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      Boeing Reinstalled Panel That Later Blew Out of 737 Max Jet

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      Employees at its Washington State factory are said to have removed the door plug for further work before the plane was delivered to Alaska Airlines.Nearly three weeks after a hole blew open on a Boeing 737 Max 9 during an Alaska Airlines flight, terrifying passengers, new details about the jet’s production are intensifying scrutiny of Boeing’s quality-control practices.About a month before the Max 9 was delivered to Alaska Airlines in October, workers at Boeing’s factory in Renton, Wash., opened and later reinstalled the panel that would blow off the plane’s body, according to a person familiar with the matter.The employees opened the panel, known as a door plug, because work needed to be done to its rivets — which are often used to join and secure parts on planes — said the person, who asked for anonymity because the person isn’t authorized to speak publicly while the National Transportation Safety Board conducts an investigation.The request to open the plug came from employees of Spirit AeroSystems, a supplier that makes the body for the 737 Max in Wichita, Kan. After Boeing employees complied, Spirit employees who are based at Boeing’s Renton factory repaired the rivets. Boeing employees then reinstalled the door.An internal system that tracks maintenance work at the facility, which assembles 737s, shows the request for maintenance but does not contain information about whether the door plug was inspected after it was replaced, the person said.The details could begin to answer a crucial question about why the door plug detached from Flight 1282 at 16,000 feet, forcing the pilots to make an emergency landing at Portland International Airport in Oregon minutes after taking off on Jan. 5. The door plug is placed where an emergency exit door would be if a jet had more seats. To stay in place, the plug relies primarily on a pair of bolts at the top and another pair at the bottom, as well as metal pins and pads on the sides.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      Trump Dreams of Economic Disaster

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      Did Donald Trump just say that he’s hoping for an economic crash? Not exactly. But what he did say was arguably even worse, especially once you put it in context.And Trump’s evident panic over recent good economic news deepens what is, for me, the biggest conundrum of American politics: Why have so many people joined — and stayed in — a personality cult built around a man who poses an existential threat to our nation’s democracy and is also personally a complete blowhard?So what did Trump actually say on Monday? Strictly speaking, he didn’t call for a crash, he predicted one, positing that the economy is running on “fumes” — and that he hopes the inevitable crash will happen this year, “because I don’t want to be Herbert Hoover.”If you think about it, this isn’t at all what a man who believes himself to be a brilliant economic manager and supposedly cares about the nation’s welfare should say. What he should have said instead is something like this: My opponent’s policies have set us on the path to disaster, but I hope the disaster doesn’t come until I’m in office — because I don’t want the American people to suffer unnecessarily, and, because I’m a very stable genius, I alone can fix it.But no, Trump says he wants the disaster to happen on someone else’s watch, specifically and openly so that he won’t have to bear the responsibility.Speaking of which, when did Trump start predicting economic disaster under President Biden? The answer is before the 2020 election. In October 2020, for example, he asserted that a Biden win would “unleash an economic disaster of epic proportions.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      Will the Economy Help or Hurt Biden ’24? Krugman and Coy Dig Into Data.

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      Peter Coy: Paul, I think the economy is going to be a huge problem for President Biden in 2024. Voters are unhappy about the state of the economy, even though by most measures it’s doing great. Imagine how much unhappier they’ll be if things get worse heading into the election — which I, for one, think is quite likely to be the case.Paul Krugman: I’m not sure about the politics. We can get into that later. But first, can we acknowledge just how good the current state of the economy is?Peter: Absolutely. Unemployment is close to its lowest point since the 1960s and inflation has come way down. That’s the big story of 2023. But 2024 is a whole ’nother thing. I think there will be two big stories in 2024. One, whether the good news continues, and two, how voters will react to whatever the economy looks like around election time.Paul: Right now many analysts, including some who were very pessimistic about inflation last year, are declaring that the soft landing has arrived. Over the past six months the core personal consumption expenditures deflator — a mouthful, but that’s what the Federal Reserve targets — rose at an annual rate of 1.9 percent, slightly below the Fed’s 2 percent target. Unemployment is 3.7 percent. The eagle has landed.Peter: I question whether we’ve stuck the soft landing. I do agree that right at this moment things look really good. While everyone talks about the cost of living going up, pay is up lately, too. Lael Brainard, Biden’s national economic adviser, points out that inflation-adjusted wages for production and nonsupervisory workers are higher now than they were before the Covid pandemic.So let’s talk about why voters aren’t feeling it. Is it just because Biden is a bad salesman?Paul: Lots of us have been worrying about the disconnect between good numbers and bad vibes. I may have been one of the first people to more or less sound the alarm that something strange was happening — in January 2022! But we’re all more or less making this up as we go along.The most informative stuff I’ve seen recently is from Briefing Book, a blog run by former White House staffers. They’ve tried to put numbers to two effects that may be dragging consumer sentiment down.One effect is partisanship. People in both parties tend to be more negative when the other party controls the presidency, but the Briefing Book folks find that the effect is much stronger for Republicans. So part of the reason consumer sentiment is poor is that Republicans talk as if we’re in a depression when a Democrat is president, never mind reality.Peter: That is so true. And I think the effect is even stronger now than it used to be because we’re more polarized.Paul: The other effect affecting consumer sentiment is that while economists tend to focus on relatively recent inflation, people tend to compare prices with what they were some time in the past. The Briefing Book estimates suggest that it takes something like two years or more for lower inflation to show up in improved consumer sentiment.This is one reason the economy may be better for Democrats than many think. If inflation really has been defeated, many people haven’t noticed it yet — but they may think differently a little over 10 months from now, even if the fundamentals are no better than they are currently.I might add that the latest numbers on consumer sentiment from several surveys have shown surprising improvement. Not enough to eliminate the gap between the sentiment and what you might have expected from the macroeconomic numbers, but some movement in a positive direction.Peter: That makes sense. Ten months from now, people may finally be getting over the trauma of high inflation. On the other hand, and I admit I’m not an economist, I’m still worried we could have a recession in 2024. Manufacturing is soft. The big interest rate increases by the Fed since March 2022 are hitting the economy with a lag. The extra savings from the pandemic have been depleted. The day after Christmas, the Federal Reserve Bank of St. Louis said the share of Americans in financial distress over credit cards and auto loans is back to where it was in the depths of the recession of 2007-9.Plus, I’d say the labor market is weaker than it looked from the November jobs report. (For example, temp-agency employment shrank, which is an early warning of weak demand for labor.)Also, small business confidence remains weak.Paul: Glad you brought up small business confidence — I wrote about that the other week. “Hard” indicators like hiring plans are pretty strong. “Soft” indicators like what businesses say about future conditions are terrible. So small businesses are in effect saying, “I’m doing OK, and expanding, but the economy is terrible” — just like consumers!I’m not at all sure when the Fed will start cutting, although it’s almost certain that it eventually will, but markets are already effectively pricing in substantial cuts — and that’s what matters for the real economy. As I write this, the 10-year real interest rate is 1.69 percent, down from 2.46 percent around six weeks prior. Still high compared with prepandemic levels, but financial conditions have loosened a lot.Could there be a recession already baked in? Sure. But I’m less convinced than I was even a month ago.Peter: The big drop in interest rates can be read two ways. The positive spin is that it’ll be good for economic growth, eventually. That’s how the stock market is interpreting it. The negative spin is that the bond market is expecting a slowdown next year that will pull rates down. Also, what if the economy slows down a lot but the Fed doesn’t want to cut rates sharply because Fed officials are afraid of being accused by Donald Trump of trying to help Biden?Paul: I guess I think better of the Fed than that. And always worth remembering that the interest rates that matter for the economy tend to be driven by expectations of future Fed policy: The Fed hasn’t cut yet, but mortgage rates are already down substantially.Peter: Yes.Paul: OK, about the election. The big mystery is why people are so down on the economy despite what look like very good numbers. At least part of that is that people don’t look at short-term inflation, but at prices compared with what they used to be some time ago — but people’s memories don’t stretch back indefinitely. As I said, the guys at Briefing Book estimate that the most recent year’s inflation rate is only about half of what consumers look at, with a lot of weight on earlier inflation. But here’s the thing: Inflation has come way down, and this will gradually filter into long-term averages. Right now the average inflation rate over the past 2 years was 5 percent, still very high; but if future inflation runs at the 2.4 percent the Fed is now projecting, which I think is a bit high, by next November the two-year average will be down to 2.7 percent. So if the economy stays where it is now, consumers will probably start to feel better about inflation.Peter: Except that perceptions of inflation are filtered through politics. Food and gasoline are more expensive for Trump supporters than Biden supporters, if you believe what people tell pollsters. That’s not going to change between now and November.The Obama-Biden ticket beat the McCain-Palin ticket in 2008 because voters blamed Republicans for the 2007-9 recession. Obama-Biden had a narrower win in 2012 against Romney-Ryan, and I think one factor was the so-called jobless recovery from that same recession. That’s why Biden is supersensitive about who gets credit and blame for turns in the economy.For the record, Trump might be president right now if it hadn’t been for the Covid pandemic, which sent the unemployment rate to 14.7 percent in April 2020. The economy was doing quite well before that happened. A lot of Republicans are nostalgic for Trumponomics, although I think the economy prospered more in spite of him than because of him. Thoughts?Paul: Most of the time, presidents have far less effect on the economy than people imagine. Big stimulus packages like Barack Obama’s in 2009 and Biden’s in 2021 can matter. But aside from pandemic relief, which was bipartisan, nothing Trump did had more than marginal effects. His 2017 tax cut didn’t have much visible effect on investment; his tariffs probably on net cost a few hundred thousand jobs, but in an economy as big as America’s, nobody noticed.Peter: Just speculating, but I wonder if when people say they trust Trump more than Biden on the economy, they’re feeling vibes more than parsing statistics. You know, “We need a tough guy in the White House!”Paul: People definitely aren’t parsing statistics. Only pathetic nerds like us do that. And while Trump wasn’t actually a tough economic leader, he literally did play one on TV.But we don’t really know if that matters, or whether people are still reacting to the shock of inflation and high interest rates, which they hadn’t seen in a long time. Again, the best case for Biden pulling this out is that voters get over that shock, with both inflation and interest rates rapidly declining.Oh, and falling interest rates mean higher bond prices, and often translate into higher stock prices, too — which has also been happening lately.Peter: True, Paul. But cold comfort for people who don’t own stocks and bonds. Or who do own stocks and bonds in their retirement plans but don’t think of themselves as part of the capitalist class. To win in November, Biden and his team are going to need to be perceived as doing something for the working class and the middle class. That’s why you see the White House talking about eliminating junk fees and capping insulin prices.Paul: For what it’s worth, I think a lot of people judge the economy in part by the stock market, even if they don’t have a personal stake. That’s why Trump boasted about it so much, and has lately been trying to say that Biden’s strong stock market is somehow a bad thing.Finally, there are some indications that Democrats in particular are feeling better about the Biden economy. The Michigan survey tracks sentiment by partisanship. The numbers are noisy, but over the past few months Democratic sentiment has been slightly more positive than it was in the months just before the pandemic struck.Peter: Paul, how important do you think the economy will be to voters compared to other issues, such as Trump’s fitness for office, Biden’s age, abortion access, et cetera? I mean, if it’s not important, why are we even having this conversation?Paul: The economy surely matters less than it did when Republicans and Democrats lived in more or less the same intellectual universe — everyone agreed that the economy was bad in 1980 or 2008; now, Dems are fairly positive while Republicans claim to believe that we’re in a severe downturn. But there are still voters on the margin, and weak Democratic supporters who will turn out if they have a sense that things are improving.Peter: Democratic strategists think the election might come down to Pennsylvania and Wisconsin, assuming that Biden holds Michigan and New Hampshire and loses Arizona and Georgia. Any thoughts about the economic outlook for Pennsylvania and Wisconsin?Paul: No strong sense about either state. But one little-noticed fact about the current economy is how uniform conditions are. In 2008, so-called sand states that had big housing bubbles were doing much worse than states that didn’t; now unemployment is low almost everywhere.Of course, all political bets are off if we have a recession. But there’s a reasonable case that the economy will be much less of a drag on Democrats by November, as the reality of a soft landing sinks in.Oh, and my subjective sense is that for whatever reason, media coverage of the economy has turned much more positive lately. I have to think this matters, otherwise, what are we even doing? And until recently, media reports tended to emphasize the downsides — “Great jobs numbers, and here’s why that’s bad for Biden” has become a sort of running joke among people I follow. These days, however, we’re starting to see reports acknowledging that we’ve had an almost miraculous combination of strong employment and falling inflation.Peter: Paul, what economic indicators will you be paying the most attention to in the next few months with regard to the election? I’ll nominate inflation and unemployment, although those are kind of obvious.Paul: Unemployment, for sure. On inflation, I’ll be watching longer-term measures: Will inflation be low enough to bring down two- or three-year averages? And especially highly visible stuff, like groceries. Thanksgiving dinner was actually cheaper in 2023 than in 2022. Will grocery prices be subdued enough to reduce the amount of complaining?Oh, and I’ll be looking at consumer sentiment, which as we’ve seen can be pretty disconnected from the economy but will matter for the election.Peter: Happy New Year!Source photographs by Caroline Purser and Anagramm/Getty ImagesThe Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.Follow the New York Times Opinion section on Facebook, Instagram, TikTok, X and Threads. More

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      Wall Street strategists’ bull and bear scenarios for 2024.

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      Wall Street’s forecasts mostly missed this year’s bull market rally. Here’s what strategists are saying about 2024.Last November and December, veteran stock market watchers forecast that 2023 would be a year to forget. They saw high inflation, a looming global recession and rising interest rates as sapping households’ buying power and denting corporate profits. For investors, they penciled in paltry gains and one of the worst performances for the S&P 500 in the past 15 years.But the market pros got the story only partly right. While interest rates did climb to a near two-decade peak, the S&P 500 has surprisingly soared to a near record high. Fueled partly by a rally in the so-called Magnificent Seven megacap tech stocks, it’s risen nearly 25 percent this year, as of Thursday’s close, shaking off a banking crisis, wars in the Middle East and Ukraine, and slowing growth in China’s economy.Crypto managed to do even better. Bitcoin bulls have swept aside a legal crackdown against the industry’s biggest players to fuel an impressive rally. The digital token has gained more than 150 percent this year, making it one of the best performing risky assets.“Twenty twenty-three was a great year for the contrarians,” David Bahnsen, the founder and chief investment officer of the Bahnsen Group, a wealth management firm, told DealBook. “You had macroeconomic concerns a year ago that didn’t come to bear, and you had valuation and financial concerns that didn’t come to bear. And it’s particularly ironic that it didn’t, because actually everything investors feared a year ago got worse.”Wall Street’s outlook for 2024 is rosier. Analysts see lower borrowing costs, a soft landing (that is, an economic slowdown that avoids a recession) and a pretty good year for investors.But if 2023 taught the market pros anything, it’s that forecasts can look out of date pretty fast. A slew of things could disrupt the markets in the year ahead — inflation creeping up again, or not, is one big factor to watch. And there are wild cards, too, with voters expected to head to the polls in over 50 countries next year, including the U.S.Here’s how Wall Street sees 2024 playing out:The bull caseThe median year-end 2024 forecast for the S&P 500 is 5,068, according to FactSet. Such a level would imply an annualized gain of roughly 6 percent for 2024.Bank of America’s equity strategists, led by Savita Subramanian, are among those in the bullish camp. In their annual forecast, they said that the S&P 500 would be likely to close out next year at 5,000, helped by a kind of “goldilocks” scenario of falling prices and rising corporate profits.Goldman Sachs is even more upbeat. Its analysts upgraded their year-end 2024 call on the S&P 500 to 5,100. They made the change after the Fed’s surprise statement on Dec. 13 that the equivalent of three interest-rate cuts were on the table for next year. Lower borrowing costs tend to give consumers and businesses more spending power, which could help Corporate America’s bottom line.Another catalyst: Investors this year put far more money into safe interest-rate sensitive assets, like money market funds, than they did into stocks. That logic could be flipped on its head in 2024. “As rates begin to fall, investors may rotate some of their cash holdings toward stocks,” David Kostin, the chief U.S. equity strategist at Goldman Sachs, said in a recent investor note.The bear caseOn the more pessimistic side is JPMorgan Chase, which carries a 2024 year-end target of 4,200. Its analysts team, led by Marko Kolanovic, the bank’s chief global market strategist, sees a struggling consumer with depleted savings, a potential recession and geopolitical uncertainty that could push up commodity prices, like oil, and push down global growth.The year ahead will be “another challenging year for market participants,” Kolanovic said. (Most strategists are even more downbeat on Europe, where recession fears are more acute. On the flip side, equities in Asia could show another year of solid growth, especially in India and Japan, Wall Street analysts say.)Lee Ferridge, the head of multi-asset strategy for North America at State Street Global Markets, is more optimistic about the American consumer, but points to a different challenge for investors. “If I’m right, the economy stays stronger. But then that’s a double-edged sword for equities,” he said. The prospect of robust consumer and business spending poses an inflation risk that could force the Fed to hold rates higher for longer, and even pause cuts, he said. “That’s going to be a headwind for equities.”“I wouldn’t be surprised to see a fairly flat year next year,” he added. “If we are up, it’s going to be the Magnificent Seven that are the drivers again.”The wild card: politics and the electionsPresidential elections are not rally killers, according to market analysis by LPL Financial that looks at the past 71 years. In that period, the S&P has risen, on average, by 7 percent during U.S. presidential election years. (The market tends to do even better in a re-election year, the financial advice firm notes.)Even with some uncommon questions swirling over next year’s contest — Will a mountain of legal troubles derail the Republican front-runner, Donald Trump? Will President Biden’s sagging polling ratings open the door for a strong third-party challenger? Will the election result be disputed, causing a constitutional crisis? — that’s unlikely to add much volatility to the markets, Wall Street pros say.“The election will not be a story in the stock market, up until November 2024, for the simple reason that the stock market will not know who’s going to win the election until November 2024,” Bahnsen said.His advice: Don’t even try to game out the election’s impact on the markets. More

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      A Christmas Gift From the Bond Market

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      It’s been a strange few days on the Donald Trump front: He said something about himself that I actually believe and something about the economy that’s mostly true.On the personal side, Trump has been sounding a lot like Adolf Hitler lately — I don’t mean his general tone, I mean his specific statement last week at a New Hampshire rally that immigrants are “poisoning the blood of our country,” echoing what Hitler wrote in “Mein Kampf” almost word for word. (And if you think it was just a one-off, he said the same thing in a September interview.) But Trump claims never to have read “Mein Kampf,” and I believe him, just as I believe that he’s barely skimmed the Bible or any of the great books or, I would guess, “The Art of the Deal.” Pretty clearly, reading isn’t his thing.What’s happening, presumably, is that Trump talks to people who have read Hitler, approvingly, and that’s how Nazi language gets into his speeches. Are you reassured?On the economic side, the stock market has recently been close to record highs, but Trump has dismissed these gains as just making “rich people richer.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      The Stock and Bond Markets Are Getting Ahead of the Fed.

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      Stock and bond markets have been rallying in anticipation of Federal Reserve rate cuts. But don’t get swept away just yet, our columnist says.It’s too early to start celebrating. That’s the Federal Reserve’s sober message — though given half a chance, the markets won’t heed it.In a news conference on Wednesday, and in written statements after its latest policymaking meeting, the Fed did what it could to restrain Wall Street’s enthusiasm.“It’s far too early to declare victory and there are certainly risks” still facing the economy, Jerome H. Powell, the Fed chair, said. But stocks shot higher anyway, with the S&P 500 on the verge of a record.The Fed indicated that it was too early to count on a “soft landing” for the economy — a reduction in inflation without a recession — though that is increasingly the Wall Street consensus. An early decline in the federal funds rate, the benchmark short-term rate that the Fed controls directly, isn’t a sure thing, either, though Mr. Powell said the Fed has begun discussing rate cuts, and the markets are, increasingly, counting on them.The markets have been climbing since July — and have been positively buoyant since late October — on the assumption that truly good times are in the offing. That may turn out to be a correct assumption — one that could be helpful to President Biden and the rest of the Democratic Party in the 2024 elections.But if you were looking for certainty about a joyful 2024, the Fed didn’t provide it in this week’s meeting. Instead, it went out of its way to say that it is positioning itself for maximum flexibility. Prudent investors may want to do the same.Reasons for OptimismOn Wednesday, the Fed said it would leave the federal funds rate where it stands now, at about 5.3 percent. That’s roughly 5 full percentage points higher than it was in early in 2022. Inflation, the glaring economic problem at the start of the year, has dropped sharply thanks, in part, to those steep interest rate increases. The Consumer Price Index rose 3.1 percent in the year through November. That was still substantially above the Fed’s target of 2 percent, but way below the inflation peak of 9.1 percent in June 2022. And because inflation has been dropping, a virtuous cycle has developed, from the Fed’s standpoint. With the federal funds rate substantially above the inflation rate, the real interest rate has been rising since July, without the Fed needing to take direct action.But Mr. Powell says rates need to be “sufficiently restrictive” to ensure that inflation doesn’t surge again. And, he cautioned, “We will need to see further evidence to have confidence that inflation is moving toward our goal.”The wonderful thing about the Fed’s interest rate tightening so far is that it has not set off a sharp increase in unemployment. The latest figures show the unemployment rate was a mere 3.7 percent in November. On a historical basis, that’s an extraordinarily low rate, and one that has been associated with a robust economy, not a weak one. Economic growth accelerated in the three months through September (the third quarter), with gross domestic product climbing at a 4.9 percent annual rate. That doesn’t look at all like the recession that had been widely anticipated a year ago.To the contrary, with indicators of robust economic growth like these, it’s no wonder that longer-term interest rates in the bond market have been dropping in anticipation of Fed rate cuts. The federal funds futures market on Wednesday forecast federal funds cuts beginning in March. By the end of 2024, the futures market expected the federal funds rate to fall to below 4 percent.But on Wednesday, the Fed forecast a slower and more modest decline, bringing the rate to about 4.6 percent.Too Soon to RelaxSeveral other indicators are less positive than the markets have been. The pattern of Treasury rates known as the yield curve has been predicting a recession since Nov. 8, 2022. Short-term rates — specifically, for three-month Treasuries — are higher than those of longer duration — particularly, for 10-year Treasuries. In financial jargon, this is an “inverted yield curve,” and it often forecasts a recession.Another well-tested economic indicator has been flashing recession warnings, too. The Leading Economic Indicators, an index formulated by the Conference Board, an independent business think tank, is “signaling recession in the near term,” Justyna Zabinska-La Monica, a senior manager at the Conference Board, said in a statement.The consensus of economists measured in independent surveys by Bloomberg and Blue Chip Economic Indicators no longer forecasts a recession in the next 12 months — reversing the view that prevailed earlier this year. But more than 30 percent of economists in the Bloomberg survey and fully 47 percent of those in the Blue Chip Economic Indicators disagree, and take the view that a recession in the next year will, in fact, happen.While economic growth, as measured by gross domestic product, has been surging, early data show that it is slowing markedly, as the bite of high interest rates gradually does its damage to consumers, small businesses, the housing market and more.Over the last two years, fiscal stimulus from residual pandemic aid and from deficit spending has countered the restrictive efforts of monetary policy. Consumers have been spending resolutely at stores and restaurants, helping to stave off an economic slowdown.Even so, a parallel measurement of economic growth — gross domestic income — has been running at a much lower rate than G.D.P. over the last year. Gross domestic income has sometimes been more reliable over the short term in measuring slowdowns. Ultimately, the two measures will be reconciled, but in which direction won’t be known for months.The MarketsThe stock and bond markets are more than eager for an end to monetary belt-tightening.Already, the U.S. stock market has fought its way upward this year and is nearly back to its peak of January 2022. And after the worst year in modern times for bonds in 2022, market returns for the year are now positive for the investment-grade bond funds — tracking the benchmark Bloomberg U.S. Aggregate Bond Index — that are part of core investment portfolios.But based on corporate profits and revenues, prices are stretched for U.S. stocks, and bond market yields reflect a consensus view that a soft landing for the economy is a near-certain thing.Those market movements may be fully justified. But they imply a near-perfect, Goldilocks economy: Inflation will keep declining, enabling the Fed to cut interest rates early enough to prevent an economic calamity.But excessive market exuberance itself could upend this outcome. Mr. Powell has spoken frequently of the tightening and loosening of financial conditions in the economy, which are partly determined by the level and direction of the stock and bond markets. Too big a rally, taking place too early, could induce the Fed to delay rate cuts.All of this will have a bearing on the elections of 2024. Prosperity tends to favor incumbents. Recessions tend to favor challengers. It’s too early to make a sure bet.Without certain knowledge, the best most investors can do is to be positioned for all eventualities. That means staying diversified, with broad holdings of stocks and bonds. Hang in, and hope for the best. More

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      Global Markets Cheer on Better Than Expected Inflation Data

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      A better-than-expected Consumer Price Index report triggered a big surge in stocks and bonds, as investors bet that interest rates will begin to fall.Upbeat investors see Tuesday’s inflation data as a possible turning point in the Fed’s battle against soaring prices.Michael M. Santiago/Getty ImagesGood news for global markets Yesterday’s impressive rally in U.S. stocks and bonds has gone worldwide this morning, as investors see central banks making gains in their fight against inflation. Adding to the good news was a breakthrough in the House last night that could avert a government shutdown.S&P 500 futures signal further gains at the opening bell. The question now is whether this represents a false dawn on inflation, or the start of a durable decline in rising costs — and interest rates.Here’s what’s exciting investors: Yesterday’s cooler-than-expected Consumer Price Index data has shifted discussion in the markets from potential interest rate hikes to cuts, and what that might mean for stocks. President Biden, whose poll ratings have been hurt by inflation, also cheered the numbers.Other promising data points came out this morning. Inflation in Britain fell to its lowest level in two years. And consumer spending and industrial output in China rebounded last month, a hopeful sign for the world’s No. 2 economy.Market optimists have moved up their bets on rate cuts. Futures markets this morning pointed to the Fed starting to lower borrowing costs by May, sooner than previous estimates of closer to the end of 2024.Less aggressive is Mohit Kumar, the chief financial economist at Jefferies, who wrote today that big rate cuts would begin after the presidential election next year. Jefferies predicts the Fed’s prime lending rate going to 3 percent by the end of 2025 from its current level of 5.25 to 5.5 percent.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.We are confirming your access to this article, this will take just a moment. However, if you are using Reader mode please log in, subscribe, or exit Reader mode since we are unable to verify access in that state.Confirming article access.If you are a subscriber, please  More

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      A Report Card for Bidenomics

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      Voters’ negative perceptions about the economy are weighing on President Biden’s poll numbers. Here’s what his economic policies have, and haven’t, accomplished.President Biden is finding it hard to sell Americans on his economic track record.Kent Nishimura for The New York TimesWhere the economy is working (and where it isn’t) With a year to go before Election Day, polls increasingly show that American voters believe next year will be a rematch between President Biden and Donald Trump — with the former president in the lead in key battleground states despite his legal troubles (more on that below).Biden’s troubles stem in large part from negative perceptions about the economy, even as several indications show that it is performing strongly. Here’s a deeper look at what “Bidenomics” has, and hasn’t, accomplished.On the positive side: jobs. Since Biden took office, employers have created 14 million jobs, and the unemployment rate has been hovering around a 50-year-low for months.The president has also been talking up signature economic accomplishments like the Infrastructure Investment and Jobs Act, which he argues have helped rebuild rural America and invigorated the economy. “Bidenomics is just another way of saying the American dream,” he said in a speech. It’s not a stretch. The economy grew last quarter at nearly 5 percent, belying a global slowdown.On the negative side: inflation. Wages have been growing slowly, but they’ve been offset by rising prices, Biden’s Achilles’ heel. Republicans have blamed the White House’s economic policies for soaring consumer prices, which hit a 40-year high in the summer of 2022.Many economists say global factors are probably more to blame. But the perception of Biden’s culpability here is hurting him.A partial win: the markets. Investors tend to give high marks to presidents whose tenures coincide with strong investment returns. The S&P 500 has gained nearly 15 percent since Biden’s inauguration, weathering much of the slump set off by the Fed’s historic rates-tightening policy. (The bond market has gone in the opposite direction.)That’s decent, but pales in comparison with the Trump years, when the benchmark index climbed more than 65 percent.Biden has been touring the country — on Monday, he was in Delaware to promote federal money flowing to Amtrak, the rail operator — to refocus the public’s perceptions of his economic achievements. Meanwhile, questions swirl over whether Biden can eventually overtake Trump.A reminder: The DealBook Summit is on Nov. 29. Among the guests are Bob Iger of Disney; Lina Khan of the F.T.C.; and David Zaslav of Warner Bros. Discovery. You can apply to attend here.HERE’S WHAT’S HAPPENING Uber’s latest earnings miss expectations. The ride-hailing giant said on Tuesday that it had earned 10 cents per share in the third quarter, below the 12 cents that analysts had forecast. But the company argued that its business showed strong growth in its core mobility division.OpenAI seeks to build on its runaway success. The Microsoft-backed A.I. start-up said that its chatbot, ChatGPT, now had over 100 million weekly active users, giving it a formidable lead in the race to capture artificial intelligence customers. The company also introduced an online store that will let users build customized chatbots.Striking Hollywood actors push back on studios’ latest contract offer. The SAG-AFTRA union said that the “last, best and final” bid still fell short on key issues like the use of A.I., making it unclear when its nearly four-month strike will end. In other labor news, Starbucks will raise the average salary of hourly workers by at least 3 percent.Trump puts his legal liabilities on displayDonald Trump may be handily leading the 2024 election polls. But his appearance in court on Monday, testifying in a civil fraud lawsuit filed by New York State, appeared to do him no favors in efforts to hold onto his business empire.It was a reminder that, while he’s riding high in the presidential race, the former president still faces a thicket of legal battles that could cost him financially and, perhaps, politically.Here are some notable moments from Trump’s testimony:Trump conceded that he had played a role in valuing his company’s properties, an issue at the heart of the case. (New York prosecutors argue that Trump illicitly inflated his net worth to defraud banks and insurers.) Of the company’s financial statements, he said, “I would look at them, I would see them, and I would maybe on occasion have some suggestions.”But Trump also sought to underplay the importance of those statements, saying they were so riddled with disclaimers that they were “worthless.” He promised, unprompted, that some of his bankers would testify in his defense.Trump also assailed the presiding judge, Arthur Engoron, for having decided before the trial that fraud was committed. Engoron appeared exasperated, telling the former president to answer questions and stop delivering speeches.The testimony was a reminder of his political baggage, which was also an undercurrent of the endorsement of Ron DeSantis on Monday by Kim Reynolds, Iowa’s popular governor. Reynolds, whose state’s caucuses could be crucial in bolstering a Trump rival, said that the U.S. needed a president “who puts this country first and not himself” — a thinly veiled rebuke of Trump.His legal issues don’t appear to have dented his popularity. He has contended that he is being politically persecuted — “People like you go around and try to demean me and try to hurt me,” he told a state lawyer on Monday — an argument that some of his supporters have embraced.In a sign of his enduring political strength, the betting site PredictIt puts Trump’s odds of winning the nomination on Monday at more than four times that of his nearest competitor in its market, Nikki Haley.Dina Powell McCormick, in 2017, when she was a deputy national security adviser during the Trump presidency.Al Drago for The New York TimesExxon Mobil taps a Wall Street and D.C. power player Dina Powell McCormick, a former Goldman Sachs executive and onetime Trump administration official, is joining the board of Exxon Mobil effective Jan. 1. Her appointment comes as energy groups have embarked on a series of big deals on the back of soaring oil prices and bumper profits.Powell McCormick has long been one of the most senior women on Wall Street. Before joining BDT & MSD partners, an investment and advisory firm, earlier this year, she spent 16 years at Goldman Sachs. Powell McCormick led the Wall Street giant’s global sovereign business and sustainability, and she was a member of its management committee, among other roles.Powell McCormick has also been a Washington power player. She has spent more than a dozen years working in government. From 2017 to 2018, she was a deputy national security adviser to Trump and played a significant role on Middle East policy, including efforts to broker a peace deal between Israel and the Palestinians. (Her husband, David McCormick, is a former C.E.O. of the hedge fund Bridgewater and was a Treasury Department official under Hank Paulson. He is running for Senate in Pennsylvania as a Republican.)Powell McCormick’s appointment even won backing from Mike Bloomberg, who is spending billions to fight climate change — a sign of how wide-ranging her political and business relationships are.“Dina has been a close partner for years through her role as global head of sustainability at Goldman Sachs,” Bloomberg said, “and we have teamed up to create new partnerships that invest in market-driven ways to create clean energy and advance climate transition goals.”Energy giants are on a deal spree. Exxon reported quarterly profits of $9.1 billion last month, as oil prices have surged and demand has skyrocketed after Russia’s invasion of Ukraine. In October, Exxon agreed to acquire the shale oil specialist Pioneer Natural Resources for around $60 billion and Chevron struck a $53 billion deal to buy Hess. Exxon’s board had been in the spotlight over the energy transition. Engine No. 1, an activist investor, won three seats after targeting the company over its governance and environmental track record. But two years later, the firm changed course, saying that Exxon had made big changes. Exxon, however, has resisted calls to pour more money into renewable energy, arguing that its money is better on low-carbon investments.Tracing WeWork’s rise and spectacular fallWeWork finally filed for bankruptcy protection on Monday, after years of struggling with crushing debt and the coronavirus pandemic’s emptying out of office spaces — and that’s even after it had abandoned the runaway growth it pursued under its co-founder, Adam Neumann.The company that sought Chapter 11 is a shell of the real estate juggernaut that first sought to go public at a $47 billion valuation. (Its stock is down 98 percent this year.) Here’s how the business once lauded by the Japanese tech investor SoftBank as a revolution went astray.WeWork has been on its heels since it scrapped its I.P.O. plans in 2019. The company had been riding high, buoyed by Neumann’s promises that the start-up — whose business involved leasing out office space for co-working — would “elevate the world’s consciousness.” But then:Prospective investors blanched at the company’s steep losses, lax corporate governance and the controversies that dogged Neumann. (Activities on private jets were among them.) And the S.E.C. criticized the company’s disclosure involving mismatches between long-term financial obligations and its short-term assets. Neumann stepped down after WeWork shelved its I.P.O., and SoftBank provided it with a multibillion-dollar lifeline.Under a new C.E.O., Sandeep Mathrani, WeWork confronted the devastating effect of pandemic lockdowns and the rise of remote working. The company went public — via a blank-check vehicle — in 2021, while it started closing locations and renegotiating leases.Mathrani left in May, reportedly after clashing with SoftBank. His replacement, David Tolley, has kept trying to right the ship, but WeWork warned in August that there was “substantial doubt” about its future. Last month, it said it would miss interest payments on its debt.WeWork’s filing raises questions about the fate of commercial real estate. The company noted on Monday that it had reached agreements with about 92 percent of creditors holding secured debt. Its restructuring involves reducing its real estate portfolio.The company is one of the largest corporate tenants in New York and London, and any move to shed more of its leases would hurt commercial landlords that are themselves struggling to pay their debts.THE SPEED READ DealsResearch analysts at some of the banks that took Birkenstock public wrote in their initial reports on the sandal maker that its I.P.O. was valued too high. (Bloomberg)“Warring Billionaires, a Rogue Employee, a Divorce: One Hedge Fund’s Tale of Woe” (NYT)PolicyIntel is reportedly the leading candidate to land billions of dollars in federal funding to build secure plants to make chips for use by the U.S. military and intelligence agencies. (WSJ)A man who posed as a billionaire rabbi and made a $290 million takeover bid for the retailer Lord & Taylor was sentenced to more than eight years in prison. (Bloomberg)Best of the restDisney hired Hugh Johnston, the longtime finance chief at PepsiCo, as its new C.F.O. (CNBC)The founder of the dating app Bumble, Whitney Wolfe Herd, is stepping down as C.E.O. (NYT)We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com. More