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The World
A bipartisan deal to suspend the government debt ceiling and set federal funding limits advanced toward climactic House votes, even as hard-right Republicans revolted over the deal between Speaker Kevin McCarthy and President Biden, claiming that their party was squandering an opportunity to force fundamental spending changes. The legislation scaled its first major obstacle on Tuesday night, when the House Rules Committee voted to clear the way for a debate on the plan on Wednesday, after right-wing opponents failed to muster enough allies to block it. (New York Times)
House Speaker Kevin McCarthy dismissed threats from Republican hard-liners to oust him over the debt-limit deal he forged with President Joe Biden and expressed confidence Tuesday that lawmakers will pass legislation in time to avert a US default. The bill, heading for a House vote on Wednesday, prompted GOP Representative Dan Bishop to call for a vote on removing McCarthy as speaker, claiming that the deal granted too many concessions to Democrats. Another conservative member, Chip Roy, promised a “reckoning” for McCarthy. (Bloomberg)
Senate braces for last-minute conservative demands on debt deal: Any one senator can slow down the legislation's passage through the upper chamber. And conservative grumbling has already started. (Politico)
Leading business groups are praising President Joe Biden and House Speaker Kevin McCarthy for forging a bipartisan agreement to raise the debt ceiling, and they are calling for Congress to pass the legislation before the government suffers a devastating default. (CNN)
Vladimir Putin has vowed to retaliate against what he claimed were Ukrainian drone strikes on Moscow, which exposed Russia’s growing vulnerability to blowback from his invasion. Russia’s president accused Ukraine of “terrorist activity” and “provoking us to respond with tit-for-tat measures” after strikes hit residential areas in the Russian capital early on Tuesday morning, which he said were aimed at “scaring Russian citizens and hitting residential buildings.” Although Putin did not say how Moscow would respond and claimed Russia did not attack civilian targets in Ukraine, he made his first reference for several months to a possible nuclear escalation of the war. (Financial Times)
Chinese fighter jet made ‘aggressive’ maneuver near US military plane over South China Sea: Pentagon. Chinese J-16 aircraft said to have forced an American RC-135 on routine operations in international airspace to fly through its wake turbulence. Beijing’s embassy in Washington counters that US reconnaissance in area is ‘a serious danger’ and ‘root cause of maritime security issues’. (South China Morning Post)
China’s burgeoning space program plans to place astronauts on the moon before 2030 and expand the country’s orbiting space station. The announcement comes against the background of a rivalry with the U.S. for reaching new milestones in outer space, reflecting their competition for influence on global events. That has conjured up memories of the space race between the U.S. and the former Soviet Union in the 1960s and 1970s, although American spending, supply chains and capabilities are believed to give it a significant edge over China, at least for the present. The U.S. aims to put astronauts back on the lunar surface by the end of 2025 as part of a renewed commitment to crewed missions, aided by private sector players such as SpaceX and Blue Origin. (Politico)
North Korea launched what it said is a space satellite toward South Korea early Wednesday morning, South Korea's Joint Chiefs of Staff said, raising geopolitical tensions at a time of increased cooperation by Japan, South Korea and the U.S. (Nikkei Asia Review)
Western countries are increasing pressure on Turkey to admit Sweden to NATO, as Stockholm makes a final push to overcome Ankara’s opposition to its membership. Ulf Kristersson, Sweden’s prime minister, writes in the Financial Times that a new anti-terror law entering force on Thursday delivers “on the last part” of an agreement to secure Ankara’s support for entry into the military alliance. (Financial Times)
UK’s Labour Party Studies Land Reforms to Cut Cost of House-Building. The UK’s main opposition Labour Party is considering making it cheaper for councils to forcibly purchase land for development, part of its bid to spur house-building. Under the current system, councils are able to issue a compulsory purchase order (CPO) to acquire land, but have to pay a price which includes the land’s so-called “hope value”, which reflects the value of potential future planning permissions. (Bloomberg)
Community college enrollment, buoyed by younger students and fresh interest in job-related programs, rose this spring for the first time in more than a decade, according to new data from the National Student Clearinghouse Research Center. The high cost of college, economic anxiety and the hot labor market may be leading students to reconsider how to get the most bang for their buck with post-secondary degrees. "I think that students are increasingly looking towards programs and majors that they can see, and easily see, a direct link to the workforce," Doug Shapiro, the research and executive director of National Student Clearinghouse, said on a call with reporters. Years of steep declines hit community colleges across the country. Community college enrollment rose 0.5% from the year before, after falling 8.2% and 10.1% in 2022 and 2021. (Axios)
Nearly every US state sued a telecom company accused of routing billions of illegal robocalls to millions of US residents on the Do Not Call Registry. Avid Telecom, an Arizona-based company formed in 2000, "chose profit over running a business that conforms to state and federal law," according to a lawsuit led by Arizona AG Kris Mayes and joined by the attorneys general of 47 other states and the District of Columbia. The case involves every US state except Alaska and South Dakota. (Ars Technica)
Economy
Rapid wage growth has not been an important driver of inflation, according to a new analysis published by the Federal Reserve Bank of San Francisco. The recent run-up in the employment cost index, a measure of wages favored among economists and policymakers, “explains only about 0.1 percentage point” of the three percentage-point increase in consumer price inflation excluding food and energy. (Bloomberg)
It’s ‘More Expensive to Live,’ and Workers Are Tapping 401(k)s for Help. More Americans are raiding their retirement accounts as the cost of living climbs, and experts predict that the number of workers drawing on their 401(k)s to pay for financial emergencies may increase due to a confluence of factors, like new provisions that make withdrawals easier and high inflation that is straining household budgets. “It’s just more expensive to live these days, and that’s what’s putting the pinch on participants,” said Craig Reid, national retirement practice leader at Marsh McLennan Agency, a workplace benefits company. “Some of it is still spillover from the Covid pandemic. A lot of it is inflation — just the grind of daily life.” (New York Times)
JPMorgan Builds Unit for World’s Richest Families in Wealth Bet: 23 Wall focuses on 700 families worth more than $4.5 trillion. (Bloomberg)
Goldman Planning Another Round of Job Cuts Amid Chill in Banking. (Bloomberg)
Office Owners Dump Lesser Buildings for Whatever They Can Get: New York City developers start to unload least-viable properties at deep discounts. Deeply discounted sales reflect the emergence of a two-tiered office market. One tier includes the highest quality space with amenities such as rooftop decks, extensive food offerings and stellar views. These properties can still attract top rents from tenants who are looking for ways to reward employees for returning to the office. But there is still a glut of run-of-the-mill space that requires a big capital investment by landlords for upgrades necessary to attract tenants. (Wall Street Journal)
Hourly workers are in demand and startups are capitalizing on it: Startups that target the massive market of hourly and gig workers and employers have raised billions of dollars in venture and growth funding over the past couple of years — and investment continues to flow to the space. (Crunchbase News)
After a pandemic-induced backup and pent-up demand, weddings have come roaring back with bigger budgets, longer guest lists and grander ideas. Almost every aspect of planning, hosting and attending weddings is getting pricier. Even guests are going into wedding debt. The average cost of a wedding in the U.S. ticked up from $28,000 to $29,000 from 2022 to 2023, according to the wedding planning website Zola. But the average cost was far higher in some states, like Washington, D.C., ($45,400), New Jersey ($44,219) and Massachusetts ($40,097). What's happening: Inflation and high demand are driving up the price of weddings, as everything from music to flowers to makeup gets more expensive. (Axios)
Technology
A group of chief executives and scientists from companies including OpenAI and Google DeepMind has warned the threat to humanity from the fast-developing technology rivals that of nuclear conflict and disease. “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war,” said a statement published by the Center for AI Safety, a San Francisco-based non-profit organization. More than 350 AI executives, researchers and engineers, including Sam Altman of OpenAI, Demis Hassabis of Google DeepMind and Dario Amodei of Anthropic, were signatories of the one-sentence statement. (Financial Times)
Analysis: Why AI Scientists Are Freaking Us Out. According to a statement issued today by a bunch of leading names in AI, “mitigating the risk of extinction from AI should be a global priority.” Right. It’s hard to imagine anyone out there disagrees—who but the most extreme misanthrope wants to extinguish the human race? The question, then, is why the very people responsible for AI’s development are suggesting it should be a priority to stop the new technology from killing off every human. Perhaps instead of issuing a single-sentence statement meant to freak everyone out, AI scientists should use their considerable skills to figure out a solution to the problem they have wrought. (The Information)
Read the statement here.
Nvidia hit a $1 trillion market cap at the open Tuesday before paring back gains, falling to $990 billion. Nvidia’s shares had to hold above $404.86 to maintain that distinction throughout the day. The stock gave back some of its gains by late afternoon trading, holding on to a fresh 52-week high but falling back just below a $1 trillion valuation, where it would close. (CNBC)
Twitter has withdrawn from the European Union’s Code of Practice on online disinformation, per the bloc’s internal market commissioner, Thierry Breton. Breton issued the social media platform with a blunt warning: Telling Twitter it cannot hide from incoming legal liability in this area. “Twitter leaves EU voluntary Code of Practice against disinformation. But obligations remain. You can run but you can’t hide,” Breton wrote — a reference to obligations the platform is legally required to comply with. (TechCrunch)
Generative artificial intelligence is all the rage in startup-land, and corporate venture capital investors don’t want to be left out. Generative AI and large language models are getting a lot of attention for their potential to automate many business tasks, big and small. “From an enterprise perspective, more than two-thirds of leaders are trying to prioritize generative AI,” Paul Drews, managing partner at Salesforce Ventures, tells Axios. Of the 44 startups Workday Ventures has backed, about 25% are already using tech developed by OpenAI, according to managing director Barbry McGann. She adds it's because the AI company's tools are so "enterprise-ready," making it easy for business software makers to quickly integrate the tech. (Axios)
Smart Links
Don't underrate China's ability to catch up in chips: Nvidia CEO. (Nikkei Asia Review)
Twitter Is Now Worth Just 33% of Elon Musk’s Purchase Price, Fidelity Says. (Bloomberg)
How Singapore Airlines soared while regional rival Cathay Pacific stalled. (Financial Times)
Philip Morris on path to becoming an ESG stock, says chief executive. (Financial Times)
Company Insiders Made Billions Before SPAC Bust: Executives and early investors sold shares worth $22 billion. (Wall Street Journal)
New warning signs emerge for China’s property market. (CNBC)