by Sumathi Bala
CNBC.com
What you need to know today
Wall Street lower
U.S. stocks closed lower Monday taking a breather from a rally sparked last week after the Federal Reserve stuck to its rate-cut forecast. The 30-stock Dow
lost more than 150 points to dip 0.4%, while the S&P 500 and Nasdaq Composite fell around 0.3% each. Bitcoin, meanwhile, jumped 7% to retake the $70,000 level.
FTX to sell AI startup stake
Bankrupt crypto exchange FTX is selling its majority stake in AI startup Anthropic for $884 million, according to a court filing. The bulk of the stake is going to ATIC Third International Investment — a group aligned with a UAE sovereign wealth fund Mubadala. Other investors include Jane Street, venture fund HOF Capital, the Ford Foundation and funds managed by Fidelity.
(Bloomberg) — Gold held Monday’s gain as investors remained cautious ahead of key US inflation data, which may provide traders with a firmer view on when the Federal Reserve will start cutting interest rates.
Rising global temperatures are associated with inflation in food prices, both in regions that are already hotter and in countries outside the tropics like the U.S., according to a study published in the journal Communications Earth & Environment.
Inflation has been brutal over the past few years. After decades of running below 3%, in early 2021, inflation increased rapidly as the economy began opening back up after the COVID-19 lockdowns. It peaked at 9.1% in June 2022 and has declined to its current level of 3.2%. While a 3.2% inflation rate is unquestionably better than it’s been since early 2021, it is still materially above the Federal Reserve’s 2% inflation target.
An inflation wave is hitting that will terrify already shattered consumers.
President Joe Biden’s easy-migration policies are the top issue facing the United States, according to the latest Harvard Harris poll.
Numerous commentators—especially those defending President Biden’s economic record—have puzzled over why Americans are sour about the state of the U.S. economy. Unemployment rates have returned to pre-pandemic lows, they correctly point out, and the official rate of inflation is declining. So why are Americans ignoring the view of many experts that the economy is doing well?
This chart has been making the rounds on Twitter this week and I think it’s a good image to send you freaks into the weekend with. It’s easy to get swept up in the chaos of the day-to-day volatility that exists in our world. Recently, our minds have been inundated with headlines about illegal immigration, squatters and the degradation of private property rights, war across the world, small battles within the larger “culture war”, increasing prices, and the decisions made by central banks around the world. In the midst of all of this chaos it is important to take a step back and remind yourself of what lies at the core of most of these issues; the fact that we’ve completely broken money.
(Bloomberg) — As inflation surged in 2022, the Federal Reserve moved to prevent a wage-hike spiral by jacking up interest rates. Now, with unemployment edging up, the central bank is signaling a willingness to cut rates to head off a job-cutting spiral – even if that means somewhat higher inflation for a while.
During an interview aired on Friday’s edition of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers stated that the “huge set of new private sector investments going on with respect to green investments and the IRA” will put upward pressure on interest rates.
This chart is from John Williams’ Shadow Government Statistics newsletter.