Job report antiCipates interest rate hike

Fed’s Kashkari: Jobs report shows why more rate hikes needed

The central bank hopes to moderate consumer and business spending

Christopher Rugaber – The Associated Press

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WASHINGTON — The solid U.S. jobs report for October underscores why the Federal Reserve needs to raise interest rates higher than it had previously forecast in order to control inflation, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Friday. In an interview with The Associated Press, Kashkari said that at the Fed’s next meeting in December he expects to issue a higher forecast for where the central bank’s benchmark rate will be next year than he did in September. He declined to specify how high a rate he envisions for 2023. Friday’s jobs data showed that hiring is “quite healthy” despite some slowing in recent months, Kashkari said. “That tells me we have more work to do to try to cool down the economy and bring demand and supply into balance,” he added.

The Fed has raised its key short-term rate six times this year, the last four times by an unusually large threequarters of a point, in a strenuous effort to curb inflation. Prices are accelerating at nearly the fastest pace in four decades.

To achieve that goal, the central bank hopes to moderate consumer and business spending, slow hiring and reduce economic growth. Yet the risk is rising that the Fed could go so far as to tip the economy into a recession. Kashkari has generally supported higher rates. He has taken a hawkish line with inflation this year, after having expressed more dovish sentiments in the past. (“Hawks” typically support higher rates to throttle inflation, while “doves” generally prefer lower rates to bolster hiring.) On Wednesday, after the Fed’s latest policy meeting, Chair Jerome Powell opened the door to smaller rate hikes in coming months. He added that a step down to a half-point increase could occur at the Fed’s next meeting in December or early next year. But Powell also cautioned that the Fed would likely elevate its key rate higher than it had projected in September — a sentiment Kashkari echoed Friday. Each quarter, the Fed issues economic and policy projections. In September, central bank officials forecast that they would raise their short-term rate to about 4.6% by the end of 2023. It is now in a range of 3.75% to 4%, its highest level in 14 years. “I had interest rates in September peaking at around 4.9% in the March-April (2023) kind of time frame,” Kashkari said in the interview. “Given what I know right now, I would expect to go higher than that. How much higher than that, I don’t know.” After its meeting Wednesday, the Fed said in a

statement that when making decisions on future rate hikes, it would consider the impact of its previous increases and the fact that it can take time for the Fed’s policies to filter into the economy. Economists took that as an acknowledgment that the Fed’s previous increases haven’t yet had their full impact, and that Fed officials are more open to giving their policies time to work, rather We want people to find jobs… than piling on more hefty rate hikes. Powell said Wednesday that the Fed would not But for me, we also need to see some evidence that the labor need to see signs of inflation declining to reduce its rate hikes. But Kashkari said upcoming data on jobs and inflation would impact his decision. market is softening at least a The Minneapolis Fed president noted there are signs inflation may cool next year, such as a little bit. sharp slowdown in home sales and smaller rent Neel Kashkari, president Federal Reserve Bank of Minneapolis increases. But he also said he is seeing no evidence that underlying inflation — which is driven more by rising wages and services prices, such as for medical care — are improving. That’s why Fed officials generally would like to see some weakening in job and wage growth. “We want people to find jobs,” Kashkari said. “But for me, we also need to see some evidence that the labor market is softening at least a little bit. I’m not seeing much evidence of that.” Separately, Susan Collins, the new president of the Boston Federal Reserve, said in remarks Friday that October’s robust jobs report may not necessarily signal a solid economy.

The Fed has raised its key short-term rate six times this year, the last four times by an unusually large three-quarters of a point, in a strenuous effort to curb inflation.

Minneapolis Federal Reserve president Neel Kashkari. >Photo by Evan Agostini/Invision/AP, File

BBC tries to understand politics by creating fake Americans

The news agency is attempting to illustrate how disinformation spreads on social media

David Bauder – The Associated Press

NEW YORK — Larry, a 71-year-old retired insurance broker and Donald Trump fan from Alabama, wouldn’t be likely to run into the liberal Emma, a 25-year-old graphic designer from New York City, on social media — even if they were both real. Each is a figment of BBC reporter Marianna Spring’s imagination. She created five fake Americans and opened social media accounts for them, part of an attempt to illustrate how disinformation spreads on sites like Facebook, Twitter and TikTok despite efforts to stop it, and how that impacts American politics. That’s also left Spring and the BBC vulnerable to charges that the project is ethically suspect in using false information to uncover false information.

“We’re doing it with very good intentions because it’s important to understand what is going on,” Spring said. In the world of disinformation, “the U.S. is the key battleground,” she said. Spring’s reporting has appeared on BBC’s newscasts and website, as well as the weekly podcast “Americast,” the British view of news from the United States. She began the project in August with the midterm election campaign in mind but hopes to keep it going through 2024.

Spring worked with the Pew Research Center in the U.S. to set up five archetypes, although the center was not involved in how to use them. Besides the very conservative Larry and very liberal Emma, there’s Britney, a more populist conservative from Texas; Gabriela, a largely apolitical independent from Miami; and Michael, a Black teacher from Milwaukee who’s a moderate Democrat.

With computer-generated photos, she set up accounts on Instagram, Facebook, Twitter, YouTube and TikTok. The accounts are passive, meaning her “people” don’t have friends or make public comments. Spring, who uses five different phones labeled with each name, tends to the accounts to fill out their “personalities.” For instance, Emma is a lesbian who follows In fact, LGBTQ groups, is an atheist, takes an active interest in women’s issues and abortion rights, supports the legalization of marijuana and follows The New York Times and NPR. These “traits” are the bait, essentially, to see how the social media companies’ algorithms kick in and what material is sent their These “traits” are the bait, essentially, to see how the social media companies’ algorithms kick in and what material is sent their way. way.

Through what she followed and liked, Britney was revealed as anti-vax and critical of big business, so she has been sent into several rabbit holes, Spring said. The account has received material, some with violent rhetoric, from groups falsely claiming Donald Trump won the 2020 election. She’s also been invited to join in with people who claim the Mar-a-Lago raid was “proof” Trump won and the state was out to get him, and groups that support conspiracy theorist Alex Jones. Despite efforts by social media companies to combat disinformation, Spring said there’s still a considerable amount getting through, mostly from a far-right perspective.

Gabriela, the non-aligned Latina mom who’s mostly expressed interest in music, fashion and how to save money while shopping, doesn’t follow political groups. But it’s far more likely that Republican-aligned material will show up in her feed. “The best thing you can do is understand how this works,” Spring said. “It makes us more aware of how we’re being targeted.” Most major social media companies prohibit impersonator accounts. Violators can be kicked off for creating them, although many evade the rules. Journalists have used several approaches to probe how the tech giants operate. For a story last year, the Wall Street Journal created more than 100 automated accounts to see how TikTok steered users in different directions. The nonprofit newsroom the Markup set up a panel of 1,200 people who agreed to have their web browsers studied for details on how Facebook and YouTube operated. “My job is to investigate misinformation and I’m setting up fake accounts,” Spring said. “The irony is not lost on me.” Spring said she believes the level of public interest in how these social media companies operate outweighs the deception involved. The BBC said the investigation was created in accordance with its strict editorial guidelines. “We take ethics extremely seriously and numerous processes are in place to ensure that our activity does not affect anyone else,” the network said. “Our coverage is transparent and clearly states that the investigation does not offer exhaustive insight into what every U.S. voter could be seeing on social media, but instead provides a snapshot of the important issues associated with the spread of online disinformation.”