Bloomberg - Evening Briefing - Fed triumph at risk

Bloomberg Weekend Reading

After overseeing the most aggressive monetary tightening cycle in decades, several central banks, including the US Federal Reserve and Bank of England, took a pause this week. While the Fed is projecting it will be able to tame consumer prices without triggering a downturn or a significant dent in currently robust employment, the remaining naysayers call this scenario too optimistic (despite more than a year of wrong calls). Then there are the other looming challenges: The United Auto Workers staged more walkouts at GM, Ford and Stellantis plants as they seek structural pay and benefit rises. The union and the Big Three automakers say there’s a long way to go to negotiate new contracts. Meanwhile, halts in vehicle production caused by the strikes will put pressure on inventories, already low due to pandemic-related parts shortages, and could drive up near-record car prices. There are also likely to be ripple effects up the auto supply chain.

But there’s a bigger threat to the Fed’s seeming triumph. In Washington, the clock is ticking on a possible government shutdown driven by far-right Republicans that will start Oct. 1 if GOP infighting continues. Bloomberg economists estimate a shutdown will hurt gross domestic product enough to even potentially cause a contraction if it stretches on, increasing unemployment from its current 3.8% to 4%. Looking to seize on the chaos, GOP presidential front-runner Donald Trump presented the shutdown—which he has been lobbying for—as a way to halt the federal felony prosecutions he faces. “As the world witnesses this American freak show, the worries grow,” Andreas Kluth writes in Bloomberg Opinion. “The biggest threat to American hegemony emanates not from Moscow or Beijing but from domestic polarization and dysfunction.”

What you’ll want to read this weekend

Ukrainian President Volodymyr Zelenskiy didn’t get the same welcome on this US trip as he did last time, finding some in Congress more skeptical of increased military aid. As far-right Republicans seek to scale back funding for Kyiv’s effort to repel Russian invaders, Poland appeared to waver over weapons supplies amid a larger dispute over Ukrainian grain sales. But US President Joe Biden vowed to continue support for Ukraine after a meeting with Zelenskiy, saying “there is no other alternative.” The tensions underscore a shift away from crisis mode toward a more long-term approach to what looks like a protracted war by the Kremlin. “In a conflict that shows few signs of ending, Ukraine’s—and America’s—challenges are only beginning,” Hal Brands writes in Bloomberg Opinion.

Tensions between Canada and India soared after Prime Minister Justin Trudeau accused the Indian government of a role in the assassination of a Sikh leader in a Vancouver suburb in June. Prime Minister Narendra Modi strongly denied any part in the killing of Hardeep Singh Nijjar, a 45-year-old activist for Sikh separatism who India has called a terrorist. The diplomatic confrontation may leave the US in a difficult position, between one of its strongest allies and an increasingly important partner in countering China.

Justin Trudeau and Narendra Modi Photographer: Evan Vucci/Getty Images

The mysterious purge of China’s foreign minister in July followed by the reported ouster of Xi Jinping’s defense chief less than two months later has raised questions about the Chinese leader’s stability and management style. The apparent departure of Defense Minister Li Shangfu, however, would eliminate one major roadblock to military talks with the US. Recently, Xi also shuffled the generals overseeing the nation’s nuclear arsenal, without giving an explanation. All of these changes come amid the backdrop of China’s economic slowdown. Xi’s crackdown may shore up his position, “but undermine efforts to revive growth,” Minxin Pei writes in Bloomberg Opinion

As the world pivots away from fossil fuels and toward renewables, solar power has taken on outsize significance. While the modern solar cell was an American invention, today the vast majority of solar panels are made in China, and the disparity has become a strategic liability. The CEO of the biggest US solar panel maker, First Solar’s Mark Widmar, says the Biden administration needs to toughen trade enforcement to guard against unfair Chinese competition. Then there’s deforestation. In northern Ecuador, an Indigenous community has taken to policing their part of the Amazon rainforest with high-tech surveillance tools to guard against activities that damage the ecosystem. 

What really stands out about the Fontainebleau Las Vegas isn’t the height—at 67 stories it’s the tallest hotel in Nevada—or the 46-foot sculpture in its lobby. Instead, it’s the 23 years it took to build. The $3.7 billion palace with seven pools, 36 restaurants and bars and a private club on the top floor will open on Dec. 13. On the other hand: Passalacqua in Italy’s Lake Como is a tiny, 24-room hotel in a restored 18th century building. Opened last year, it has already been crowned the world’s best hotel.

Passalacqua in Italy’s Lake Como is a tiny, 24-room hotel in a restored 18th century building.  Source: Passalacqua

What you’ll need to know next week

  • China’s “Golden Week,” or national holidays, could boost  travel.
  • American Energy Security Summit spotlights a 2024 election concern.
  • The euro area’s final inflation reading for August.
  • Bank of Japan’s Ueda meets with the four biggest business groups. 
  • The US government shutdown deadline arrives.

Why Working at Dollar General Isn’t the Dream

Dollar General has over 19,000 US locations—more than Walmart and Wendy’s combined. The stores seem to be among the country’s last retail outlets that haven’t heard of inflation. A dollar there can buy you a couple of bananas, a yogurt, a bar of soap, a tube of lip gloss, a jump rope or a water gun. There are, however, other costs, for those rock bottom prices.The stores are often dirty, miserable and downright dangerous.

Dollar General workers and members of Step Up Louisiana, USSW, and other supporters march and rally at Dollar General headquarters for safer stores. Photographer: Union of Southern Service Workers (USSW)

Older messages

UAW’s early victory

Friday, September 22, 2023

Bloomberg Evening Briefing View in browser Bloomberg The United Auto Workers' unprecedented strategy to simultaneously target all three legacy carmakers is showing results. The union said that it

Bad week for Wall Street

Thursday, September 21, 2023

Bloomberg Evening Briefing View in browser Bloomberg A bad week on Wall Street turned dismal Thursday after the relentless surge in Treasury yields sapped demand for risk assets. In the end, US stocks

Spreading strikes

Wednesday, September 20, 2023

Bloomberg Evening Briefing View in browser Bloomberg There was little movement in the standoff between Big Auto and unionized workers looking to level up on pay and benefits in what could become one of

‘The answer is no’

Tuesday, September 19, 2023

Bloomberg Evening Briefing View in browser Bloomberg “If we allow Ukraine to be carved up, is the independence of any nation secure?” US President Joe Biden asked world leaders gathered Tuesday at the

Hurricane Fain

Monday, September 18, 2023

Bloomberg Evening Briefing View in browser Bloomberg In recent years, Detroit automakers managed to survive a pandemic and a semiconductor shortage while finally embracing the historic transition to

Skip the bonds

Friday, December 8, 2023

Bloomberg Evening Briefing View in browser Bloomberg After the beating they've taken in bonds over the last two years, investors could be forgiven for wondering if it was ever a good idea to rely

🦘 Australia has energy

Friday, December 8, 2023

US job data muddied the inflation waters | Australian energy companies discussed a multi-billion-dollar merger | Finimize TOGETHER WITH Hi Reader, here's what you need to know for December 9th in 3

Should you go for the gold?

Friday, December 8, 2023

Here's what to know going into 2024 ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

Goods are getting cheaper

Friday, December 8, 2023

Here's why you probably haven't noticed. View in browser BUSINESS INSIDER BUSINESS INSIDER Subscribe INSIDE SCOOP Jenny Chang-Rodriguez/Business Insider Many things are actually getting cheaper

Battle of the Buttons

Friday, December 8, 2023

How PayPal, Amazon and Shopify are Changing the Checkout ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Insider Today: Ivy League ultimatum

Friday, December 8, 2023

Plus: Mr. Bezos' neighborhood, and Elon vs. Iger. View in browser December 8, 2023 • 6 min read with Dan DeFrancesco Happy Friday! National Geographic's Pictures of the Year are here, and they

Tech’s grim new look

Thursday, December 7, 2023

Bloomberg Evening Briefing View in browser Bloomberg Silicon Valley tells the world its empires are built on ingenuity and determination. In the tech boom of the past decade, however, much of its

👩‍⚖️ Europe's regulating AI

Thursday, December 7, 2023

European lawmakers agreed on AI regulatory rules | British homes got pricier again | Finimize TOGETHER WITH Hi Reader, here's what you need to know for December 8th in 3:13 minutes. ⚡️ If AI is

Give yourself the gift of a good night’s sleep

Thursday, December 7, 2023

Start 2024 with comfort, quality and affordability. ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

Wall Street's lonely bankers

Thursday, December 7, 2023

Junior bankers share their stories of loneliness. View in browser BUSINESS INSIDER BUSINESS INSIDER Subscribe INSIDE SCOOP Arantza Pena Popo/Insider Wall Street's loneliness crisis Junior bankers