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The World
Biden to cut short overseas trip as US debt ceiling talks inch forward: Joe Biden will cut short a planned overseas trip and return to Washington on Sunday, after Speaker of the House Kevin McCarthy offered the first hint that lawmakers were moving towards a deal to raise the debt ceiling and avert an unprecedented government default. The US president is set to depart today for G7 meetings in Japan. He had originally been scheduled to travel on to Papua New Guinea and Australia, but those plans have been scrapped. The change in plans came as Biden met the four top members of Congress — Republicans McCarthy and Mitch McConnell and Democrats Chuck Schumer and Hakeem Jeffries — in the Oval Office to try and make progress on a potential deal to raise the debt ceiling and avert default. All parties were cautiously upbeat after the hour-long meeting. (Financial Times)
President Biden is deploying two of his top advisers to negotiate a debt deal with Capitol Hill Republicans — a sign of progress, however incremental, for the negotiations weeks away from a potential default. The negotiators will be Steve Ricchetti, one of Biden’s longest-serving advisers, and Office of Management and Budget Director Shalanda Young, both of whom are well respected on Capitol Hill. Their appointment suggests the administration is ramping up its level of engagement beyond the staff-level talks that were merely designed to set the table for negotiation. The announcement was well received by Republicans on the Hill, who viewed it as a sign that talks had moved to a new level. (Politico)
Fed Officials Reveal Debate Over Whether to Pause Rate Hike in June: One of the Federal Reserve’s more hawkish policymakers suggested it will need to keep raising interest rates, while four others stressed watching the impact of their tightening so far. The remarks on Tuesday by Cleveland Fed President Loretta Mester, New York Fed chief John Williams and Richmond’s Thomas Barkin, Dallas’s Lorie Logan and Chicago’s Austan Goolsbee expose ongoing internal debate over a pause on rate hikes next month. (Bloomberg)
As China’s special envoy Li Hui arrives on Ukraine peace mission, observers call for cautious optimism: Kyiv is the first stop on Chinese special representative for Eurasian affairs’ five-nation European tour, which will also take him to Russia. While both China and the EU want the war to end, asking Russia to ‘suddenly withdraw all troops’ will be unrealistic, Renmin University professor says. (South China Morning Post)
Cuba announces new migration policies as exodus continues: Cuba announced measures that ease restrictions on its citizens living abroad as the communist-run nation continues to grapple with an unprecedented exodus of migrants to the U.S. The foreign ministry said passports would be valid for 10 years, instead of six, for Cubans over 16 years of age, and cut by more than half the costs associated with renewing the travel documents off-island. (Reuters)
Intrusion at national security adviser’s home under investigation: The U.S. Secret Service is investigating how a man entered the home of President Biden’s national security adviser in the middle of the night roughly two weeks ago without being detected by agents guarding his house, according to three government officials. The unknown man walked into Jake Sullivan’s home at about 3 a.m. one night in late April and Sullivan confronted the individual, instructing him to leave, two of the people briefed on the incident said. There were no signs of forced entry at the home, according to one of the people. Sullivan has a round-the-clock Secret Service detail. But agents stationed outside the house were unaware that an intruder had gotten inside the home, located in the West End neighborhood of Washington, until the man had already left and Sullivan came outside to alert the agents, the two people said. (Washington Post)
Texas GOP’s broadest attempt yet to erode blue cities’ power gets one step closer to becoming law: Gov. Greg Abbott and other supporters of the bill have long sought legislation to push back against local regulations that they say hamper business owners and harm the state’s economy. (Texas Tribune)
From the WSJ Editor in Chief: “The Wall Street Journal is eliminating the routine use of honorifics, or courtesy titles, in its news pages, starting Wednesday. As I said in a note to staff on Tuesday, the Journal has been one of the few news organizations to continue to use the titles, under our long-held belief that Mr., Ms. and so forth help us to maintain a polite tone. However, the trend among almost all news organizations and magazines has been to go without, as editors have concluded that the titles in news articles are becoming a vestige of a more-formal past, and that the flood of Mr., Ms., Mx. or Mrs. in sentences can slow down readers’ enjoyment of our writing.” (Wall Street Journal)
Economy
Top executives from Silicon Valley Bank and Signature Bank refused to commit to voluntarily handing back the millions of dollars they were paid before the collapse of their banks triggered a US regional banking crisis. In their first public appearances since the two lenders were shut down by regulators in March, former SVB former chief executive Greg Becker, alongside ex-Signature executives Scott Shay and Eric Howell, were quizzed by members of the Senate banking committee over their roles in the recent failures. Lawmakers including Elizabeth Warren, the progressive Democratic senator from Massachusetts, repeatedly asked Becker and Shay if they would return their pay to the FDIC, which shouldered billions of dollars of losses following the collapse of the two banks. (Financial Times)
Americans Have Never Been So Unwilling to Relocate for a New Job: Can’t move, won’t move. That’s increasingly the approach of Americans who are in the market for a new job. The share of job seekers who relocated to take up a new position fell to 1.6%, the lowest level on record, in the first quarter of 2023, according to a quarterly survey that’s been carried out by executive coaching firm Challenger, Gray & Christmas, Inc. for decades. (Bloomberg)
The Return to the Office Has Stalled: Many companies have settled into a hybrid work strategy that shows little sign of fading, putting pressure on cities that are suffering from declining real-estate values. When average city office-occupancy rates at the start of the year surpassed 50% for the first time during the pandemic, many landlords viewed this milestone as a sign that employees were finally resuming their former work habits. Those office-usage rates have barely budged as most companies have settled into a hybrid work strategy that shows little sign of fading. About 58% of companies allow employees to work a portion of their week from home, according to Scoop Technologies, a software firm that developed an index monitoring workplace strategies of close to 4,500 companies. The number of companies that require employees to be in the office full time has actually declined to 42%, from 49% three months ago, Scoop said. Employees at companies with hybrid strategies work an average of 2.5 days a week in the office. (Wall Street Journal)
Rise in Distressed Sales Signals New Chapter for Beleaguered Office Market: Uptick in troubled office-building sales indicates more owners believe weak demand is here to stay. (Wall Street Journal)
Americans Curb Spending on Home Improvements: Home Depot warned that its annual sales will fall for first time since 2009. The company said demand for home-improvement goods is softening as shoppers spend more on services. (Wall Street Journal)
April's retail sales numbers show consumers are shopping: Retail sales are on the upswing for the first time since January. Shoppers had been pulling back on spending, raising fears that the American consumer's habits — the bedrock of the economy — were starting to show cracks. April's numbers, however, show shoppers picking up momentum. (Axios)
Retail sales rose 0.4% in April, softer than Wall Street's expectations but breaking a streak of monthly declines. That compares to a 0.7% decline in the prior month (which was revised up from the initially reported 1% drop).
Online retailers (+1.2%), health and personal care stores (+0.9%) and restaurants (+0.6%) are among the categories with the biggest monthly jumps in spending.
Sporting goods stores (-3.3%) and furniture shops (-0.7%) are among those that declined.
Technology
ChatGPT’s Sam Altman Warns Congress That AI ‘Can Go Quite Wrong’: The chief executive of ChatGPT creator OpenAI called on Congress to create licensing and safety standards for advanced artificial-intelligence systems, as lawmakers begin a bipartisan push toward regulating the powerful new tools available to consumers. “We understand that people are anxious about how it can change the way we live. We are, too,” Sam Altman said of AI technology at a Senate subcommittee hearing Tuesday, his first appearance before Congress. “If this technology goes wrong, it can go quite wrong.” Mr. Altman called for “a new agency that licenses any effort above a certain scale of capabilities and could take that license away and ensure compliance with safety standards.” In the meantime, he said, OpenAI pre-tests and constantly updates its tools to ensure safety, arguing that making them widely available to the public actually helps the company identify and mitigate risks. (Wall Street Journal)
AI hearing leaves Washington with 3 big questions: Here are three big unknowns that now hang over Washington’s efforts to control a profound and disruptive new technology. (Politico)
Do we need a new federal agency?
Who owns the data that AI trains on?
How much will AI influence the 2024 election?
Microsoft Says New A.I. Shows Signs of Human Reasoning: A provocative paper from researchers at Microsoft claims A.I. technology shows the ability to understand the way people do. Critics say those scientists are kidding themselves. (New York Times)
The race is on to bring the technology behind ChatGPT to the smartphone in your pocket. And to judge from the surprising speed at which the technology is advancing, the latest moves in artificial intelligence could transform mobile communications and computing far faster than seemed likely just months ago. As tech companies rush to embed generative AI into their software and services, they face significantly higher computing costs. The concern has weighed in particular on Google, with Wall Street analysts warning that the company’s profit margins could be squeezed if internet search users come to expect AI-generated content in standard search results. Running generative AI on mobile handsets, rather than through the cloud on servers operated by big tech groups, could answer one of the biggest economic questions raised by the latest tech fad. (Financial Times)
Apple unveils new cognitive, vision, and speech accessibility features for iOS, iPadOS, and macOS, like an AI voice that sounds like the user's, coming in 2023. (TechCrunch)
Apple rolls out new concert discovery features, including Set Lists in Apple Music for select artists and Guides to local venues in Apple Maps for select cities. (TechCrunch)
Smart Links
In 2024, Couples Can Put Over $10,000 a Year Into Health Savings Accounts. (Wall Street Journal)
Calgary air quality deteriorates as wildfires rage in Western Canada. (Reuters)
China’s Recovery Loses Steam, Signaling Trouble for Global Economy. (Wall Street Journal)
Pfizer Sells $31 Billion of Bonds in Fourth-Largest Deal Ever. (Bloomberg)