Jan Masylek was a model of German corporate success It seemed so damn simple for him Also, it turned out, a fraudster Where does the money come from?
That was something that I was always questioning myself But what if I told you that was the least interesting thing about him?
His secret office was less than 500 meters down the road I often ask myself now, did I know the true Jan at all?
Certain things in my life since then have gone terribly wrong.
I don't know if they followed me to my home.
It looks like the ingredients of a really grand spy story, because this ties together the Cold War with the new one.
Good morning from the Financial Times.
Today is Thursday, June 19th, and this is your FT News Briefing.
The Fed is down on the U .S. economy, and the U .K. inflation rate is a bit of a bummer, too.
Plus, big tech companies have put all their chips on artificial intelligence, and they want Congress to clear the regulatory runway for them.
I'm Mark Filippino, and here's the news you need to start your day.
The Federal Reserve kept interest rates on hold yesterday, and that was expected going into the meeting.
But the bigger thing was the central bank cut its outlook for the U .S. economy.
Here to tell me more about what the central bank is thinking is the FT's U .S. economics editor, Claire Jones.
Hey, Claire. Hi, Mark.
So Claire, we mentioned the economy.
Tell me a little bit more about why the Fed cut its outlook.
So what we saw yesterday was the The Fed's economic projections really catch up with economic reality.
The Fed releases quarterly forecasts.
The last round we saw were in March. That was before the chaos of Liberation Day in early April.
What we saw yesterday was a downgrade in the growth expectation for this year.
They now think growth is going to be 1 .4%.
That's substantially weaker than it was in 2024.
Inflation's going to be higher than they thought back in March. They think it's going to be 3%, far in excess of their 2 % goal.
And unemployment is, it's going to be a little bit worse, but they still think the U .S. labor market is going to be pretty strong.
Unemployment will creep up a little bit, but not too much. Now, the Fed also released something yesterday called the dot plot.
Basically, every member of the Federal Open Market Committee charts out what they think interest rates are going to look like over the next few years.
What did this dot plot tell us?
So there's two aspects of the dot plot that I think are quite interesting.
One is that people are very attached to the median dot plot projection, which gives you the kind of view of what the kind of average FOMC voter is thinking about what's going to happen to interest rates.
The median projection didn't change at all.
It still showed two quarter point cuts by the end of this year.
That might not look that spectacular.
But what we did see is a real kind of like stretching of the views among the committee.
Last time around in March, very few people expected to see no interest rate cuts this year.
Now with the outlook on inflation looking so much worse, there's really this sense in which a lot of Fed officials, seven to be exact, now don't think there's going to be any space to cut interest rates this year.
And that's quite significant.
So, Clare, tell me a little bit more about this push and pull when it comes to interest rate philosophy, because even though the outlook for inflation might be a little bit higher over the next few months, it seems like it's been contained up until this point.
That's a great point, Mark.
I mean, coming into this meeting, we saw a reading for May CPI inflation that was a lot better than a lot of people had feared.
And Powell said yesterday, you know, in terms of other aspects of US inflation that would not be tariff related, you know, those look pretty good.
I mean, we're not seeing the sort of burst in inflation we had in the services sector that we got, you know, after the pandemic.
The overall picture is looking OK.
However, you know, it's going to take a few months at least to see the impact of the tariffs coming through.
There's still a lot of uncertainty about what the tariffs will actually be.
businesses still have to decide how much of the tariffs they're going to pay for themselves and how much they're going to pass on to customers.
There's a long way to go.
And the Fed is saying, you know, the labor market looks pretty decent.
We don't expect a disaster there.
We think there's room to wait and see.
And that is what we're going to do.
Claire, the Fed under Powell has been accused of moving, frankly, too slowly when it comes to moving interest rates?
You know, you mentioned the burst of inflation after the pandemic.
The Fed was playing catch up and raising rates then.
Is there a concern that the Fed is moving too slowly now, but in the other direction, lowering interest rates?
Well, if you ask the U .S. president, Donald Trump said yesterday morning that he'd like the Fed to cut not by a quarter point, But by two percentage points, at least that.
So there certainly is these concerns from the White House that the Fed is being too slow among the more mainstream economists and Fed watchers, less so.
I mean, there is a case where the Fed might end up being too late.
But there's just so much uncertainty about what the tariffs are going to do to the US economy right now that being a bit patient, it does seem prudent.
it does seem the right approach. That's the FT's Claire Jones.
Thanks, Claire. Cheers, Mark.
UK inflation is staying stubbornly high.
It clocked in at 3 .4 % last month, according to figures out yesterday.
And the outlook for inflation has become more uncertain because of the escalating conflict in the Middle East. That could push oil prices higher.
The Bank of England meets today, and the new inflation number makes it more likely that it keeps interest rates steady, like the Fed did yesterday.
The BOE has cut rates four times since last summer, and traders expect two more rate cuts this year.
Big tech companies in the U .S. are lobbying for a 10 -year ban on certain rules for artificial intelligence.
intelligence the provision already passed the house of representatives last month as part of president trump's budget bill the one he's calling the big beautiful bill now the provision just needs to get through the senate this decade -long moratorium on ai regulation faces a bit of an uphill battle though here to talk more about this is the ft's u .s business and politics correspondent alex rogers hey alex hey mark okay so what are the details of this provision alex so congress Congress right now is debating whether or not to pass a 10 -year ban on states regulating AI.
Some studies suggest that over 1 ,000 AI -related bills have been introduced across the United States, and the big tech companies are pushing for a ban on states regulating their industry in favor of a, as they would say, a temporary pause or a light -touch framework.
They're looking for a way for the federal government to provide some certainty as they face states across the country looking to regulate their new industry.
And which companies are really pushing for this ban and what are they worried about specifically?
So Microsoft, Amazon, Meta, Google, the major big tech companies have hired lobbyists and have pressured Congress to pass this 10 -year ban.
The whole debate is innovation versus safety in a way.
If you have all of the big tech companies is on one side saying we will lose our lead in AI.
Then you also have on the other side, a bunch of different states who want to regulate this industry in California or New York or Tennessee.
They may all have different ideas about how to regulate AI.
The AI companies, though, on the other hand, they're saying that if this happens, then China or other countries will take the lead in AI.
How likely is it that this provision is going to make it into the Big Beautiful Bill.
The 10 -year ban has already passed the House, and now the debate is in the Senate.
The Republican senator of Texas, Ted Cruz, is pushing for this provision to pass the Senate.
Right now, he's facing opposition from a few other Republican senators.
Josh Hawley of Missouri is one.
He thinks that individual states really should have the power to pass their own AI regulation.
Marsha Blackburn of Tennessee also seems to be an opponent of this ban.
And every vote matters.
The Republicans have to pass this bill on a party line vote with no Democrats.
And so they can only afford to lose a few.
And the question gets really wonky in the Senate because for the Senate to pass the big, beautiful bill, everything needs to have a budgetary impact.
When you're just passing a 10 -year moratorium on states regulating AI, it's hard to determine what the budgetary impact of that would be.
And so we don't know yet if this provision is going to pass the Senate.
Regardless of how the ban fares in the Senate, is there anything that tells us about how the relationship between tech companies and Washington is changing?
I think this just shows that the tech industry writ large has learned the lessons of the past. The famous example is Microsoft not understanding in the 90s how powerful Washington is, And then Washington comes down and threatens to break up these companies.
The tech industry now is very savvy about how to deal with Washington.
And so when they see a huge bill like this, one big, beautiful bill come up, they have an opportunity here to strike and to pass something that benefits themselves.
Alex Rogers is the FT's business and politics correspondent.
Thanks, Alex. Thanks, Mark.
The conflict between Israel and Iran is starting to hit global supply chains.
Insurance prices are skyrocketing for ships traveling through the Strait of Hormuz near Iran.
Now, the rates to cover the ships themselves, not including cargo, are up more than 60 % since the start of the war between Israel and Iran last week.
The Strait is a key route for crude oil.
No missiles have been fired at a ship there, but insurers are concerned about safety in the region.
Vessels going through the Strait of Hormuz face a ton of threats, including attacks by the Iran -backed Houthi rebels.
And the increased risk could mean that some insurers flat out stop offering coverage altogether.
You can read more on all these stories for free when you click the links in our show notes.
This has been your daily FT News briefing.
Check back tomorrow for the latest business news.
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