My mid-week back from vacay morning reads:
• Inflation Is Overhyped, Says This Pro. “I hear a lot of people say that we’re never going to fix it, that 7% is the new normal. That’s overhyped. There were multiple things that drove inflation up, but almost all of them are being corrected. The massive Covid-related stimulus was, in hindsight, possibly too much. But that money has been spent. So we’re mostly past it. The supply-chain issues have been largely corrected. Freight costs have come back down. And the Fed kept rates at zero for way, way too long. That has obviously been corrected. We will be back in the 2% to 3% range for inflation.” (Barron’s)
• The government numbers are not fake. They’re just noisy: In which David Sacks and Balaji raise a false alarm about the jobs numbers. (Noahpinion) see also Change Your Perspective: Monthly NFP is likely the single most overrated economic data point in the US, while the intermediate term employment trend is the most underrated. (When you have 14 straight upside surprises, perhaps somewthing is off in your model…) (The Big Picture)
• Jerome Powell’s Big Problem Just Got Even More Complicated: The Fed aims to avert financial instability while also fighting inflation—predicaments that frequently call for opposite policies. (Wall Street Journal)
• Investors Are Putting Big Money Into Japan Again. Here’s Why. The Japanese stock market is up nearly 30 percent this year, far ahead of the S&P 500, as firms bet that changes in how companies are run might just finally last. (New York Times)
• These millionaires want to tax the rich, and they’re lobbying working-class voters: The nonprofit Patriotic Millionaires has lobbied Congress to make changes for more than a decade. Its members see inequality as a danger — they worry big money is corrupting politics and driving civil unrest. But they haven’t had much success. President Donald Trump’s 2017 tax cuts largely benefited the wealthy, and even when Democrats controlled the Senate in 2021, they failed to pass a bill to raise the minimum wage. (NPR)
• The tech industry was deflating. Then came ChatGPT. Last year, Silicon Valley was drowning in layoffs and dour predictions. Artificial intelligence made the gloom go away (Washington Post)
• Rich nations say they’re spending billions to fight climate change. Some money is going to strange places. Wealthy countries have pledged $100 billion a year to help reduce the effects of global warming. But Reuters found large sums going to projects including a coal plant, a hotel and chocolate shops. (Reuters)
• Illinois Becomes First State to ‘Ban’ Book Bans: A new law lets the state withhold funds from libraries that remove books or don’t follow American Library Association guidelines. (Citylab)
• Trump finds no new lawyers for court appearance in Mar-a-Lago case: Trump is expected to be represented by existing lawyers Todd Blanche and Chris Kise. (The Guardian)
• The Denver Nuggets Were Built to Last: Not every franchise can be so lucky as to draft the best player in the game, but any can afford to be patient—and the Nuggets’ long, steady march carried them all the way to the NBA title. (The Ringer)
Be sure to check out our Masters in Business interview this weekend with Mathieu Chabran, Tikehau Capital A global alternative asset manager with $40B in assets. The firm is headquartered in Paris, and has offices in 13 countries, but primarily is run out of money centers in New York, London, and Singapore. He cofounded Tikehau in 2004 with Antoine Flamarion, a colleague at Deutsche Bank, and runs the US division. Chabran was named Chevalier de l’Ordre de la Légion d’Honneur by decree of the President of the French Republic in January 2022.
Market to Fed: Pause!
Source: Wells Fargo via FT
Sign up for our reads-only mailing list here.
