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Good morning readers. If you were holding your breath waiting for the Fed to cut interest rates…you might want to exhale for a minute. Federal Reserve Chair Jerome Powell addressed the state of the U.S. economy, emphasizing the persistent challenge of achieving the central bank's inflation target. Despite robust growth and a strong labor market, Powell indicated that inflation remains below the desired level, suggesting that interest rate cuts are not on the immediate horizon. This stance reflects the Fed's cautious approach, with Powell highlighting the need for greater confidence in sustained inflation before any policy easing. Financial markets, once hopeful for rate cuts, are now recalibrating expectations in light of the data.

Let’s jump into today’s storylines.

In today’s digest:

• Algorithm’s are illegally fixing rent prices

• Headline Hustle: Jurors get selected and seated for Trump’s hush money trial in New York, TGI Friday’s is going public via merger with its UK franchisee, Samsung gets awarded $6.4 billion to build chip plant in Texas

• The global economy is doing well for now, but it probably won’t last

• Pulse Points: What’s Trending

US

Algorithm’s could be the reason for your sky-high rent

If your rent seems to defy gravity while your paycheck stubbornly stays earthbound, you might not be just unlucky—algorithmic price-setting might be at play. Enter RealPage, a property-management software firm now under legal fire for allegedly inflating rent prices for over 4.5 million rental units across the U.S.

State and federal watchdogs are circling RealPage and its array of landlord clients, accusing them of using algorithmic sorcery to illegally fix rent prices across the U.S. From Arizona to Washington, D.C., lawsuits are piling up, alleging that RealPage’s tech tinkering has turned competitive rental markets into high-priced puppet shows.

The price of prediction

At the heart of the storm is RealPage’s pricing system, which crunches vast amounts of data to suggest rent adjustments for everything from lease renewals to new listings. Critics argue this tech tool isn't just a passive advisor; it's actively orchestrating a rent-setting cartel, pushing prices above where they might naturally float.

The Justice Department is on the case, with eyes on whether RealPage’s practices constitute price-fixing—a serious antitrust no-no. Meanwhile, President Biden has thrown landlord behaviors into the spotlight, championing efforts to tackle what he sees as predatory pricing during his State of the Union address.

Beyond just rents

The implications of these legal battles stretch far beyond apartment leases.

• RealPage's woes could send shockwaves across various sectors that rely on algorithms to set prices, from online retail to vehicle exports.

• If RealPage is found guilty, it could redefine what’s fair game for pricing software everywhere.

This isn't just a nightmare for RealPage; landlords nationwide are biting their nails. Many are rethinking their reliance on such technologies, fearful of falling into legal crosshairs themselves. Some property owners are already distancing themselves from practices that might hint at price collusion, perhaps signaling a return to more traditional methods of rent determination.

Big picture: For renters feeling the pinch, these cases might eventually bring some relief—or at least a clearer picture of what’s driving their bills sky-high.

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IN THE KNOW

Headline Hustle

💰️ Trump’s hush money trial gets its first 7 jurors seated in New York. Jurors for Donald Trump's hush money trial in New York are being swiftly selected, with seven already seated and opening statements expected next Monday. The trial marks the first-ever criminal trial of a former U.S. president, focusing on a $130,000 payment to Stormy Daniels. Trump's interactions with prospective jurors drew a warning from Judge Juan Merchan. Despite Trump's complaints about the trial's pace and Merchan's alleged bias, proceedings are advancing faster than anticipated.

🍔 TGI Friday’s is going public through merger with its UK franchisee. TGI Fridays and Hostmore, the chain’s U.K. franchisee, announced a merger valued at £177 million ($220 million). If approved, TGI Fridays will trade on the London Stock Exchange as "TGIF." The company, retaining its U.S. base in Dallas, Texas, plans to focus on its bar offerings with CEO Weldon Spangler at the helm. With 189 restaurants in the U.S. and U.K., the merger is expected to close in the third quarter pending regulatory approval.

📱 Samsung gets $6.4 billion to build chip plant in Texas. The U.S. government is granting Samsung Electronics up to $6.4 billion to expand chip-making facilities in Texas, part of the Biden administration's efforts to bolster semiconductor manufacturing domestically. This funding boosts Samsung's investment in Taylor, Texas, to approximately $45 billion, including a second chip-making factory and advanced packaging facilities. The move aims to create thousands of jobs and enhance the nation's chip production capabilities, crucial for national security and economic growth.

GLOBAL

Surprise, surprise: The global economy is kicking but its shoes might be too tight

Just when you thought the global economy might be running out of steam, it picks up the pace—but don't plan your celebrations just yet.

This year, we're seeing a surprising uptick in global economic growth, with the International Monetary Fund (IMF) now forecasting a 3.2% expansion for 2024, a bump from their previous 2.9% prediction. A robust U.S. economy, alongside stronger-than-expected performances from China, Russia, India, and Brazil, fuels this optimistic outlook. As the IMF’s chief economist, Pierre-Olivier Gourinchas puts it, "the global economy remains quite resilient."

Short-term gains, long-term pains

However, the view further down the track isn't quite as bright. By the decade's end, we're looking at a growth rate dipping to 2.8% annually, a stark contrast to the 3.8% average from 2000 to 2019. This slowdown stems from a dwindling labor supply due to aging populations worldwide—a demographic shift that's replacing the youthful energy that once powered economic expansion.

The gap between rich and poor countries, which had been narrowing, is now a gaping hole again, exacerbated by the pandemic. While rich nations powered through with stimulus spending, poorer countries were left counting pennies, struggling with high costs for essentials like food and fertilizers. The result? Slower progress on life expectancy, inequality, and consumption.

Looking for a silver lining? The IMF hints that artificial intelligence (AI) might just be the wildcard for economic revival.

• By turbocharging productivity, AI could potentially boost growth by up to 0.8 percentage points annually over the next decade.

• But it's a double-edged sword—AI could also sideline humans in some jobs or morph their roles entirely, with impacts varying dramatically across different global stages.

Looking ahead…the world economy might be outpacing the gloom for now, but the race is long, and it's running on a road that needs serious paving.

SNIPPETS

Pulse Points

• Tesla has delayed deliveries of its Cybertruck, with buyers reporting postponed delivery dates without explanation, amidst signs of weakening demand for its electric vehicles.

• Starting Tuesday, Apple will allow developers to distribute iOS apps directly to European Union users via the web, provided they meet certain criteria including app notarization.

• Caitlin Clark being drafted No. 1 by the Indiana Fever was expected, but her salary of $76,535 as per the WNBA's agreement surprised many.

• The Republican-led House Oversight Committee is investigating President Joe Biden’s new task force on corporate-pricing practices, suspecting it could be a "political tool," according to a letter obtained by CNBC.

• Waymo, Alphabet's self-driving company, started testing its robotaxis in Atlanta on Tuesday, expanding its testing and deployment operations to another city.

• Canada announced plans to increase capital-gains taxes on corporations and wealthy individuals to fund multibillion-dollar initiatives aimed at improving the financial prospects of younger Canadians.

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