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Musk’s Twitter changes + The soft landing window has narrowed
A quick fix of the latest financial happenings.
Good morning, investors!
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Without further ado…
The Twitter Deal Is Done. What’s New?
Twitter is under new management after Musk’s acquisition finally closed last week. Even though we’re early into Twitter’s newest Complaint Hotline Operator’s tenure at the helm of the bird app, the business and platform are already undergoing notable changes:
Twitter is now private.
Twitter’s verified badges will cost $8 a month. Previously, they were reserved for individuals of influence. The subscription fee will also unlock additional benefits like a visibility boost, reduced ads, and the ability to post longer media clips.
Claims are now fact-checked, much to the chagrin of the White House account. After boasting about an increase in Social Security payments to older Americans, the fact-checking feature corrected the assertion, instead crediting the increase to inflation. (See screenshot below)
Half of Twitter’s workforce — about 3,700 jobs — will get the boot in an effort to cut costs.
Twitter employees have to go back into the office, which will likely result in additional attrition.
The return of Vine? Musk posted a poll asking users whether he should bring back the long-dead short-form video platform (think Tik Tok, but with less dancing and before Gen Z could vote).
Two Jerome Powell Statements on the Narrowing Window for a Soft Landing
On Wednesday, the Federal Reserve pushed through yet another 0.75% rate hike, bringing the target range to 3.75–4%, a level we haven’t seen since January 2008. The market initially reacted positively to the Fed’s revision to a statement on future rate increases:
Investors latched onto the idea of the Fed “[taking] into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation,” which was widely interpreted as easing off of a hawkish stance (frankly, I struggle to read it that way). However, sentiment took a grim turn once Fed Chair Jerome Powell’s conference commenced.
During his opening remarks, Powell said, “We still have some ways to go, and incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected.” In short, expect rate hikes to continue.
And as far as a recession goes, here are two questions posed to Powell regarding the potential for a soft landing and his abbreviated/slightly modified answers.
Q: “I'm wondering, has the window for a soft landing narrowed? Do you still think it's possible?”
POWELL. “Has it narrowed? Yes. Is it still possible? Yes. I think, we've always said it was going to be difficult…
…All I would say is that the job losses may turn out to be less than would be indicated by those traditional measures because job openings are so elevated and because the labor market is so strong. Again, that's going to be something we discover empirically. I think no one knows whether there's going to be a recession or not, and if so, how bad that recession would be.”
Q: “Why do you feel like the window has narrowed?”
POWELL. “Because we haven't seen inflation coming down. The implication of inflation not coming down and what we would have expected to have seen by now is that as the supply side problems have resolved themselves, we would have expected goods inflation to come down by now, long since by now. Although it has come down, it's not to the extent that we had hoped.
At the same time, now you see services inflation, core services inflation moving up and I just think that the inflation picture has become more and more challenging over the course of this year, without question. That means that we have to have policy be more restrictive and that narrows the path to a soft landing I would say.”
Three Eye-Opening Tweets
And finally, we close with three eye-opening tweets.
Musk’s justification for charging a fee for verification, in typical meme format.
Would be big news for the cannabis industry
Apple: impressive company
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