeared a foregone conclusion when figures for February revealed inflation was still uncomfortably high, running at 6% year-on-year, three-times as fast as the Fed’s target. But as panic spread following svb’s collapse, some prominent voices called for a pause to survey the effects on the economy. Or as Eric Rosengren, a former president of the Fed’s branch in Boston, put it: “After a significant shock from an earthquake should you immediately resume normal life?”In the end the Fed was undeterred. Having already lifted rates by nearly five percentage points over the past year—its steepest tightening in four decades—the latest increase of a quarter-point was, in numerical terms, piddling. But as a measure of the Fed’s resolve, it was freighted with significance: it showed that Mr Powell and his colleagues believe they can use monetary-policy tools, especially interest rates, to tackle inflation, even when tightening poses risks to financial stability.The Fed is willing to take this stance because of the range of alternative tools it can deploy in response to the mayhem in markets. Over the past couple of weeks, the Fed, acting in concert with other parts of the state, has raced to safeguard both assets and liabilities in the banking system. On the asset side, it has given troubled banks easier access to liquidity, offering to lend against the face value of government-bond holdings, even when market pricing is much lower. This has spared banks from having to realise losses that, in aggregate, ran to $620bn at the end of 2022—enough to wipe out nearly a third of equity capital in the American banking system.As for liabilities, the Federal Deposit Insurance Corporation, a regulator, pledged to stand behind large uninsured deposits in svb and Signature, another bank that suffered a run. Janet Yellen, the treasury secretary, has hinted at similar support if depositors flee smaller banks, though on March 22nd she said the Biden administration was not considering blanket insurance (which would require approval from Congress). Still, even with deposit insurance legally capped at $250,000, the message seems to be that accounts are safe no matter their size. The combination of the Fed’s lending plus insurance has, for now, helped calm things down: after plunging by a quarter, the kbw index of American bank stocks has somewhat stabilised.The Fed’s nightmarish balancing act between inflation and financial stability looks very different from its past two crises. During both the global financial meltdown of 2007-09 and the sudden economic stoppage in 2020 when covid-19 struck, the Fed and other central banks threw everything they had at reviving the economy and propping up the financial system. On both occasions, financial and economic risks pointed sharply downwards. That may have contributed to doubts about the Fed’s ability to walk and chew gum—to fight inflation and soothe market strains.For Fed watchers, though, such cross-cutting actions look less surprising. In several cases—after a big bank collapse in 1984, a stockmarket crash in 1987 and a hedge-fund blow-up in 1998—the Fed briefly stopped raising rates or modestly cut them but resumed tightening policy before long. Economists at Citigroup, a bank, concluded that these experiences, not 2008 or 2020, are more pertinent today. Whereas markets are pricing in the possibility that the Fed may cut rates by half a percentage point before the end of this year, Citi’s view is that the central bank may surprise investors with its willingness to keep policy tight so long as inflation remains high. Indeed, that is exactly what it has signalled. Along with raising rates on March 22nd, the Fed published a summary of its projections. The view of the median member of the Federal Open Market Committee is that they will raise rates by another quarter-point this year and only start cutting them next year.Nevertheless, the neat division between monetary-policy and financial-stability tools can look blurrier in practice. Take the Fed’s balance-sheet. As part of efforts to tame inflation, the central bank last year began quantitative tightening, letting a fixed number of maturing bonds roll off its balance-sheet each month, removing liquidity from the banking system. Between last May and the start of March it shrank its assets by about $600bn. Then in the course of a few days after the svb rout, its assets grew by $300bn—a by-product of the credit it had provided to banks through its discount window and other emergency operations. Monetary wonks see a clear distinction: quantitative tightening is an enduring change to the Fed’s balance-sheet, whereas the emergency credit will vanish when things normalise. But given that one of the main channels through which balance-sheet policies work is as a signal about the Fed’s intentions, the potential for confusion is evident.Another blurred line is the feedback between financial stability and monetary policy. Most of those who argued for a Fed pause were not crudely advocating that the central bank needs to rescue beleaguered investors. Rather, the more sophisticated point was that bank chaos and market turmoil were themselves tantamount to rate increases. Financial conditions—which include bond yields, credit spreads and stock values—have tightened in the past couple of weeks. Torsten Slok of Apollo Global Management, a private-equity firm, reckoned that the shift in pricing was equivalent to an extra 1.5 percentage points of rate increases by the Fed, enough to tip the economy into a hard landing.Not all agree the effect will be so large. Banks are responsible for about one-third of credit provision in America, with capital markets and firms such as mortgage lenders offering the rest. This could insulate firms from stricter lending standards at banks. Moreover, America’s biggest banks account for more than half the banking system by assets, and they remain in strong shape. Yet even with these caveats, the impact is still real. As banks shore up their balance-sheets, both deposit and wholesale-funding costs are rising, which transmits the tightening to the financial system. Deutsche Bank thinks the lending shock, if minor, will shave half a percentage point off annual gdp growth. The Fed will probably now have to go less far to tame inflation.Ultimately, its ability to treat instability and inflation on separate tracks depends on the severity of the banking crisis. “If financial issues are screaming, they will always, and rightly, trump slower-moving macroeconomic questions,” says Krishna Guha of Evercore isi, an advisory firm. The fact that America’s emergency interventions in the past two weeks had gained traction, with deposit outflows slowing and markets paring their losses, is what enabled the Fed to turn its attention back to inflation. It is easy to imagine an alternative scenario in which the interventions failed, forcing it to desist from a rate rise.This helps to explain the haste of Swiss officials to bring an end to the Credit Suisse drama. Central bankers know only too well that the uncontrolled collapse of such a big firm would send shock waves through the global financial system. In that case, they would have been under immense pressure to retreat from the fight against inflation. The right tool for the right job is an attractive way of delineating the objectives of central banking. Yet it only works so long as the job of restoring stability after a financial explosion is handled swiftly. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

Regulators and officials across the European Union have been nervous about potential contagion to their banking sectors after the recent turmoil in the United States.
However, they think the U.S. should learn from some of the regulatory works put in place in the euro area.
Basel III is a set of reforms that strengthens the supervision and risk management of banks and has been developed since 2008.
It applies to most European banks, but American lenders with a balance sheet below $250 billion do not have to follow them.

Chair of the ECB Supervisory Board Andrea Enria and Chairperson of the European Banking Authority (EBA) Jose Manuel Campa in the European Parliament on March 21, 2023.
Thierry Monasse | Getty Images News | Getty Images

U.S. regulators made mistakes in failing to prevent the collapse of Silicon Valley Bank and other financial institutions, according to lawmakers in the European Union who believe this is also a moment for some self-assessment in Europe.
Silvergate Capital, a bank focused on cryptocurrency, was the first to fall, saying March 8 that it would be ceasing operations. Shortly after, Silicon Valley Bank failed after a run on deposits. Signature Bank, which focused on lending to real estate firms, then saw deposit outflows leading regulators to seize the bank to prevent contagion across the sector.

Since then, First Republic Bank has also received support from other banks amid fears of a wider shock to the financial system. And in Switzerland, a non-member of the European Union, authorities had to rescue Credit Suisse by asking UBS to step in with an acquisition.
Meanwhile, regulators and officials across the European Union have been nervous about potential contagion to their own banking sector. After all, it’s not been that long since European banks were in the depths of the global financial crisis.
“There is no direct read across of U.S. events to [the] euro area significant banks,” Andrea Enria, chair of the European Central Bank’s supervisory board, said Tuesday. Like him, an array of officials have made an effort to stress that the European banking system is in much better share compared to 2008.

The U.S. lacks some controls.

Lawmaker in the European Parliament

This reinforces the view in the EU that the U.S. should learn from some of the regulatory works put in place in the euro area since the financial crisis.
“You need stronger regulation … in that sense the U.S. lacks some controls,” Paul Tang, a lawmaker and a member of the European Parliament’s economic committee, told CNBC.

When asked if U.S. regulators made some mistakes, thus failing to prevent the recent banking turmoil, he said: “I definitely think so, you need to have scrutiny. That was the message from 2008.”
In the heart of European policymaking, in Brussels, an official, who did not want to be named due to the politically sensitive nature of the topic, told CNBC that several meetings between EU officials in recent days “stressed the failures of regulation [in the U.S.] particularly when compared with the EU.”
One of the key differences is that the U.S. has a more relaxed set of capital rules for smaller banks.
“The main difference is the Basel III requirements,” Stéphanie Yon-Courtin, a member of the European Parliament told CNBC. “These banking rules,” she said, “apply to very few banks — this is where the problem lays.”

Basel III is a set of reforms that strengthens the supervision and risk management of banks and has been developed since 2008.
It applies to most European banks, but American lenders with a balance sheet below $250 billion do not have to follow them.

‘Remain vigilant’

Despite some of the criticism toward American regulators, the EU recognizes this is not the time to be complacent. “We have to remain vigilant,” Yon-Courtin said. “We have to be careful and ensure these rules are still fit for purpose,” she added, pushing for a constant monitoring of the rulebook.
One of the main discussions in the EU in recent days has actually been the need to improve the European Banking Union — a set of laws introduced in 2014 to make European banks more robust.
The debate has been politically sensitive, but the reality that high interest rates are here to stay has made it even more important.
“We are well aware that the ongoing fast pace normalization of monetary policy conditions is increasing our banks’ exposure to interest rate risk,” Enria, the chair of the ECB’s supervisory board, said Tuesday.

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Chinese tech giant Tencent reported Wednesday better-than-expected quarterly revenue, helped by growth in ads within its growing “video accounts” business.
However, ads still account for less than one-fifth of Tencent’s overall revenue — which barely grew in the fourth quarter and fell for all of 2022 as Covid controls dragged down economic growth.
Tencent shared some general details about how it was developing artificial intelligence, but did not share specific forthcoming products in that category.

Chinese tech giant Tencent released quarterly results Wednesday.
Nurphoto | Nurphoto | Getty Images

BEIJING — Chinese tech giant Tencent reported better-than-expected quarterly revenue on Wednesday, helped by growth in ads within its growing “video accounts” business.
Overall revenue for the quarter ended Dec. 31 came in at 144.95 billion yuan ($21.07 billion), higher than the 143.89 billion yuan estimated by FactSet.

Tencent’s online advertising revenue overall grew by 15% to 24.7 billion yuan, beating a FactSet estimate of 22.18 billion yuan — and growing for the first time since the second quarter of 2021. The company said most ad spend came from e-commerce companies, fast-moving consumer goods and games.
Video accounts sit within the WeChat messaging and social media app and are a way for individuals and businesses to share short videos and livestreams on the platform. Average monthly users of WeChat in China and overseas rose by 3.5% from a year ago 1.31 billion accounts in the fourth quarter.

Ad spending

In-feed ads for video accounts generated more than 1 billion yuan in revenue in the fourth quarter, Tencent said. It said user time spent on video accounts was more than 1.2 times that spent on WeChat Moments, which is similar to Facebook’s News Feed.
“This advertising unit allowed them to unlock revenue coming from e-commerce, which has done pretty well,” James Lee, U.S. and China internet analyst at Mizuho Securities, said on CNBC’s “Squawk Box Asia.” He has a neutral rating on Tencent and a price target of 400 Hong Kong dollars.
Shares of Tencent in Hong Kong were trading 5% higher on Thursday, at HK$366.40.

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WeChat also has mini-programs that allow users to buy products from merchants within the app. Tencent said user time spent on mini-programs roughly doubled in the fourth quarter to also exceed that spent on Moments — generating “several trillions” yuan of gross merchandise value last year.
GMV measures total sales value over a certain period of time.

That level of GMV makes Tencent “one of the largest e-commerce platforms” that the company is starting to monetize, Lee said. “I think that has a very good potential going forward.”
Tencent did not disclose exact GMV figures. It was unclear how the numbers compared to Alibaba, which generated 540.3 billion yuan in GMV during its annual shopping festival in November 2021, the latest figures available.
Advertising expenditure is often an indicator on economic sentiment.

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Companies selling lower priced goods are “seeing a broad-based recovery already,” Tencent Chief Strategy Officer James Mitchell said on an earnings call. “For companies that sell higher-ticket priced items, it varies category-by-category.”
He said those merchants and advertisers generally expect consumption to pick up later this year. Many video account viewers don’t use existing short-video apps such as Kuaishou or ByteDance’s Douyin, Mitchell said.
However, ads still account for less than one-fifth of Tencent’s overall revenue — which barely grew in the fourth quarter and fell for all of 2022 as Covid controls dragged down economic growth.

Revenue sources

The largest revenue segment, which includes the giant gaming business, fell by 2% to 70.4 billion yuan in the fourth quarter, in line with FactSet estimates for 70.2 billion yuan. In April 2022, Beijing started to regularly approve new game titles again after a hiatus of more than six months.
Tencent’s second-largest revenue source, financial technology and business services revenue fell by 1% to 47.2 billion yuan, below FactSet estimates for 49.49 billion yuan.
“FinTech Services revenue growth was slower than the previous quarter due to COVID-19 outbreaks temporarily suppressing payment activity,” Tencent said in a release. “Business Services revenues decreased year-on-year as we scaled back loss-making activities.”

For the first three months of 2023, daily average commercial payment volume rebounded by double-digits from a year ago as consumption recovered, the company said.
As the regulatory environment in China “normalizes,” the company sees opportunities to develop financial products such as in wealth management, loans and insurance over the longer term, Martin Lau, executive director and president, said on the earnings call.
Earnings per share for the quarter were 3.04 yuan, slightly better than FactSet expectations of 3 yuan. That’s on a non-International Financial Reporting Standards basis, similar to the “non-GAAP” (Generally Accepted Accounting Principles) standard used in the U.S.

Opportunities in A.I.

Tencent did not share many details on how it plans to implement artificial intelligence in the wake of OpenAI’s wildly popular ChatGPT chatbot, although the company said it expected to launch a chatbot at some unspecified point.
Lau said on a separate call with media he expects artificial intelligence would be an “important amplifier” for future growth, particularly in AI-generated content, but cast the company’s work in the tech as still in early stages.
Tencent is developing a large artificial intelligence “foundation” model called Hunyuan.
“The foundation model is something we have been developing since last year,” Lau on the call with reporters. He did not comment on ChatGPT or Baidu’s Ernie bot, which was launched last week.
“It’s much more important for us to do it right than to do it fast.”

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United States Federal Reserve building, Washington D.C.
Lance Nelson | The Image Bank | Getty Images

The Federal Reserve will hike interest rates just one more time in 2023 before the central bank ends its inflation battle, according to its median forecast released Wednesday.
The Fed kept the “terminal rate,” or the rate at which its benchmark fed funds rate will peak, unchanged from the last estimate in December at 5.1%, equivalent to a target range of 5%-5.25%. The central bank on Wednesday took the benchmark rate a quarter percentage point higher to a range between 4.75%-5%. 

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4 hours ago

11 hours ago

The so-called dot plot, which the Fed uses to signal its outlook for the path of interest rates, indicates that a majority of officials, 10 out of 18 members, expect only one more rate hike by the end of this year. Seven Fed officials see rates going higher than the 5.1% terminal rate.
For 2024, the rate-setting Federal Open Market Committee projected that rates would fall to 4.3%, slightly higher than its December estimate of 4.1%.
Here are the Fed’s latest targets:

Arrows pointing outwards

The latest forecast came amid the spreading banking chaos that sent markets onto a roller coaster in March. The Fed and other regulators stepped in with emergency actions to safeguard depositors at failed banks, but concerns still linger about a run in deposits at some regional banks.
Fed Chairman Jerome Powell said the market is getting it wrong when it prices in rate cuts later this year.

“Participants don’t see rate cuts this year. They just don’t,” Powell said in a press conference Wednesday.
Fed officials also updated their economic projections. They slightly hiked their expectations for inflation, with a 3.3% rate pegged for 2023, compared with 3.1% in December. Unemployment was lowered to 4.5%, while the outlook for GDP nudged down to 0.4%.
The estimates for the next two years were little changed, except the GDP projection in 2024 came down to 1.2% from 1.6% in December.

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A major Wall Street firm is ranking financial instability over inflation as the biggest economic risk for the next three months.
In an interview following the Federal Reserve’s quarter point interest rate hike, Wells Fargo Securities’ Michael Schumacher suggested policymakers are underestimating how quickly tightening credit conditions could hurt the economy.

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“The Fed is not really giving enough credence to the idea that tighter credit means things weaken in a fairly quick manner,” the firm’s head of macro strategy told CNBC’s “Fast Money” on Wednesday.
He estimates it will take a month or two to get clarity on credit conditions.
“It’s hard to say right now whether the Fed has tightened enough or too much,” said Schumacher. “That’s why the market has been bouncing around so much —whether it’s the equity market or the bond market. People are trying to get a read on this.”
On Wednesday, stocks closed at their lows for the session. The Dow fell 530 points, breaking a two-day win streak. The S&P 500 and tech-heavy Nasdaq also closed lower.
As long as the financial sector can avoid another meltdown, Schumacher believes the Fed will hold interest rates higher for longer because inflation is still too high.

“We’re telling clients the Fed probably hikes rates one more time. [But] not a lot of confidence around that call,” Schumacher said. “We’d be shocked if it was more than that.”
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WASHINGTON — The Federal Reserve on Wednesday enacted a quarter percentage point interest rate increase, expressing caution about the recent banking crisis and indicating that hikes are nearing an end.Along with its ninth hike since March 2022, the rate-setting Federal Open Market Committee noted that future increases are not assured and will depend largely on incoming data.”The Committee will closely monitor incoming information and assess the implications for monetary policy,” the FOMC’s post-meeting statement said. “The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”That wording is a departure from previous statements which indicated “ongoing increases” would be appropriate to bring down inflation.
While comments Fed Chair Jerome Powell made during a news conference were taken to mean that the central bank may be nearing the end of its rate-hiking cycle, he qualified that the inflation fight isn’t over.

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“The process of getting inflation back down to 2% has a long way to go and is likely to be bumpy,” the central bank leader said.
Also, Powell acknowledged that the recent events in the banking system were likely to result in tighter credit conditions, and that was likely why the central bank’s tone had softened.
Still, he said that despite market pricing to the contrary, “rate cuts are not in our base case” for the remainder of 2023.
Stocks initially rose after the Fed’s decision, but slumped following Powell’s remarks.
“The U.S. banking system is sound and resilient,” the committee said, in its prepared statement. “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.”

During the news conference, Powell said the FOMC considered a pause in rate hikes in light of the banking crisis, but ultimately unanimously approved the decision to raise rates due to intermediate data on inflation and the strength of the labor market.
“We are committed to restoring price stability and all of the evidence says that the public has confidence that we will do so, that will bring inflation down to 2% over time. It is important that we sustain that confidence with our actions, as well as our words,” Powell said.

The increase takes the benchmark federal funds rate to a target range between 4.75%-5%. The rate sets what banks charge each other for overnight lending but feeds through to a multitude of consumer debt like mortgages, auto loans and credit cards.Projections released along with the rate decision point to a peak rate of 5.1%, unchanged from the last estimate in December and indicative that a majority of officials expect only one more rate hike ahead.Data released along with the statement shows that seven of the 18 Fed officials who submitted estimates for the “dot plot” see rates going higher than the 5.1% “terminal rate.”The next two years’ worth of projections also showed considerable disagreement among members, reflected in a wide dispersion among the “dots.” Still, the median of the estimates points to a 0.8 percentage point reduction in rates in 2024 and 1.2 percentage points worth of cuts in 2025.The statement eliminated all references to the impact of Russia’s invasion of Ukraine.Markets had been closely watching the decision, which came with a higher degree of uncertainty than is typical for Fed moves.

Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, on Wednesday, March 22, 2023.
Al Drago | Bloomberg | Getty Images

Earlier this month, Powell had indicated the central bank may have to take a more aggressive path to tame inflation. But a fast-moving banking crisis thwarted any notion of a more hawkish move – and contributed to general market sentiment that the Fed will be cutting rates before the year comes to a close.Estimates released Wednesday of where Federal Open Market Committee members see rates, inflation, unemployment and gross domestic product underscored the uncertainty for the policy path.Officials also tweaked their economic projections. They slightly increased their expectations for inflation, with a 3.3% rate pegged for this year, compared with 3.1% in December. Unemployment was lowered a notch to 4.5%, while the outlook for GDP nudged down to 0.4%.The estimates for the next two years were little changed, except the GDP projection for 2024 came down to 1.2% from 1.6% in December.

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The forecasts come amid a volatile backdrop.
Despite the banking turmoil and volatile expectations around monetary policy, markets have held their ground. The Dow Jones Industrial Average is up some 2% over the past week, though the 10-year Treasury yield has risen about 20 basis points, or 0.2 percentage points, during the same period.While late 2022 data had pointed to some softening in inflation, recent reports have been less encouraging.The personal consumption expenditures price index, a favorite inflation gauge for the Fed, rose 0.6% in January and was up 5.4% from a year ago – 4.7% when stripping out food and energy. That’s well above the central bank’s 2% target, and the data prompted Powell on March 7 to warn that interest rates likely would rise more than expected.

But the banking issues have complicated the decision-making calculus as the Fed’s pace of tightening has contributed to liquidity problems.Closures of Silicon Valley Bank and Signature Bank, and capital issues at Credit Suisse and First Republic, have raised concerns about the state of the industry.While big banks are considered well capitalized, smaller institutions have faced liquidity crunches due to the rapidly rising interest rates that have made otherwise safe long-term investments lose value. Silicon Valley, for instance, had to sell bonds at a loss, triggering a crisis of confidence.The Fed and other regulators stepped in with emergency measures that seem to have stemmed immediate funding concerns, but worries linger over how deep the damage is among regional banks.At the same, recession concerns persist as the rate increases work their way through the economic plumbing.An indicator that the New York Fed produces using the spread between 3-month and 10-year Treasurys put the chance of a contraction in the next 12 months at about 55% as of the end of February. The yield curve inversion has increased since then.However, the Atlanta Fed’s GDP tracker puts first-quarter growth at 3.2%. Consumers continue to spend – though credit card usage is on the rise – and unemployment was at 3.6% while payroll growth has been brisk.

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All Coinbase Japan customers will have until Feb. 16 to withdraw their fiat and crypto holdings, the company said in a blog post.
Jakub Porzycki | Nurphoto | Getty Images

Check out the companies making headlines in extended trading.
Steelcase — Shares of the office furniture company jumped nearly 6% on Wednesday evening following a strong earnings report for its most recent quarter. Both adjusted earnings per share and revenue were higher than analysts estimated, according to FactSet. Steelcase also issued guidance for the current quarter that was higher than Wall Street’s projections.

MillerKnoll — MillerKnoll, another furniture company, saw shares decline 3% after hours. Earnings and revenue guidance were weaker than analysts anticipated, according to FactSet. The company posted stronger-than-expected adjusted earnings per share for the most recent quarter.
KB Home — Shares of the home retailer rose 2.7% after the company reported better than expected financial results. KB Home posted earnings of $1.45 per share on revenue of $1.38 billion for its fiscal first quarter. Analysts were calling for earnings of $1.15 per share on revenue of $1.31 billion, according to Refinitiv. The company also announced a $500 million buyback program.
Coinbase — Shares of the crypto services company dropped about 10% after the Securities and Exchange Commission issued it a Wells notice, warning the exchange that it identified potential violations of U.S. securities law.

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