The ‘soft landing’ scenario

The US and other industrialized countries may be able to bring inflation down without triggering huge jumps in unemployment that economists would otherwise have predicted prior to the pandemic, according to new research from the Federal Reserve Bank of Chicago. If correct, that might improve the chances of seeing a unicorn-like “soft landing” for the US economy. Kansas City Fed President Esther George said the US central bank doesn’t want to raise interest rates by so much that policy becomes overly restrictive, and agreed the economy may avoid a sharp downturn. “This scenario—can there be a soft landing—is one we would all want to see,” George said. “There are some possibilities for that.” After a year filled with recession calls from all corners of the market, could Fed Chair Jerome Powell, once pilloried as captain of “team transitory,” really have pulled it off? —David E. Rovella

Despite growing belief in that “soft landing,” Silicon Valley CEOs are taking no chances and instead firing their workers by the tens of thousands. Google joined the crowd Friday as its parent company Alphabet terminated 12,000 people, or more than 6% of its global workforce, becoming the latest tech giant to retrench after years of abundant growth. In the wave of tech worker culling, some 100,000 people have lost their jobs so far.

Mass firings by Amazon and Microsoft are the latest blow for the Seattle region, which is still struggling to recover from the pandemic’s decimation of its commuter economy—one that, as in many cities, is the lifeblood of America’s second-largest tech hub. The number of jobs lost, at least 28,000 globally between the two companies, is a psychological blow that may have long-lasting effects.

But Wall Street appeared fond of the tech sector on Friday, in part thanks to those tens of thousands of job losses. The S&P 500 Index rose for the first time in four days, with all 11 sectors gaining. Alphabet gained after revealing its job-cutting plan and Netflix surged after reporting stronger-than-expected subscriber numbers. Here’s your markets wrap.

Morgan Stanley cut Chief Executive Officer James Gorman’s compensation by 10% to $31.5 million for 2022, a year in which profit tumbled and the shares sank. The package includes $1.5 million in salary and a $7.5 million cash bonus.

The man who has lived his life by tweet and until recently was the richest person on Earth says his social media posts aren’t all that important. Elon Musk played down the impact his tweets had on Tesla’s stock price as he defended himself at a trial over his 2018 tweet about taking the carmaker private (which he didn’t). “It’s difficult to say the stock price is linked to the tweet,” Musk told jurors from the witness stand Friday in San Francisco federal court. “Just because I tweet about something doesn’t mean people believe it or will act accordingly.” Tesla investors disagree, contending his tweets were lies that drove decisions which ultimately cost them billions of dollars.

Turkish President Recep Tayyip Erdogan turned to nationalist rhetoric against Greece to fire up supporters ahead of this year’s elections, warning Prime Minister Kyriakos Mitsotakis not to antagonize him over long- running territorial disputes.

Theranos founder Elizabeth Holmes should report to prison as scheduled in April, US prosecutors say, rather than living on an expensive estate while she appeals her conviction. As Holmes unsuccessfully fought fraud charges, she lived on a property reportedly with $13,000 in monthly upkeep costs, the government said in a court filing. Prosecutors added that the convicted fraudster “continues to show no remorse.”

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