Bloomberg - Evening Briefing - Bringing the gavel down

The US Supreme Court’s Republican-appointed supermajority wielded its power broadly this week, striking down laws and erasing long-held legal precedent supported by large percentage of Americans. On Thursday the court effectively barred universities from using race as a factor in university admissions, marking the start of a new era in higher education. The next day, the same six justices tossed out President Joe Biden’s plan to slash the student debt of more than 40 million people, rejecting one of his signature initiatives as exceeding his power. They also ruled that a Christian website designer’s First Amendment rights allow her to discriminate against same-sex customers.

For a second year in a row, the US Supreme Court ended its term with landmark rulings hailed by Republicans and decried by Democrats—​​​​​​including President Joe Biden.  Photographer: Chris Kleponis/CNP

Critics of the court contend the cases represent an aggressive, ideological use of its power at a time when its credibility with Americans is at an historic low—both because of what Democrats see as a court beholden to Republican policies and recent revelations of questionable ethical conduct on the part of its most conservative members, Samuel Alito and Clarence Thomas. “This is not a normal court,” Biden said Thursday after it severely curtailed affirmative action. The Democrat also said he worried the website decision could “invite more discrimination against LGBTQI+ Americans.” Practically, some institutions of higher education said they would look for ways to continue to factor race into admissions—and student-loan relief advocates pressed Biden to find other ways to forgive college debt. But the broader issue, Noah Feldman writes in Bloomberg Opinion, is that the supermajority “is going to keep striking down liberal executive branch initiatives it doesn’t like.”

Vladimir Putin is eager to project a mood of normalcy in Russia, but few there are buying it as his effort to reassert control shows cracks. Since Wagner Group mercenary boss Yevgeny Prigozhin was exiled to Belarus after his failed uprising, Putin has been sniffing around for collaborators, in particular Sergei Surovikin, a fearsome top general whom the New York Times reported knew the mutiny was coming. In describing Putin now, “the metaphor increasingly used by Western officials is that of a wounded animal: weaker, but prone to lashing out,” Lionel Laurent writes in Bloomberg Opinion. In this unstable moment, Bloomberg editors write, the US and its allies need to focus on two things: reducing the risk of nuclear weapons use and keeping steady its support for Ukraine.

Sergei Surovikin and Vladimir Putin Photographer: Alexey Druzhinin/Getty Images

Inflation in the US might fall back to its 2% target in the next year, but getting there is likely to require two more interest-rate hikes, Federal Reserve officials forecast. The economy has proven resilient in the face of tightening monetary policy, and Fed Chair Jerome Powell said regulators are committed to learning lessons from the failure of Silicon Valley Bank and other regional US lenders. But while big banks aced their stress test this week and were deemed well-capitalized, midsize banks are bearing the brunt of higher rates. Many have turned to a patchwork of sources to shore up fleeing deposits, and the surging costs are starting to take a toll on earnings.

China has struggled for years to find a response to US sanctions, tariffs and export controls without scaring off foreign companies. Now Beijing has passed a sweeping foreign policy law that bolts together a slew of existing tools in an effort to counter Western powers. The country is also refusing to resume high-level communication with American armed forces until Washington lifts sanctions on Chinese Defense Minister Li Shangfu. Meantime, China’s Guangzhou Automobile Group said it has developed the world’s first car engine that runs on ammonia.

Li Shangfu Photographer: Picture Alliance

In the coming weeks, the US Federal Trade Commission is set to bring an antitrust suit against Amazon’s core online marketplace, according to documents reviewed by Bloomberg. Commissioner Lina Khan is unlikely to accept compromises from Amazon and could seek to restructure the company—a dramatic outcome that Amazon would surely appeal. Simultaneously, the company’s cloud unit is investing $100 million to help its customers develop and deploy new forms of AI. 

The 94-room Belmond Hotel Cipriani—opened in Venice in 1950 by the inventor of the Bellini—was named the world’s best hotel. The fatal implosion of the Titan submersible on its way to view the Titanic’s wreck has raised questions about the future of undersea tourism. But operators of the vehicles, popular on yachts and luxury cruises for seeing pristine coastlines and coral reefs, say it’s business as usual. And finally, our film critic calls the final installment of the Indiana Jones series, starring a Harrison Ford who reverse age from 80, “a flesh-and-blood cartoon with plenty of thrills and laughs and even a bit of pathos.”

The Belmond Hotel Cipriani Photographer: Tyson Sadlo

• US financial markets closed for the July 4 holiday.
• US jobs report for June, after May’s big upward payroll surprise.
• Asia earnings season kicks off amid slide of China momentum.
• OPEC seminar in Vienna; Some journalists are excluded again.  
• Thai parliament meets; prime minister candidate assures supporters.

A pandemic-driven flood of transplants to the South has resulted in six states—Florida, Texas, Georgia, the Carolinas and Tennessee—contributing more to the national GDP than the Washington-New York-Boston corridor for the first time since government figures going back to the 1990s. In recent decades, the warmer weather, lower taxes, looser regulation and cheaper housing lured companies and retirees. But this Covid-era Sun Belt economic upswing is wider in scope and shows no sign of reversing. 

Some 2.2 million people have migrated to Florida and across the Southeast in the past two years. Source: Bloomberg

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