FOMC minutes suggest another 25 bps hike is coming

Top stories today: 1) FOMC minutes suggest a final 25 bps hike is coming 2) March CPI: 5.0%, core CPI: 5.6% 3) LinkedIn launches free verification service 4) FTX has recovered $7.3B in assets 5) 7% of iPhones are now made in India 6) Internet ad spending grows 10.8% to $209.7B in 2022

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Top stories today:1) FOMC minutes suggest a final 25 bps hike is coming2) March CPI: 5.0%, core CPI: 5.6%3) LinkedIn launches free verification service4) FTX has recovered $7.3B in assets5) 7% of iPhones are now made in India6) Internet ad spending grows 10.8% to $209.7B in 2022

0. Data and calendar

All values as of 3 AM PT / 6 AM ET, other than S&P500 close (1 PM PT / 4 PM ET).

All times are ET.

1. FOMC minutes suggest a final 25 bps hike is coming

  • "Some additional policy firming may be appropriate to attain a sufficiently restrictive policy stance to return inflation to 2 percent over time... [given that] inflation remained much too high and that the labor market remained tight."

  • Mild recession in 2H23: "Given their assessment of the potential economic effects of the recent banking-sector developments, the staff's projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years."

  • Problems in just a few banks: "Participants noted that the most significant issues appeared to have been limited to a small number of banks with poor risk-management practices and that the banking system remained sound and resilient." - Bloomberg, FOMC minutes

Even with the hawkish minutes, markets now price in 66% chance of a 25 bps hike, down from 73%

2. CPI falls to 5.0% in March, while core CPI remained high at 5.6%

  • Broad CPI: 0.1% MoM / 5.0% YoY, exp. 0.2% / 5.2%, from 0.4% / 6.0%

  • Core CPI: 0.4% MoM / 5.6% YoY, exp. 0.4% / 5.6%, from 0.5% / 5.5% - WSJ, BLS

    • On a monthly basis, core CPI remained high.

Falling energy prices have helped cool off broad CPI, but core CPI remains sticky

Core services are particularly bad, running at 7%

And those, which include most wages, can be particularly tricky to force down:

Breaking down by subcategories, we see clothing and airline fares jumping the most in March

Markets are pricing in just one 25 bps hike, and then 200 bps in cuts

There is a big difference between what the Fed is saying and what markets believe

Both have been very wrong in the past, so we don't expect either prediction to be precise

3. LinkedIn launches free verification service

You can verify your identity

And you can verify your work email, all free of charge

Read more: Techcrunch, LinkedIn.

4. FTX has recovered $7.3B in assets

  • $7.3B in total, at current market prices:

    • $2.0B in cash

    • $4.3B in liquid crypto, which includes large positions in Solana and Aptos

    • $0.5B in securities (mostly Robinhood shares)

    • $0.6B in settlements - Reuters

  • This excludes an estimated $4B in illiquid investments, which will likely be sold for a fraction of that.

The new management expects to have an initial reorganization plan by Q3

We expect a 50% cash recovery, given $13B in liabilities

  • The math: $7.3B in assets / $13B in liabilities = 56%, minus a few percentage points for cost and fees.

  • Creditors could also get shares in the new FTX company, if the new management reboots the exchange. That's the path to 100%+ recovery.

FTT almost doubled in price after the lawyers suggested the exchange might be rebooted

  • Even though the likely beneficiaries of that are shareholders, not token holders, who could still be wiped out. - The Block

The Judge denied SBF's ask for $10M to cover legal fees

  • No evidence of need: "I have no choice but to deny the motion for lack of evidence. I will do so without prejudice. If Mr. Bankman-Fried wants to come back and put on an evidentiary hearing that will establish the elements necessary for me to lift the automatic stay, he's free to do so. But we'll deal with that another day," said Judge John Dorsey. - The Block

5. 7 percent of iPhones are now made in India

  • An example of U.S.-China decoupling, which is the new buzzword of 2023, meaning the reduction of trade and economic cooperation between the two regions. Some have estimated a 7% hit to GDP with full decoupling (equivalent to 2-3 years of no growth). - Bloomberg2

  • India? Why not Brazil or Mexico? India is right next to China, and could be compromised in the event of a new Cold War. Latin American countries are much closer to home, and Apple already has an iPhone factory in Brazil, corresponding to 1% of total production.

  • Apple also looking at Thailand: it already manufactures Watches there, and it might start making Macbooks in the region. - Nikkei

6. Internet ad spending slows growth to 10.8% YoY, reaches $209.7B in 2022

Mobile ads represent 73% of total spend

Top 10 companies represent 77% of total spend

While search maintains the lead, video ads are growing faster

Internet ads are by far the most popular form of ad

7. Miami and Chicago are the fastest-growing tech hubs

Ranked by 2020-2022 % growth in venture capital investment:

But Silicon Valley still leads in total VC investments

In related news, Manhattan rent reached a record high of $4,175 in March

In contrast to San Francisco, the largest city in Silicon Valley, where occupancy rates and prices are only going down:

8. FiveThirtyEight's national polling average for GOP primary shows Trump 49% x DeSantis 26%

Historically, a 49% polling average would suggest a ~90% probability of winning the nomination

9. Other headlines


  • 18-year-old requirement for social media bill passes in Arkansas, details still murky.

  • OpenAI researching "consistency" AI image models, allowing for faster processing.

  • Italy gives OpenAI a list of to-dos before unblocking ChatGPT.

  • Scale AI: a look at the $7.3B company and its founder Alexandr Wang.

  • Android 14 beta is available, with very few new features.


  • HBO Max rebranding to Max and incorporating Discovery+, kids content.

  • Meta and Google return to having 2 performance reviews a year, from 1.

  • Adderall shortage continues, underlying importance of FDA reform.

  • Apple touch button supplier falls 12% after reports that Apple abandoned idea.

  • IBM explores selling parent for $1B+.

  • Softbank to sell Ventures Asia arm.

  • AI still very far away from beating the stock market.

  • Buffett's Japan trip is seen as a stamp of approval for Japanese investments.

  • PBS also stops tweeting after Elon marked it as government-funded (which is true).

  • Vox spins off viral video website NowThis; nonprofit is helping fund the new company.

  • Game of Thrones getting a new prequel: A Knight of the Seven Kingdoms.


  • Ethereum steady after Shanghai upgrade that allows for withdrawals of staked ETH.

  • France positioning itself as a crypto hub, still lags behind U.S., UK.

U.S. politics

  • Dominion judge sanctions Fox, "very concerned" that Fox withheld key evidence.

  • Fox News and Rumble to host 1st GOP presidential debate, in Milwaukee in August.

  • Trump could be charged with fraud related to fundraising with election claims.

  • Michael Cohen sued by Trump for $500M for attorney-client privilege violation.

  • Abortion pill: appeals court partly overturns Texas court ban; case likely heading to SCOTUS.

  • Chart: GOP now literally represents poorest Americans.

  • Suicides in the U.S. rise 4% in 2012 to 14.1 deaths per 100,000.


  • Leaker was "right-winger", "loved shooting guns", not hostile to the U.S. government, says Discord member.

  • Another leaked doc shows broad infighting among Russian officials, estimate of 110K Russians killed in Ukraine war.

  • Putin personally approved arrest of WSJ reporter.

  • North Korea fires new missile on Korean waters.

10. Interesting tweets, memes, and images

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