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.

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 co-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 cases in New York, including the public corruption charges against Sheldon Silver, the former speaker of the New York State Assembly, and Dean G. Skelos, the former Republican majority leader of the State Senate.