Retailers like Walmart and Target are cutting prices on everyday essentials in response to inflation and in an effort to attract more customers. Walmart reported a 3.8% increase in sales in the first quarter and has rolled back prices on nearly 7,000 items in its stores. Target also slashed prices on more than 1,500 items and is expected to make more price cuts over the summer. Other retailers like Ikea and Aldi have also reduced prices recently, indicating a trend towards lower prices in the retail sector.
While the price cuts from retailers are a positive sign that inflation may be coming down, other areas such as housing and wage growth need to also stabilize to reach the Federal Reserve’s 2% target. The median price of a previously owned home in the US has increased, and wage gains have slowed but remain above historical averages. The Fed’s progress on tamping down inflation stalled in the first quarter, leading to concerns about when rates might be cut. However, recent data suggests that inflation is cooling again, with consumer prices rising at a slower rate.
The economy is also showing signs of cooling, with Americans falling behind on payments and becoming more frugal. Retail sales were unchanged in recent months, indicating that consumers are dialing down their spending. This trend of decreased spending could be contributing to the price cuts from retailers, as they try to attract more customers in a challenging economic environment. The upcoming data on the Personal Consumption Expenditures index for April will provide more insight into inflation levels and consumer spending.
In a separate story, there is speculation about whether Scarlett Johansson will sue OpenAI for creating a voice assistant that sounds like her performance in the film “Her.” Johansson claims that OpenAI tried to hire her to voice an AI assistant for ChatGPT, and when she refused, they used a sound-alike voice. Legal experts believe Johansson may have a credible claim if she decides to sue, pointing to past cases that could lead to significant damages for OpenAI. This incident highlights the lack of industry oversight in AI and the need for greater protections for creators.
In the UK, regulators fined Citigroup £62 million for failures in its trading systems that almost resulted in a massive stock dump on European markets. Citigroup faced fines from the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority for the trading system failures. The fines were reduced by 30% because Citigroup agreed to settle the matter and took steps to strengthen its systems and controls. The incident may have been caused by a fat-finger error, where incorrect data is inputted due to pressing the wrong key, but Citigroup did not comment on this speculation.
