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Fed minutes reveal divisions.

Federal Reserve officials struck a tenuous agreement to pause interest-rate increases at their June meeting, all but committing to hike again later this month in a bid to keep fighting stubborn inflation. The minutes from the Fed’s June 13-14 meeting show that while almost all officials deemed it “appropriate or acceptable” to keep rates unchanged in a 5% to 5.25% target range, some would have supported a quarter-point increase instead. The minutes also showed that a large majority of policymakers – “almost all” – agreed that more tightening will likely be needed this year. It provided ample evidence that the Fed likely isn’t done. 

Inflation's return changes the world. Illustration: James Ferguson | Financial Times

Wall Street traders reel on sudden shift in interest rate bets

All of a sudden, the biggest interest-rate shock in decades is rousing traders from their slumber once again with soft echoes of 2022’s everything-selloff. More than a year after central bankers began their forceful monetary tightening campaign, money managers just got blindsided by the latest signs that the world’s biggest economy continues to run hot. Cue a renewed in-tandem plunge in stocks and bonds like the bad days of 2022. (Bloomberg Markets | Jul 6)

SEC to release new rules for $5.5 trillion money-market industry

The US Securities and Exchange Commission is set to impose a slate of new rules on money-market mutual funds, setting up a potential clash with titans in the $5.5 trillion industry. The agency plans to hold a meeting on July 12 to finalize the changes, which are meant to prevent the kind of outflows that occurred in March 2020 when the onset of the pandemic roiled markets. That turmoil prompted the Federal Reserve to intervene and rescue money-market funds for the second time in 12 years, spurring calls for the SEC to impose tougher regulations. (Bloomberg Markets | Jul 6)

Bets on 'Year of the Bond' persist in face of still-hawkish Fed

Some of the biggest bond managers are sticking to their bullish view on the market for US government debt, even as that trade looks riskier by the day. Some firms are keeping the faith that a rousing fixed-income rally is coming, a stance that is being sorely tested by the economy’s resilience and the Federal Reserve’s eyeing of higher interest rates. (Bloomberg Markets | Jul 5)

Global regulators recommend exit fees for hard-to-sell assets

Fund managers investing in hard-to-sell assets such as property should charge clients for withdrawing their cash in an attempt to discourage a rush for the exit, global financial regulators have recommended. The Financial Stability Board and International Organization of Securities Commissions on Wednesday published guidance for asset managers, saying that investors who withdraw their money from an open-ended fund should not disadvantage clients choosing to remain in the fund. (Financial Times | Jul 5)

Inflation slog grips Fed and ECB as global rate policy decouples

Stubborn inflation keeping US and European officials in tightening mode is likely to further decouple global monetary policy in the coming months as the rest of the world forges its own path. Another hike in interest rates is anticipated by the Federal Reserve and the European Central Bank for July. The higher overall number masks a far less synchronized picture than the world has been recently used to. (Bloomberg Economics | Jul 4)

Treasury yield-curve inversion nears most extreme since 1980s

A key segment of the US Treasury yield curve approached its most inverted level in decades Monday as traders priced in further Federal Reserve policy tightening. The two-year note’s yield exceeded the 10-year rate by as much as 110.8 basis points as the shorter maturity rate reached 4.96%. The inversion touched 110.9 basis points in March, a level last seen in the early 1980s, according to data compiled by Bloomberg. (Bloomberg Markets | Jul 3)

Leveraged-loan logjam eases after banks unload tens of billions of debt

Banks have sold off tens of billions of leveraged-buyout debt that was gumming up their lending operations, raising hopes that a critical business on Wall Street is returning to normal. (The Wall Street Journal | Jul 2)

We weren't breached, Microsoft says

Microsoft refuted the claim by hacktivist group Anonymous Sudan that it hacked the tech giant and got access to 30 million customer accounts. Microsoft said its analysis of the data sampling posted shows "this is not a legitimate claim." The hacking group has been linked with pro-Russian causes.

— InfoSecurity Magazine

CISA and partners release joint advisory on newly identified Truebot malware variants

The Cybersecurity and Infrastructure Security Agency (CISA), Federal Bureau of Investigations (FBI), the Multi-State Information Sharing and Analysis Center (MS-ISAC), and the Canadian Centre for Cyber Security (CCCS) released a joint Cybersecurity Advisory (CSA), Increased Truebot Activity Infects US and Canada Based Networks.

— CISA

White House invites private sector to partner with federal government

The White House’s National Cybersecurity Strategy is primarily written for and designed to guide federal government officials. Yet the latest release of the strategy is remarkable for the commitments it makes to the private sector on a range of cybersecurity issues. Most significantly, the White House invited the private sector to join the federal government to address cybersecurity challenges not as a participant, but as a partner.

— Federal News Network

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Photo illustration: Emil Lendof | WSJ

TV’s golden era proved costly to streamers

Consumers are winning from the streaming revolution but across most of Hollywood, the businesses churning out TV and movies are losing. Streaming losses and layoffs were already leading to an industry retrenchment. Then the writers’ strike hit.

— The Wall Street Journal

People hire phone bots to torture telemarketers

AI software and voice cloners simulate distracted saps willing to stay on the phone forever — or until callers finally give up. Complaints about unwanted telephone calls are the largest category of consumer complaints to the FCC, with the average American receiving 14 unwanted calls a month.

— The Wall Street Journal

Luggage can be left at home with Japan Airlines clothing rental

Tourists and business travelers to Japan will soon be able to show up with little more than the clothes they’re wearing, thanks to an initiative by Japan Airlines Co. and Sumitomo Corp. to offer rental clothing during visits to the island nation.

— Bloomberg Pursuits