The Federal Reserve left interest rates near zero, betting on its current strategy to help end the U.S. economic crisis, which Chair Jerome Powell calls the most severe “in our lifetime.” Powell said in a press conference Wednesday that the biggest enemy of a U.S. recovery is the nation’s skyrocketing coronavirus infection rate and the restrictions many states are being forced to reimpose. “We have seen some signs in recent weeks that the increase in virus cases, and the renewed measures to control it, are starting to weigh on economic activity,” he said. On Thursday, markets will get a look at the economic damage done by the first wave of shutdowns. Data are forecast to show U.S. gross domestic product plummeted an annualized 34.8% in the second quarter, the most in records dating back to the 1940. —David E. Rovella

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Here are today’s top stories

The Fed said another Congressional rescue package would be a good idea. But tucked into the latest proposals from Democrats and Republicans are a slew of provisions that don’t have much to do with a public health crisis. Republicans want $29.4 billion for fighter jets and other military spending and $1.75 billion for a new FBI building in the same spot the agency currently occupies, near one of President Donald Trump’s hotels. Democrats propose $136.6 billion for state and local tax breaks for high earners and expanded access to banks for cannabis companies. For now, anyway, the two sides are nowhere near a deal. Meanwhile, millions of Americans just saw their weekly unemployment benefits shrink by $600. And 30 million Americans said they didn’t have enough to eat at some point last week.

Decisions by governors in Arizona, Florida, Texas and elsewhere to ignore medical experts and reopen early has helped accelerate Covid-19 infections and now deaths, which exceed 150,000, the most in the world. On Wednesday, Florida and California reported a new record number of daily fatalities. Anthony Fauci, the Trump administration’s top infectious disease expert, warned that in addition to masks, social distancing and hand washing, eye protection is also advisable to avoid infection. Fears the virus is creeping back up the East Coast are rising, with New Jersey’s jump in cases meaning indoor dining and gyms may stay closed. Here is the latest.

The European Union showed no sign of reopening its doors to Americans by backtracking further on a plan to let in more foreign travelers amid a resurgence in coronavirus cases around the world.

Trump is pulling 12,000 U.S. troops out of Germany, a move this Republican senator called a “grave error” in NATO’s bid to deter Russian “aggression.” Trump said in an interview that, despite many recent calls with Russian President Vladimir Putin, he never discussed reports that Moscow offered cash bounties to members of the Taliban to murder American soldiers. In response to Trump’s dismissal of the allegations, former Vice President Joe Biden’s campaign said the president “continues to turn his back on those who put their lives on the line for our country, and on his own duty.”

The Covid-19 pandemic spawned predictions that stay-at-home orders would deliver a baby bump. Yet far from having more children than usual, Americans are expecting fewer—500,000 fewer by next year—and that’s bad for the economy, Peter Coy writes in Bloomberg Businessweek.

Federal agents fire tear gas on protesters in Portland, Oregon, on July 24.

Photographer: Nathan Howard/Getty Images

Unidentified federal agents in combat fatigues who have been tear-gassing, beating and sometimes detaining protesters in Portland, Oregon, without charge, will retreat from the city as part of an agreement between Democratic Governor Kate Brown and the Trump administration. The details, however, are still subject to debate.

Before Mark Zuckerberg signed a deal to buy Instagram, he floated the idea of a takeover to the startup’s co-founder, Kevin Systrom, who was not interested. “Will he go into destroy mode if I say no?” Systrom asked a board member of the Facebook CEO. “Probably,” replied Matt Cohler, the venture capitalist and early Facebook employee. Then Cohler said Facebook would likely go into destroy mode either way. On Wednesday, as Congress grilled tech CEOs, Zuckerberg went off-script and attacked Apple and Google.

What you’ll need to know tomorrow

• Bezos and Zuckerberg take tech wealth to a whole new level.
• Qualcomm shares jumped on a strong forecast, pact with Huawei.
• Herd immunity seems to be developing in Mumbai’s poorest areas.
• Bloomberg QuickTake: What we know about kids and Covid-19.
• Bloomberg Opinion: Working from home is bad news for landlords.
• Bloomberg Opinion: Barr makes excuses for U.S. election sabotage.
• Britain’s MI6 Secret Intelligence Service has a new ‘M,’ only he’s ‘C.’

What you’ll want to read in Bloomberg Digital

‘Work-Life Balance’ Will Never Be the Same

When it comes to helping employees balance work hours with relaxation, Acuity Insurance has a unique tool at its disposal: a 65-foot Ferris wheel inside its Wisconsin headquarters. Before the pandemic struck, employees were regularly invited to bring their families in for a ride while drinks and kid-friendly food were served. After-work social events like these have been hallmarks of companies looking to boost employee morale. But those days are over, and companies interested in keeping workers content and productive face an unprecedented challenge with many working from home. Even the best-rated companies when it comes to work-life balance concede things will never be the same.

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