Bloomberg - Evening Briefing - The sweet spot

For those out there waiting for a dip in financing costs, this week offered hope on both sides of the Atlantic. The European Central Bank said it could begin lowering interest rates in June, projecting that inflation will fall back to its 2% target next year. In the US, Federal Reserve Chair Jerome Powell also said his central bank is getting close to the confidence level needed to start lowering rates. The comments are a new chapter in an inflation fight that started during the pandemic and was exacerbated by Russia’s war on Ukraine. But even as the Fed raised rates, the US economy held tough—from growth to consumer spending and labor. Powell and his colleagues have said they want to see more balance between supply and demand in the labor market, and February’s jobs report pointed to that eventuality being close aboard. To some investors, the moderating job and pay gains suggest the US economy has reached a sort of sweet spot where it will keep expanding without much risk of a re-acceleration in inflation. There’s another name for that. 

Such an imminent soft landing has equity markets on a tear and consumers more upbeat. For President Joe Biden, that enviable economy should, historically speaking, make re-election a cakewalk. On several metrics, from violent crime to income equality and and wage growth, Biden’s presidency has outperformed that of his predecessor, according to data and analysis compiled by Bloomberg Opinion columnists. Still, with eight months to go, his poll numbers have been weighed down by the legacy of inflation, the immigration debate and age concerns that dog both candidates. But at his State of the Union address Thursday, the Democratic incumbent made a forceful effort to erase any doubt about his vigor.

In a raucous and at times pugnacious speech to both houses of Congress, Biden touted the historic US economic comeback and cast himself as the bulwark against what he said are threats to American democracy, namely Vladimir Putin and Donald Trump. He chided Republicans for blocking border security legislation they had originally sought and took aim at his likely opponent in the 2024 campaign on everything from China to reproductive rights to kowtowing to America’s most dangerous rival. Trump’s path to the Republican nomination (and his grip on the GOP) became clearer this week after former South Carolina Governor Nikki Haley suspended her campaign following Super Tuesday losses. 

US President Joe Biden during a State of the Union address Photographer: Al Drago/Bloomberg

Efforts to secure a cease-fire in the Israel-Hamas war before the start of the Muslim holy month of Ramadan have faltered, and the deadlock presents an even bleaker future for the more than 2 million residents of Gaza barely surviving after five months of war. Hundreds of thousands of Palestinian civilians are living in tents and on the streets after relentless bombardments Israel says are aimed at destroying Hamas and its infrastructure. The European Union, US, UK and United Arab Emirates are setting up a maritime aid corridor to Gaza, and the US said it will establish a temporary port to boost the delivery of desperately needed medical supplies and food amid reports of malnutrition and starvation.

Robot future. Amazon workers got a glimpse of a new robot that could one day toil alongside them, or instead of them. Agility Robotics has targeted the warehousing industry with two-legged bots and sees them eventually stocking shelves and working in hospitals. JPMorgan Chase, for its part, helped some of its corporate customers slash manual work by almost 90% with its currently free cashflow management tool that runs on artificial intelligence. Then there was a Microsoft staffer who warned the company and regulators about the potential of harmful AI content. 

Digit, at an Amazon warehouse near Seattle, will be mass-produced starting this year. Source: Amazon

In places most prone to wildfires and hurricanes, like California and Florida, state “insurers of last resort” are absorbing trillions of dollars in risk after private companies retreated. This raises the question of how will they cover claims in the wake of a truly major catastrophe? Some lawmakers and analysts say a big enough disaster could trigger a a national real estate crisis. Then there’s the promise of electric vehicles and a mitigation of car pollution. But a new analysis suggests that even a global all-EV fleet can’t fix the staggering number of deaths, injuries and illnesses attributed to cars and car infrastructure. 

EVs remain largely absent in many parts of the world and the power used to charge them is often derived from fossil fuel. In this week’s episode of the Bloomberg Originals series, An Optimist’s Guide to the Planet, host Nikolaj Coster-Waldau details how that is starting to change. For Michael Strahan, the path to success both on and off the football field led through the Big Apple. On this week’s episode of The Deal with Alex Rodriguez and Jason Kelly, the former football star-turned-businessman and morning show host explains how the hustle of New York helped make it all happen. 

Michael Strahan Photographer: Carmen Mandato/Getty Images

• Daylight Saving Time in the US and the Academy Awards.
• Saudi Aramco earnings and dividends amid weaker oil prices.
• Portuguese voters go to the polls to replace Socialist prime minister.
• Putin to extend his rule following Kremlin-controlled election.
• Anniversary of SVB’s collapse as banks face bigger cleanup bill.

Project Titan, Apple’s secretive car program, has been canceled. The tech giant spent billions of dollars over the past decade as part of a grandiose plan to upend the car industry in the same way the iPhone revolutionized mobile phones. But last month, Apple quietly abandoned the project. This week’s mini-documentary by Bloomberg Originals goes under the hood of Project Titan to reveal what the company was planning and explain why it ultimately fell apart.

Get Bloomberg’s Evening Briefing: If you were forwarded this newsletter, sign up here to get it every to get it every Saturday, along with Bloomberg’s Evening Briefing, our flagship daily report on the biggest global news.

Bloomberg Technology Summit: Led by Bloomberg Businessweek Editor Brad Stone and Bloomberg TV Host and Executive Producer Emily Chang, this full-day experience in downtown San Francisco on May 9 will bring together leading CEOs, tech visionaries and industry icons to focus on what’s next in artificial intelligence, the chip wars, antitrust outcomes and life after the smartphone. Learn more.