Bloomberg - Evening Briefing - Near the apex

It’s safe to say that the US economy is in a “wait-and-see” period, with the Federal Reserve’s aggressive campaign to stem inflation possibly, but not assuredly, at its apex. Fed Chair Jerome Powell and other central bank policymakers said as much this week, warning (as they have been saying for some time) that while interest rates are in restrictive territory and inflation continues to fall, there are other pitfalls that may befall the economy, including reverberations from Israel’s month-long war with Hamas. That means that, theoretically, rates could go higher, or more likely remain where they are for longer. Two Fed officials noted however that the economy hasn’t felt the full effect of past rate increases, suggesting some slowing is yet to come. Together, this means it may be too soon to start handicapping when rate cuts may start. The Fed also said it’s keeping close tabs on potential losses at banks stemming from elevated interest rates and commercial real estate. Still, the economy is barreling toward 2024 in better shape than even the soft-landing crowd expected only six months ago. As for Team Recession, it’s been 17 months of wrong calls.

In Britain, no growth was good news. The UK economy flatlined in the third quarter, defying forecasts of a small contraction and ensuring a recession is avoided at least for this year. As China slips back into deflation, exporters to the world’s second biggest economy will be hit by a double whammy of falling demand and eroding price competitiveness, according to an HSBC economist. 

Israel appeared to be closing in on Al Shifa, the main hospital in Gaza City, which Israeli officials claim houses a Hamas command center in the tunnels below. Palestinian deaths in the month-long war, began after Hamas militants killed 1,200 people on Oct. 7, rose above 11,000, according the group’s health ministry. There was no end in sight to Israel’s drive into the heart of Gaza, as Benny Gantz, a former general and opposition leader who joined a wartime government, said there would be “no limitations” to the effort to destroy Hamas. Tensions are playing out on US campuses, with increasing protests over the Palestinian death toll and concerns over antisemitism, notably at Harvard.

President Joe Biden and Chinese leader Xi Jinping will sit down on Nov. 15 after a year of rising tensions over Taiwan, trade and even a spy balloon. Each leader has a list of concerns: Xi wants to calm foreign investors, Biden wants a resumption of military talks and greater transparency. But it’s Xi who needs a good meeting more than Biden does, Minxin Pei writes in Bloomberg Opinion. “Most obviously, Sino-US tensions are destroying investor confidence and making China ‘un-investable,’” he said. Another question after three beloved pandas were sent from American zoos back to China: Will panda diplomacy ever return?  

Xi Jinping and Joe Biden during the G20 Summit in Bali last November Photographer: Saul Loeb/AFP

The Panama Canal doesn’t have enough water. A lack of rainfall blamed on climate change is leading to a steady decline in levels of Gatun Lake, which feeds one of the busiest shipping lanes in the world. Now the artery is clogged, and two giant gas tankers even performed U-turns just miles from its opening and sailed away. New quotas on the number of ships that can enter the passageway threaten trade in energy, consumer goods and food. The past 12 months have been the hottest on record, as 99% of the world’s population experienced above-average warmth.

A Russian missile struck a commercial ship at a major Ukrainian Black Sea port, highlighting the ongoing risk to commodity exports from Russia’s invasion. Ukrainian farmers, in the midst of this year’s harvest, are collecting larger-than-expected crops of key staples like corn, much of which is typically sold abroad. Ukrainian President Volodymyr Zelenskiy welcomed a decision by the European Union’s executive arm to support the start of membership talks with Kyiv. With the war at a stalemate, “a new strategy for Ukraine built around achieving a settlement rather than victory is indeed needed,” Marc Champion writes in Bloomberg Opinion. 

Here is a holiday guide with 96 gifts, most of them on the luxurious side, from a Maserati MC20 for $212,000 to a more modest but still upmarket Spurcycle steel-and-brass bike bell for $69. Wellness is a big global business with $5.6 trillion in revenue in 2022, according to a new report from the Global Wellness Institute. China’s biggest art fairs are back in a first post-Covid test of collectors’ appetite.

The Maserati MC20. Photographer: David Paul Morris/Bloomberg

• Biden, Xi to meet on the sidelines of APEC summit.
• US government funding deadline; October inflation data.
• Results from China’s Singles Day, the biggest online shopping event.
• India celebrates the Hindu holiday of Diwali.
• Dubai Air Show in an expected hot year coming for aircraft deals.

Recent global events, including the invasion of Ukraine and a rupturing of the world’s supply chains during the pandemic, sparked a broad rethinking of globalization. In the mini-documentary The Great Fracture, we show who stands to gain as investment is increasingly shaped by US-China tensions and Russia’s war.

Watch: The Great Fracture from Bloomberg Originals

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