The contradictions in the US economy keep piling up. Economic output rebounded following two quarterly contractions, in part because of resilient consumers and business. Inflation remains stubbornly high, but unemployment is at historic lows. Companies are still vexed by supply-chain bottlenecks, but inventories are piling up. The housing market has tanked, but people are spending on goods and services. The mixed bag may mean the Federal Reserve will stay the course with another jumbo rate hike next week, and some economists are still betting the central bank’s strategy will bring on a recession. The European Central Bank, also facing a potential contraction, lifted its policy rate by 75 basis points this week and signaled it’s making progress in its inflation battle. The continent, bracing for an energy shortfall this winter as Russian chokes off supply, has for now found itself with surprise gas surplus. Take all the predictions with a grain of salt, Allison Schrager writes in Bloomberg Opinion. “We’re in unprecedented times, and it’s just as likely we’ll slog along full of uncertainty as it is that inflation will lead to a deep recession.”

Elon Musk sealed his $44 billion deal for Twitter, fired the top executives (they get to collect more than $100 million) and said “the bird has been freed,” which is being interpreted to mean he will follow through on his calls for less moderation and an end to lifetime bans from the platform. Users are waiting to see which high-profile personalities who were blocked will be allowed back on. 

The tech earnings gloom got even darker this week. Amazon warned of its slowest holiday season ever, Meta’s $676 billion rout forced it from the ranks of the world’s 20 largest companies, and chipmakers are warning of a supply glut and tumbling prices. The result: Cost cuts are coming. And even though Apple did just enough to avoid the misery, concern remain about how many people will actually buy its iPhones.

The UK’s latest prime minister—its fifth in six years—is the first non-white person to hold the keys to 10 Downing Street and the youngest prime minister in more than 200 years. But Rishi Sunak is also the richest person ever to take the role, a point that’s fueled accusations he’s out of touch when the country’s poorest families have £2.66 ($3.08) a week left after paying for food and essentials. In an early sign of his priorities, Sunak said he won’t attend the COP27 climate change summit next month because of “depressing” economic challenges.

Rishi Sunak, center top, arriving at the Conservative Party campaign headquarters in London on Oct. 24. Photographer: Chris J. Ratcliffe/Bloomberg

Xi Jinping, in position to lead China for at least another decade, has vowed to achieve world dominance for his country in the next 30 years—but how he plans to get there has unsettled markets. He stacked his leadership ranks with loyalists, and his Covid, technology and Taiwan policies were met with growing concern about their impact on the economy. Hal Brands writes in Bloomberg Opinion that Xi’s deepening autocratic control is unlikely to end well for China or anyone else—and may lead to war.

We have reached peak cacio e pepe. The Italian pasta recipe—only three ingredients, but notoriously hard to make right—is now a flavoring akin to pumpkin spice, cropping up on everything from soup to deviled eggs. Care for a peaty whisky with your dinner instead? Try the oldest continuously operating distillery in Scotland.

Social media star cacio e pepe Photographer: Elena Noviello/Moment RF

• Fed officials poised for fourth straight rate hike to tame inflation.
• Oil and gas mega-conference, ADIPEC and Aramco earnings.
• The Bank of England to begin actively selling sovereign bonds.
• Second round of voting in Brazil’s tightening presidential election. 
• Finance heavyweights head to Hong Kong for investment summit.

Biggest Source of Clean Energy Is Evaporating

China’s Three Gorges Dam is an awe-inspiring sight—its turbines are capable of single-handedly powering the Philippines. But this summer the facility was eerily quiet. Dams are the world’s largest source of clean energy, yet extreme weather is making them less effective in the battle against global warming. The water woes of China’s iconic mega-dam are part of a global hydropower crisis that’s depleted waterways from Germany to the US Midwest. 

The water woes of China’s iconic mega-dam are part of a global hydropower crisis thanks in part to global warming. Source: Bloomberg

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