Bloomberg - Evening Briefing - Inflation at 70%

Markets came back down to earth after Wednesday’s rally that followed softer-than-expected inflation data. Despite the consumer price report and a surprise drop in producer prices Thursday, the Federal Reserve looks set to keep its monetary policy tight, John Authors writes in Bloomberg Opinion, which may mean chances of recession remain sizable. Though US gas prices fell below $4 and recent data is a bright spot, the pain is far from over globally. Argentina raised its interest rate to the highest in nearly three years to 69.5%. Inflation in Argentina surged past 70% and is raising serious political pressure on leaders. Mexico also raised its key interest rate to an all time high in the face of the highest inflation in 21 years. Food inflation remains 13% higher than a year ago around the globe, meaning many are going hungry.  In the US, the rental crisis is worsening as many would-be homebuyers are backing out of the market after mortgage rates jumped. And people of color and those with lower incomes are the most affected by the increase in rent prices. Here’s your markets wrap. —Margaret Sutherlin

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

US Attorney General Merrick Garland said he personally approved a decision to search former President Donald Trump’s Mar-a-Lago home on Monday, and that the Justice Department is asking a judge to unseal the search warrant. His comments marked a sharp departure from the department’s usual practice of not discussing an ongoing investigation, and rebutted the torrent of criticism from Trump and his Republican allies over the search of a former president’s home. Though, a New York Times report shows the former president was subpoenaed months before the FBI executed the search. Meanwhile, an armed man tried to breach the FBI offices in Cincinnati, leading to multiple exchanges of gunfire.

There’s a new clue to understanding long Covid. Researchers found striking decreases in the stress hormone cortisol were the strongest predictor for who develops long Covid. The new study identified several potential drivers of the lingering symptoms afflicting millions of survivors. Health officials in the US said Americans no longer need to quarantine after Covid exposure. 

Mark Zuckerberg’s new top lieutenant at Meta is the anti-Sheryl Sandberg. He’s rarely in the public and he’s not a household name. Javier Olivan, the company’s new chief operating officer, has long been the unofficial fixer at Facebook. He’s spun out Facebook’s Messenger app. He was a key advocate for major deals, including its $22 billion acquisition of WhatsApp, as well as the lesser-known Onavo tool—which helped Meta gather competitive intel on how often users were opening other social apps on their phones. While Zuckerberg invented Facebook, it was Olivan who helped expand the service—with all of its societal benefits and ills—to unprecedented size and power.

Mark Zuckerberg, chief executive officer of Meta, and Javier Olivan in 2014.  Photographer: Susana Gonzalez/Bloomberg

The fighting remains intense around Europe's largest nuclear power plant in Ukraine, with Russia shelling near a storage facility for radioactive materials. The United Nations pushed for a cease-fire around the plant, warning a nuclear disaster is possible. Germany will host an international conference in Berlin in October on how to organize the reconstruction of Ukraine following Russia’s invasion. Chancellor Olaf Scholz suggested a reconstruction package for Ukraine will be “bigger” than the Marshall Plan, which helped western Europe recover from World War II.

The operation of a controversial American-made missile shield was “not negotiable,” said South Korea, which pushed back at China’s efforts to hold current President Yoon Suk Yeol to his predecessor’s pledge to freeze the project’s deployment. The missile shield represents the latest test of Yoon’s promise to strengthen security ties with the US and Japan, and take a tougher line against China and North Korea. 

Buses of migrants from the Southern border sent by Texas’s Republican governor continued to arrive in New York City this week, testing a repeated promise made by Mayor Eric Adams that all are welcome “with open arms.” But the migrants coming by the busload are quickly learning that Adams’s supportive words mask a much harsher reality: A city that can’t really handle them.

A bus carrying migrants from Texas arrives at Port Authority Bus Terminal on August 10 in New York. Photographer: Yuki Iwamura/AFP

Job hoppers have long scored bigger raises than those who stay, but the gap is getting even wider. People who switched saw their wages jump by a record 6.7% on average in the 12 months through July, nearly two percentage points higher than those who remained in their same roles

• US jobless claims rose the most since November, a sign of moderation. 
• Bloomberg Opinion: Fed damage to housing may take years to fix.
• Makers of Zantac see shares crater over lawsuit concerns. 
• Hong Kong’s population declined again—only this time it’s a record.
• The median price of a US home is more than $400,000.
• A major power outage is impacting Toronto’s financial district. 
• The Aman New York is the city’s newest—and most expensive—hotel. 

BreAnn Scally is a pet lover, the kind who wishes she could take home every stray she passes on the street. So she was intrigued last year when she discovered that PetSmart, the pet-supply chain, offered what it advertises on its website as “FREE paid” grooming training. Turns out that free training is anything but. Increasingly companies–from pet grooming to finance—are forcing employees who quit to pay back thousands (sometimes tens of thousands) of dollars in training costs. Companies say these contracts are indispensable thanks in part to the Great Resignation.

An employee plays with dogs during doggie day care at a PetSmart in New York.  Photographer: Victor J. Blue/Bloomberg

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