The Fed held its benchmark rate steady (in a range of 3.5% to 3.75%).
Interestingly, the press release under the new chair Kevin Warsh is now much shorter than it used to be.
Xi Jinping wants China to boost demand. Why isn’t it working? (Financial Times)
Yen falls after Fed decision, erasing intervention gains since April: Japanese currency near two-year low as rate gap pressures mount
“Critical Minerals, Geopolitics, and the Green Transition“ by Tomás Domínguez-Iino, Jonathan T. Elliot, and Allan Hsiao.
“The green energy transition will be powered by the mining and processing of lithium, nickel, and cobalt, which are critical for the production of advanced batteries. These minerals are concentrated geographically but traded globally. We study the geopolitical implications of active policy intervention in key mining countries, and we discuss consequences for green technology adoption worldwide. We show that the joint use of critical minerals in advanced batteries generates complementarity, which shapes both producer welfare and battery adoption. We quantify supply chain vulnerability, policy spillovers across mineral markets, and the potential for mineral cartels.”
Super interesting!
“Labor Market Consequences of Generative AI: Early Evidence from Norway” by Dennis Facius and Roberto Iacono.
“Does Generative AI displace early-career workers? We provide population-wide evidence from Norwegian administrative registers, 2015 through March 2025, exploiting the November 2022 release of ChatGPT as an availability shock. Using the within-firm composition difference-in-differences employed in recent work, supplemented with a synthetic difference-in-differences at the occupation level and a firm-level shift-share design, we find no robust evidence of employment displacement among young workers in highly AI-exposed occupations, nor any robust response across other age cohorts or on incumbent labor-market outcomes. While estimated coefficients for young workers are negative, in line with the existing literature, they are small and statistically insignificant. A backdating exercise on the synthetic difference-in-differences yields larger absolute estimates than the actual treatment date across most age bands. This suggests the apparent post-2022 decline reflects, at least in part, pre-existing secular trends rather than a clean AI-period break.”