Rates will be higher-er for longer-er. Yesterday, Cleveland Fed’s Mester said, “The economic projections released by the FOMC in September indicate that the median participant thinks another rate increase will be appropriate this year and that monetary policy will have to be held sufficiently restrictive for a while in order to get inflation back down to 2 percent. This is consistent with my own reading of economic conditions, the outlook, and the risks to the outlook. At this point, I suspect we may well need to raise the fed funds rate once more this year and then hold it there for some time as we accumulate more information on economic developments and assess the effects of the tightening in financial conditions that has already occurred. But whether the fed funds rate needs to go higher than its current level and for how long policy needs to remain restrictive will depend on how the economy evolves relative to the outlook.”
Investors are worried about the ballooning US deficit, which is cited as a factor of the recent UST selloff, per Bloomberg. Treasury yields are at multi-year highs, with the 10-yr at its highest in 16 years.
GOOGL’s Nadella gave testimony to Congress and explained the frenemies’ relationship that benefits both Apple and Alphabet and also maintains a wide moat for GOOGL. Apple doesn’t want Google to teach people to circumvent the Safari browser and go to Chrome, and GOOGL wants to stay the preferred provider on Apple products.
Swift and Beyonce may save AMC theatres with their concert-films coming to a screen near you. Expect to pay $22/show for a standard time, and even higher rates for large screen formats like Imax and Dolby.
Per the FT, Meta basically is threatening to charge folks in the EU $14/mo for Instagram without ads, or $17/mo for Insta +FB on desktop without ads, if the EU restricts its ability to show users personalized ads without getting consent. I expect users will be choosing the free version. But this certainly is playing tough with the regulators.
Global funds have trimmed their China equity exposure to the lowest level since 2020, per Bloomberg. Time to take the opposite side? Or too early still? The Hong Kong market was down sharply, with the Hang Seng -2.69%. On a positive note, the Chinese tourism industry more than doubled its revenue over the mid-autumn holiday weekend, per Bloomberg.
BoE’s Mann said that UK interest rates may remain permanently higher, per Bloomberg. Imagine Fed folks using that language here?!! Also, it doesn’t look like France is going to delay Brexit tariffs on UK-EU electric cars, per Reuters. So, the British are getting pounded from all angles. If they could only undo Brexit…
TikTok was forced to halt its online shop service in Indonesia this week to comply with limits on social commerce in the country. Indonesia is the first and largest market for TikTok Shop.
SBF’s trial begins today, and Michael Lewis’ book on the topic (Going Infinite) was released in concert. Companies may want to consider banning Gen X bosses from reading the book and getting even more frustrated with Gen Y hires.