Bloomberg - Evening Briefing - Rate cuts by March

Strategists at UBS Investment Bank are sounding a welcome note as far as Wall Street and its frenzied hope for rate cuts is concerned. They predict the US Federal Reserve will cut interest rates almost four times more than what markets are pricing. And not only that, but the continued decline in inflation will enable the central bank to start easing policy as soon as March, and in big chunks. “Inflation is normalizing quickly,” UBS’s Bhanu Baweja said. “By the time we get to March, the Fed will be looking at real rates which are very high.”

Morgan Stanley also anticipates deep cuts. Researchers led by chief US economist Ellen Zentner see rate reductions starting in June 2024, then again in September and every meeting from the fourth quarter onward. But Goldman Sachs—whose forecasts are closest to market bets and the central bank’s own outlook—is raining on the parade: the firm doesn’t see the first rate cut until this time next year.  —David E. Rovella

However, an inflationary wild card has appeared in the form of a change in how the US government estimates health insurance costs. It’s expected to give a slight boost to a popular inflation measure, reversing a trend that had been providing some relief of late.   

President Joe Biden called on Israel to take “less intrusive action” at the al Shifa hospital in Gaza, stepping up pressure on the US ally to reduce civilian deaths. With more than 11,000 Palestinians reported by local health authorities to have been killed in the war, Israel pressed on with its offensive against Hamas with raids in northern Gaza, on the outskirts of the Shati refugee camp. Heavy gunfire also continued in the vicinity of the Al-Quds hospital in Gaza City.

Here we go again. Mike Johnson, the new US Speaker of the House, faces a critical 24 hours during which fellow far-right Republicans could blow up his plan to avoid a government shutdown. Biden could torpedo it as well, though the Democrat indicated Monday he was inclined against making a veto threat, noting ongoing bipartisan negotiations with Senate leaders.

Thirty six percent. That’s how much Google pays Apple from the money it makes on search advertising through the Safari browser. Kevin Murphy, a University of Chicago professor, disclosed the number during his testimony in Google’s defense at the Justice Department’s antitrust trial in Washington. Both Google and Apple had objected to revealing details publicly about their agreement. John Schmidtlein, Google’s main litigator, visibly cringed when Murphy said the number.

Google lawyer John Schmidtlein Photographer: Ting Shen/Bloomberg

The US Supreme Court adopted a code of conduct for the first time, responding to a stream of ethics scandals that have further undercut its public standing. All nine justices signed their name to the new code, including Clarence Thomas, whose conduct has come under the greatest scrutiny. Thomas has been the subject of a series of ProPublica stories detailing luxury vacations, private jet flights, real estate purchases and school tuition payments funded by Republican megadonor Harlan Crow. Still, the new ethics code won’t necessarily mean significant changes in how the nine justices conduct themselves.

The number of international students at US colleges and universities has nearly recovered from a Covid-related decline as a surge in Indian pupils helped make up for a loss in students from China. The number of foreign students at US schools rose 12% in the 2022-2023 academic year to almost 1.06 million students, within striking distance of 2019.

Thailand is mulling a plan to station Chinese police personnel at some of its popular tourist destinations, but the move has sparked a controversy with some critics raising concerns over sovereignty. Thai government spokesman Chai Wacharonke said the plan was aimed at busting Chinese mafia groups operating in Thailand and had nothing to do with Thailand’s independence. Thai Internet users slammed the move, with most saying they are worried that Thailand would become another location for the covert operations targeting Chinese dissidents overseas.

Phuket, Thailand Photographer: Andre Malerba/Bloomberg

• European Union readies a new sanctions package against Russia.
• He’s back: David Cameron returns to the UK cabinet.
• But there’s controversy: Cameron’s China ties are drawing scrutiny.
• Bloomberg Opinion: Anger is what’s driving the US economy.
• De Beers will stockpile unsold diamonds after prices tumble.
• Donald Trump’s defense in New York fraud trial turns on Deutsche Bank.
• Fired Fox employee sues after questioning “false reporting” on election.

Hopefully you’ve booked your end-of-year travel earlier than you did last year. But no matter how well you’ve gotten ahead of your holiday plans, if you’re one of the almost 50% of Americans who say they’re traveling between Thanksgiving weekend and January, there’s a good chance you could experience disruptions this winter season (you may know this phenomenon by more colorful terms). Still, we’re here to help: here are a few ways to avoid Santa’s travel hellscape.

Photographer: Krisztian Bocsi/Bloomberg

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