Two U.S. Federal Reserve governors stake out competing views of inflation risk
Two Federal Reserve governors on Wednesday laid out competing visions of where U.S. monetary policy may be heading, with one citing ongoing concerns about inflation and another expressing confidence that price pressures will continue to ease. (…)
Bowman, appointed to the Fed’s Board of Governors by Trump during his first four-year term in the White House, said in comments to an economic forum in West Palm Beach, Florida, that with inflation still elevated and moving sideways in the last few months, the Fed needed to be cautious.
“We have seen considerable progress in lowering inflation since early 2023, but progress seems to have stalled in recent months. … I would prefer to proceed cautiously in bringing the policy rate down to better assess how far we are from the endpoint,” Bowman said, noting that the Fed’s Nov. 7 policy statement “included a flexible, data-dependent approach, providing the (Federal Open Market) Committee with optionality in deciding future policy adjustments.” (…)
But [Lisa] Cook, who was appointed to the Fed’s board by President Joe Biden in 2022, also voiced confidence in a continued easing of price pressures that are now largely confined to the housing sector. She estimates that inflation, while stalled of late, would drop to around 2.2% next year, just above the Fed’s 2% target, and continue lower from there. (…)
Still, “the totality of the data suggests that a disinflationary trajectory is still in place and that the labour market is gradually cooling,” Cook said. “Going forward, I still see the direction of the appropriate policy rate path to be downward.” (…)
But the totality of the data negates the notion that “price pressures are now largely confined to the housing sector”.
Core CPI is up 3.3% YoY but CPI-Services is still rising 4.8%. The 1.5% gap between the two inflation series is the largest since 2003.
And CPI-Services less Rent is up 4.5% YoY and was up 6.1% annualized in the last 2 months. CPI-Housing is up 4.2% but slowed to +3.6% in the last 2 months.
November 19:
CHINA WATCH
Taiwan October export orders beat forecasts on AI, China demand remains soft
Export orders rose 4.9% last month to $55.45 billion from a year earlier, the economy ministry said on Wednesday. That topped both the 3.6% gain forecast in a Reuters poll and September’s expansion of 4.6%, and marked the eighth straight month of growth.
Orders for goods from Taiwan, home to tech giants such as chip manufacturer TSMC are a bellwether of global technology demand.
The ministry expects export order momentum to be sustained as new applications keep rolling out, boosting demand for semiconductors and servers, the ministry said. Consumer electronics products will enter the traditional hot demand season in the second half of the year, it added. (…)
The ministry said it expects export orders in November will rise between 4.7% and 8.6% year-on-year.
Taiwan’s orders in October for telecommunications products were up 0.5% from the prior year, while electronic products rose 11.2% from a year earlier.
Overall orders from China improved, down 0.1% versus a 3.6% fall the prior month. Orders from the United States jumped 12.6%versus an 8.3% gain in September.
Orders from Europe rose 2.7% in October after dipping 4.2% in September. From Japan, orders were up 5.3% versus a rise of 9.8% during the same period.
Apple sales fall y/y on China’s Singles’ Day, Huawei up 7%, data shows
The iPhone manufacturer saw its sales decline year-on-year by “double digit percentages” from Oct. 18 to Nov. 10, the research consultancy said. In comparison, its main rival in China, Huawei, recorded 7% sales growth, fueled by price cuts on its Pura 70 and Mate 60 models.
Xiaomi also saw sales decline, with volumes falling 6%.
“To capitalize on one of the biggest sales festivals of the year, major Chinese OEMs (manufacturers) except Huawei launched their latest flagships ahead of the festival,” Counterpoint said, describing this as a key reason for Apple’s decline. Only Xiaomi did so last year, it noted.
Overall, smartphone sales in China during the event, the country’s biggest online shopping festival, fell 9% year-on-year as a slowing economy weighed on consumer enthusiasm despite the promotions, Counterpoint said. (…)
Google Should Be Forced to Sell Chrome Browser, Justice Department Says Spinoff would be a major blow to Google following its loss in antitrust trial
Government lawyers said competition can only be restored if Google separates its search engine from products it has built to access the internet, such as Chrome and its Android mobile operating system. Chrome controls about two-thirds of the global browser market, according to the website Statcounter. Searches in the Chrome address bar go through Google unless a user changes the settings.
The Justice Department also requested that Google be prevented from giving preferential access to its search engine on devices that use its Android mobile operating system. If Google violated that rule in the future, it would have to divest Android as well under the government’s proposal. (…)
Google would also be forbidden from paying to be the default search engine on any browser, including Chrome under its new owner. Google currently pays Apple tens of billions of dollars a year to be the default on its Safari browser. (…)
The government’s proposal also goes after Google’s role in the young artificial-intelligence market, which is starting to displace traditional search. The Justice Department wants the court to compel Google to allow website publishers to opt out of having their data used to train its AI models. Alternatively, the search giant could pay publishers to use their data.
Kent Walker, Google president of global affairs, described the Justice Department’s suggested remedy as a “wildly overbroad proposal” that would “harm Americans and America’s global technology leadership.” He said Google would file its own proposed remedy to the court in December.
About half of U.S. internet searches go through products where Google has paid to be the default, including Android phones, Apple devices and browsers such as Firefox, according to U.S. District Judge Amit Mehta’s opinion. Another 20% go through Chrome browsers that users have downloaded themselves and default to Google search.
Advertisements next to search results accounted for 57% of Google parent Alphabet’s $307 billion of revenue last year.
Mehta will oversee a trial starting in April to decide how to address Google’s antitrust violations. The judge has said he plans to decide by August. Google is expected to appeal his decision. That could delay the impact of a ruling for months or years. (…)
In an opinion 25 years ago, judges on the U.S. Court of Appeals for the District of Columbia Circuit vacated a lower court’s order to break up Microsoft. They suggest that remedy was only appropriate when a monopoly had been formed through mergers, as opposed to organically grown.
While the Justice Department will gain a new antitrust chief after President-elect Donald Trump takes office, Republicans have generally supported antitrust action against the company. The department filed the lawsuit in 2020 when Trump was president. (…)
The Justice Department’s proposal asks for Google to have to share its search data with competitors.
AI CORNER
That could be a killer app!
Children can now pen wishlists to send to the North Pole, before Santa will contact them via a “real call.” For $9.95, children receive a one-time call from Santa and for $14.95, kids can chat with him for five minutes and receive a recording to “relive the magic and cherished memories of this moment for years to come.” After deciding which package to purchase, parents can then fill in details that personalize the message from Santa.
The service does not utilize pre-recorded audio and instead uses generative AI to mimic real conversations, per Jam Press. (New York Post via ADG)
EDGE AND ODDS
One of this blog’s goal is to provide practical info (edge) to investors to help improve their odds of achieving good risk-adjusted investment returns.
This one probably will not hit most readers’ fancy:
- The Secret to Selling a $100 Million Mansion They’ve dealt with billionaires, signed NDAs and fielded bizarre requests. Four real-estate power brokers dish on how they got the deal done.
But this next one should put your imagination at work:
The art market went bananas over a million-dollar banana.
“Comedian,” by Italian artist Maurizio Cattelan, sold for $6.2 million at auction Wednesday night.
The piece consists of an ordinary, yellow banana affixed to a white wall with a diagonal piece of silver duct tape. Since Cattelan debuted the work at Art Basel Miami Beach five years ago, what’s become known as the Banana has turned into a viral sensation. It’s attracted crowds, copycats, and even its own cryptocurrency.
The Banana also is reigniting a long-running debate about the value society is willing to place on an everyday object simply because an artist calls it art. (Marcel Duchamp famously kick-started the argument in 1913 when he mounted a bicycle wheel to a stool.)
Perrotin Gallery originally sold Cattelan’s duct-taped banana in an edition of three plus two artist’s proofs, or early prototypes—so five bananas in all—for between $120,000 and $150,000 apiece in 2019. On Wednesday, Sotheby’s in New York estimated its example from this bunch would sell for at least $1 million, but at least seven bidders chased it far higher.
Ultimately it sold to Chinese collector Justin Sun, founder of cryptocurrency platform Tron. He intends to pay for the piece in crypto. After the sale, Sun said he considered the piece to be historic, but he also said he has plans of his own for the Banana: “In the coming days, I will personally eat the banana as part of this unique artistic experience, honoring its place in both art history and popular culture.” (…)
To keep a work made of a real banana intact, the artist enlists the work’s owner—who receives a 14-page sheet of instructions that doubles as a certificate of authenticity—to continually refresh the installation by buying their own supply of new bananas and tape. One stipulation is that the banana’s curve should point right, not left. The fruit should also be displayed vertically, not horizontally like a smile, and roughly at eye level.
If someone visiting Sotheby’s preview had tried to rip the Banana off the wall and eat it like artist David Datuna did at one point during its Miami fair debut, Sotheby’s was prepared. Expert David Galperin said, “We have backups.”
A version of the banana already belongs to a museum, sealing its cultural posterity: One of the original buyers of “Comedian” donated their banana to New York’s Solomon R. Guggenheim Museum. (The museum has yet to put the fruit on view.) (…)
Cryptocurrency investors, who last caused an art-world stir when they unsuccessfully competed to buy a copy of the U.S. Constitution at Sotheby’s in 2021, have gravitated in recent weeks to a pair of meme coins inspired by Cattelan’s banana, including a token called $BAN that was minted on Oct. 25 by a Sotheby’s employee. (…)
More than 23,000 wallets now hold $BAN, and its fluctuating market cap has climbed to as much as $330 million in the days leading up to the Sotheby’s auction.
The circumstances and surge have irked other investors with some 7,000 wallets holding another meme coin minted in August called $BTW, which stands for Banana Tape Wall. Its market cap is hovering around $4.5 million. $BTW holders are now jockeying for more attention by promoting their token on X with hashtags like #StayTaped. (…)