Business
European Central Bank says it will raise interest rates for the first time in 11 years in July.
The European Central Financial institution entered into a brand new period on Thursday, as policymakers clearly acknowledged their plan to lift rates of interest subsequent month for the primary time in additional than a decade.
To arrange for that transfer, the financial institution confirmed that it could cease rising its bond-buying program firstly of July.
Throughout the eurozone, inflation has outpaced economists’ expectations: The annual fee of worth will increase climbed to eight.1 p.c in Might, the best for the reason that creation of the euro foreign money in 1999. Policymakers have been spurred into sooner motion towards inflationary forces which can be being stoked by the battle in Ukraine.
“Excessive inflation is a significant problem for all of us,” the financial institution mentioned in a press release, because it warned that inflationary pressures had “broadened and intensified,” reaching extra items and companies. Inflation, excluding meals and vitality costs, which are usually extra unstable, is predicted to exceed the financial institution’s 2 p.c inflation goal by 2024.
The assertion was specific about elevating charges, saying that the financial institution deliberate to lift it key fee by a quarter-point at its July assembly, including that it anticipated to lift charges once more in September. After that, there will likely be a “gradual however sustained path” of future will increase, the financial institution mentioned.
If the inflation outlook persists or deteriorates then the financial institution would take into account a bigger bounce in charges in September than in July. Some policymakers had already been advocating for a half-percentage level improve. Christine Lagarde, the president of the financial institution, will lead a information convention on Thursday afternoon in Amsterdam.
The central financial institution additionally up to date its forecasts for the financial system on Thursday, portray a grim image of rising inflation and a deteriorating development outlook because the battle in Ukraine disrupts commerce and pushes vitality and commodity costs greater. This yr, inflation will common 6.8 p.c, up from 5.1 p.c projected in March. The financial institution mentioned the financial system will develop 2.1 this yr, slower than the earlier forecast of three.7 p.c.
“Inflation will stay undesirably elevated for a while,” the central financial institution mentioned on Thursday.
The necessity to deal with inflation is outweighing issues a few slowing financial system.
The European Central Financial institution has been slower to tighten its financial coverage in comparison with different main central banks in the US and Britain as a result of it anticipated the sharp rise in inflation to be short-term and reverse comparatively rapidly as vitality costs settled. In Europe, there have been additionally fewer indicators of second-round inflationary results, corresponding to employees demanding massive wage will increase in response to rising costs.
For a lot of the previous decade, policymakers have been battling towards inflation that was too low. However as client costs started climbing and spreading to extra items and companies in late 2021, the financial institution has ramped up its technique of so-called coverage normalization, together with the opportunity of elevating its adverse rate of interest.
On Thursday, the financial institution mentioned it forecast the annual inflation fee to be 2.1 p.c for 2024, above the financial institution’s 2 p.c goal, cementing the circumstances for financial tightening.
In the intervening time, the central financial institution’s deposit fee, which is what banks obtain for depositing cash with the central financial institution in a single day, is at minus 0.5 p.c, in impact a penalty meant to encourage banks to lend the cash slightly than preserve it on the central financial institution. The speed was first minimize under zero in mid-2014 because the inflation fee fell towards zero.
As a precursor to elevating charges, the financial institution’s bond-buying program, a means of protecting borrowing prices down and injecting cash into the system, is ready to finish in early July, policymakers mentioned. (A particular pandemic-era bond-buying program resulted in March after 1.7 trillion euros in purchases.) This month, the financial institution is ready to purchase €20 billion in principally authorities bonds. This system began in 2015, and its purchases have grown and shrunk as policymakers tried to warmth up and funky down the financial system as essential. As of Might, holdings in this system amounted to greater than €3 trillion in bonds.
Officers will likely be fastidiously watching the borrowing prices of nations with excessive debt burdens, corresponding to Italy, as rates of interest rise. The purpose is to make sure that the rates of interest they pay on their bonds don’t diverge an excessive amount of from different nations within the bloc, corresponding to Germany, with a view to preserve borrowing prices uniform among the many nations utilizing the frequent foreign money. The unfold between Italy’s 10-year authorities bond yield and Germany’s has grown to greater than 2 proportion factors, the widest since early 2020, when the onset of the coronavirus pandemic roiled monetary markets.
The reinvestment of proceeds from maturing bonds could possibly be used to keep away from this so-called fragmentation. The central financial institution has already careworn that there’s flexibility in its asset buy applications, however traders are ready to see if the financial institution will present extra particulars on the way it may reply to diverging borrowing prices.
Business
Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging
Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.
The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.
“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.
Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”
The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.
People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.
Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.
This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.
The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.
“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”
The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.
Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.
The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.
The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.
Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.
In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.
Business
'TikTok refugees' unexpectedly turn to Chinese alternative as ban looms
TAIPEI, Taiwan — TikTok users concerned about a looming ban are finding solace in a strange place.
Days ahead of a Supreme Court decision that could determine whether the popular short-video app shuts down starting Sunday, a number of users appear to be turning to an app called RedNote — more commonly known to its majority-Chinese audience by its Chinese name, Xiaohongshu.
It’s a surprising choice since Xiaohongshu is Chinese-owned, and such ties are the reason U.S. lawmakers moved to ban TikTok in the U.S., citing privacy and national security concerns.
Also Xiaohongshu is dominated by Chinese language, and its content is subject to censorship by Chinese government officials, something alien to most U.S. users.
But by embracing a Chinese social media and lifestyle app similar to Instagram, some U.S. TikTok users say they are protesting what they believe is the unfair ban of the ubiquitous app.
“I think America is trying to bully China into selling to an American owner. A lot of us just don’t want to give in to them,” said Samantha Manassero, a 39-year-old nurse in L.A. who downloaded Xiaohongshu on Sunday night after watching content creators on TikTok pitch it as a comparable app. “I think some of it is literally just pettiness.”
Last year, Congress passed a bill that requires TikTok’s owner, Bytedance, to sell the app to a U.S.-approved owner or face a nationwide ban. As soon as Wednesday, the Supreme Court is expected to uphold the legality of the ban.
It was unclear whether Xiaohongshu, which was started in 2013, would become a viable alternative to TikTok or if the recent migration to the Chinese platform accounts for a significant share of TikTok’s 170 million U.S. users.
But a surge in new users made Xiaohongshu the top free download on Apple’s App Store this week. No. 2 on the charts was another social media app developed by Bytedance, Lemon8. It’s unclear whether either app will be subjected to the same U.S. government scrutiny as TikTok.
It is also difficult to determine exactly how many U.S. TikTok users have created accounts on Xiaohongshu or how many will stay on it. While many Xiaohongshu regulars have welcomed the influx of Americans identifying themselves as “TikTok refugees,” the app’s interface is largely in Chinese, making it difficult to navigate for non-native speakers.
Chinese apps are subject to stringent censorship on discussions that the Chinese government deems politically sensitive. These topics can range from illegal activities to LGBTQ+ rights to Winnie the Pooh, images of which have been used to mock Chinese President Xi Jinping.
The Chinese version of TikTok, called Douyin, has different content restrictions and is only available for mobile download in China. Bytedance has argued that TikTok, which is used by the rest of the world, is a separate entity from Douyin and not beholden to the Chinese Communist Party.
That did not stop President-elect Donald Trump from proposing a ban of TikTok in 2020, or President Biden from signing it into law in 2024.
The legality of such a ban has been questioned several times. Last month, in an about-face, Trump, who has 14.8 million followers on TikTok, filed a legal brief requesting to stay the ban so he can negotiate a deal once he takes office.
As TikTok faces an uncertain future, Xiaohongshu’s latest arrivals were eager to try out the new app despite its foreign nature.
Manassero, who posts videos about healthcare and power lifting to about 7,000 followers on TikTok, said she already has a much larger audience of 26,000 on Instagram. However, she was motivated to create an account on Xiaohongshu partly out of frustration at the U.S. government’s determination to outlaw TikTok.
“I don’t know what I’m doing, I don’t know what I’m reading, I’m just pressing buttons,” Manassero said in her first video post. The next morning, her account had received 5,000 views and 3,500 new followers. By Tuesday, the hashtag “Tiktok refugee” had received more than 90 million views and 2 million comments.
TikTokers sought each other out with introductions, follow requests and shared tips on how to navigate the app’s Chinese functions. On Monday, more than 190,000 viewers joined a live chat named “TikTok Refugees Club,” and held discussions in English about what a TikTok ban would mean and future plans for social media content. In the comments, users greeted new arrivals and lamented they could not understand each other.
“Maybe you can learn how to speak Chinese,” one user wrote in English.
“Where’s the translator?” another viewer asked in Chinese.
On Tuesday, the Wall Street Journal reported that Chinese officials had discussed the possibility of selling TikTok to a trusted non-Chinese party such as Elon Musk, who already owns social media platform X. However, analysts said that Bytedance is unlikely to agree to a sale of the underlying algorithm that powers the app, meaning the platform under a new owner could still look drastically different.
Manassero and other TikTokers expressed distaste at the prospect of migrating to U.S. tech platforms such as Instagram or X that could benefit from an influx of users if TikTok shuts down.
“We don’t want to turn around and make a bunch of billionaires even more rich,” she said. “I would honestly rather the app get shut down than be owned by Elon Musk.”
Though she is still trying to figure out how to use Xiaohongshu and message people back, Manassero said she would likely stay on the Chinese lifestyle app regardless of whether the TikTok ban goes through.
“The response has been so friendly and nice. It’s good energy,” she said. “This feels like the early TikTok days: a little more organic, so it’s fun.”
Business
Why TikTok Users Are Downloading ‘Red Note,’ the Chinese App
Manimatana Lee spent the past five years building one of the hottest commodities on the internet: a group of people who reliably watch her videos on TikTok.
She built an audience of nearly 10,000 followers with videos of herself vacuuming her house in Wisconsin while her youngest daughter napped in a carrier on her back. A video of Ms. Lee dancing and doing the dishes — while wearing her sleeping baby — has been watched more than one million times since November.
Now, with the Supreme Court soon to rule in a case that could determine whether TikTok could be banned in the United States over national security concerns, Ms. Lee and other Americans looking for alternatives are downloading Xiaohongshu, a social media app that is popular in China and little known outside the country.
“How funny would it be if they ban TikTok and we all just move over to this Chinese app,” Ms. Lee wrote on Monday on TikTok encouraging her followers to join her.
Xiaohongshu was the most downloaded free app in the U.S. Apple store on Tuesday. Over 300 million people, mostly in China, use the app, where they share short videos as well as still, text-based posts. People flocking to it said, in interviews and on the app, that they wanted to show they do not share Washington’s concerns about TikTok’s ties to China.
TikTok, which is available in more than 150 countries but not China, is owned by the Chinese internet company ByteDance. American creators who post videos on TikTok say the app has been a source of connection, entertainment and information since it became a sensation during the Covid-19 pandemic. Its secret sauce is its proprietary algorithm, technology that recommends a constant stream of short videos targeted to keep people scrolling.
But lawmakers in the United States and other countries have warned that the Chinese government could use TikTok to access data about its users such as location and browsing histories. Officials in Washington say they are also concerned that China could use TikTok to spread false information among the 170 million people who use it in the United States.
Xiaohongshu means “little red book” in Mandarin. Americans new to the app said they were not put off by the reference to a book of Mao Zedong’s sayings. Many call the app “Red Note.”
“I don’t really care if I’m using a Chinese app at all,” said Ms. Lee. “It’s like a place for me to escape reality. And if it’s making me feel good, I’m here for it.”
A group of American creators have sued the government over the law that could see the TikTok app forcibly sold or banned in the United States, and TikTok is paying their legal fees. Ms. Lee and another creator said in interviews that their interest in Xiaohongshu had not been incentivized by either company. TikTok did not respond to a request for comment.
The Americans on Xiaohongshu have rallied under the hashtag “TikTokrefugee,” which had been viewed 100 million times and sparked around 2.5 million discussion threads on the app by Tuesday.
Joining the app has put American users in closer contact with people online in China than they have ever been on TikTok. In China, people use Douyin, a very similar app that ByteDance used to develop the technology that made TikTok a worldwide hit. Douyin is difficult to access outside China.
Many shared tips on how to navigate the app, which is mainly made for and used by people who read and speak Mandarin. Some took screenshots and asked ChatGPT to translate posts, they said.
Xiaohongshu displays the city or province of Chinese users who post and comment, and the country for users outside China. “We are coming to the Chinese spies and begging them to let us stay here,” said one American user. “Approved, welcome to Red Note,” someone in Shanghai replied.
Until late December, 85 percent of Xiaohongshu traffic was from China, according to Similarweb, a data provider and website traffic tracker. The app is especially popular among women in their 20s and 30s, and its long comment threads have become a popular source of information for people to swap questions about everyday concerns, similar to Reddit.
Xiaohongshu did not respond to requests for comment.
On Tuesday, more than 100,000 people had joined a live group chat hosted by a user named “TikTok Refugee Club,” where people from around the world chatted with Chinese users about urban safety. In another group chat, which had been viewed more than 30,000 times, participants discussed censorship and shared tips in the comments on how to avoid being banned from the platform for bringing up politically sensitive topics.
Under another video posted by someone who said they were usually on TikTok, a user in China responded with a meme of a cat with paws outstretched. “I’m your Chinese spy,” the comment said, “give me all your data.”
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