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The World
House lawmakers overwhelmingly agreed to suspend the nation’s debt ceiling for two years, heading off an economically devastating default. After a revolt by far-right Republicans threatened to scuttle consideration of the bill, a bipartisan coalition lined up in large numbers to support the compromise negotiated by President Biden and Speaker Kevin McCarthy and pull the nation back from the brink of economic catastrophe. The 314-117 vote came days before the nation was projected to exhaust its borrowing power, and after a marathon set of talks between White House negotiators and top House Republicans. (New York Times)
No one got everything they wanted. Many progressive Democrats opposed the bill, objecting to curbs on government spending and to new work requirements for some recipients of federal food stamps and family welfare benefits. Far-right Republicans also slammed the agreement for not securing more aggressive spending cuts. And some GOP members cast doubt on McCarthy’s fitness to lead, underscoring the fractures within the party since McCarthy won the speakership earlier this year after 15 rounds of voting and multiple concessions. (Washington Post)
Can McCarthy Pass the Debt Deal and Keep His Job? Hard-right lawmakers who have for years resisted increasing the nation’s borrowing limit did not mince words about how they thought Speaker Kevin McCarthy fared during negotiations with President Biden over averting a federal default. “Nobody could have done a worse job,” said Representative Dan Bishop of North Carolina, who said he was fed up with what he said were Mr. McCarthy’s “lies” about the deal he was going to get. Representative Bob Good of Virginia openly marveled at how “our own leadership” caved to Democrats on major tenets of the debt limit bill that Republicans passed last month. Representative Chip Roy of Texas claimed the deal had torn the conference “asunder” and promised Republican leaders would face a “reckoning.” But for all the fury about the deal — by far the biggest test of Mr. McCarthy’s leadership since he became speaker in January — few far-right Republicans have yet to seriously entertain the notion of ousting him over it. (New York Times)
China is facing more complex and difficult national security concerns, President Xi Jinping warned, in comments analysts said showed the country harboured no “illusions” about the possible damaging effects of its rivalry with the US and had little hope of a lasting improvement in ties. The remarks from Xi came as he chaired a meeting of the National Security Commission, his first since securing an unprecedented third term as leader of China’s ruling Communist Party at its 20th congress in October. Xi heads both the commission and the Chinese military. He said the country’s security apparatus needed to stay “keenly aware” of the complicated and challenging circumstances facing national security, and correctly grasp major related issues, according to state news agency Xinhua. (South China Morning Post)
How Taiwan became the indispensable economy. In the days after then-U.S. House Speaker Nancy Pelosi visited Taiwan last year, Taiwanese suppliers to U.S. tech giants including Apple, Google, Meta and Amazon were inundated with requests from their customers. Could they produce from outside Taiwan to secure supplies, in case Beijing went to war over the island? Pelosi’s visit had sparked more than a diplomatic spat between Washington and Beijing, which responded to her trip with unprecedented military exercises around Taiwan. It triggered a tech industry crisis, which might now threaten the global electronics supply chain. Taiwan is best known for making cutting-edge semiconductors. But its companies also turn out other crucial components from printed circuit boards to advanced camera lenses, and they run huge device assembly operations in China. This has created a triangle of critical interdependence between Taiwan, China and the U.S that has deepened even as tensions between Beijing, Washington and Taipei have risen. (Nikkei Asia, Financial Times)
Taiwan, U.S. to sign first deal under new trade framework. (Reuters)
North Korean leader Kim Jong Un is believed to weigh over 308 lb according to an AI estimate, a South Korean lawmaker said in a remark reflecting abiding interest in the health of the North's secretive ruler. The health of North Korean leaders is typically a tightly held state secret, and speculation about the condition of the current leader Kim, believed to be 39 years old, has been recurring due to his heavy smoking, apparent weight gain and family history of cardiovascular problems. (Reuters)
Saudi Arabia is accelerating its expansion into the global food industry with a pact to buy shares of BRF SA, Brazil’s biggest poultry producer. It’s the latest in a series of recent moves by Saudi Arabia to curb food imports, diversify its economy and reduce its reliance on oil — all pillars of Crown Prince Mohammed Bin Salman’s Vision 2030 strategic plan. The kingdom has ramped up its push into agriculture after the Covid-19 pandemic and Russia’s invasion of Ukraine sent food prices to a record, upended trade flows and laid bare the fragility of the world’s supply chains. (Bloomberg)
The European Union has used a transatlantic trade and technology talking shop to commit to moving fast and producing a draft Code of Conduct for artificial intelligence, working with US counterparts and in the hope that governments in other regions — including Indonesia and India — will want to get involved. What’s planned is a set of standards for applying AI to bridge the gap, ahead of legislation being passed to regulate uses of the tech in respective countries and regions around the world. Whether AI giants will agree to abide by what will be voluntary (non-legally binding) standards remains to be seen. (TechCrunch)
The earth is already past safe limits for humans as temperature rise, water system disruption and destruction of natural habitats have reached boundaries, a study by a group of the world’s foremost scientists has found. The research, published in the journal Nature, identified eight earth system boundaries that included climate, biodiversity, water, natural ecosystems, land use and the effect of fertilizers and aerosols. Human activities had pushed seven of these boundaries beyond their “safe and just limit” into risk zones that indicate the threat to planetary and human health, it said. (Financial Times)
For the first time, the International Court of Justice (ICJ) will rule on legal consequences for nations that are damaging the climate “by their acts and omissions”. The United Nations resolution was catalysed by 27 law students from eight Pacific Island countries, whose experiences of living on the front line of global warming inspired them to form the advocacy group Pacific Islands Students Fighting Climate Change. (Nature)
Former New Jersey Gov. Chris Christie is expected to announce his 2024 Republican candidacy for president next Tuesday in New Hampshire. Christie, 60, is a former close Trump ally who now calls the former president a "coward" and "puppet of Putin." (Axios)
Former Vice President Mike Pence plans to launch his 2024 bid for the White House next Wednesday. Pence, who has been exploring a bid for the past several months, has criticized Trump following the Jan. 6 Capitol riots, in which Trump pressured Pence to reject the election results and falsely claimed he had the power to do so. (Semafor)
Eighteen percent of Americans are satisfied with the way things are going in the U.S., staying below 20% as it has since March. Americans are slightly more satisfied than last summer when gas prices and inflation were soaring. (Gallup)
Economy
Top White House economists are optimistic that sticky inflation will be increasingly less so in the coming months as rapid wage growth continues to cool. The new analysis is part of an emerging consensus that the strong labor market is a key driver behind U.S. inflation. If that's true, the job market might have to loosen up before prices can fall to a more comfortable level. The White House identified parts of the service economy that are particularly sensitive to wages — think day care centers, auto repair shops, casinos and more. Others, like health insurance, aren't. The Fed's preferred inflation gauge, the Personal Consumption Expenditures price index (excluding food and energy), rose 4.7% in the 12 months through April. (Axios)
Strong job numbers, low layoffs show no ‘major’ signs of a recession: economists. (CNBC)
Falling German and French inflation lifts hopes of an end to eurozone rate rises. (Financial Times)
Fed Prepares to Skip June Rate Rise but Hike Later: Two Federal Reserve officials framed a potential decision to forgo a rate increase as a chance to assess more economic information, then possibly raise rates later this summer. (Wall Street Journal)
A top official at the Federal Reserve said there was no “compelling” reason to wait before implementing another interest rate rise should economic data confirm that more must be done to bring US inflation under control. In an interview with the Financial Times, Loretta Mester, president of the Cleveland Fed, pushed back against recent suggestions from some policymakers who argued the US central bank should forego a rate rise at its next meeting in June. (Financial Times)
After ballooning for years, CEO pay growth is finally slowing. The typical compensation package for chief executives who run S&P 500 companies rose just 0.9% last year, to a median of $14.8 million, according to data analyzed for The Associated Press by Equilar. That means half the CEOs in the survey made more and half made less. It was the smallest increase since 2015. Still, that’s unlikely to quell mounting criticism that CEO pay has become excessively high and the imbalance between company bosses and rank-and-file workers too wide. Discontent over that gap has helped fuel labor unrest, and even some institutional investors have pushed back against a few of the most eye-popping packages. (Associated Press)
ExxonMobil and Chevron shareholders solidly rejected climate change proposals at the US oil majors’ annual meetings, scaling back support from last year and splitting with results at peers in Europe where resolutions related to global warming have won stronger support. Only 11 per cent of Exxon shareholders supported a petition calling for the company to set emissions reduction targets that would be consistent with the goals of the 2015 Paris climate agreement. A similar proposal at Chevron received less than 10 per cent support. The vote tallies highlight differences between shareholder support for climate change action at US and European oil companies. Last week, 20 per cent of Shell’s shareholders voted against the company’s energy transition plan, arguing that it was not enough to reduce emissions. At BP in April, 17 per cent of shareholders backed a resolution to force the company to reduce its oil and gas output faster. (Financial Times)
Dollar General is the fastest-growing retailer in America, opening about 1,000 stores a year. But following repeated violent incidents and federal workplace safety violations at stores, some Dollar General workers and labor advocates are calling for stronger safety and health protections. Workers and their allies are rallying Wednesday outside Dollar General’s headquarters in Goodlettsville, TN, ahead of the company’s annual shareholder meeting to protest conditions. They say the company is failing to take basic precautions to prevent violence in its stores. Since 2014, there have been 49 people killed and 172 people injured at Dollar General stores, according to data from non-profit group Gun Violence Archive. (CNN)
We Asked Workers Why They’re Not Coming Back to the Office: Terrible commutes. Expensive child care. Employees explain why they will keep working from home. Managers say they will renew the push to get employees back into offices later this year. The share of companies planning to keep office attendance voluntary, rather than mandatory, is dropping, according to a survey released in May of more than 200 corporate real-estate executives conducted by property-services firm CBRE, one of the largest managers of U.S. office space. (Wall Street Journal)
Technology
Apple, touting the value of its App Store just ahead of the company’s developer expo, said that the platform handled transactions worth $1.1 trillion last year, up 29% from 2021. Annual sales and billings — which include money from apps and subscriptions, in-app advertising and physical goods or services — climbed more than 80% on the App Store since 2019. The latest annual increase was an uptick from growth of 27% in 2021 and 2020. (Bloomberg)
Apple could have a pretty big Worldwide Developers Conference next week, according to Bloomberg’s Mark Gurman. In addition to the rumored mixed reality headset and the usual updates to its operating systems, Gurman is expecting Apple to focus on “several” new Macs at the show, he said in a tweet. Gurman has already reported that a MacBook Air with a larger 15-inch screen and M2 chip is in the works, and it seems possible that could be one of the stars of the WWDC show. Apple revealed the redesigned M2-equipped 13-inch Air at last year’s WWDC, so it’s not out of the realm of possibility that Apple would once again use the event to introduce a larger Air. Gurman has also reported on Macs with an as-yet-unannounced M3 chip, including MacBook Airs and, perhaps more notably, the iMac, which hasn’t been refreshed since the launch of the M1 iMac in May 2021. However, Gurman said in March that the iMac might not ship until the second half of the year. (The Verge)
Amazon is rolling out artificial intelligence across a dozen of its largest warehouses to screen items for damage before orders are shipped to customers. Amazon warehouse workers are responsible for checking goods for signs of wear and tear as they pick, pack and stow merchandise while meeting company-set targets measuring how many orders they handle per hour. Checking for damage can be time consuming given that most items are in fine condition. (Wall Street Journal)
Google Invests in AI Startup Runway to Wrest Cloud Business From AWS. Runway is a New York–based startup that lets customers generate video from text descriptions using artificial intelligence it pioneered (The Information)
AI Is Writing Code Now. For Companies, That Is Good and Bad. Chief information officers could see their job getting more complex even as generative AI makes software development easier. (Wall Street Journal)
If the apparel industry gets its way, small labels with QR codes on them would replace the bulky clothing tags that offer washing instructions and other information. Digital product labels — which brands like Ralph Lauren are already starting to use — could provide a lot more information to consumers, who could scan them for a library of details about the garment they're wearing (or might buy). The move would come at a time when the broader retail industry is transitioning to "2D" barcodes, which will unlock reams of online extras about everyday products. Garment manufacturers have been lobbying Congress and the FTC for permission to replace physical clothing tags — which must include care instructions, fiber content, country of origin, etc. — with digital labels, most likely in the form of a QR code. (Axios)
Hedge Funds Are Deploying ChatGPT to Handle All the Grunt Work: Generative AI is writing and editing code and parsing research. Man Group, Citadel are among firms experimenting with tech. (Bloomberg)
ZipRecruiter Cuts 20% of Workforce in Latest Tech-Sector Layoffs: Half of the job cuts will come from sales and customer support roles. (Bloomberg)
Smart Links
Chinese graduates lower their ambitions in moribund jobs market. (Reuters)
Amazon's Ring used to spy on customers, FTC says in privacy settlement. (Reuters)
Ransomware attack on US dental insurance giant exposes data of 9 million patients. (TechCrunch)
The Data Science Behind Raising Fast Food Prices. (Wall Street Journal)
Dimon Hints at Life After JPMorgan, Says He’d Consider Public Office (Bloomberg)
Billionaire Perot Warns of Real Estate Recession as Loans Dry Up. (Bloomberg)