Fed aftermath.

Fed Chair Jerome Powell on Wednesday night signaled the central bank will slow the pace of interest-rate increases next month, while stressing borrowing costs will need to keep rising and remain restrictive for some time to beat inflation. While that sentiment was very much in line with expectations, the confirmation that a calmer pace of hikes is imminent sparked a rally in global stocks and pushed the dollar to a three-month low. As Sarah Hewin, senior economist at Standard Chartered, put it, the upshot is “there is no one-way bet any more on dollar strength.''

Jay Powell at the November 2021 meeting. FT Montage: Jim Lo Scalzo | EPA-EFE/Shutterstock

A year of pain: investors struggle in a new era of higher rates

Twelve months after Jay Powell called an end to super-cheap money, fund managers are still adjusting to a very different environment. One year ago, Powell threw out the rulebook global investors had used for over a decade. But on November 30 2021, Powell publicly accepted that assessment might have been wrong. Ending the Fed’s stimulative bond purchases might need to accelerate, he said. (Financial Times - Alphaville | Nov 30)

Junk bonds rally as investors speculate inflation has peaked

Investors are driving a modest end-of-year rally in junk bonds, erasing some of 2022’s biting losses in a bet that the economic outlook for next year has stabilized. Yields on below-investment-grade corporate bonds tracked by Intercontinental Exchange’s index have declined to 8.8% through Tuesday’s trading, down from a recent high of 9.61% on Oct. 13. Investors say they are growing more confident that interest rates might peak without putting many lower-rated companies’ ability to repay debt in serious jeopardy. (The Wall Street Journal | Nov 30)

Yield curve inversion reaches new extremes

Yields on longer-term U.S. Treasurys have fallen further below those on short-term bonds than at any time in decades, a sign that investors think the Federal Reserve is close to winning its inflation battle regardless of the cost to economic activity. A scenario in which short-term yields exceed long-term yields is known on Wall Street as an inverted yield curve and is often seen as a red flag that a recession is looming. (The Wall Street Journal | Nov 29)

Hoarders are the answer to US jobs riddle

The global economy looks shaky and some of the world’s biggest names are firing thousands of employees. For those workers, there’s little good news right now. But for others who are still employed, there’s a glimmer of hope: Even if there’s a recession in their country, they have a good shot at hanging onto their jobs. Almost three years after Covid-19 hit, companies around the world are still complaining they can’t get the talent they need. They worry labor shortages will outlast not only the pandemic, but any future downturn, too. (Bloomberg Economics | Nov 28)

Global inflation likely to have peaked, key data indicators suggest

Key data indicators suggest that this year’s rampant global inflation has peaked and that the pace of headline price growth is set to slow in the coming months. Factory gate prices, shipping rates, commodity prices and inflation expectations have all begun to subside from their recent record levels. According to economists, the figures suggest that price pressures on global supply chains are easing, making it likely that headline inflation will fall from the historically high rates that hit household finances and business activity in recent months. (Financial Times | Nov 27)

CISA's strategic plan is ushering in a new cybersecurity era

CISA, the group tasked with strengthening our national approach to cybersecurity and securing critical infrastructure, has released a strategic plan that outlines four goals that must be met to address the "diverse and dynamic challenges facing our nation."

— Dark Reading

Cyber insurers turn attention to catastrophic hacks

While cyber insurance has evolved significantly in recent years, insurers say they might still be unprepared for the fallout from a catastrophic cyberattack. Insurers have adapted to unrelenting cyberattacks by tightening requirements for policyholders and raising premiums after losses soared in 2020, partly because of a spike in ransomware claims.

— The Wall Street Journal

It's not like flipping a switch

The Federal Communications Commission took its most aggressive step yet to expunge Chinese tech from U.S. telecom networks with its decision late last week to ban the sale of equipment from companies the US government deems a national security threat. But gear from the targeted Chinese tech giants Huawei, ZTE, Hytera, Hikvision and Dahua is so deeply embedded within the American telecom and networking landscape, it’ll take years and billions of dollars to effectively eliminate any risk that these companies pose.

— Cyberscoop

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Cybersecurity and Infrastructure Security Agency here.

Illustration: Qianhui Yu | Bloomberg

Objects of wonder: 11 holiday gift ideas that are truly magical

The best spirits, the most extravagant luxury trinkets, and items that aren’t even physical gifts at all are still there for the taking. But this year is a time to get back to what’s best about the act of giving: sparking a sense of wonder in someone. To that end, here are 11 of the most enchanting objects Bloomberg Pursuits has seen in their many years of research on these guides. Each of them has curiosity built into the gift itself, and you’ll find that many offer a new view into nature, life or just your bedroom at home. These are 2022's Gifts of Wonder.

— Bloomberg Pursuits