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US economy doing just fine.

Fed Chair Jerome Powell says the US economy is doing just fine, so there’s no rush to lower interest rates. Traders dialed back their estimates of a cut next month to less than 60% from roughly 80% a day earlier.

Stock-index futures drop on Powell’s comments. A gauge of the dollar is set to rise about 1.4% for the week. European equities head for a fourth weekly decline and Chinese stock slumped.

Fed Chair Jerome Powell said the recent performance of the US economy has been “remarkably good,” giving central bankers room to lower interest rates at a careful pace. He said it wasn’t sending signals that policymakers need to be in a hurry, and he made no comments on the possibility of a cut at the December meeting. A gauge of the dollar halted a five-day gain, and traders pared back their expectations for a December move.

China’s economy showed encouraging signs as retail sales grew at the strongest pace in eight months, indicating Beijing’s recent stimulus efforts have boosted some key sectors. The data represents an improvement in a part of the economy that has struggled with the sluggish sentiment. Still, two of the world’s most prominent investors are signaling that the days of across-the-board gains in Chinese stocks may be ending.

Interest rates and longer-term refinancing operations should take priority in times of increased economic volatility, ECB Executive Board member Isabel Schnabel said, warning of the dangers of large-scale bond-buying programs and forward guidance. She said quantitative easing should “be used more cautiously in the future.”

The US Treasury added South Korea to a “monitoring list” for foreign exchange practices that continues to include Japan and Germany. It reiterated its criticism of China’s lack of transparency concerning managing its currency.

US money market fund assets break $6.7 trillion

For the first time ever, US money-market funds have more than $7 trillion in assets under management, a milestone for an industry that’s skyrocketed in popularity among investors, thanks to lofty and dependable yields. Even after the Fed cut its benchmark rate by half a point in September and a quarter point this month, they remain popular for their yields. So far this year, more than $700 billion has flooded into the funds, according to one estimate. (Bloomberg Markets | Nov 14)

Fed refuses to back Basel climate plan, leaving talks in limbo

US regulators led by the Fed won’t back a plan to push lenders to disclose their climate risk. The Basel Committee on Banking Supervision has already watered down the proposal significantly to accommodate the Fed. Now, the group that sets standards for central banks is bracing for a scenario where the goals of addressing climate change through regulation could be permanently shelved. (Bloomberg Green - Climate Politics | Nov 14)

Inflation stays firm, but not enough to derail December Fed cut

Consumer prices edged up in October after having recorded the slowest rate of growth in 3½ years in the previous month, a sign of how inflation continues to move lower on an uneven and bumpy path. The latest report likely wasn’t enough to derail another interest-rate cut from the Federal Reserve in December. But together with solid consumer spending and steady hiring, firmer inflation could kick off a bigger debate at officials’ next meeting over whether to slow the pace of rate cuts early next year. (The Wall Street Journal | Nov 13)

Basis swaps surge amid US repo market concerns

Traders have piled into basis swaps, crossing secured and unsecured overnight US dollar rates in recent weeks, as anticipated and existing funding pressures hit repo markets. Weekly volumes of federal funds-versus-secured overnight financing rate (SOFR) swaps increased almost fourfold between the last week of August and mid-October, as the Federal Reserve continued to drain reserves from the US banking system through quantitative tightening. This pushes banks to use the repo market as a way of securing cash to shore up liquidity requirements around reporting dates and makes them reluctant to lend cash to other parties. (Risk | Nov 14)

Real-estate scions are breaking a cardinal rule: Never sell

William Rudin, scion of one of New York City’s premier real-estate dynasties, says his grandfather built a property empire by following a cardinal rule: Never sell. While the city’s office market wobbled during economic downturns, values and cash flows would always recover because workers came back during good times. But last year, Rudin sold control of a 30-story office tower in downtown Manhattan his family developed in the 1960s. This fall, the family agreed to part with 80 Pine Street, another financial district tower, after anchor tenant American International Group left. (The Wall Street Journal | Nov 12)

The ChatGPT virtual assistant logo. Photo: Andrey Rudakov | Bloomberg

OpenAI, Google, and Anthropic are struggling to build more advanced AI

OpenAI was on the cusp of a milestone. The startup finished an initial round of training in September for a massive new artificial intelligence model that it hoped would significantly surpass prior versions of the technology behind ChatGPT and move closer to its goal of powerful AI that outperforms humans. But the model, known internally as Orion, did not hit the company’s desired performance. And OpenAI isn’t alone in hitting stumbling blocks recently.

— Bloomberg Technology

To-do list

Cybersecurity agencies in the US, Australia, Canada, New Zealand, and the UK issued a report Tuesday on the most-exploited vulnerabilities of 2023, many of which continue to provide entrée to hackers. Bugs in products from Citrix, Cisco, and Fortinet account for the top five. The agencies advised businesses to decrease their risk, in part, by: 

• Updating operating systems, applications, and firmware in a timely manner
• Moving any systems that can't be scanned quickly for known bugs to a tech service provider
• Enforcing phishing-resistant multifactor authentication
• Continuously monitoring networks and devices for unusual activity — and investigating it when discovered

— The Wall Street Journal

Snowflake hackers identified and charged with stealing 50 billion AT&T records

Snowflake hackers stole 50 billion records from AT&T, according to an indictment from the US Department of Justice. The telecom company was breached through one of its Snowflake servers in a widespread hack of the storage technology that affected many businesses. Snowflake disclosed the incident in May.

— TechCrunch

Order the weird cocktail. Photo Illustration: Halie Chavez | Bloomberg. Photos: Getty Images

Why you should order the weirdest drink on the menu

The pandemic brought us into an extended “comfort drinks” phase: At a time when everything seemed tumultuous and uncertain, it helped to know that a trusty martini or Negroni could be relied upon to hit the spot. It’s also something of a litmus test: A bar really shows you who it is through these baseline classics, whether good, bad, or fancy.

— Bloomberg Pursuits

Can you sleep your way to better decision-making?

The author John Steinbeck said: “It is a common experience that a problem difficult at night is resolved in the morning after the committee of sleep has worked on it.” Many others have claimed they formulated breakthroughs and innovations in dreams. Recent studies on the science of sleep suggest these claims are supported by modern science. A 2024 study suggests that sleep can help us make more rational, informed decisions, and not be swayed by a misleading first impression.

— The Conversation

These are the 8 friends you need to be happy in life

It turns out there are 8 types of “vital friends.” Many of us don’t have all of them in our squad, and that’s why we often feel disappointed or like we’re not getting everything we need. (You have to collect all the different Pokemon to win at the game called life.

— Barking Up The Wrong Tree