Global markets think the war against inflation is over. And the Fed won.
Why it matters: Reading the tea leaves from bond, stock and currency markets sheds light on how investors believe the economy will develop next year.
- It also helps explain the rip-roaring rally in stocks.
The big picture: The overwhelming signal markets are sending right now is that inflation will fall back to the snail's pace of 2% that prevailed before COVID.
- This is most clear in the market-based reading of inflation expectations — charted above, and often referred to as a "five-year breakeven" — which is now nearly back to 2%.
- That's the lowest it's been since the pandemic-era inflation issues flared up in 2021.
Biden Moves to Forgive Nearly $5 Billion in Student Loans
President Joe Biden moved to forgive $4.8 billion in student loans Wednesday, providing relief to more than 80,000 borrowers including public sector employees and Americans who have been repaying their federal debts for decades.
The move implements regulatory changes taken by the administration to expand access to existing programs. Under new rules, the US wiped out $2.6 billion in loans for more than 34,000 federal, state, local, and nonprofit employees, including teachers and members of the military.
President Joe Biden moved to forgive $4.8 billion in student loans Wednesday, providing relief to more than 80,000 borrowers including public sector employees and Americans who have been repaying their federal debts for decades.
The move implements regulatory changes taken by the administration to expand access to existing programs. Under new rules, the US wiped out $2.6 billion in loans for more than 34,000 federal, state, local, and nonprofit employees, including teachers and members of the military.
Biden Skillfully Handled Xi Jinping’s U.S. Visit in Ways Trump Simply Never Could
Trump, for example, might well have begun by confusing Chinese president Xi Jinping with the object of his longtime bromance, North Korean leader Kim Jong Un, as he did just over a week ago. Further, he certainly would have been unable to conduct the kind of detailed, multi-faceted diplomatic exchanges that Biden did—given that even Trump’s former top advisors were astonished by his ignorance of policy matters.
Biden, on the other hand, in both his press conference following the Xi meeting and in his remarks throughout the summit, showed a complete, confident mastery of an enormous range of issues—an unsurprising contrast given that Biden is the U.S. president with by far the most foreign policy experience, and Trump, among all our presidents, entered office with the least such experience and seemed to learn little during his time in the Oval Office.
During the post-Xi press conference, Biden handled questions about two major world crises—in Ukraine and Gaza—as well as a range of issues concerning China including Taiwan, his relationship with Xi, human rights, the rivalry between the two superpowers, tensions in the South China sea, and more.
The four-hour meeting with Xi was highly substantive (unlike Trump’s superficial and embarrassing encounters with the Chinese leader in which his principle takeaway was “we love each other”) and covered a range of very sensitive issues.
Poland offers hope for reclaiming democracy
Once illiberal leaders — such as Hungary’s Viktor Orban or Turkey’s Recep Tayyip Erdogan — gain power through elections, they are difficult to oust. Liberal forces find themselves at a severe disadvantage when ostensibly “free” elections roll around after regimes crack down on dissent, enlarge executive power, cripple courts, foment violence and flood the zone with propaganda and disinformation, However, the stunning election results in Poland on Sunday offer new hope for democracy defenders.
“What happened in Poland is proof that when pro-democracy forces cease their bickering and come together as a unified front, they can overcome wannabe authoritarians, even when they’re faced with an uneven playing field,” Uriel Epshtein, chief executive of the Renew Democracy Initiative, told me.
Michael Abramowitz, the president of Freedom House, tells me, “This is a historic turnout in the face of an unfair election environment. It is a victory against anti-democratic forces in Poland. It’s also the case that it will take time to roll back the damage done by PiS to the country’s rule of law, judiciary, and state services, including restoring the editorial independence of the public broadcaster.” He adds, “The fight for democracy is not over in Poland — it is a long road ahead. But this is a consequential moment and a clear step in the direction of freedom for the Polish people.”
And with Poland’s example, pro-democracy forces around the world have additional reason to maintain hope.
Biden’s Democratic Party is to the left of Obama’s. Thank a progressive
Those are some of the policies and political stances of President Biden, Gov. Tim Walz of Minnesota and Gov. Gretchen Whitmer of Michigan, all of whom are generally considered part of the Democratic Party’s center-left wing, as opposed to its more progressive bloc. These views either weren’t pushed hard, or weren’t held at all, by President Barack Obama and the Democratic governors who were in office a decade ago.
Left-wing ideas and policies are more ascendant in American politics today than arguably at any time since the 1960s and certainly since Ronald Reagan won the presidency and pushed U.S. politics — including the Democratic Party — firmly to the right. It’s not that the left’s ideas are always winning, as recent Supreme Court rulings limiting affirmative action in college admissions and college debt forgiveness showed. It’s that progressive ideas are now truly in the mainstream — pushing the United States in a more equal and just direction.
When Jimmy Carter, Bill Clinton and Obama were in the White House, Biden generally supported their more moderate policies. But as president, he has been decidedly more left-wing than his Democratic predecessors.
US manufacturing commitments double after Biden subsidies launched
The investment in semiconductor and clean tech investments is almost double the commitments made in the same sectors in the whole of 2021, and nearly 20 times the amount in 2019, according to data compiled by the Financial Times.
While the FT identified four projects worth at least $1bn each in these sectors in 2019, there were 31 of that size after August 2022.
There has been more than $40bn in planned capital spending since the start of the year. Asian giants LG, Hanwha, and LONGI have all announced deals in the past month, taking total large-scale investments to $204bn on April 14.
“We see right now the tectonic plates are shifting with respect to investment in the United States,” said US energy secretary Jennifer Granholm this week, referring to the surge of investment in recent months.
From Detroit to Hollywood, New Union Leaders Take a Harder Line
Shawn Fain is not a typical president of the United Automobile Workers union.
Mr. Fain recently declined a symbolic handshake with the chief executives of the major Detroit automakers, a gesture that traditionally kicks off contract negotiations. He is seeking an ambitious 40 percent wage increase for rank-and-file members — in line, he says, with the pay gains of those corporate leaders over the past four years. And in a video meeting with members this month, Mr. Fain threw a list of proposals from Stellantis, the maker of Chrysler and Jeep, into a wastebasket, saying it belonged in the trash “because that’s what it is.”
the forces that swept Mr. Fain into power are the same ones that have borne down on unions across a variety of industries: a feeling among members that they have spent years enduring out-of-touch leaders, meager wage growth and concession-filled labor agreements, which forced some to do similar jobs as co-workers for less pay.
“We kept being told, ‘This is a good contract,’” said Shana Shaw, a U.A.W. member who has worked at a General Motors plant in Missouri since 2008. “And our members are saying, ‘It’s not a good contract!’”
The long-simmering rage helps explain why, in addition to Mr. Fain, several prominent unions are now in the hands of outspoken leaders who have taken their membership to the brink of high-stakes labor stoppages — or beyond.
These kids sued over climate change — and won
The decision impacts the implementation of the Montana Environmental Policy Act (MEPA). Prior to the ruling, the state government was not permitted to consider the impact of climate change when approving energy projects, but now that process will likely change. The judge also ruled that a change to MEPA earlier this year made by the state legislature is unconstitutional.
The decision reads, in part: “Montana’s [greenhouse gas emissions] and climate change have proven to be a substantial factor in causing climate impacts to Montana’s environment and harm and injury to the Youth Plaintiffs.”
Do citizens have a right to a healthy environment? In Montana they do. The state constitution reads, “The state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations.” And a group of young people are using that language to sue the state over its energy policies.
In one of the country’s first climate change lawsuits, a group of 16 young people in Montana alleges that the state has violated their constitutional right to “a clean and healthful environment.” The plaintiffs are arguing that the state government’s ongoing support of the fossil fuel industry in Montana is disproportionately harming them
A Huge Win in Ohio Offers a Blueprint for 2024
Abortion Remains the Republicans’ Achilles Heel
The Dobbs decision fundamentally changed American politics.
The results in Ohio show that abortion remains the driving issue in American politics and the Republicans’ weakness. I wrote this around the one year anniversary of the Dobbs decision, delving into why the issue is so problematic for Republicans:
The best political strategies center on issues that unite your base and divide theirs. Abortion is one of those issues. In the NBC News/WSJ poll, nearly one-third of Republicans disapprove of the Dobbs decision. Only seven percent of Democrats approve of it. We are a pro-choice party; the Republicans are conflicted. They must appeal to their extremist base but risk pushing more moderate members into our camp.
Suddenly, It Looks Like We’re in a Golden Age for Medicine
Hype springs eternal in medicine, but lately the horizon of new possibility seems almost blindingly bright. “I’ve been running my research lab for almost 30 years,” says Jennifer Doudna, a biochemist at the University of California, Berkeley. “And I can say that throughout that period of time, I’ve just never experienced what we’re seeing over just the last five years.”
Beyond Crispr and Covid vaccines, there are countless potential applications of mRNA tools for other diseases; a new frontier for immunotherapy and next-generation cancer treatment; a whole new world of weight-loss drugs; new insights and drug-development pathways to chase with the help of machine learning; and vaccines heralded as game-changing for some of the world’s most intractable infectious diseases.
“It’s stunning,” says the immunologist Barney Graham, the former deputy director of the Vaccine Research Center and a central figure in the development of mRNA vaccines, who has lately been writing about a “new era for vaccinology.” “You cannot imagine what you’re going to see over the next 30 years. The pace of advancement is in an exponential phase right now.”
The new treatment approved by the FDA is a big deal.
A proven treatment to slow down the progression of Alzheimer’s — a devastating disease that robs individuals of their personality, autonomy, and ultimately life — has long been out of reach.
But within the next year, Alzheimer’s patients could conceivably have access to not just one such treatment, but two.
This new era for Alzheimer’s treatment began this week, when the Food and Drug Administration granted full approval to a new Alzheimer’s drug, lecanemab, which is being sold by its manufacturer Eisai under the brand name Leqembi. Memory clinics are already reporting increasing curiosity among patients about the new treatment, and they expect interest will only grow following the FDA’s final sign-off.
In the next few weeks, new clinical trial results are also expected for another treatment candidate, donanemab, which has had impressive preliminary results.
How Migrants Flown to Martha’s Vineyard Came to Call It Home
When Ms. Cauro fled Venezuela last summer, she never imagined that one day she would be working and living on a wealthy island south of Cape Cod, surrounded by boats and mansions of the kind she had seen only in the movies.
It has been nine months since the government of Florida, under the direction of Gov. Ron DeSantis, chartered two flights from Texas that picked up Ms. Cauro and 48 other newly arrived migrants and dropped them off on Martha’s Vineyard, a liberal enclave that until then had little firsthand experience with the surge in migration on the U.S.-Mexico border.
Ms. Cauro is one of at least four migrants who have quietly stayed behind on the island, forming bonds with a community that opened what doors it could. Ms. Cauro, 25, is working as a landscaper. Her brother, Daniel, 29, and her cousin, Eliud Aguilar, 28, found jobs in painting and roofing.
“I did not even know where Martha’s Vineyard was. And now I feel welcomed by everybody here. I’m working, making friends and this is home for me now,” Ms. Cauro said with a wide smile. “This is home now. I don’t want to leave.”
Ketanji Brown Jackson’s first major opinion saves Medicaid
Last November, the Supreme Court heard a nightmarish case that threatened to destroy a significant portion of the United States’ social safety net. Had the defendants’ arguments in Health and Hospital Corporation v. Talevski prevailed before the justices, federal Medicaid law could have been rendered practically unenforceable — leaving patients with no resource if they were unlawfully denied care or abused by their health providers.
But the Court rejected that approach in a 7–2 decision. It’s also Justice Ketanji Brown Jackson’s first majority opinion in a case with this kind of sweeping policy stakes.
A Paralyzed Man Can Walk Naturally Again With Brain and Spine Implants
Gert-Jan Oskam was living in China in 2011 when he was in a motorcycle accident that left him paralyzed from the hips down. Now, with a combination of devices, scientists have given him control over his lower body again.
“For 12 years I’ve been trying to get back my feet,” Mr. Oskam said in a press briefing on Tuesday. “Now I have learned how to walk normal, natural.”
In a study published on Wednesday in the journal Nature, researchers in Switzerland described implants that provided a “digital bridge” between Mr. Oskam’s brain and his spinal cord, bypassing injured sections. The discovery allowed Mr. Oskam, 40, to stand, walk and ascend a steep ramp with only the assistance of a walker. More than a year after the implant was inserted, he has retained these abilities and has actually showed signs of neurological recovery, walking with crutches even when the implant was switched off.
The Republican plan to take over school boards may be backfiring
In an Oregon school district in the predominantly rural Clackamas County, where students have protested a recent onslaught of book bans, several “parental rights” candidates lost their bids for the school board.
In Illinois and Wisconsin, a key swing state, school board candidates who ran on culture war issues largely failed in April.
That tracks with Tuesday night’s losses for three parental rights candidates, including two incumbents, in Oregon’s Canby School District
It’s not clear, however, that Republicans’ focus on education is continuing to pay dividends. In addition to suffering the losses in Pennsylvania and in Illinois and Wisconsin last month, 35 parental rights candidates were defeated in New York school races last year. That meant that many of them decided not to run again this year, with many seats going uncontested in Tuesday’s school board elections in New York.
The FDA approves a breakthrough vaccine 50 years in the making
On Wednesday, the Food and Drug Administration approved the first vaccine that protects against respiratory syncytial virus, otherwise known as RSV.
This is a big moment in the fight against a major scourge. Researchers have been working to create an RSV vaccine for more than half a century. And it’s not an exaggeration to say RSV vaccines could save hundreds of thousands of lives each year on a global scale.
Tucker Carlson departs Fox News, pushed out by Rupert Murdoch
Tucker Carlson, the provocative, conservative prime-time host who sustained Fox News as a ratings juggernaut, has been forced out of the network.
Fox News announced the stunning departure of its top-rated host Monday with no explanation, but people familiar with the situation who were not authorized to comment publicly said the decision to fire Carlson came straight from Fox Corp. Chairman Rupert Murdoch with input from board members and other Fox Corp. executives.
The fight against factory farming is winning criminal trials
Since its founding a decade ago, DxE, a grassroots animal rights group, has been testing out this strategy, which it calls “open rescue”: activists walk into factory farms and slaughterhouses and simply remove animals suffering there, taking them to receive veterinary care and eventually to live out their lives peacefully on animal sanctuaries. The tactic serves an elegant double purpose, saving animal lives in the immediate term while intentionally provoking conflict with a legal system that treats living beings on farms as though they were inanimate property rather than sentient individuals.
Santurio and Paul’s victory comes after a historic trial last October, in which DxE activists were acquitted by a Utah jury after facing a decade in prison for rescuing two sick, dying piglets said to be worth $42 each from Smithfield Foods, America’s top pork producer. More and more of the group’s rescues are making their way to trial (two more cases are scheduled for this year), where activists often facing lengthy prison sentences attempt to convince juries that they have a “right to rescue.”
Eli Lilly Says It Will Cut the Price of Insulin
The drugmaker Eli Lilly and Company said on Wednesday that it would significantly reduce the sticker prices of several of its lifesaving insulin products that are used by diabetes patients and whose prices Lilly has repeatedly increased in the past.
The announcement comes at a time of mounting political pressure on drug companies to rein in what lawmakers and other critics view as the industry’s pattern of abusive profiteering.
In his State of the Union address last month, President Biden blasted drug companies for increasing the prices for insulin. “Big Pharma has been unfairly charging people hundreds of dollars, $400 to $500 a month, making record profits,” he said.
Some of my favorites from On the Lighter Side
Happy New Year Everyone!
Keep an eye out for the new series Boosting Biden (AKA Dark Brandon did that) which will be starting at 7:30 am on the 1st).
I am so lucky and so proud to be in this with all of you. 💚💛🧡❤️✊🏽✊🏿✊🏾✊🏼✊🏻❤️🧡💛💚