The White House said Wednesday it expects US inflation was still “elevated” in May despite guarded hopes a key data report due for release later this week will show price increases had cooled.
Consumer prices in the world’s largest economy have soared by the fastest pace in more than four decades, with gas prices at the pump hitting new records daily amid the fallout from Russia’s invasion of Ukraine as well as ongoing supply chain challenges due to the Covid-19 pandemic.
The Labor Department is due to release consumer price data for May on Friday, and economists expect the monthly increase to accelerate after slowing in April, when CPI posted an 8.3 percent increase over last year.
“We expect the headline inflation number to be elevated,” Press Secretary Karine Jean-Pierre told reporters traveling with President Joe Biden on Air Force One.
Biden has made fighting inflation his top domestic priority, but is finding he has few tools to directly impact prices.
The Federal Reserve has begun raising interest rates aggressively to combat inflationary pressures, saying the goal is to sustain economic expansion while avoiding a recession.
Biden has stuck to an upbeat message about the overall outlook.
“We continue to believe that the economy can transition from what has been a historic recovery … to stable steady growth,” Jean-Pierre said.
But she acknowledged that the impact of the war in Ukraine has continued to push some prices higher, including airfares.
US regulator favors revamp of stock market trading system
Citing equity market trading defects revealed in last year’s GameStop saga, a top US securities regulator on Wednesday endorsed a broad revamp of the stock market trading system.
In a speech billed as a first step towards a possible update in the rules likely to rile financial firms, Gary Gensler, chair of the Securities and Exchange Commission, said he favored restructuring the system in order to better protect retail investors.
“It’s not clear… that our current national market system is as fair and competitive as possible for investors,” Gensler said in a virtual address at a conference hosted by Piper Sandler.
The speech marks the SEC’s latest action in response to frenzied trading in early 2021 during which extreme volatility in GameStop, AMC Entertainment and a handful of other equities rocked the market and led brokerages to implement sudden trading restrictions that angered investors and spurred congressional probes.
Gensler said the current system routes “the vast majority” of stock trades orders to electronic trading wholesalers such as Citadel Securities and Virtu Financial.
In some cases, these firms pay the brokerages, an arrangement known as “payment for order flow” that can allow brokerages such as Robinhood Markets to offer commission-free trades to individual investors.
But Gensler is skeptical that this arrangement protects retail investors and believes the payment for order flow system creates conflicts of interests and encourages “gamification” on online platforms to increase trading volumes.
Gensler has asked SEC staff to consider steps to “enhance order-by-order competition,” potentially through auctions. He has also asked staff for recommendations to mitigate the risks with payment for order flow and to provide more transparency.
The SEC head described the speech as a starting point towards possible regulation that will include extensive public comment and discussion with other SEC commissioners.
Doug Cifu, chief executive of Virtu, disputed Gensler’s characterizations, telling CNBC that most of the broker dealers with which his firm trades do not accept payment for order flow.
“The chair with all due respect is conflating the issue of payment for order flow with the ecosystem that has evolved in this country for retail trading, which has really enabled retail investors to have instantaneous execution and essentially zero commission on 8000 listed names,” Cifu said.
“You know, the cliche that markets have never been better is actually factually correct.”
Twitter to share data at heart of Musk deal dispute: report
Twitter will yield to Elon Musk’s demand for internal data central to a standoff over his troubled $44 billion bid to buy the social media platform, the Washington Post reported on Wednesday.
The news comes just days after the Tesla chief threatened to back out of his deal to purchase Twitter, accusing it of failing to provide data on fake accounts.
The Post cited an unnamed source familiar with the negotiations as saying Twitter’s board decided to let Musk access its full “firehose” of internal data associated with the hundreds of millions of tweets posted daily at the service.
“This would end the major standoff between Musk and the board on this hot button issue which has paused the deal,” Wedbush analyst Dan Ives said in a tweet.
Twitter chief executive Parag Agrawal has said that fewer than five percent of accounts active on any given day at Twitter are bots, but that analysis cannot be replicated externally due to the need to keep user data private.
About two dozen companies already pay to access the massive trove of internal Twitter data, which includes records of tweets along with information about accounts and devices used to fire them off, according to the Post.
Twitter declined to comment on the Washington Post report but has defended its responsiveness to Musk’s requests, and vowed to complete the deal on the original terms.
The mercurial Musk agreed to buy Twitter in a $44 billion deal in late April.
He began making significant noise about fake accounts in mid-May, saying on Twitter he could walk away from the transaction if his concerns were not addressed.
Some observers have seen Musk’s questioning of Twitter bots as a means to end the takeover process, or to pressure Twitter into lowering the price.
The potential for Musk to take Twitter private has stoked protest from critics who warn his stewardship will embolden hate groups and disinformation campaigns.
US securities regulators have also pressed Musk for an explanation of an apparent delay in reporting his Twitter stock buys.
Report accuses TikTok of spreading hate speech ahead of Kenya poll
Clips containing hate-speech, political disinformation and threats of ethnic violence are spreading on TikTok ahead of Kenya’s high-stakes elections, a new report said Wednesday, accusing the video-sharing platform of “failing its first real test in Africa”.
East Africa’s economic powerhouse will hold presidential and parliamentary elections on August 9, in the shadow of previous polls which have often been marred by ethnic violence.
On Wednesday, the US-based global non-profit Mozilla Foundation said it had analysed 130 videos which sought to spread misinformation and stoke fear, accruing over four million views after being shared by dozens of accounts.
“Kenya’s democracy carries a tainted past of post-election violence. Now, political disinformation on TikTok — in violation of the platform’s own policies — is stirring up this highly volatile political landscape,” Odanga Madung, a fellow at the foundation, said.
Many of the videos contained explicit threats of ethnic violence against communities based in the Rift Valley region, according to the non-profit.
In one instance, a video which drew more than 400,000 views, alleged that a certain presidential candidate hated a particular community and would target them if he came to power.
The torrent of misinformation included fake television news bulletins, doctored newspaper pages and sham opinion polls.
“The content targets specific communities with threats and uses past violence as a tool of fear,” the report said, adding that similar narratives were peddled in 2007 when a disputed election result sparked tribal violence which cost more than 1,100 lives.
– ‘Remove election misinformation’ –
The report said TikTok had removed several videos and suspended many accounts after reviewing the report.
A spokesperson for TikTok told AFP that the company planned to roll out new features to connect users “with authoritative information about the Kenyan elections”.
“We prohibit and remove election misinformation, promotions of violence, and other violations of our policies.”
TikTok, which is owned by Chinese tech giant ByteDance, saw explosive growth during the pandemic, but was doing little to rein in fake news, the report said.
Moderators were often asked to examine content which they knew little about, despite being unfamiliar with the context and the language used, a former TikTok employee told the researchers behind the report.
Kenya’s elections have been dogged by claims of fake news before.
An undercover expose by UK media revealed that Cambridge Analytica, a British consulting firm, used the personal data of millions of Facebook users to target political ads and spread misinformation during the 2013 and 2017 presidential campaigns.
“Rather than learn from the mistakes of more established platforms like Facebook and Twitter, TikTok is following in their footsteps, hosting and spreading political disinformation ahead of a delicate African election,” the report said.
“TikTok’s shortcomings in terms of moderation of the platform only adds fuel to the fire.”
Experts recently told AFP that the war in Ukraine had made TikTok the number one source of misinformation thanks to its gigantic number of users and minimal filtering of content.
AFP is a partner of TikTok, providing fact-checking services in Asia-Pacific, Europe, the Middle East, Latin America and Africa.
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