Climate change indifference

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 policies could reverse the deep scepticism many young people feel toward Biden. Recent Wall Street Journal polls have found that Biden’s support among young people is shrinking compared with 2020 amid concerns about the president’s age and his support for Israel’s war against Hamas. A Journal poll, which surveyed voters in seven swing states in March, found that just 3pc of 18-to-34-year-old voters named climate change as their top issue, with most citing the economy, inflation or immigration. That is roughly in line with voters of all ages, 2pc of whom cited climate change as their top issue. Other polls show that young people are more likely than older voters to say addressing climate change is important, even if many don’t name it as their top priority.

(Adapted from “Biden Is Spending $1 Trillion to Fight Climate Change. Voters Don’t Care.” by Amrith Ramkumar and Andrew Restuccia, published on April 9, 2024, by The Wall Street Journal)

Costco gold

Americans can’t get enough gold. Costco, which started offering gold bars last year online and in a few stores, has been selling out within hours. Consumers rated gold as a better investment than stocks and mutual funds in 2023 for the first time in a decade, according to a Gallup poll. The price has been hitting record highs. Gold buyers, especially those on the younger side, say it is a hedge against catastrophe. Even people who aren’t building bunkers and predicting 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. Searching for a safe store of value, some turned to gold — and Costco. The warehouse retailer said it sold $100m in gold bars in 2023. It later added silver coins to its inventory. Precious metal sales helped drive 18pc year-over-year growth in e-commerce sales during its most recent quarter, which ended in February, Costco said.

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

Fed easing not likely

For most of the year everyone from stockpickers and homebuyers to President Joe Biden has banked on the Federal Reserve cutting interest rates soon. Over the past two weeks, those hopes have been dashed. Annual consumer price inflation in March, at 3.5pc, was higher than expected for the third month in a row; retail sales grew by 0.7pc on the previous month. On April 16, Jerome Powell, the Fed’s chairman, warned that the battle against inflation was taking “longer than expected”. Investors had begun 2024 pricing in more than 1.5 percentage points of interest-rate cuts over the course of the year. Today, they expect rates to fall by only 0.5 points. The euphoric expectations for rate cuts took on a life of their own after the Fed turned too doveish in December. That unduly stimulated the economy and will force the central bank to retrace its steps and then some. The consequences of higher-for-longer interest rates will reverberate around America, financial markets and the world economy.

(Adapted from “America’s interest rates are unlikely to fall this year,” by Katherine Hamilton, published on April 4, 2024, by The Wall Street Journal)

Getting comfortable with AI

Three ways to develop and practice the habit of maintaining AI literacy. 1) Seek the discomfort of continual learning about AI to navigate its business and technological implications. 2) Some executives might not be interested in learning why AI is relevant to the organisation and might perceive it as laborious. However, that labour is not optional anymore: AI is driving changes in processes across the enterprise so profound that they constitute 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 Can’t Get Comfortable With AI,” by Marc Pinski, Monideepa Tarafdar, and Alexander Benlian, published on April 9, 2024, by MIT Sloan School of Management)

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