Central banks around the world have almost tamed the pandemic-ignited surge of inflation, with the European Central Bank embarking on its second interest-rate cut as growth slows. The US Federal Reserve next week is poised to begin cutting rates as it weighs the lingering vestiges of inflation with data indicating the economy is cooling. Traders boosted bets on a larger, half-point cut—a move that champions say will ensure the Fed won’t get behind the curve as it tries to manage a soft landing and avoid a hit to the labor market. Others say a half-point cut would be an overreaction and that the economy isn’t in urgent need of looser monetary policy. And while global central banks have used all the tools in their toolboxes these past few years to battle inflation this time, supply shocks, geopolitics and climate change are showing the limitations of their approach. In the future, their power may be further constrained.

After a widely-panned performance against Vice President Kamala Harris, Donald Trump declined her offer of a second debate. Harris, 59, who methodically went after Trump, 78, baiting him and belittling him while tying him tightly to the end of federal abortion rights, was even declared the winner by some Republicans. She pointed out that he is a convicted felon, argued that his campaign rallies were small affairs and reminded viewers of his often warm references to a fictional serial killer and cannibal. Trump meanwhile moved on to pet consumption, repeating a falsehood about Haitian migrants seen as part of his campaign’s racially-tinged anti-immigrant agenda. But a debate victory for Harris, Timothy O’Brien writes in Bloomberg Opinion, “doesn’t pave her path to the White House. That avenue runs through seven swing states where Trump retains strong support,” though a new poll shows Harris ahead of Trump nationally. Each candidate returned immediately to those battlegrounds. Missing from the debate were many meaningful discussions on policy, particular the US’s fiscal future, Bloomberg’s editors argue. “If Washington refuses to change course,” they wrote about America’s finances, “financial markets will eventually force its hand, and the crunch that follows will be brutal.”

The US housing shortage is at the center of this year’s presidential race, with both Trump and Harris offering promises to ease the worst housing quagmire in decades. It’s a crisis that localities created by denying new construction in their neighborhoods, leading to an irrational picture of a country that can no longer build, one expert says. The question now is whether the Fed can orchestrate a soft landing that keeps the economy strong while dropping rates enough to jump-start the market. New York City apartment hunters got some relief in August as rents declined from record highs. Still the median rental price in Manhattan was $4,245.

Deflation dogging China since last year is now threatening to worsen the outlook for the world’s second-largest economy. Apart from food costs, data show consumer price growth has barely registered while incomes are sagging. A deepening selloff in Chinese stocks is exacerbating a crisis of confidence, heaping pressure on policymakers to halt the downward spiral. Then there’s the country’s 8,700 investment bankers, who’ve been forced to take big pay cuts and adhere to other belt-tightening measures under its common prosperity campaign. Now, at least three top investment bankers have been detained since August in a anti-corruption sweep. 

Billionaire Jared Isaacman and SpaceX engineer Sarah Gillis made history by performing the world’s first commercial space walk, or, rather, partially emerging from their capsule to perform tests. Still, the Polaris Dawn mission also made history Tuesday when the SpaceX Dragon capsule reached a peak altitude of 1,400 kilometers (870 miles) above Earth, sending the crew farther than any humans have traveled since the Apollo-era moon landings. China, for its part, is aiming to loosen Elon Musk’s lock on reusable launch vehicles—and close a yawning technology gap with the US.  

The Michelin Guide handed out its first list of honors for hotels in North America: Just 10 received the highest rating of three keys for a “very special stay:” five in the US, three in Mexico and two in Canada. Bloomberg has its own recommendations for offbeat winter stays around the world. A glass cabin in Oregon, maybe? The brother-and-sister team of Zoe and Layo Paskin, known for their contributions to UK club culture, have expanded their empire with the Barbary Notting Hill, in the grand stucco-fronted London neighborhood that retains a faint accent of its bohemian past.

Waldorf Astoria Cancun Photographer: Victor Elias

• Deluge of central bank decisions, from Japan to England, Brazil.
• FedEx earnings will put a spotlight on US economic growth.
• Arguments over TikTok divestment-or-ban bill in Washington.
• EU State of the Union address at the European Parliament.
• Milken Asia Summit; Global crypto conference in Singapore. 

Are the vast amounts of money being poured into artificial intelligence something that will yield a superintelligence beyond human control? On the first episode of the new season of The Future with Hannah Fry, she explores the promise of AI as she witnesses robots struggling with simple tasks we humans take for granted, and hears from experts how it’s possible AI will—if we’re not careful—someday takeover. 

Watch The Future with Hannah Fry

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