The better inflation gauge

In the US, inflation has slowed substantially over the past two years. But there’s been a disconnect between what inflation data shows and what millions of Americans say they are experiencing. Just ask any candidate on the campaign trail. Sure, it’s partly due to the emotional scars from years of high prices, the high sensitivity to even residual inflation, massive credit card debt (see below) and, more darkly, the increasing willingness to see personal finances and even the broader economy through the prism of political tribalism. But there may be something else at work: the government’s key inflation measure excludes some major everyday costs that have surged in recent years. Property taxes? Not counted. Tips? Not counted. Interest charges on your loans? Not counted. Here’s what’s not in the government’s inflation report, why it may be the missing piece of the puzzle, and how to get a better number.

For its part, the International Monetary Fund has declared the fight over inflation to be receding, but it warned that global growth is at risk from wars and protectionist rhetoric. Though central banks have tamed inflation without sending nations into recession, the IMF said growth would continue at middling rates in the near term, and sit at lower than predicted levels this year. On Wall Street, Goldman Sachs predicted the end of high market returns while JPMorgan said that—with the S&P back at record highs—there’s room to run. In other words, dealer’s choice. Here’s your markets wrap. —Margaret Sutherlin

McDonald’s Quarter Pounders were linked to an E. coli outbreak in the US that sickened 49 people, mainly in Colorado and Nebraska, and killed one, the US Centers for Disease Control and Prevention said. Ten people have been hospitalized, including a child, the agency said. All reported eating at McDonald’s before they fell ill, and specifically mentioned having a Quarter Pounder, the agency said. The restaurant chain’s shares dropped more than 10% in postmarket trading.

Democrats couldn’t ask for a better foil than Elon Musk. The eccentric, South Africa-born billionaire who has retweeted racist and anti-semitic posts has ludicrous wealth, celebrity and a storied history of noxious behavior. He’s a villain straight out of central casting, writes Joshua Green for Bloomberg Businessweek. And many of the super PACs supporting Democratic candidate Vice President Kamala Harris are pouring advertising dollars to illustrate his attempts to buy Trump’s election for him, highlighting the billionaire Republican buddies. But there’s a flip side to their relationship. It’s one that goes way back to when Musk was a green capitalist voting for President Barack Obama. Political slights and snubs along the way helped shape both men, turning Musk into the far-right firebrand he’s become. Tune into the new special podcast series Citizen Elon to learn more about the political evolution of the world’s richest person.

As much as Harris may benefit from targeting Musk, her party has been wrestling with a longer-term threat. National Democratic candidates might win more votes, but its state and local officials fall short in races that matter for everything from abortion access to certifying elections. Now growing initiatives backed by venture capitalists are trying to narrow the gap with Republicans, whose billionaire donors (other than Musk) have focused on swinging thousands of down-ballot races. The pitch of the platforms, like Oath and the States Project, is a “Moneyball” style approach to political giving, driving dollars to tight contests that are, in theory, most likely to tip the scales. Funneling money to down-ballot races has taken on heightened importance since the 2020 presidential election, when Trump-aligned state officials questioned their obligation to certify the results. And the GOP appointee-controlled Supreme Court’s decision to overturn Roe v. Wade two years later has thrust the fate of women’s reproductive rights into the hands of state legislators.

While US Secretary of State Anthony Blinken met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem Tuesday, the FBI said it was investigating the alleged leak of classified documents that detailed Israeli preparations to attack Iran. The US continued to press Israel to avoid hitting Iran’s oil-export or nuclear sites in its promised retaliation for Iranian missile strikes on Oct. 1, themselves retaliation for Israeli assassinations of Hezbollah, Hamas and Iranian officials. The White House fears such an attack could exacerbate the ongoing regional war and push up energy prices.

US pressure to restrict chips in China is going to keep growing, said Christophe Fouquet, CEO of Dutch chip industry behemoth ASML. “The question is what is right for the Netherlands? What is right for Europe?” he said during the Bloomberg Tech Summit in London. The Dutch government has struggled to find a middle ground between its US ally and its top company’s biggest market. Meanwhile, the Biden administration extended a 25% tax credit to additional chip manufacturing projects in an effort to bring more chip manufacturing stateside.

There’s a familiar fight brewing ahead of the annual United Nations climate meeting in Baku, Azerbaijan, and China is at the center of it. How can the world’s second-largest economy be simultaneously “developed,” as in at the cutting edge of science and technology, yet still be officially classed as “developing?” The latter classification conveniently allows concessions on emissions and access to global funds,

For the second year running, Bloomberg got the lowdown on the UK’s startups, assembling a list that spans a landscape dominated by artificial intelligence. Venture capital investments returned to growth by midyear with the mania unleashed by OpenAI clearly apparent across the pond.