Source: Statista

As expected, the Federal Open Market Committee (FOMC) decided to keep the target range for the federal funds rate at 5.25 to 5.50 percent for the fifth consecutive meeting, as it wants to “gain greater confidence that inflation is moving sustainable toward 2 percent” before beginning to cut rates. Two years into the most aggressive tightening cycle since the early 1980s, one thing appears to be clear though: unless something extraordinary happens and inflation unexpectedly heats up again, we have like reached the ceiling and rates will only go down from here.

“The economy has made considerable progress toward our dual mandate objectives,” Fed chairman Jerome Powell said at a press conference. “Inflation has eased substantially while the labor market has remained strong, and that is very good news.” Powell refused to declare ‘mission accomplished’ just yet, though, pointing out that “inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain.” He did say that it would “likely be appropriate to begin dialing back policy restraint at some point this year,” though, which is about as optimistic as it gets from Powell, who has been very cautious with his rhetoric throughout the inflation crisis. In agreement with their chairman, FOMC meeting participants also reiterated their belief that rate cuts are on the horizon for 2024. According to projection materials published on Wednesday, we could see as many as three 25 basis point cuts before the end of the year, with 15 out of 19 meeting participants anticipating that the target range for the federal funds rate will fall below 5 percent by year’s end.

For next year and beyond, the committee members expect interest rates to return to lower levels, albeit at a slower pace than previously anticipated. Looking at the dot plots for 2025 and beyond also reveals a high degree of uncertainty and different levels of optimism within the committee, as predictions for the appropriate policy rate at the end of 2025 range from 2.625 to 5.375 and from 2.375 to 4.875 for the end of 2026.

Source: Statista

On Wednesday, the U.S. House of Representatives passed a bill that would force TikTok’s parent company ByteDance to sell the popular social media platform in order to cut any ties between TikTok, its current parent company and the Chinese government. The bill, officially called “Protecting Americans from Foreign Adversary Controlled Applications Act”, alleges that TikTok is at least indirectly controlled by the Chinese Communist Party, allowing the latter to “surveil and influence the American public” and thus poses “an unacceptable risk to U.S. national security.”

The bill essentially says that ByteDance must sell TikTok or at least the U.S. arm of it to a company that has no ties to a “foreign adversary” within six months. If that is not the case, it would be unlawful for app stores and web hosting companies to distribute the app in the United States. But there are a lot of hurdles left to clear: Aside from the fact that the bill still faces a long legislative process and is widely considered unlikely to pass the Senate, it would be hard to find a buyer for what is one of the most popular social media platforms in the U.S. and globally. Paradoxically, the few companies that could afford to buy TikTok would likely be banned from doing so. Meta for example, already under antitrust scrutiny for its social media dominance, would never be allowed by the FTC to acquire another hugely popular social media platform.

In recent years, TikTok has surged in popularity in the U.S. and across the globe, captivating users with easily consumable content. With its innovative short-form video format, TikTok has become a cultural phenomenon, influencing trends in music, dance, comedy and beyond. Its algorithm-driven content recommendation system has proven highly effective in keeping users engaged, inspiring other social media platforms to turn lean heavily into algorithm recommendations as well (hello Instagram!).

According to Statista Consumer Insights, 4 in 10 U.S. adults aged 18 to 64 regularly used TikTok in 2023, making it the fourth most popular social media platform in the U.S., trailing only Facebook, YouTube and Instagram. That’s up from just 14 percent in 2020, showing how quickly TikTok has established itself as a key player in the social media landscape following its launch arrival in the United States in 2018. As our chart shows, the app is particularly popular among younger users with almost 60 percent of 18 to 29-year-olds using it regularly. It is also the most popular social media platform for U.S. teens according to another recent survey, which is why some lawmakers fear it could be used by the CCP to “indoctrinate” the American youth.