Member Briefing March 5, 2024
BIS: Central Banks on Brink of Victory in Inflation Fight
Central banks are on the brink of victory in the fight to bring the global surge in inflation back under control, the Bank for International Settlements said on Monday. There was cause for "cautious optimism", according to the latest quarterly report from the BIS, which is often dubbed the central bankers' central bank due to its regular behind-closed-doors meetings of the world's top monetary policymakers. the BIS has been gradually becoming more hopeful about the outlook. At the end of last year it said progress in beating back inflation had been encouraging, but stressed at that point that central banks were not out of the woods.
The report also looked at the stubbornness of inflation and what neutral borrowing rates where they are neither too loose or too restrictive - or "r*" in economist speak - were likely to be in the wake of the COVID-19 pandemic and as deglobalization and aging populations reshape economies. It concluded that inflationary pressures could become more stubborn as services industries increase their weight in economies, while r* could now be higher, although gauging it was fraught with uncertainty.
$45M Going to 7 N.Y. Locations to Attract High-Tech Manufacturing Businesses
More than $45 million has been awarded to improve seven locations in New York so that they may attract high-tech manufacturing businesses, Gov. Kathy Hochul's office announced Friday. The money comes from the FAST NY (Focused Attraction of Shovel-Ready Tracts) program, which is designed to prepare and develop sites to increase the chances of large employers and high-manufacturing companies to settle on those locations.
“From the Hudson Valley to the Southern Tier, these FAST NY investments are helping to unlock economic opportunity all across our state,” Hochul said in a statement. “Businesses of the future are flocking to New York because of our top-notch workforce, our thoughtful incentives, and our turnkey, shovel-ready sites, and I am committed to working with the Legislature to bring in even more 21st century employers and grow the jobs of tomorrow in our state.”
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- U.S. Voter Sympathy for Palestinians Grows as Israel War Drags On, WSJ Poll Finds - WSJ
- A Ship Hit by Yemen’s Houthi Rebels Feb 18th Sinks in the Red Sea, The First Vessel Lost in Conflict - AP
- U.S. and Allies Reach for Last Resort to Get Aid to Gazans - WSJ
- Israel Arrests Dozens In Biggest Raid On Occupied West Bank In Years, Reports Say - Forbes
- U.S. Envoy Says War at Lebanese Israeli Border Would Not Be Containable - Reuters
- U.S., Israel at Odds Over Claims of Links Between Hamas and Charities - WSJ
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- European States Gather Soviet-Style Artillery Rounds for Ukraine – Defense News
- With A Million Shells About To Ship, Ukraine’s Artillery Crisis Could End Soon - Forbes
- Russia's Air Force Appears to be Backing Off After Ukraine Said it Shot Down 15 Planes in 2 Weeks - Insider
- Ukrainian Rescuers Complete Search After Odesa Drone Attack Kills 12 - Reuters
- Mysterious Deaths Of Putin Critics Continue: Navalny, Russian Helicopter Pilot Join Oligarchs - Forbes
- Germany and Russia Spar Over a Leaked Audio on Missiles for Ukraine - AP
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Other Headlines
- UN Rights Chief Says China Committing Violations in Xinjiang, Tibet – Reuters
- Haiti Orders a Curfew After Gangs Overrun its Two Largest Prisons. Thousands Have Escaped - AP
- Pakistan’s New Leader, Shehbaz Sharif, Installed - NYT
- The World Is in for Another China Exports Shock - WSJ
- Burkina Faso Prosecutor Says Around 170 'Executed' in Attacks on Villages – Reuters
- South Korea Manufacturing Expands for 2nd Month – Trading View
- South Korea Trade Exports Keep Rising, Supporting Growth Outlook - Bloomberg
- 5 Key Issues at Stake in the Upcoming 2024 Mexican Elections - AP
Policy and Politics
Federal Court Rules Corporate Transparency Act—or CT Unconstitutional
An Alabama federal judge ruled the Corporate Transparency Act, a sweeping bipartisan anti-money-laundering law passed in 2021, was unconstitutional, leaving its future uncertain. The act became effective Jan. 1. Congress hoped it would help stop money-laundering by rooting out the use of anonymous shell companies and would track the flow of illicit money and protect U.S. national security interests. The law creates a beneficial ownership database and reporting requirements for companies to file ownership information to the U.S. Treasury Department. The law focuses primarily on small and private companies and applies to more than 32 million small businesses nationwide.
U.S. District Judge Liles C. Burke, in a ruling Friday, sided with the small business group, saying that the CTA was unconstitutional. Judge Burke raised questions about the corporate formation requirements imposed by the bill, a process which is usually left to state governments, and noted that the law applies to corporate entities even if the entity conducts businesses only within a single state or does no business at all. The judge added that the CTA’s ownership disclosure requirements gave the government “unfettered legislative power.” A spokeswoman for the Treasury Department said in an email Monday the agency is complying with the court’s injunction, but didn’t indicate whether the government would appeal the ruling.
NYS Labor Committee Chairs Seek Upstate, Downstate Minimum Wage Parity
New York state lawmakers and advocates announced that the newly minted chair of the Assembly Labor Committee, Rochester’s Harry Bronson, will be the prime Assembly sponsor of legislation that would create a minimum wage parity between upstate and downstate New York. The bill, known as the Upstate Parity and Minimum Wage Protection Act, would create a statewide minimum wage floor of $17 per hour. As of Jan. 1, the minimum wage in New York City, Westchester and Long Island sits at $16 per hour. In upstate New York, that figure rests at $15 per hour. By 2026, the minimum wage in non-upstate areas will rise to $17 per hour, while upstate will rise to $16 per hour.
In 2023, the Legislature passed and Gov. Kathy Hochul approved legislation that would index the minimum wage to inflation starting in 2027. However, the minimum wage does not increase if there is an increase in unemployment. The legislation, which Bronson will sponsor, would repeal that rule. The legislation is sponsored in the state Senate by Bronson’s committee counterpart, Jessica Ramos.
Read more at NY State of Politics
Ulster BOCES to Open CTE Center at Former IBM site iPark87
On Route 9W in Port Ewen south of Kingston, Ulster BOCES educates students, K-12 and adults for a variety of careers in government, education and business including advanced manufacturing. But the facility there is too small to accommodate the growing demand for Career education. So iPark 87 in the Town of Ulster will open a second site for BOCES, where it will move its Career and Technical Center. That facility, with 90,000 sq. ft. of classroom and 105,000 sq. ft. of overall space, will open in September 2025 to serve 1,800 students. A year later, retro-fit of the Port Ewen facility with 60,000 square feet of classroom and 90,000, square feet of overall space, will open to serve special education students in grades K-12 known as the Center for Innovative Teaching & Learning (CITL).
“We have a chance, in this, to reimagine the student experience on the both sides of the house as well,” said Jonah Schenker, Ulster BOCES superintendent. “It’s really around reshaping what economic and workforce development means in a county and really centering our work as a BOCES …”
Health and Wellness
Why Gen Z’s Mental Health is Forcing Them Out of Work
A recent report found people in their early 20s are more likely to be out of work because of ill health – of which mental health is a huge contributing factor – than those in their early 40s. One in 20 young people were economically inactive due to ill health in 2023. Meanwhile, in 2021/2022, 34% of young people aged 18-24 reported symptoms of a mental disorder, such as depression, anxiety or bipolar disorder, compared to 24% in 2000.
The impact of the pandemic during key developmental years for young people is one of the many other contributing factors: "The cost of living crisis, the climate crisis, domestic politics and conflicts overseas, a technological revolution making young people are more aware of instability, academic pressure, money worries and a mental health system that can't meet demand." Says Adam Jones, policy and public affairs manager at YoungMinds. Individual circumstances have to be taken into account too: "Relationship breakdowns, family breakdowns, abuse, bullying, and other forms of trauma that can have a profound impact on young people's journey into adulthood".
Election 2024
- What To Know About Super Tuesday: How Trump Could (Almost) Clinch GOP Nomination – Forbes
- Supreme Court Restores Trump’s Ballot Eligibility - Reuters
- Haley Faces Growing Third-Party Speculation – The Hill
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
What Do Ongoing Shipping Disruptions Tell Us About the Future of Supply Chains?
From a ship stuck in the Suez Canal, to piracy, to a worldwide shutdown, there’s no question that the supply chain has seen its fair share of chaos in the last five years. This is especially the case for ocean shipping. In the manufacturing industry, where international trade is a core fundamental, supply chain woes have implications for both companies and consumers. With our world continuing to optimize the time and cost effectiveness of trade, manufacturers have found themselves in an extremely connected environment. This growing interdependence has bolstered the need for reliable, efficient transport.
Diversifying suppliers can give companies some flexibility. Another approach is nearshoring; shortening your supply chain will not only comply with new ESG regulations, but provide more control and stability, explains Pawan Joshi, EVP of products and strategy at supply chain platform e2open. Despite efforts to shorten supply chains, commerce will continue to rely on global connections. Some raw materials and food products can only be found in certain parts of the world, he says. “At the end of the day, the true constraints in the supply chain are not me and my production facility, it is me, my production facility and four or five tiers upstream that go all the way down to that critical component or ingredient,” he says.
Chase CEO Jamie Dimon Wants to See Schools Measured on Student Job Occupancy Instead of College Admission Rates
In the work experience versus college experience debate, the former has won a powerful new advocate: JPMorgan Chase CEO Jamie Dimon. The Harvard Business School alumnus said he wanted to see more of a focus in the education system on high school graduates landing jobs instead of being forced into further education. Although Dimon paid his respect to America's "wonderful" universities in an interview released over the weekend, the billionaire Wall Street titan said more emphasis should be placed on how well schools support students who want to go straight into the world of work.
Dimon has long been an advocate of shaking up the education system to introduce a greater focus on skills, previously lauding Germany's apprenticeship scheme, for example. And while the number of apprenticeship opportunities in America is growing—and is predicted by the U.S. Bureau of Labor Statistics to continue to do so—the 600,000 individuals currently on such schemes are a drop in the ocean compared to millions of college undergraduates.
Stopgap Funding Leaves DOD Programs in "Purgatory"
On Thursday, Congress passed its fourth short-term spending bill to prevent a government shutdown, extending Defense Department funding at fiscal 2023 levels until March 22, as the Aerospace Industries Association and members continue to call for full-year funding. "The lack of full-year funding has put key government programs in purgatory, wasted taxpayer money on outdated budgets and hindered forward progress that will make the country more secure, push us to the next levels of technological advancement and support American competitiveness in key industries like aerospace," said AIA President and CEO Eric Fanning.
Without an FY24 defense budget, the Pentagon remains unable to implement new modernization programs and cannot take new steps to expand the defense-industrial base amid wars in Europe and the Middle East. Last year’s debt ceiling deal caps FY24 defense spending at $886 billion. If Congress does not pass a full FY24 federal budget by April 30, the debt ceiling agreement puts government funding on a one-year continuing resolution that would cut spending at the Pentagon and all other federal agencies by 1%.
Boeing in Talks to Buy Troubled Supplier Spirit AeroSystems
Boeing is in talks to acquire Spirit AeroSystems, the troubled jet-fuselage supplier it split off two decades ago that has been at the center of quality issues affecting 737 MAX jets. Spirit has hired bankers to explore strategic options and has had preliminary discussions with its former owner, according to people familiar with the matter. The talks might not result in a deal. Spirit is also exploring selling operations in Ireland that make parts for Boeing’s chief rival, Airbus.
Spirit, which makes 737 fuselages and other airframe components, was created when Boeing sold some of its factories in 2005. Boeing accounts for nearly two-thirds of Spirit’s sales, with Airbus and defense companies comprising the rest. Spirit and Boeing issued statements confirming that they were in merger discussions. “We believe that the reintegration of Boeing and Spirit AeroSystems’ manufacturing operations would further strengthen aviation safety, improve quality and serve the interests of our customers, employees, and shareholders,” Boeing said in a statement.
De Minimis Mess - Trade Loophole Keeps Cheap Chinese Products Flowing to US
More packages than ever are entering the U.S. under a trade provision—frequently used by e-commerce giants Temu and Shein—that allows duty-free entry with little scrutiny, even as lawmakers call for action. The so-called de minimis provision allows packages with contents under $800 in value to enter the country under a simplified procedure. Critics say that is a loophole helping companies end run tariffs and defy bans on imported goods made with forced labor.
So far in fiscal year 2024, at least 485 million packages have entered the U.S. under the provision, according to data provided to The Wall Street Journal by Rep. Mike Gallagher, a Wisconsin Republican who chairs the House Select Committee on the Chinese Communist Party. That compares with 685 million packages in all of fiscal year 2022, according to U.S. Customs and Border Protection. Most Americans encounter the de minimis provision when they return from abroad and bring souvenirs without paying duty. Businesses such as Temu and Shein, though, have used the program to let them bypass the scrutiny Customs gives bulk shipments by sending goods directly to U.S. consumers.
Tesla's Supercharger Network Continues to Secure Partnerships, But Competition Is Coming
It's no secret that Tesla Inc. is the cream of the electric vehicle (EV) industry crop. And that doesn't just hold true with its vehicles. The company is also known for its growing Supercharger network. While Tesla continues to secure partnerships for the future, there are a handful of startups looking to disrupt the industry. For example, Dunamis Charge is addressing affordability and accessibility barriers to EV adoption in urban communities. The startup and others are playing catchup, but with a niche approach, there's plenty of market share to go around.
BP plc is making significant strides in the electric vehicle charging sector with a $100 million purchase of Supercharger hardware from Tesla. The groundbreaking deal marks the first instance of Tesla’s DC fast-charging equipment being acquired for use in a third-party charging network. The purchase is intended for BP’s EV charging business BP Pulse, which is investing up to $1 billion to develop a nationwide charging network by 2030.
JetBlue, Spirit End $3.8 Billion Merger Agreement After Losing Antitrust Suit
JetBlue Airways and Spirit Airlines on Monday said they are ending their agreement to merge, weeks after losing a federal antitrust lawsuit that challenged the deal. The CEOs of JetBlue and Spirit cited regulatory hurdles in ending their merger agreement. The carriers contended they needed to combine to better compete with large airlines that control most of the U.S. market. Almost two years ago, JetBlue swooped in with an unsolicited bid for Spirit Airlines, which had weeks earlier struck a merger agreement with fellow budget airline Frontier. JetBlue ultimately won Spirit shareholder approval to take over the discount carrier.
A federal judge in January sided with the Justice Department and blocked JetBlue’s attempted takeover of budget carrier Spirit. In his ruling, Judge William Young said JetBlue’s takeover of Spirit would “harm cost-conscious travelers who rely on Spirit’s low fares.” JetBlue and Spirit had appealed the judge’s decision, but JetBlue noted the appeal was required under the terms of the merger agreement. Analysts had expected little chance of a successful appeal.
The Pentagon’s Plan for More Ambitious, Affordable Jet Fighters: AI Pilots
The soaring cost of existing military aircraft and advances in flying software have the Air Force pivoting toward a new generation of pilotless jets to bolster a fleet that its leaders say is the smallest and oldest since it became a separate service in 1947. The Air Force wants at least 1,000 of the mini-fighters now being developed, including hundreds within five years. They would escort and protect crewed aircraft such as the F-35 and the new B-21 bomber, carry their own weapons to attack other planes and targets on the ground and act as scouts and communications hubs in the sky.
The drones, known as Collaborative Combat Aircraft, or CCAs, are part of a $6 billion program being pursued by Boeing, Lockheed Martin, Northrop Grumman, General Atomics and newcomer Anduril Industries. The Pentagon plans by the summer to choose two of the companies to start building the jets.
NASA And SpaceX Blast Off To International Space Station
SpaceX and NASA on Sunday successfully launched a crew of Russian and American astronauts towards the International Space Station (ISS) to begin a months-long mission in Earth orbit, the latest joint endeavor between Elon Musk’s rocket venture and the U.S. government agency as competition in the budding space industry heats up. NASA and SpaceX said the four-person crew had successfully reached Earth orbit in the company’s Dragon spacecraft to begin a six month science mission aboard the ISS. Dragon was launched atop SpaceX’s Falcon 9 rocket from NASA’s Kennedy Space Center in Florida Sunday night after multiple delays due to bad weather.
NASA and SpaceX said the four person crew had successfully reached Earth orbit in the company’s Dragon spacecraft to begin a six month science mission aboard the ISS. Dragon was launched atop SpaceX’s Falcon 9 rocket from NASA’s Kennedy Space Center in Florida Sunday night after multiple delays due to bad weather.