The Cryptocurrency Fueling the Financial Underworld
Digest
The podcast begins with a discussion of the recent decline in US inflation, reaching a three-year low. This positive economic indicator suggests the Federal Reserve may begin gradually reducing interest rates at its upcoming meeting. While overall inflation declined, core inflation, excluding volatile food and energy costs, remained steady, primarily driven by housing price increases. The podcast then shifts to the news of PwC's US unit laying off 1,800 workers, its first formal layoffs since 2009. The accounting firm is restructuring its technology group to address declining demand. US stocks rebounded from earlier declines, ending the day near session highs, following the slightly hotter than expected inflation reading. The podcast continues with a discussion of the Republican debate aftermath, with Republicans expressing concern about former President Trump's performance against Kamala Harris. They also complain about ABC News' debate moderators. Democrats dismiss the complaints as whining about the outcome. The podcast then covers the averted government shutdown, with Republican House Speaker Mike Johnson scrapping a planned vote to avoid a shutdown due to opposition from GOP members. The proposal would have extended government funding for six months, but some Republicans opposed the timeline and voting provision. The podcast delves into the growing popularity of Tether, a privately controlled cryptocurrency, as a workaround for sanctions and financial instability in various countries. Its stability, acceptance, and liquidity make it attractive for individuals and companies facing restrictions on traditional banking systems. The podcast concludes with a discussion of the impact of the Supreme Court ruling on race-conscious admissions on Harvard's enrollment trends. Harvard enrolled fewer students who identified as Black in its class of 2028, the first group to enter after the ruling. Other schools have also reported declines in racially diverse students, particularly Black students. The podcast also explores the challenges posed by AI-generated resumes for tech companies, as job seekers use AI to misrepresent their experience and identities. The influx of AI-generated applications makes it difficult for companies to sift through candidates and potentially miss out on qualified individuals.
Outlines
Economic Indicators and Monetary Policy
The podcast discusses the recent decline in US inflation, reaching a three-year low, and its potential impact on the Federal Reserve's monetary policy. The Federal Reserve may begin gradually reducing interest rates at its upcoming meeting. While overall inflation declined, core inflation, excluding volatile food and energy costs, remained steady, primarily driven by housing price increases.
Corporate Layoffs and Stock Market Rebound
The podcast covers the news of PwC's US unit laying off 1,800 workers, its first formal layoffs since 2009. The accounting firm is restructuring its technology group to address declining demand. US stocks rebounded from earlier declines, ending the day near session highs, following the slightly hotter than expected inflation reading.
Political Debate Aftermath and Tensions
The podcast discusses the Republican debate aftermath, with Republicans expressing concern about former President Trump's performance against Kamala Harris. They also complain about ABC News' debate moderators. Democrats dismiss the complaints as whining about the outcome.
Government Shutdown Averted, but Tensions Remain
The podcast covers the averted government shutdown, with Republican House Speaker Mike Johnson scrapping a planned vote to avoid a shutdown due to opposition from GOP members. The proposal would have extended government funding for six months, but some Republicans opposed the timeline and voting provision.
Keywords
Tether
A cryptocurrency pegged 1:1 to the US dollar, privately controlled by secretive owners in the British Virgin Islands. It's gaining popularity as a workaround for sanctions and financial instability, particularly in countries with limited access to traditional banking systems.
Core Inflation
A measure of inflation that excludes volatile food and energy costs. It provides a more stable indicator of underlying price pressures in the economy.
Generative AI
A type of artificial intelligence that can create new content, such as text, images, or code. Job seekers are using generative AI tools to create custom resumes for each job application, increasing the volume of applications and posing challenges for employers.
Sanctions Busters
Individuals or entities that engage in activities that circumvent sanctions imposed by governments. Tether is being used by sanctions busters to move funds around the world, undermining efforts to restrict financial activity.
Monetary Policy
Actions taken by a central bank to manage the money supply and interest rates to influence economic activity. The Federal Reserve is considering reducing interest rates in response to easing inflation, a key aspect of monetary policy.
Housing Price Increases
A significant driver of core inflation, as rental leases often have long terms, leading to a lag in price adjustments. Analysts expect housing price increases to gradually moderate over time.
Q&A
How is the recent decline in US inflation impacting the Federal Reserve's monetary policy?
The easing inflation suggests the Federal Reserve may begin gradually reducing interest rates at its upcoming meeting. This move aims to stimulate economic growth while managing inflation.
What are the main factors driving core inflation?
Core inflation is primarily driven by housing price increases, which tend to be sticky due to long-term rental leases. Analysts expect these increases to moderate over time.
How is Tether being used to circumvent sanctions and financial instability?
Tether's stability, acceptance, and liquidity make it attractive for individuals and companies in countries facing sanctions or economic turmoil. It allows them to bypass traditional banking systems and conduct financial transactions.
What challenges are tech companies facing due to AI-generated resumes?
The influx of AI-generated resumes makes it difficult for companies to sift through candidates and potentially miss out on qualified individuals. Companies are struggling to manage the volume of applications and ensure the authenticity of applicant information.
What are the potential implications of the Supreme Court ruling on race-conscious admissions for college enrollment?
The ruling has led to a decline in the enrollment of Black students at Harvard and other universities. This raises concerns about the impact on diversity and inclusion in higher education.
Show Notes
P.M. Edition for Sept. 11. The Wall Street Journal’s Angus Berwick explains how Tether became an important cog in the world economy. And U.S. inflation eased in August to new three-year lows, but core inflation held steady. Journal markets reporter David Uberti on how this could influence the Fed’s interest-rate cut decision. Plus, what Republicans and Democrats are saying after last night’s face-off between Donald Trump and Kamala Harris. Tracie Hunte hosts.
Sign up for the WSJ's free What's News newsletter.
Learn more about your ad choices. Visit megaphone.fm/adchoices
Table of contents
United States
