Fed triumph at risk

After overseeing the most aggressive monetary tightening cycle in decades, several central banks, including the US Federal Reserve and Bank of England, took a pause this week. While the Fed is projecting it will be able to tame consumer prices without triggering a downturn or a significant dent in currently robust employment, the remaining naysayers call this scenario too optimistic (despite more than a year of wrong calls). Then there are the other looming challenges: The United Auto Workers staged more walkouts at GM, Ford and Stellantis plants as they seek structural pay and benefit rises. The union and the Big Three automakers say there’s a long way to go to negotiate new contracts. Meanwhile, halts in vehicle production caused by the strikes will put pressure on inventories, already low due to pandemic-related parts shortages, and could drive up near-record car prices. There are also likely to be ripple effects up the auto supply chain.

But there’s a bigger threat to the Fed’s seeming triumph. In Washington, the clock is ticking on a possible government shutdown driven by far-right Republicans that will start Oct. 1 if GOP infighting continues. Bloomberg economists estimate a shutdown will hurt gross domestic product enough to even potentially cause a contraction if it stretches on, increasing unemployment from its current 3.8% to 4%. Looking to seize on the chaos, GOP presidential front-runner Donald Trump presented the shutdown—which he has been lobbying for—as a way to halt the federal felony prosecutions he faces. “As the world witnesses this American freak show, the worries grow,” Andreas Kluth writes in Bloomberg Opinion. “The biggest threat to American hegemony emanates not from Moscow or Beijing but from domestic polarization and dysfunction.”

Ukrainian President Volodymyr Zelenskiy didn’t get the same welcome on this US trip as he did last time, finding some in Congress more skeptical of increased military aid. As far-right Republicans seek to scale back funding for Kyiv’s effort to repel Russian invaders, Poland appeared to waver over weapons supplies amid a larger dispute over Ukrainian grain sales. But US President Joe Biden vowed to continue support for Ukraine after a meeting with Zelenskiy, saying “there is no other alternative.” The tensions underscore a shift away from crisis mode toward a more long-term approach to what looks like a protracted war by the Kremlin. “In a conflict that shows few signs of ending, Ukraine’s—and America’s—challenges are only beginning,” Hal Brands writes in Bloomberg Opinion.

Tensions between Canada and India soared after Prime Minister Justin Trudeau accused the Indian government of a role in the assassination of a Sikh leader in a Vancouver suburb in June. Prime Minister Narendra Modi strongly denied any part in the killing of Hardeep Singh Nijjar, a 45-year-old activist for Sikh separatism who India has called a terrorist. The diplomatic confrontation may leave the US in a difficult position, between one of its strongest allies and an increasingly important partner in countering China.

The mysterious purge of China’s foreign minister in July followed by the reported ouster of Xi Jinping’s defense chief less than two months later has raised questions about the Chinese leader’s stability and management style. The apparent departure of Defense Minister Li Shangfu, however, would eliminate one major roadblock to military talks with the US. Recently, Xi also shuffled the generals overseeing the nation’s nuclear arsenal, without giving an explanation. All of these changes come amid the backdrop of China’s economic slowdown. Xi’s crackdown may shore up his position, “but undermine efforts to revive growth,” Minxin Pei writes in Bloomberg Opinion.

As the world pivots away from fossil fuels and toward renewables, solar power has taken on outsize significance. While the modern solar cell was an American invention, today the vast majority of solar panels are made in China, and the disparity has become a strategic liability. The CEO of the biggest US solar panel maker, First Solar’s Mark Widmar, says the Biden administration needs to toughen trade enforcement to guard against unfair Chinese competition. Then there’s deforestation. In northern Ecuador, an Indigenous community has taken to policing their part of the Amazon rainforest with high-tech surveillance tools to guard against activities that damage the ecosystem.

What really stands out about the Fontainebleau Las Vegas isn’t the height—at 67 stories it’s the tallest hotel in Nevada—or the 46-foot sculpture in its lobby. Instead, it’s the 23 years it took to build. The $3.7 billion palace with seven pools, 36 restaurants and bars and a private club on the top floor will open on Dec. 13. On the other hand: Passalacqua in Italy’s Lake Como is a tiny, 24-room hotel in a restored 18th century building. Opened last year, it has already been crowned the world’s best hotel.

Dollar General has over 19,000 US locations—more than Walmart and Wendy’s combined. The stores seem to be among the country’s last retail outlets that haven’t heard of inflation. A dollar there can buy you a couple of bananas, a yogurt, a bar of soap, a tube of lip gloss, a jump rope or a water gun. There are, however, other costs, for those rock bottom prices.The stores are often dirty, miserable and downright dangerous.

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