A High-Stakes Inflation Report for Washington and Wall Street

What to watch for in Tuesday’s inflation number

The markets have rebounded from their fall swoon — with the S&P 500 up more than 7 percent over the past two weeks — as investors grow more optimistic that the Fed is done raising interest rates.

That conviction will be put to the test with a new batch of inflation data this week, starting with Tuesday’s Consumer Price Index data at 8:30 a.m. Eastern. It arrives amid deep divisions on Wall Street over the Fed’s next move, and as inflation weighs heavily on President Biden’s poll numbers.

Tuesday’s figure could signal that progress on inflation is slowing. The closely watched core reading for October, which strips out food and fuel costs, is expected to show a 4.1 percent year-on-year gain. That’s no better than the September figure, and well above the Fed’s 2 percent target.

There may be more positive news in the headline figure. The overall number is forecast to have slowed to 3.3 percent, a decent improvement over the September level. That would be thanks to a decline in energy prices (with retail gasoline prices having fallen for seven straight weeks, according to a Deutsche Bank research note), cheaper airfare and a slowdown in hiring and wage gains.

The Fed’s plans for rates remain an open question. It is expected to keep rates steady at next month’s meeting of its open market committee. But Jay Powell, the central bank’s chair, reiterated last week that it won’t rule out further rate rises as long as inflation remains elevated.

That uncertainty puts more weight on the C.P.I. release, according to analysts, as well as Wednesday’s Producer Price Index and retail sales reports.

Some on Wall Street are already forecasting rate cuts. Many investment banks see core inflation going down, giving the Fed the flexibility to lower borrowing costs next year. “The hard part of the inflation fight now looks over,” Jan Hatzius, Goldman Sachs’s chief economist, wrote to clients on Sunday, adding that he saw rates start to come down by the end of 2024. Economists at UBS and Morgan Stanley see the central bank cutting borrowing costs even faster.

But those bullish calls are coming even though few on Wall Street see core inflation falling to the Fed’s target before 2025.

Consumers hold a dimmer view. The University of Michigan’s consumer sentiment report last week showed that households were still worried about inflation, high interest rates and geopolitical turmoil in the Middle East and Ukraine.

HERE’S WHAT’S HAPPENING

The Supreme Court adopts an ethics code. The decision comes after revelations of undisclosed gifts, including luxury trips given to Justice Clarence Thomas by wealthy donors. The creation of the code is seen as a compromise brokered by Chief Justice John Roberts, but critics note that it’s unclear how it will be enforced.

The White House delays plans for its Asia-Pacific trade pact amid Democratic pushback. The Biden administration won’t announce that it has largely settled the terms of its Indo-Pacific Economic Framework for Prosperity after facing criticism from Democratic lawmakers over worker protections, The Times reports. Officials had planned to introduce the pact this week at an international meeting of Asia-Pacific leaders in San Francisco.

Donald Trump’s social media company reports steep losses. Truth Social said in a regulatory filing that it had lost $73 million since it began operating last year. The former president’s social network also warned that it may be forced to shut down if it’s unable to complete its merger with a blank-check financial vehicle meant to take it public.

A Starbucks employees’ union plans to strike. Starbucks Workers United, which says it represents over 9,000 baristas across more than 360 stores, will stage a walkout on Thursday, coinciding with the coffee chain’s annual Red Cup Day promotion. It’s the latest clash over efforts to organize Starbucks workers; the union hasn’t been able to reach a collective bargaining agreement with management.

Law groups urge firms to tackle Islamophobia

The Israel-Hamas war has prompted corporate leaders and Wall Street to speak out against antisemitism in business and at universities, and some law firms have rescinded job offers to students who they say are associated with inflammatory language.

Now, a coalition of Muslim bar associations has accused the same law firms of failing to stand up against rising Islamophobia.

The groups say law firms are putting a chill on free speech. The American Muslim Bar Association, the National Association of Muslim Lawyers and about a dozen Muslim and South Asian lawyers’ organizations said on Monday in a letter to 100 top law firms that the firms were contributing to an “environment of Islamophobia and anti-Arab sentiment.”

Among other objections, the groups said that a Nov. 1 letter that the firms sent to law schools about antisemitism on campuses made only a “brief reference to Islamophobia,” even though hate crimes against Muslims, including Arabs, are increasing.

They say the approach is creating a “hostile” workplace. “Some firms’ uneven treatment of this highly sensitive issue is sadly dehumanizing Palestinian, Arab and Muslim lives, creating a workplace that is less inclusive, less welcoming and more hostile,” the bar associations write.

Some firms have refused to acknowledge Palestinian civilian losses or humanitarian causes while speaking up for Israel, and staff members fear professional retribution if they dissent. The groups want the firms to join them in a new letter to law school deans addressing Islamophobia.

The letter reflects a growing split in public and private organizations. A commodities trading house reportedly fired an analyst after he was filmed covering up what appeared to be posters of Israeli hostages in Gaza. Some Democratic aides in Congress are breaking with their bosses over the conflict and agitating for a cease-fire.

At Google, which is known for its open culture and allowing activism, Arab and Muslim staff members say they face hostility for speaking out in support of Palestinians, while Israeli and Jewish employees say they are angry about the messages on internal channels.

A rebuffed bid to inject a little basketball into the PGA Tour

As the PGA Tour and Saudi Arabia’s sovereign wealth fund, the backer of LIV Golf, work to complete a groundbreaking deal by Dec. 31, a prominent sports executive’s name has come up in their talks.

Prospective investors looking to take a stake in the potential new golf colossus that would emerge from those talks have reached out to Adam Silver, the N.B.A. commissioner, to oversee it, DealBook’s Lauren Hirsch reports. He isn’t interested, but the move reflects the size of ambitions for the sports endeavor.

The state of play: Suitors have submitted their offers to the PGA Tour, including proposals that would either replace Saudi Arabia’s Public Investment Fund, or invest alongside it.

One bidder is Fenway Sports Group, which owns the Boston Red Sox and Liverpool F.C. (Jay Monahan, the PGA Tour commissioner, is a Fenway alumnus.)

Media is a big part of these plans, as investors bet on the fervor of big broadcasters and tech companies for live programming to lift sports league valuations. The PGA Tour signed a nine-year TV agreement with CBS Sports, NBC Sports and ESPN in 2020, and industry executives expect the likes of Amazon, Apple and YouTube to compete for the next deal.

This was the context for the effort to recruit Silver, who has been praised for his handling of N.B.A. streaming rights.

What’s next: The PGA Tour board met on Monday at its headquarters in Ponte Vedra Beach, Fla. The gathering came months after Tiger Woods joined as a director, following player unrest over how the PGA Tour-Saudi talks unfolded.

Andrew will interview Monahan at the DealBook Summit on Nov. 29, along with Elon Musk of SpaceX, Tesla and X, the former House speaker Kevin McCarthy and others. You can apply to attend here.

$150 billion

— The estimated annual cost to the U.S. economy from extreme weather events caused by climate change, according to the latest National Climate Assessment. The report comes as the Biden administration is set to toughen air quality rules that polluting industries say are too costly.

Anti-corruption prosecutor joins Cooley

Rebekah Donaleski, a veteran federal prosecutor and a chief of the public corruption unit at the U.S. attorney’s office for the Southern District of New York, has joined the international law firm Cooley, writes The Times’s Benjamin Weiser for DealBook.

Donaleski oversaw the investigation and indictment of some of the highest-profile defendants in recent years. They include Senator Robert Menendez, Democrat of New Jersey, who has been accused of bribery-related charges and pleaded not guilty; Ghislaine Maxwell, the former girlfriend of Jeffrey Epstein who was convicted of sex-trafficking; and Michael Avenatti, the former lawyer for Stormy Daniels who was convicted in a fraud scheme.

Donaleski will be a partner in Cooley’s white-collar defense and investigations practice group in New York. The firm, which has its headquarters in Palo Alto, Calif., and has 19 offices in the United States, Asia and Europe, has become a home to former chiefs of the Southern District’s public corruption unit, like Andrew Goldstein, who heads the Cooley group, and another partner, Russell Capone.

Donaleski, 37, will focus on corporate and government investigations, crisis management and trials. With Cooley’s core client base of technology and life sciences companies facing increasing regulatory scrutiny and investigations,Goldstein said,“Rebekah is, as we see it, an essential linchpin to continuing to grow our New York office” and the firm’s ability to handle ever more complex cases.

Donaleski said: “My experience as public corruption chief — being innovative, being creative about how to bring cases — will really translate well to serving clients who are under increasingly innovative regulatory enforcement actions.”

THE SPEED READ

Deals

• Glencore will buy a 77 percent stake in Teck’s coal business for $6.9 billion, paving the way for the commodities giant to spin out its profitable but polluting thermal coal division. (Bloomberg)

• Creative Artists Agency and the deal maker Michael Klein are creating an investment bank focused on sports, media and entertainment. (WSJ)

Policy

• Speaker Mike Johnson is moving to expedite a stopgap spending deal, rebuffing hard-right Republicans as he seeks to avert a government shutdown this week. (WaPo)

• President Biden and China’s top leader, Xi Jinping, reportedly plan to announce a deal in which Beijing will crack down on the production and exporting of fentanyl. (Bloomberg)

• A witness in the Google antitrust trial inadvertently let slip that the search giant pays Apple 36 percent of the revenue it collects from queries made via the Safari web browser. (Bloomberg)

Best of the rest

• Stellantis, the parent company of Jeep and Chrysler, plans to offer buyouts to about half of its U.S. salaried office workers. (WSJ)

• “Inside the strange, secretive rise of the ‘overemployed’” (Insider)

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