Young liberals join Trump’s push for a rate cut
President Trump wants the Fed to cut interest rates to juice the American economy. Employ America, a group of left-leaning millennials, is pushing the central bank to do the same thing — though for different reasons, Jeanna Smialek of the NYT reports.
The group thinks lower rates will help protect U.S. workers as the economy starts slowing down. It argues that the Fed has been too focused on preventing inflation and should instead pay more attention to expanding employment.
Its case is being made as Fed officials become less sure that the U.S. is at nearly full employment. “There is no destination point for full employment,” Lael Brainard, a Fed governor, said recently.
President Trump wants rate cuts because they would weaken the U.S. dollar (helping his trade wars) and stimulate spending.
But there’s an opportunity for Employ America to be heard. “The Fed is showing itself to be much more open to reconsidering its policy regime,” said Peter Conti-Brown, a Fed historian at the University of Pennsylvania’s Wharton School.
More: Greg Ip of the WSJ urges the Fed to brush off accusations of political kowtowing if it thinks rates must be cut. And C.E.O. confidence has fallen to its lowest levels of the Trump administration, a survey found.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York and Michael J. de la Merced in London.
Zuckerberg emails cause concern at Facebook
The social media giant has reportedly uncovered messages from Mark Zuckerberg that are tied to questionable privacy practices at the company, the WSJ reported, citing unnamed sources.
The messages surfaced as Facebook was responding to an investigation into privacy practices by the Federal Trade Commission, the WSJ reports.
Government investigators are reportedly examining whether Mr. Zuckerberg or others were aware of practices that violated a 2012 settlement with the F.T.C. over consumer privacy matters.
Facebook already expects the agency to impose a new multibillion-dollar fine and would hope that the penalty would put its privacy matters to bed. But lawmakers are pressing the agency to impose harsher penalties.
There are some caveats. The WSJ said that while sources had described the messages, reporters didn’t review the actual correspondence. It’s unclear whether any of the practices described in them violated the 2012 settlement.
Facebook said in a statement after the WSJ article was published: “At no point did Mark or any other Facebook employee knowingly violate the company’s obligations under the F.T.C. consent order nor do any emails exist that indicate they did.”
New York deals a big blow to powerful landlords
Titans of the real estate industry, long one of the most influential in New York State, are still reeling from sweeping moves by Albany lawmakers to overhaul rent-control laws, the NYT reports.
New bills would abolish rules that let landlords eliminate rent control and closed other loopholes that would raise rents. The legislation would affect one million rent-controlled apartments, or nearly 40 percent of New York City’s rental stock.
“I’m in shock. I think many of us in my industry are in shock,” said James R. Wacht, a board member of a leading New York real estate trade group. “It’s a lot worse than we anticipated.”
Moguls like Douglas Durst and Richard LeFrak called Gov. Andrew Cuomo — to whom they have donated huge sums — to persuade him to block the measures. But Mr. Cuomo brushed off their entreaties, according to the NYT.
Industry officials concede that they overlooked the rise of progressive politicians and antipathy toward the wealthy, both in New York and nationwide. They are now scrambling to persuade moderate lawmakers to roll back parts of the legislation.
The trade war is hurting U.S. tourism
The Trump administration’s dispute with Beijing has affected tech giants and industrial conglomerates. Now it has started to pinch another industry: the $1.6 trillion tourism business, Martha White reports in the NYT.
The number of tourists coming to the U.S. from China dropped last year, according to data from the Commerce Department. Industry professionals are worried that the trade fight will accelerate that trend.
Spending by Chinese tourists in New York City fell 12 percent in the first quarter. That’s an issue because visitors from China tend to spend twice as much as those from other countries.
Chinese travel to the U.S. could drop as much as 50 percent, Bank of America analysts warned last week. That could mean an $18 billion hit to the American travel industry.
It reflects how China “has essentially weaponized tourism,” according to Adam Sacks, an industry consultant. Beijing has issued a travel advisory for its citizens about visiting the U.S. And in the past, it has dissuaded tourists from visiting countries that it was fighting politically, like South Korea.
More: Google and Nintendo are moving production of some products out of China to avoid tariffs. But Wall Street banks are still working with China’s biggest tech start-ups.
How G.E.’s new chief is trying to bring the good times back
Bloomberg Businessweek took a look at Larry Culp, the former Danaher C.E.O. who took over as G.E.’s chief executive in October. He’s been rolling up his sleeves — but it’s too soon to tell whether that’s enough.
• “Since taking over as C.E.O. on Oct. 1, he’s eschewed the company’s Boston headquarters for frequent travel, spending day-and-a-half sessions with G.E. units around the world and meeting with C.E.O.s at Boeing, Duke Energy and Safran, among other customers.”
• “Inside the company, he has preached the importance of hewing to measurable results.”
• “On a conference call with analysts in January, he said, ‘When we talk about execution, we talk about daily management.’ He used the phrase ‘daily management’ six times and the word ‘lean’ 11 times in a recent presentation at an industry conference.”
• “Whereas Culp expanded his former company with acquisitions, his first job at G.E. will be to shrink it. At Danaher, he could mostly ignore an outside world that mostly ignored him — a luxury he no longer enjoys.”
• “If he can restore G.E. to its old self, he could go down as one of the greatest C.E.O.s ever,” Businessweek said. “Culp also could collect a windfall of more than $200 million if G.E.’s stock goes way up and stays there.”
More: Was G.E.’s former chief Jack Welch really so good — or just really lucky?
SunTrust plus BB&T equals Truist
The two big regional banks unveiled the name their combined company would adopt if their $28 billion merger goes through. It doesn’t exactly roll off the tongue, does it?
Here’s what the two banks’ C.E.O.s said of the new name:
• “Truist is a brand name representative of two mission- and purpose-driven companies coming together to serve our clients as a true financial partner,” Bill Rogers of SunTrust said.
• “True to the heritage of both companies, Truist will reflect what we stand for — a shared belief in building a better future for our clients and communities,” Kelly King of BB&T added.
The name follows in the footsteps of companies such as Interbrand, Mondelez and Verizon in adopting — let’s say “inventive” — monikers after a deal.
Can you come up with a better name? Send us your suggestions.
Reckitt Benckiser, the maker of Durex condoms and Lysol cleaners, has hired Laxman Narasimhan, PepsiCo’s chief commercial officer, as its new C.E.O.
Simon Belsham will step down as the president of Walmart’s Jet division as the retailer folds the business into its Walmart.com unit.
GitHub has hired Erica Brescia, the co-founder of the software start-up Bitnami, as its C.O.O.
Jess Ravich, the head of alternative products at the asset management firm TCW, has left.
The speed read
• At Renault’s annual shareholder meeting yesterday, the French carmaker’s chairman pledged to repair relations with its partner, Nissan of Japan. (NYT)
• Dish, Charter Communications and Altice are among the companies said to be considering bids for assets that T-Mobile might sell to win approval for its takeover of Sprint. (Bloomberg)
• Gympass, which sells monthly gym passes to companies for their employees, has raised $300 million from SoftBank’s Vision Fund and other investors. (Bloomberg)
• Google’s parent company, Alphabet, has recorded a streak of I.P.O. wins thanks to its stakes in Lyft, Uber and the cybersecurity company CrowdStrike. (CNBC)
• Arcadia, the parent company of Topshop, avoided collapse after reaching an agreement with creditors. (FT)
• Epic Games, the maker of Fortnite, has bought the video-chat app Houseparty. (WSJ)
Politics and policy
• Social Security in the U.S. faces a big test next year: It will have to start drawing down assets to pay out promised benefits for the first time since 1982. (NYT)
• Businesses in Hong Kong are alarmed by the huge protests sweeping the territory and by Beijing’s efforts to tighten control. (NYT)
• Delta’s C.E.O., Ed Bastian, said the airline won’t take a stand on anti-abortion laws: “This is something that the courts need to settle and resolve, not corporate America.” (Business Insider)
• Howard Schultz said yesterday that he was postponing his explorations into a presidential campaign until the fall because of back surgery. (Week)
• A House committee voted yesterday to recommend that Attorney General William Barr and Commerce Secretary Wilbur Ross be held in contempt over an investigation into a census citizenship question. (NYT)
• If Russia offered him dirt on a political opponent, President Trump said, “I’d take it.” (NYT)
• Britain’s Parliament rejected a bill aimed at blocking a departure from the E.U. without an agreement. (BBC)
• Boris Johnson, the apparent front-runner in the race to become the governing Conservative Party’s next leader, conceded that a no-deal Brexit would be a last resort. (FT)
• The Chinese telecom giant wants Verizon to pay big fees for allegedly violating 238 of its patents. (NYT)
• It also urged the F.C.C. to abandon a move to bar American carriers from spending federal subsidies on equipment from providers deemed a national security threat. (Bloomberg)
• Google has reportedly fired half of its lobbying firms as it revamps its Washington presence in the wake of increased antitrust scrutiny. (WSJ)
• E.U. officials have reportedly begun looking into efforts by Google to head off new antitrust inquiries. (Bloomberg)
• Telegram’s founder accused China of hacking the messaging service after Hong Kong protesters used it to organize protests. (FT)
• A lawsuit has accused Amazon Echo devices of illegally recording children’s voices without their consent. (Seattle Times)
Best of the rest
• The story of the rise and fall of uBiome, a start-up focused on gut health that was raided by the F.B.I. (Business Insider)
• Norway’s Parliament voted yesterday to direct the country’s sovereign wealth fund to sell $13 billion of fossil-fuel investments and pour $20 billion into renewable energy assets. (WSJ)
• The head of the National Institutes of Health pledged to decline invitations to conferences that don’t feature enough women panelists. (NYT)
• A former Stanford sailing coach was sentenced to six months’ home detention — far less than what prosecutors had sought — for his role in the college admissions scandal. (NYT)
• A Vancouver store introduced plastic bags with embarrassing messages to shame consumers into using reusable alternatives. But they became a hit. (NYT)