Week InReview
Friday | Nov 3, 2021
The great pandemic closet purge.
Illustration: The Wall Street Journal
THE PANDEMIC closet purge isn’t merely an exercise in swapping formal clothes for casual ones, stylists say. The purge feeds a desire to simplify during complicated, uncertain times. And it’s an acknowledgment that looks created in the before times often seem false or irrelevant now.

— The Wall Street Journal
let's recap...
Jay Powell sent markets into a tailspin this week by making his most hawkish comments since the start of the pandemic. Photo: Getty Images
On Tuesday, U.S. Senator Pat Toomey channelled the mid-20th century British economist John Maynard Keynes’ dictum that “in the long run we are all dead.” Asking Federal Reserve chair Jay Powell about the current bout of above-target inflation, Toomey said, “I know you believe this is transitory. But everything is transitory. Life is transitory.” Powell, wisely, said he would now ditch the word, acknowledging that describing high inflation as “transitory” is causing as much confusion as clarity. (Financial Times - opinion | Dec 2)

With financial markets already selling off on fears over the Omicron coronavirus variant, it might have seemed like an odd moment for the chair of the Federal Reserve to make his most hawkish comments on monetary policy since the start of the pandemic. But on Tuesday, Jay Powell effectively jettisoned the Fed’s previous stance on soaring inflation and signaled his support for a faster reduction of the central bank’s massive bond-buying program, giving policymakers leeway to raise interest rates more quickly than expected. (Financial Times | Dec 2) see also Global inflation set to be higher for longer, says OECD (The Wall Street Journal | Dec 1)

Bond volatility is accelerating as Covid-19 and inflation fears play havoc with the policy outlook. Treasury yields surged Wednesday after Federal Reserve Chair Jerome Powell suggested Tuesday that stubbornly high inflation warranted increasing the pace of policy tightening. That saw the market reverse course after benchmark 10-year yields fell to a two-month low this week on fears over omicron’s resistance to existing vaccines. (Bloomberg Markets | Dec 1)

Securities and Exchange Commission Chair Gary Gensler doubled down on his calls for more oversight of cryptocurrency trading platforms on Wednesday, offering new insight into his priorities as he seeks to crack down on the digital coin industry. Gensler reiterated the need for digital asset exchanges to register with the SEC — a move that could bring more investor protections and compliance costs for the firms. He said that the agency is open to working with platforms around thorny issues like custody of tokens, but also said that the firms could face enforcement actions if they don’t comply with the watchdog’s rules. (Bloomberg Crypto | Dec 1)

Starting next year, home buyers in high-cost areas of the country will be able to borrow nearly $1 million for a mortgage loan backed by the government, a reflection of the rapid appreciation in home prices nationally. The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac will jump to $970,800 in high-cost markets such as parts of California and New York, up from $822,375 this year, the Federal Housing Finance Agency said Tuesday. (The Wall Street Journal | Nov 30)
Reinfection risk
Photo: Dwayne Senior/Bloomberg
(Dec 2) — The risk of reinfection from the omicron coronavirus variant is three times higher than for any previous variant, according to a South African study. Despite the fact it may spread more easily, early reports suggest omicron may be less deadly than delta — a glimmer of hope that’s spurred JPMorgan to advise investors to buy the dip as the end of the pandemic could be in sight. Elsewhere, vaccine experts say get a booster now and don't wait for an omicron shot to be developed; two fresh omicron cases were found in the U.S., along with the first cases in Singapore and India; Germany is banning the unvaccinated from restaurants and shops; and Pfizer says it expects its shot to be effective against the new variant.
CFTC subcommittee sees Dec 13 for remaining swaps SOFR switch
(Dec 2) — A subcommittee of the Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC), selected Dec. 13 as the date for switching interdealer trading conventions for the U.S. dollar leg of newly-executed cross-currency derivatives, according to a statement. 
  • This is part two of the SOFR First initiative’s second phase that initially went into effect in September, which addresses the transition of other currencies
  • The first part recommended cross-currency swaps referencing USD, CHF, JPY and GDP utilize risk-free reference rates instead of Libor
  • Recommendation is intended to capture the USD leg of all other cross-currency derivative transactions, regardless of the accompanying non-USD currency leg
  • The fourth and final phase of the SOFR First initiative is forthcoming and will involve exchange-traded derivatives
  • NOTE: First and third phases of SOFR First for the transitioning of linear swaps and non-linear derivatives occurred on July 26 and Nov. 8, respectively
the cyber cafe
What Microsoft’s shift to passwordless means for cybersecurity
Earlier this year, Microsoft announced that its users will no longer need passwords to log into their accounts. This may sound like a completely foreign idea to the casual consumer, but for those in the cybersecurity industry, the shift away from password dependence has long been mentioned as a safer alternative.
— Security

Israel restricts hacking too, spyware exports amid controversy
Israel reduced the number of countries where its companies can export hacking tools and cyberweapons to exclude countries that aren't democracies. Companies can continue to export to countries in Europe and members of the Five Eyes alliance. The U.S., U.K., New Zealand, Australia and Canada are members of the Five Eyes alliance. The U.S. Department of Commerce also recently added two Israeli companies, NSO Group and Candiru, to its entity list, making it more difficult for them to access technology and products made by American companies. NSO Group has faced increased criticism since reports about its Pegasus software came out in July.
— PC Mag

New bank cyber incident rule takes effect April 1
U.S. banking regulators finalized a new rule last week that requires banks to report any cyber incident that has the potential to cause serious harm within 36 hours and expands the reporting requirement for third-party vendors. Analysts say the rule, set to take effect on April 1, is well-aligned with the voluntary reporting banks have been doing.
binge reading disorder
Why you should always pack champagne and other VIP travel tips. Photo: Maison Benjamin
Making travel plans? We asked a VIP concierge for his insider tips. 
Luxury lifestyle concierge service, Maison Benjamin, handles property management, small-scale catering, travel booking, and even personal shopping for an elite group of globe-trotting VIPs in the Hamptons, Miami, and New York City. Here he shares some tips picked up during his frequent globe-trots.

How to add your favorite people to your iPhone to save time and hassle
Apple’s VIP calling features, including Favorites and the Contacts widget, let you better control how you reach people — and when they can reach you. You don’t need an iPhone 13 to add people to your Favorites list, just Apple’s latest operating system, iOS 15.

Wall Street grudgingly allows remote work as bankers dig in
Finance employees who couldn’t imagine working from home before the pandemic are now reluctant to return to the office. Their bosses can’t figure out how to bring them back.
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