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The World
Investors are weighing whether resurgent inflation could prompt central bankers to rethink current loose monetary policy. The Dow had its worst day since February (down 475 points), while the FTSE 100 endured its worst day in three months amid heightened apprehension around inflation. Fed officials reassured investors that they would pursue a “patient” approach to adjusting their monetary policy in the face of higher inflation and job gains, a message echoed by Fed governor Lael Brainard, who said a “transitory surge” in inflation would abate when imbalances in the supply chain and labour market resolve themselves. (Financial Times, The Times)
Job openings reached a record level of 8.1 million at the end of March, reflecting a widening gap between open positions and workers willing and able to take those roles. (Wall Street Journal)
Missouri’s and Tennessee’s governors are joining five other Republican-led states in ending all federally funded pandemic-related unemployment benefits this summer, saying the extra money is keeping those out of work from rejoining the labor force and making it hard for employers to fill jobs. (Reuters)
Analysis: Christian Broda and Stanley Druckenmiller: With Covid uncertainty receding fast, and several quarters deep into the strongest recovery from any postwar recession, the Federal Reserve’s guidance continues to be the most accommodative on record, by a mile. Keeping emergency settings after the emergency has passed carries bigger risks for the Fed than missing its inflation target by a few decimal points. It’s time for a change. With its narrow focus on inflation expectations, the Fed seems to be fighting the last battle. Just because the Fed hasn’t faced big trade-offs in recent decades doesn’t mean trade-offs aren’t coming or that they no longer exist. Chairman Jerome Powell needs to recognize the likelihood of future political pressures on the Fed and stop enabling fiscal and market excesses. The long-term risks from asset bubbles and fiscal dominance dwarf the short-term risk of putting the brakes on a booming economy in 2022. (Wall Street Journal)
Violence between Israelis and Palestinians escalates toward all-out war: The worst fighting between Israelis and Palestinians in seven years intensified on Tuesday night, as Israeli airstrikes began targeting Hamas offices in Gaza City and militants in Gaza fired rockets at the metropolis of Tel Aviv, the southern city of Ashkelon and Israel’s main airport. In Gaza, at least 35 Palestinians, including 10 children, had been killed by Tuesday night, and 203 others were wounded. In Israel, three people were killed in strikes on Tel Aviv and the seaside city of Ashkelon, and at least 100 were wounded. (New York Times, Washington Post, Jerusalem Post)
Up to 70,000 migrants are waiting in Libya to make the crossing to Europe, prompting calls in Rome for a naval blockade to stop them. Concern about new arrivals is growing after 2,150 migrants took advantage of calm seas to sail to the tiny Italian island of Lampedusa on Sunday and Monday, including 800 packed into two large fishing boats. (The Times)
China's emissions surpass all developed nations combined. (Axios)
Bangladesh hit back after China envoy warns against joining Quad: “We decide our foreign policy,” Bangladeshi Foreign Minister A. K. Abdul Momen insists. (Nikkei Asian Review)
U.S. President Joe Biden is set to nominate Rahm Emanuel, former chief of staff to President Barack Obama, as U.S. ambassador to Japan. (Nikkei Asian Review)
When the C.D.C. released new guidelines last month for mask wearing, it announced that “less than 10%” of Covid-19 transmission was occurring outdoors. But the number is almost certainly misleading. It appears to be based partly on a misclassification of some Covid transmission that actually took place in enclosed spaces. An even bigger issue is the extreme caution of C.D.C. officials, who picked a benchmark — 10% — so high that nobody could reasonably dispute it. (New York Times)
C.D.C. Director Dr. Rochelle Walensky defended the agency against accusations that federal scientists were being too slow to update their pandemic-control guidance and overly conservative with their recommendations, especially on outdoor mask wearing. (New York Times)
57% of workers support a mandatory Covid-19 vaccine for return to office. (CNBC)
Production of the Apple iPhone 12 at a Foxconn factory in India has slumped by more than 50% because workers infected with Covid-19 have had to leave their posts. (Reuters)
L.A.’s Hollywood Bowl is reserving 85% of seats for vaccinated guests. (Los Angeles Times)
In defiant floor speech, Rep. Liz Cheney declared, “Our election was not stolen, and America has not failed.” Cheney renewed her criticism of Donald Trump’s claims that the 2020 election was stolen, accusing the former president and his defenders of being “at war with the Constitution” on the eve of a vote by her colleagues to oust her from her role as the No. 3 House Republican. (Washington Post)
Over 100 former Republican officials will sign a letter tomorrow declaring that if the Republican Party does not break with former President Donald Trump and change course, they will back the creation of a third party. The letter, headlined: "A Call For American Renewal," is an exploratory move toward forming a breakaway party, two of its organizers said. The group is dismayed by what it says is a modern Republican Party driven by its allegiance to Trump, who continues to falsely claim the 2020 election was stolen from him. (Reuters)
California expects a staggering $75.7 billion surplus despite a year of pandemic closures — an amount that surpasses most states' annual spending and prompted Gov. Gavin Newsom to propose sending cash back to residents as he faces a recall election. California's coffers are bulging thanks to the high-flying Silicon Valley, surging stock market and a large share of professionals who were able to continue working remotely during Covid-19. (Politico)
Florida, Georgia, Virginia, and North Carolina declared states of emergency over potential gas shortages. More than 1,000 gas stations in the Southeast are now running out of fuel, according to S&P's Oil Price Information Service. (CNN)
Economy
The PPP has run dry, and voter support for government aid to many industries is fading: Net support for federal government aid to small businesses dropped 6 percentage points from last March, to plus-73 in a new survey. Net support for technology companies fell 22 points over the past 14 months, to minus-6. 55% of voters say the U.S. economy is still hurting and needs more stimulus. (Morning Consult)
Credit-card debt keeps falling, putting bank on edge. Americans are paying off their credit cards at the fastest rates in years. Banks are responding with generous card solicitations and looser underwriting standards. (Wall Street Journal)
U.S. home prices rose nearly everywhere in 1Q21, a rapid price appreciation that shows little sign of fading soon. The median sales price for existing single-family homes was higher in the quarter compared with a year earlier for 182 of 183 metro areas. In 89% of those metro areas, median prices rose by more than 10% from a year earlier. (Wall Street Journal)
Demand for vacation homes soars — even as people prepare to return to offices. Rate locks have risen 178% for second homes over the past year as of April, according to an analysis by Redfin. (MarketWatch)
71% of U.S. adults predict the average price of houses in their area will increase over the next year. The current results stand in sharp contrast to attitudes in April 2020, amid mounting economic uncertainty at the start of the coronavirus pandemic, when just 40% predicted a rise in home values. (Gallup)
Female entrepreneurs are especially common in developing nations like Angola as well as in developed countries on the Arabian Peninsular, like Saudi Arabia, Oman or Kuwait, and in the Americas, like in Panama, Chile and the U.S. Many developed nations in Europe have very low rates of female entrepreneurs, according to the study. The researchers distinguish between necessity-driven entrepreneurship, which can be caused by a lack of formal employment opportunities in a country, and innovation-driven entrepreneurialism, which exists in countries with well-developed formal job markets. (Statista)
Technology
TikTok is testing a tool for brands to recruit employees. The pilot program is designed to help people find jobs on TikTok and connect with companies looking to find candidates. It's also meant to help brands use TikTok as a recruitment channel. The company is currently testing the service with a beta group of companies. Several big brands have been asked about participating, including sports leagues. (Axios)
TikTok has begun working with merchants in Europe, including the UK, to test ways they can sell products directly to users within the app. (Bloomberg)
Google plans to double the size of its team studying artificial-intelligence ethics in the coming years, as the company looks to strengthen a group that has had its credibility challenged by research controversies and personnel defections. (Wall Street Journal)
A German regulator has banned Facebook from processing any data from WhatsApp users, arguing that the messaging app’s controversial new terms of service are illegal under European privacy law. (Financial Times)
Deep dive on the DarkSide ransomware gang, which pressures victims into paying via phone calls by affiliates, DDoS attacks, and threats of tipping short sellers. (Krebs on Security)
Smart Links
More companies are offering pregnancy loss leave. (Fortune)
The business case for car-free streets. (City Lab)
TSMC is stuck in the middle of a global panic over chip supply. (Bloomberg Businessweek)
France bans use in schools of a method increasingly used by some French speakers to make the language more inclusive by feminizing some words. (Associated Press)
As Elon Musk played host on SNL, Doge giveaway schemes flooded social media. (Bloomberg)
Coinbase reaches #1 on U.S. Apple App Store for first time since 2017. (The Block)
Bitcoin devours more electricity than many countries. (Statista)