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The World
U.S. consumer inflation accelerated to 9.1% in June, a pace not seen in more than four decades, adding pressure on the Federal Reserve to act more aggressively to slow rapid price increases throughout the economy. The consumer-price index’s advance for the 12 months ended in June was the fastest pace since November 1981, the Labor Department said on Wednesday. A big jump in gasoline prices—up 11.2% from the previous month and nearly 60% from a year earlier—drove much of the increase, while shelter and food prices were also major contributors. (Wall Street Journal)
Fed Could Weigh Historic 100 Basis-Point Hike After Inflation Scorcher: Futures show one-in-two chance of super-sized July move, with 75 basis points now also in play for Fed’s September meeting. “Everything is in play,” Atlanta Fed President Raphael Bostic told reporters. Asked if that included raising rates by a full percentage point, he replied, “it would mean everything.” (Bloomberg)
Mohamed El-Erian: June’s awful US inflation numbers are a reminder of tough days ahead for many in America and around the world, and especially the most vulnerable segments of the population and the most fragile developing countries. This is not because inflation will record yet another four-decade high over the next three months. It won’t. Rather, it is because of the damage already unleashed and that which is to come. (Financial Times)
The state and local tax deduction issue threatens to spark a showdown among Democrats as high-stakes Senate talks inch closer to a deal on President Joe Biden’s economic agenda. Majority Leader Chuck Schumer and Senator Joe Manchin are negotiating a slimmed-down tax and spending plan. But Manchin says the federal deduction popular in high-tax states like New York, New Jersey and California, known as SALT, hasn’t been in the mix. (Bloomberg)
President Joe Biden and Israeli Prime Minister Yair Lapid today will sign a joint agreement pledging to prevent Iran from acquiring a nuclear weapon on the second day of Biden's Middle East trip. (Reuters)
Rising petrol price squeezes China’s economy, opens door for energy upgrade: China has increased petrol prices 10 times this year due to rising cost of crude oil, indirectly filtering into daily lives and forcing authorities to rethink energy strategies. China has been encouraged to focus on electric vehicles and new energy, although its relationship with Russia has raised concerns amid rising geopolitical tensions. (South China Morning Post)
Japan warned that a new wave of coronavirus cases appears to be rapidly spreading through the nation, calling on people to be especially careful ahead of an upcoming long weekend and imminent summer school vacations. Japan has recently seen new COVID-19 cases surge to levels not seen since early this year, with Tokyo recording 16,878 new cases, the highest since February, while national cases rose above 90,000. (Reuters)
As drought shrivels Lake Powell, millions face power crisis: With water levels falling ‘lower than thought possible’ at Glen Canyon dam, energy production could halt as soon as July 2023. (The Guardian)
Extreme heat blasting Western Europe could set all-time record in U.K. Amber heat warnings have been posted in England, which could near its highest temperature on record: 101.7 degrees. (Washington Post)
Shanghai issues third heatwave red alert for this summer. (Reuters)
Economy
Bank of America Corp. economists forecast a “mild recession this year” in the US, saying services spending is slowing and hot inflation is spurring consumers to pull back. “A number of forces have coincided to slow economic momentum more rapidly than we previously expected,” analysts led by Michael Gapen, who recently joined the firm as head of US economics, said in a report. (Bloomberg)
Rents in US Rise at Fastest Pace Since 1986, Buoying Inflation. (Bloomberg)
UK house price growth falls to lowest since March 2021. (Reuters)
Crypto lender Celsius Network filed for Chapter 11 bankruptcy, a month after it froze customer withdrawals and joining other casualties battered by a rout in digital assets. Celsius, which has $167 million cash on hand, said it took the step to stabilize its business and work out a restructuring for all stakeholders. The filing was done in the Southern District of New York. (Bloomberg)
Euro dips below parity against dollar for first time since 2002: Single currency tanked to low of $0.9998 as Ukraine war and high gas prices fuel concern of recession. (The Guardian)
Free Pizza Didn’t Get Employees Back to the Office, but Air Conditioning: Will After two summers when many jobs could be done virtually in shorts, employees are reconfronting the hot mess of commuting to the office in sweltering heat. Eric Busseau, a 28-year-old financial consultant in Chicago, says he now decides whether to go to the office based on how hot and humid the forecast says the day will be. “I live in an apartment from like 1924 and I’ve got window air conditioners,” he says, “but it does not compete with the industrial-strength air-conditioning of my office tower.” (Wall Street Journal)
Technology
Netflix said it chose Microsoft to help launch a low-cost, advertising-supported streaming plan, a surprise move that gives a major boost to the tech giant’s growing ad business. Seeking a partner was critical for Netflix to enter the ad business quickly. Microsoft will supply technology to facilitate the placement of video ads on Netflix. All ads served on Netflix will be available exclusively through Microsoft’s platforms. (Wall Street Journal)
Panasonic Holdings will invest $4 billion in a second U.S. electric vehicle battery factory in Kansas, its subsidiary Panasonic Energy announced, confirming an earlier Nikkei report. The factory is expected to hire as many as 4,000 employees and supply a new high-capacity battery for Tesla. (Nikkei Asia Review)
Americans are paying record-high prices for new vehicles: Fueled by pent-up consumer demand, low vehicle inventories and rising sales of luxury vehicles, Cox Automotive reports the average transaction price of a new vehicle last month was $48,083. That average price was a 1.9% increase from May and higher than the previous high of $47,202 set in December. (CNBC)
Business Leaders Say Computer Science Needs to Be A Core Subject. (EdSurge)
Smart Links
12 Hours of Misery at Heathrow: Huge Crowds, Lost Bags, Endless Cancellations. (Wall Street Journal)
The 10 Worst Airports in Europe for Delays Right Now. (Bloomberg)
Bill Gates donates another $20bn to his charitable foundation. (Financial Times)
Statue honoring Black educator replaces Confederate general at U.S. Capitol. (Axios)
Warren Buffett’s Berkshire Hathaway Adds to Big Oil Bet. (Wall Street Journal)
Australia unemployment dives to 48-year low as jobs boom. (Reuters)