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The World
Fed Chair Jerome Powell — confirmed by the Senate to a second term, 80-19 — reaffirmed that the central bank is likely to raise interest rates by a half percentage point at each of its next two meetings — June and July — while leaving open the possibility it could do more. Powell made clear his determination to get inflation under control but said a soft landing a challenge and will include ‘some pain.’ (Bloomberg)
President Vladimir V. Putin of Russia has said stopping NATO’s expansion helped drive him to invade Ukraine. But on Thursday, Finland declared its unequivocal intention to join, not only upending Putin’s plan but placing the alliance’s newest prospective member on Russia’s northern doorstep. The declaration by Finland’s leaders that they will join NATO — with expectations that neighboring Sweden would soon do the same — could now reshape a strategic balance in Europe that has prevailed for decades. It is the latest example of how Russia’s invasion of Ukraine 11 weeks ago has backfired on Mr. Putin’s intentions. (New York Times)
U.S.-led sanctions are forcing Russia to use computer chips from dishwashers and refrigerators in some military equipment, Commerce Secretary Gina Raimondo said. (Washington Post)
North Korea said 6 people have died as Covid-19 spreads at an ‘explosive’ rate. The country’s leader, Kim Jong-un, said 187,800 people were in quarantine, and state TV showed him wearing a mask for the first time. (New York Times)
The Biden administration canceled plans to auction drilling rights in three regions off the U.S. coastline later this year, adding more friction to an uneasy relationship with the oil industry during a period of high gasoline prices. The decision to cancel lease sales for two regions in the Gulf of Mexico and one off the coast of Alaska leaves oil-and-gas companies facing a blackout period of unknown length for access to new drilling spots in valuable offshore acreage. Canceling the pending sales with no new schedule yet proposed could mean the industry now faces years between successful federal offshore auctions. (Wall Street Journal)
President Biden is agonizing over ordering a sweeping cancellation of student loan debt, despite pressure from Democrats -- including Vice President Kamala Harris -- eager for a political win before midterm elections, according to several people familiar with the matter. While he said last month that he’s considering “some debt reduction,” Biden has not made up his mind about many details of the plan, including how much debt to forgive per borrower. (Bloomberg)
Baby-formula manufacturers and retailers say they are working to address a long-running shortage in products on store shelves, but the hardships facing U.S. families may take months to abate. Abbott Laboratories, producer of Similac baby formula, said it is bringing products from its factory in Ireland to the U.S. as it continues talks with the FDA to restart production at its factory in Michigan. However, the company has said it would take weeks before products from the plant are available on store shelves. Rivals have been trying to accelerate production, but challenges remain in getting supply to the right places. (Wall Street Journal)
The world’s biggest fossil fuel firms are quietly planning scores of “carbon bomb” oil and gas projects that would drive the climate past internationally agreed temperature limits with catastrophic global impacts, a Guardian investigation shows. The exclusive data shows these firms are in effect placing multibillion-dollar bets against humanity halting global heating. Their huge investments in new fossil fuel production could pay off only if countries fail to rapidly slash carbon emissions, which scientists say is vital. (The Guardian)
Economy
Cryptocurrencies melt down in a ‘perfect storm’ of fear and panic: The price of Bitcoin plunged to its lowest point since 2020. Coinbase, the large cryptocurrency exchange, tanked in value. A cryptocurrency that promoted itself as a stable means of exchange collapsed. And more than $300 billion was wiped out by a crash in cryptocurrency prices since Monday. The crypto world went into a full meltdown this week in a sell-off that graphically illustrated the risks of the experimental and unregulated digital currencies. Even as celebrities such as Kim Kardashian and tech moguls like Elon Musk have talked up crypto, the accelerating declines of virtual currencies like Bitcoin and Ether show that, in some cases, two years of financial gains can disappear overnight. (New York Times)
Bitcoin fell below $26K for the first time since December 2020, down 20%+ in a week; ether fell to $1,704, its lowest level since July 2021, down 30%+ in a week. (CNBC)
Amidst worries that Tether, the world’s biggest stablecoin, was losing its 1-to-1 peg to the dollar, Paolo Ardoino stepped in to reassure investors. Tether’s CTO emphasized that the private company behind the coin that plays a critical role in the crypto ecosystem had no problem with redemptions, including even a $600-million repayment in the last 24 hours. “Actually the peg was not broken,” Ardoino said. “It would have been broken if Tether didn’t honor redemption at $1.” (Bloomberg)
California’s minimum wage for all employers will rise to $15.50 an hour in January, the first time that rising inflation has triggered a provision of a 6-year-old state law governing automatic pay increases. (Los Angeles Times)
Payroll data shows hybrid work is here to stay: Liz Wilke is the principal economist at Gusto, a payroll platform startup that helps companies process payroll and manage other aspects of HR and benefits. Hybrid is no longer the exception but the expectation of workers across industries. Employees are moving. The ones who used to live close to their places of work have moved farther out, with the median distance of employees’ homes from the office increasing by a mile since the pandemic began. At the same time, workers who used to live far from the office have moved closer. Wilke interprets this dual movement as reflective of changing values around the office: People like working from home for heads-down, focused work, but they like the office for collaboration and social engagement. In short, they want the best of both worlds. (Protocol)
Record-setting quit rates are about more than just pay: Amid a historically tight labor market, a record 4.5 million Americans quit their jobs in March. Many were driven by a desire to earn a higher income, but Morning Consult data suggests that burnout is also contributing to greater attrition rates in certain industries. (Morning Consult)
Acquisitions of companies in the European Union by UK private equity firms jumped 80% from 245 in 2020 to 442 in 2021. 2Q21 was exceptionally busy, the research found, with a 50% increase of UK PE acquisitions of EU companies compared to 1Q21. (Private Equity News)
What happened when a Wall Street investment giant moved to Nashville: AllianceBernstein relocated 1,000 jobs in an effort to save $80 million a year. While employees who made the move relish the shorter commutes and higher quality of life, some complain of career stagnation and troubles hiring. (Bloomberg Businessweek)
Technology
Elon Musk is in talks to raise enough equity and preferred financing for his proposed buyout of Twitter to eliminate the need for any margin loan linked to his Tesla shares. The billionaire’s advisers, led by Morgan Stanley, have begun soliciting interest from potential investors for as much as $6 billion in preferred equity financing. (Bloomberg)
Twitter will freeze hiring and rescind offers ahead of the Musk deal. Meanwhile, the heads of product and revenue said they were asked to leave the company. (Bloomberg)
Twitter’s market cap has dropped to $9 billion below Musk’s purchase price as concerns about deal emerge. (CNBC)
Tech layoffs and hiring freezes appear to accelerate: Earlier in the year, much of the talk in the tech sector focused on falling valuations, dropping stock prices and slower funding rounds, and a lot of chatter the past two months has been around staffing. Now many tech companies are slowing or outright freezing hiring. Others are going a step further: laying employees off. (Crunchbase)
Is tech's hot job market flaming out? In the last two weeks, Netflix, Meta, Robinhood and Uber all initiated hiring freezes or layoffs. Privately backed startups like Cameo and Mural laid off big chunks of their workforce. And Amazon, Alphabet and Apple joined Netflix and Meta with disappointing earnings reports and corresponding stock sell-offs. For the first time in nearly two years, the narrative around Big Tech’s latest boom is starting to look shaky. (Protocol)
Intel takes direct aim at Nvidia: A conversation with veteran chip architect Raja Koduri, who has designed graphics tech for the likes of AMD and Apple, about Intel’s plans for breaking into the graphics and accelerated computing market. (Protocol)
Chinese regulators further tightened their grip on the internet industry, banning younger users from sending virtual gifts on livestream platforms, which could affect companies including ByteDance Ltd. and Kuaishou Technology. The announcement came after the central government hinted it would wrap up a year-long crackdown on China’s internet industry, which is the world’s largest e-commerce market and has created technology giants such as Alibaba Group Holding Ltd. and Tencent Holdings. (Bloomberg)
Smart Links
Women-led venture funds have already raised more money than last year. (The Information)
European gas prices soar after Moscow imposes sanctions on EU energy companies. (Financial Times)
Disney CEO calls hypothetical ESPN streaming package ‘the ultimate fan offering’. (The Verge)
Robinhood shares pop more than 20% after Sam Bankman-Fried buys 7.6% stake. (CNBC)
Twenty-hour flights from New York push long-haul travel to the limit at $12,000 a ticket. (Bloomberg)