What I Read This Week…

The Federal Reserve is expected to cut interest rates by 25 basis points this week, xAI released an updated version of Grok, and researchers at MIT have developed a new way to see inside living tissue

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Caught My Eye…

• ​​The Federal Reserve is expected to cut interest rates by 25 basis points later this week, even though CPI has risen to 2.7%. What's going on? Earlier this week, the Bureau of Labor Statistics reported that November CPI increased for the second straight month, with CPI at 2.7% compared to last year. Despite this higher inflation, markets are pricing in a 96% chance of a rate cut at the December 18th FOMC meeting. Why? First, investors speculate that recent inflation increases haven't diverged far enough from the Federal Reserve's forecasts to reverse their policy direction. Second, investors believe the Federal Reserve will move to cut rates to address rising unemployment, which has climbed from 3.7% to 4.2%, given its dual mandate of both stable prices and maximum employment. However, if the Fed cuts rates while inflation continues to increase, it risks creating a situation of rising prices and slowing growth - a combination that could lead to stagflation.

• xAI recently released an updated version of Grok-2, making it available to all X users. Among its new features, Grok can now draw information from both X posts and the broader internet, providing answers with citations that users can explore for deeper context. The model's integration with X's platform gives it access to a massive continuous stream of real-time, proprietary data - encompassing text, images, audio, and human interactions from across the platform. Grok's direct access to this data could provide a competitive advantage that compounds over time. Through Reinforcement Learning from Human Feedback and its integration with X's platform, Grok's access to proprietary data could make it the most contextually aware and up-to-date AI chatbot available.

• Researchers at MIT have developed a new way to see inside living tissue without having to cut or chemically treat the sample. Traditional imaging methods require scientists to process tissue samples first, which kills the cells and makes it impossible to study how they behave naturally. Their new method uses specialized lasers to look more than three times deeper into tissue than previous techniques - from 200 to over 700 micrometers. The technique works by shining a controlled laser light through a flexible fiber optic cable that, when bent, adjusts the color and intensity of the light to minimize scattering as it travels through tissue. By controlling exactly how the light penetrates the tissue, researchers can capture clearer images of living cells in action, making it useful for studying how diseases progress, how drugs work in the body, and how the immune system responds to threats. The researchers are now working to improve the technology by developing algorithms that take the images and reconstruct the full 3D structures of the biological samples in high resolution.

Other Reading…

• David Sacks, from ‘PayPal Mafia’ to Trump’s AI and Crypto Tsar (Financial Times)

• ABC Will Give $15 Million to Trump's Presidential Library to Settle Defamation Lawsuit (AP News)

• Federal Appeals Court Declines to Temporarily Block Ban on TikTok (CNN Business)

• Trump Team Wants to Scrap Car-Crash Reporting Rule that Tesla Opposes (Reuters)

• The AI Revolution is Running Out of Data. What Can Researchers Do? (Nature)

• The Solar Power Enthusiasts Importing Their Own Equipment From China (WSJ)

• Chinese Naval Exercise Leaves Taiwan and U.S. Struggling for Response (Financial Times)

• Endemic Discontent Leaves Little Sympathy for U.S. Health Insurers (Financial Times)

• Gukesh Becomes the Youngest World Champion in History (lichess.org)

On X…