What we’re reading (12/12)
“Fresh Concerns About AI Spending Are Rattling Wall Street” (Wall Street Journal). “The potential delay of hundreds of billions of dollars in promised spending on artificial intelligence is dealing a new blow to the stock-market rally. Investors had piled into shares of banks, industrial firms and materials producers earlier this week, with bets that lower interest rates will reheat a sluggish economy sending the Dow Jones Industrial Average and S&P 500 to new highs. On Friday, that fell apart.”
“Why America Gave Up On Economists” (Vox). “Both parties have turned their backs on traditional economic advice. Is the country paying the price?”
“Of MAGA And Monetary Policy” (Paul Krugman). “[E]ven if Trump isn’t able to capture full control over monetary policy through his pick for Fed chair, the effects will still be negative. Because as I pointed out in my critique of Hassett, in times of crisis the Fed chair has to be capable of showing leadership and gravitas, as well as garnering trust. Given that the Fed’s future task has been made especially difficult by Trump’s chaotic policies, higher-than-desired inflation, a weakening job market, very high future deficits, and a falling dollar, installing a Trump sycophant as Fed chair would mean facing any future crisis without any of the reserves of credibility that got us through the global financial crisis in 2008 and the Covid crisis in 2020.”
“Fed Officials Split Over Risks to US Economy Going Into 2026” (Bloomberg). “Federal Reserve officials — including two who will become voters in 2026 — offered strongly opposing views Friday on what to do with interest rates, continuing a debate that will grip the US central bank into the new year. Three policymakers focused in their comments on inflation risks, though one of them suggested he was advocating only a temporary pause to rate cuts to confirm inflation is subsiding. Two more emphasized risks to the labor market instead.”
“SpaceX Sets $800 Billion Valuation, Confirms 2026 IPO Plans” (Bloomberg). “SpaceX is moving forward with an insider share sale that values Elon Musk’s rocket and satellite maker at about $800 billion, setting up what could be the largest initial public offering of all time.”
