Data Points – Newspaper – DAWN.COM

Indifference about climate change

President Biden has done more to address climate change than any of his predecessors. So far, voters don’t seem to care. It is unclear whether climate policy can reverse the deep skepticism of many young people toward Biden. Recent Wall Street Journal polls show Biden’s support among young people declining compared to 2020, amid concerns about the president’s age and his support for Israel’s war against Hamas. A Journal poll that surveyed voters in seven swing states in March found that only three percent of 18- to 34-year-old voters named climate change as their top issue, with most citing the economy, inflation or immigration. That roughly reflects voters of all ages, two percent of whom cited climate change as their top issue. Other polls show that younger voters are more likely than older voters to say tackling climate change is important, even though many do not list it as their top priority.

(Adapted from “Biden spends $1 trillion to fight climate change. Voters don’t care.” By Amrith Ramkumar and Andrew Restuccia, published April 9, 2024, by The Wall Street Journal)

Costco Gold

Americans can’t get enough gold. Costco, which started offering gold bars online and in a few stores last year, sold out in hours. Consumers rated gold as a better investment than stocks and mutual funds for the first time in a decade in 2023, according to a Gallup poll. The price has reached record highs. Buyers of gold, especially those on the younger side, say it is a hedge against catastrophe. Even people who don’t build bunkers and predict doomsday are increasingly preparing for worst-case scenarios. Some millennial investors said they don’t trust the financial system, especially after a series of bank failures last year. Looking for a safe store of value, some turned to gold — and Costco. The department store retailer said he would sell $100 million worth of gold bars in 2023. He later added silver coins to his inventory. Precious metals sales drove 18% year-over-year growth in e-commerce revenue during the most recent quarter ended in February, Costco said.

(Adapted from ‘The Costo Shoppers Putting $2,000 Gold Bars In Their Cards’, by Katherine Hamilton, published April 4, 2024, by The Wall Street Journal)

An easing by the Fed is unlikely

For most of the year, everyone from stock pickers and homebuyers to President Joe Biden has been counting on the Federal Reserve to cut rates soon. Over the past two weeks, that hope has faded. Annual consumer price inflation in March was higher than expected for the third month in a row at 3.5%; Retail sales rose 0.7 percent from the previous month. On April 16, Federal Reserve Chairman Jerome Powell warned that the fight against inflation would “take longer than expected.” Investors had started pricing in more than 1.5 percentage points of interest rate cuts over the course of the year in 2024. Today they expect interest rates to fall by only 0.5 points. The euphoric expectations about rate cuts took on a life of their own after the Fed became too lazy in December. This unnecessarily stimulated the economy and will force the central bank to reverse its course. The consequences of longer interest rates will reverberate across America, the financial markets and the global economy.

(Adapted from “U.S. Interest Rates Unlikely to Fall This Year,” by Katherine Hamilton, published April 4, 2024, by The Wall Street Journal)

Becoming comfortable with AI

Three ways to develop and practice the habit of maintaining AI literacy. 1) Avoid the discomfort of continually learning about AI to navigate its business and technology implications. 2) Some executives may not be interested in why AI is relevant to the organization and may experience it as laborious. However, that work is no longer optional: AI is driving changes to processes across the enterprise that are so profound that they pose significant strategic risks and opportunities within each executive’s areas of responsibility. 3) Prepare for the unexpected effects AI can cause, along with possible counterintuitive outcomes.

(Adapted from “Why Executives May Be Uncomfortable with AI,” by Marc Pinski, Monideepa Tarafdar, and Alexander Benlian, published April 9, 2024, by MIT Sloan School of Management)

Published in Dawn, The Business and Finance Weekly, April 22, 2024