What’s Up? (March 19-25)
Lawmakers Grill a Tech Executive
Shou Chew, the chief executive of TikTok, did not meet a warm reception when he appeared before lawmakers in Congress for the first time last week. During more than five hours of testimony, Mr. Shou was barraged with questions about TikTok’s effects on teenagers’ mental health, limits to onscreen time, the relationship between the app and its Chinese parent company, ByteDance, and how it treats the data of its American users. The questions came from lawmakers on both sides of the aisle, an indication of how the viral social app had become part of the larger battle between the United States and China over technological and economic supremacy. Mr. Chew tried to convince lawmakers of TikTok’s distance from China’s government, at times by emphasizing his own biography: Mr. Chew lives in Singapore and attended business school in the United States. He also stated that ByteDance was a private company “not owned or controlled by the Chinese government.” But he failed to reassure lawmakers. “Your platform should be banned,” one House Republican told him.
Banks on Edge
Banks continued to find themselves on shaky ground last week after the collapse of Silicon Valley Bank and Signature Bank earlier this month touched off panic among customers and investors about the health of the country’s midsize banking institutions. On Monday, shares of First Republic fell 47 percent, suggesting that a recent $30 million cash infusion — a joint effort by a group of the country’s largest banks to rescue First Republic — had largely failed to persuade investors to stick by the bank. (Trading was halted 11 times that day to prevent a free fall.) But First Republic is far from the only bank with worries. Banks are seeking funds from the Federal Reserve’s loan program to ensure they have cash on hand to make it through the hard times that may lie ahead.
Rates Rise Again
The Federal Reserve lifted its benchmark interest rate by a quarter-point on Wednesday, the second consecutive increase of that size, amid a banking crisis spurred in part by the Fed’s sustained campaign of raising rates. Jerome H. Powell, the Fed chair, said that officials had “considered” pausing interest rate increases because of the turmoil but that recent economic data made the case for the central bank to continue on its path of increasing rates to fight inflation. Mr. Powell emphasized repeatedly at a news conference last week that inflation was surprisingly stubborn, but officials forecast that inflation would slow to 3.3 percent by the end of the year, down from 5.4 percent in the last reading.
What’s Next? (March 26-April 1)
The A.I. Race Is On
The race to develop artificial intelligence that can be competitive with ChatGPT, the software that now powers Microsoft’s search engine, has only just begun. Last week, Google released a chatbot called Bard, which it introduced as a stand-alone webpage rather than a component of its search engine, a move that probably reflects the company’s reluctance to tinker with its flagship product. Google is also being broadly cautious about how it brings A.I. to users after the sometimes disturbing answers Microsoft’s chatbot gave to users’ questions. Still, Google plans to introduce more than 20 A.I. products and features. The field is liable to get much more crowded: Two former Google employees recently raised $1 billion for their own A.I. company. OpenAI, the company behind ChatGPT, is trying to up its game with newer technology called GPT-4. And conservatives are vying to build chatbots that reflect their views.
A New Inflation Reading
On Friday, the Commerce Department will release the latest reading from the Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge and the one that central bankers use to determine if they’ve hit their 2 percent inflation target. Inflation had been on a downward trajectory for several months until January, when it unexpectedly accelerated again to 5.4 percent, from 5.3 in December. Even if that number ticks back down, this week’s report is likely to illustrate that the Fed is far from its goals, particularly when considered alongside recent strong jobs reports and other data that suggest the economy is not cooling as much as expected.
A Looming Strike in Hollywood
Television and movie writers are creeping toward a potential strike, as Hollywood studios bristle at writers’ accusations that their working conditions have worsened and argue that their demands for increased pay are at odds with economic realities. The two sides — the Writers Guild of America, a union representing more than 11,000 entertainment writers on the East and West coasts, and the Alliance of Motion Picture and Television Producers, which bargains on behalf of Hollywood’s nine largest studios — began talks last week, but a vote to authorize a strike could occur as soon as the first week of April. A work stoppage among writers would first affect late-night television, like “The Late Show With Stephen Colbert” or, if a strike were to last several weeks, “Saturday Night Live.”
In a pair of lawsuits filed on Monday, a Fox News producer accused Fox lawyers of coercing her into giving misleading testimony in Dominion Voting Systems’ defamation case to set her up. The Bank of England also raised its benchmark rate by a quarter-point last week. And wild swings last week in the market for government bonds sent an ominous signal about the economic outlook.
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