🏛️ Is Inflation Messing With The Fed's Plans?

Good morning. US stock futures fell in Thursday morning trading as Wall Street digested the latest inflation data.

♨️ Inflation comes in hotter than expected

📝 Our report: Looks like the consumer price index decided to kick things up a notch in March, surprising everyone by sprinting faster than expected. With inflation on the rise, it seems like those dreams of the Federal Reserve cutting interest rates anytime soon might need to hit the snooze button for a bit longer!

 🔑 Key points:

• The CPI, a broad measure of goods and services costs across the economy, rose 0.4% for the month, putting the 12-month inflation rate at 3.5%, or 0.3 percentage point higher than in February, the Labor Department’s Bureau of Labor Statistics reported.

• Increasing inflation was also bad news for workers, as real average hourly earnings were flat on the month and increased just 0.6% over the past year, according to a separate BLS release.

• The report comes with markets on edge and Fed officials expressing caution about the near-term direction for monetary policy. Central bank policymakers have repeatedly called for patience on cutting rates, saying they have not seen enough evidence that inflation is on a solid path back to their 2% annual goal.

💡 So what: A higher than expected inflation rate usually puts pressure on the Federal Reserve to consider tightening monetary policy. This could involve raising interest rates or reducing asset purchases to curb inflationary pressures and maintain price stability.

Thursday - Boston Fed President Susan Collins Speaks

Friday - Consumer Sentiment

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🤖 AI companies under watchful eye of DOJ

WHAT: The US Justice Department is keeping an eye out for AI companies with executives or directors in common, suspecting it might be a no-no in the antitrust rulebook. The Justice Department is “on the lookout for AI competitors sharing board members,” Andrew Forman, deputy assistant attorney general for antitrust, said at a conference in Washington.

WHY: US antitrust law bars so-called interlocking directorates, in which individuals or entities sit on the board of directors for two companies that directly compete with one another. The Biden administration has stepped up enforcement against these interlocks, forcing directors to step down from the boards of companies such as Warner Bros. Discovery and Nextdoor Holdings.

🏢 EU corporate giants bash plans to allow Big Tech cloud data access

WHAT: Deutsche Telekom, Orange, Airbus, and a bunch of other EU companies aren't too thrilled about a proposal that would let the big guns like Amazon, Google, and Microsoft play in the sandbox of highly sensitive EU cloud contracts. The proposal scraps so-called sovereignty requirements from a previous draft which obliged U.S. tech giants to set up a joint venture or cooperate with an EU-based company to store and process customer data in the bloc in order to qualify for the highest level of the EU cybersecurity label.

WHY: Big Tech is looking to the lucrative government cloud market to spur growth while the EU on the other hand fears illegal state surveillance and the dominance of U.S. cloud providers.

🦾 Crypto platform slapped with SEC warning

WHAT: The U.S. Securities and Exchange Commission has given Uniswap Labs a little tap on the shoulder, hinting at potential enforcement action in a blog post published on its website. The reason for the SEC's warning against Uniswap was not immediately clear from the blog post, but can be pegged to the regulator's campaign to apply U.S. securities law to the digital asset-related companies like Coinbase.

WHY: Uniswap is a crypto marketplace for decentralized finance or DeFi developers, traders and liquidity providers.

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