Slowing rapid U.S. inflation has been an unexpectedly painless process so far. High interest rates make it expensive to take out a mortgage or borrow to start a business, but they have not slowed economic growth or dramatically increased unemployment.

Yet price increases have been fluctuating around 3.2 percent for five months. This flat line raises questions about whether the latest phase in the battle against inflation could prove more difficult for the Federal Reserve.

Fed officials will have a chance to respond to the latest data on Wednesday when they conclude a two-day policy meeting. Central bankers are expected to leave interest rates unchanged, but their new quarterly economic forecasts could show how the latest economic developments influence their view on the number of rate cuts this year and next.

The Fed’s latest economic estimates, released in December, suggested Fed officials would cut rates by three quarter points by the end of 2024. Since then, the economy has remained surprisingly strong and inflation, while still down sharply from 2022 highs, has proven stubborn. Some economists think it’s possible officials could adjust their rate cut expectations, predicting just two steps this year.

By leaving interest rates higher for a little longer, officials could continue to put pressure on the economy and guard against the risk that inflation would pick up again.

“The Federal Reserve should not be in a race to cut rates,” said Joseph Davis, Vanguard’s chief global economist, explaining that the economy has held up better than would be expected if rates were to drastically depress growth , and that premature cuts risk inflation will heat up in 2025. “We have an increasing chance that they won’t cut rates at all this year.”

Mr. Davis’ team is an outlier in that regard: Investors in a broader sense still see a very small chance that the Fed will keep interest rates at the current 5.3 percent through 2024.

But markets have been steadily reassessing how many rate cuts they expect. Investors now expect central bankers to cut interest rates three times by the end of the year to around 4.6 percent. Just a month ago they expected four cuts and saw a reasonable chance of five.

Two major developments have shifted these views.

Inflation is stronger than expected. The consumer price index exceeded economists’ expectations in January and February, as inflation in the services sector proved persistent and some goods, such as clothing, rose in price.

Wholesale inflation – which measures the costs of purchases companies make – also came in higher than expected in the data released last week. That matters because it contributes to the personal consumption expenditures inflation index, a measure with a longer lag, but the one the Fed officially targets with its 2 percent inflation target.

Given the data, Fed officials will likely use this meeting to debate “whether inflation can continue to cool,” Diane Swonk, chief economist at KPMG US, wrote in a research note.

“The concern is that the low-hanging fruit associated with the recovery of supply chains and the fall in commodity prices has been picked, while a floor may be emerging under prices in the services sector,” she explains.

The second development is that the economy still has a lot of momentum. Job growth was solid in February, although the unemployment rate rose wage growth only slows down slowly. If the economy retains too much strength, it could keep the labor market tight and wages rising, which in turn would give companies an incentive to raise prices. That could make it difficult for the Fed to reduce inflation in a sustainable way.

The Fed does not want to cut interest rates prematurely. If the central bank fails to quickly get price rises under control, it could convince consumers and businesses that inflation is likely to be higher in the future. That could make it even harder to eradicate inflation over time.

At the same time, the Fed does not want to leave interest rates high for too long. If it does, it could do more damage to the economy than necessary, costing Americans jobs and wage increases.

Fed officials have been signaling for months that interest rates are coming soon, but they are also trying to keep their options open on timing and size.

Jerome H. Powell, the Fed chairman, recently said in testimony to Congress that it would be appropriate to cut rates if the Fed is confident that inflation has fallen sufficiently, adding: “And we are not far from it.”

But several of his colleagues have struck a cautious tone.

“Right now, I think the biggest mistake would be to cut rates too early or too quickly without sufficient evidence that inflation is on a sustainable and timely path,” said Loretta Mester, the president of the Federal Reserve Bank of Cleveland, in a statement. a recent speech. That point was echoed by other officials, including Christopher Wallera Fed governor.

Fed officials have another policy project on their plate in March: They have indicated they will discuss their future plans for their bond-invested balance sheet. They have shrunk their balance sheets by allowing securities to mature without reinvestment, a process that takes a little bit of energy out of the markets and the economy at the margins.

The Fed’s balance sheet grew during the pandemic as it bought bonds in large quantities, first to calm markets and later to stimulate the economy. Officials want to return it to more normal levels to prevent it from playing such a major role in financial markets. At the same time, they want to avoid reducing their bond investments so much that they run the risk of a market burst.

George Goncalves, head of US Macro Strategy at MUFG, said he thought officials would first want to make a plan to slow the deleveraging of balance sheets, and then move on to interest rate cuts. He thinks the first rate cut could come in June or July.

Michael Feroli, the chief US economist at JP Morgan, expects a rate cut in June – and said he doubted the argument that finishing the job on inflation could prove harder than starting it. He thinks cooling labor costs and housing inflation will continue to slow price increases.

“Maybe we’re getting a little nervous,” Mr. Feroli said. The idea that the “last mile” will be more difficult “has a nice rhetorical appeal, but then you bounce back a bit, and I’m not convinced.”

Reid Hoffman, founder of LinkedIn and longtime venture capitalist, is no longer the public face of venture capital firm Greylock. Michael Moritz, who has worked at Sequoia Capital for 38 years, officially separated from the investment firm last summer. And Jeff Jordan, a top investor at Andreessen Horowitz for 12 years, left in May.

They are among the most recognizable of a generation of Silicon Valley investors who are retiring from venture capital at the end of a lucrative 15-year boom for the industry.

Many more are leaving. Investors at Tiger global, Paradigm, Lightspeed Venture Partners, Emergence capital And Spark Capital have all announced plans to step back. Foundry Group, a venture capital firm in Boulder, Colorado that has backed 200 companies since 2006, said in January that no new fund would be raised.

All told, the steady number of departures has created a sense that venture capital – a $1.1 trillion A corner of the financial world that invests in young, private companies, sometimes spawning companies like Apple, Google and Amazon, is in a moment of transition.

“We are at an inflection point,” said Alan Wink, director of capital markets at EisnerAmper, which provides advisory services to venture capital firms. While there have been waves of retirements in the past, he said this one was more pronounced.

The turnover creates an opening for new investors to step up, potentially changing the power players in Silicon Valley. That could also change the calculus for young companies as they decide which venture firms to seek funding from.

Yet the latest generation of investors is faced with a startup investment landscape that has become more challenging. Few venture capital funds benefit from the huge windfalls – which come from start-ups going public or being bought – that can safeguard an investor’s reputation. That also makes it harder for venture capital firms to raise money, with industry fundraising falling 61 percent last year and some major companies lowering their targets.

The latest generation of investors, including Mr. Moritz, 69; Mr. Hoffman, 56; John Doerr of Kleiner Perkins, 72; Jim Breyer of Accel, 62; and Benchmark’s Bill Gurley, 57, rose to prominence by betting on consumer internet startups such as Google, Facebook, Uber and Airbnb, which grew into giants.

Today’s emerging venture capitalists are waiting for their version of those winners. Some of the most valued startups — like OpenAI, the $86 billion artificial intelligence company — are in no rush to go public or sell. And it could take years for the frenzy surrounding generative AI to translate into big wins.

“We are in a period of reset, based on where the technology is and where it is going,” said David York, an investor at Top Tier Capital, which invests in other venture capital firms. “These stars will emerge.”

Industry stalwarts like Vinod Khosla of Khosla Ventures, Marc Andreessen of Andreessen Horowitz, and Peter Thiel of Founders Fund continue to write checks and exert influence. (All three companies have supported OpenAI.)

But many others are stepping down as a 15-year winning streak that has generated billions in profits for the industry recently turned into a downturn. Venture capital firms typically invest in ten-year fund cycles, and some aren’t eager to commit to another decade.

“There’s a bull market element to it,” said Mike Volpi, 57, an investor at Index Ventures who recently said he would withdraw from the firm’s next fund. Mr Volpi’s decision was previously reported via the Newcomer newsletter.

EisnerAmper’s Mr. Wink said that in some cases, the investors backing venture capital funds would like fresh blood. The message he said: Get on top.

“Don’t be like many professional athletes who sign that last contract and your on-field performance is nowhere near what it was in your glory days,” he added.

For years, venture capital could only grow, driven by low interest rates that encouraged investors around the world to take on more risk. Cheap money, the proliferation of smartphones, and abundant cloud storage have allowed many technology startups to flourish, delivering huge returns for investors who had bet on these companies over the past fifteen years.

According to PitchBook, which tracks startups, investment in U.S. startups increased eightfold to $344 billion between 2012 and 2022. Venture capital firms grew from small partnerships into huge asset managers.

The largest venture capital firms, including Sequoia Capital and Andreessen Horowitz, now manage tens of billions of dollars in investments. They have grown into more specialized funds focusing on assets such as cryptocurrencies, opened offices in Europe and Asia and entered new areas such as asset management and public equities.

Andreessen Horowitz, Sequoia Capital, Bessemer Venture Partners, General Catalyst and others also became registered investment advisors, meaning they could invest in more than just private companies. For a short time, venture capital was the job for ambitious young people in the financial sector.

The expansions have contributed to some investors deciding to take a step back. Mr. Volpi, who joined Index Ventures in 2009 after 14 years at Cisco, said he got into venture capital because of a change of pace from the corporate world. He has backed startups including work messaging company Slack and AI startup Cohere.

But over the years, Index – and the venture industry as a whole – grew bigger and more professional.

“Maybe it’s up to someone else to fight that battle,” Mr. Volpi said.

Many venture capital funds have also grown so large that owning a stake in a “unicorn,” or a startup valued at $1 billion or more, is no longer enough to generate the same profits as before.

“If you want to give three times your money back, a unicorn is not enough,” said Renata Quintini, an investor at Renegade Partners, a venture capital firm. “You need a decacorn,” she added, referring to a start-up valued at $10 billion or more.

The largest companies have moved from providing profits to their investors from the traditional definition of venture capital — very young, risky companies with the potential for outsized growth — to a more general idea of ​​“tech exposure,” Ms. Quintini said.

Manu Kumar, founder of venture capital firm K9 Ventures, has felt the shift. Since 2009, he has written checks of $500,000 or less to invest in very young companies. Some of those investments, including Lyft and Twilio, went public, while others were sold to larger tech companies like LinkedIn, Meta, Google and Twitter.

But starting last year, he said, the venture capital investors who would have provided the next round of funding to the startups he backed began demanding more progress before investing. (Startups typically raise a series of increasingly large financings until they go public or sell.) And potential buyers were laying off workers and cutting costs, not acquiring startups.

“Companies today have only one option,” Mr Kumar said. “They need to build a real business.”

In October, Mr. Kumar told investors that the math of his investment strategy was no longer working and that he would not create a new venture capital fund. He plans to keep an eye on the market and revisit the option in a year.

“I want to be convinced of what my strategy will be,” he said. “I don’t have that belief at the moment.”

Donald Trump, who is desperately seeking a cash infusion to support his presidential campaign, met in Palm Beach, Florida, on Sunday with Elon Musk, one of the richest men in the world, and a pair of wealthy Republican donors, according to three people who had been briefed on the meeting who spoke on condition of anonymity to describe a private conversation.

Trump and his team are working to find additional major donors to shore up his finances as he heads into the expected general election against President Biden. Mr. Trump has praised Mr. Musk to allies and hopes to have a one-on-one meeting with the billionaire soon, according to a person who has discussed the matter with Mr. Trump.

It is not yet clear whether Musk plans to spend any of his fortune on Trump’s behalf. But his recent social media posts suggest he believes it is essential that Biden is defeated in November – and people who have spoken to Musk privately have confirmed that is indeed his view.

With a net worth of around $200 billion, Mr. Musk could decide to throw his support behind Mr. Trump and potentially, almost single-handedly, erase the enormous financial advantage of Mr. Biden and his allies, according to Forbes. over the former president.

Aides to Mr. Trump did not respond to a request for comment. Mr Musk did not respond to requests for comment.

Mr. Musk has long portrayed himself as an independent spirit, and like many other business leaders, he has donated to candidates from both parties over the years. Unlike other American billionaires, he hasn’t spent much money on presidential elections, and his donations over the years have been split fairly evenly between Democrats and Republicans. Musk’s companies, Tesla and SpaceX, have benefited from contracts and subsidies from the federal government.

A person close to Mr Musk said his relationship with the government had historically made him wary of identifying too closely with one political party over another. In 2017, the billionaire famously resigned from two business advisory boards when Mr. Trump was president over Mr. Trump’s decision to withdraw from the Paris climate accord.

“Climate change is real,” Musk posted on Twitter in June 2017. “Leaving Paris is not good for America and the world.”

The two have had other moments of friction. A few months before the midterm elections, in the summer of 2022, he spoke with the former president traded insultswith Mr Trump calling him a curse and Mr Musk saying it was time for the former president to ‘sail into the sunset’.

At the same time, however, Musk became more open about his preference for the Republican Party.

On the eve of the midterm elections, he told his more than 100 million followers on a Republican Congress. He has railed against what he describes as the left’s “woke” agenda and attacked Mr Biden over the record number of migrants entering the United States during his presidency.

Mr Musk’s comments on immigration have become increasingly alarmist. He has suggested that the president’s immigration policies threaten the very existence of America and have pushed American democracy to the brink. He has suggested that Democrats are “bringing in large numbers of illegals.” to cheat during elections. There is no evidence to support his claim of massive voter fraud.

“America will fall if it tries to absorb the world,” Musk said Posted at X on Tuesday. Earlier today he said Posted that the Biden administration’s immigration policies amounted to “treason.”

The person close to Mr Musk, who spoke on condition of anonymity, said that if he is behind Mr Trump, his views on immigration will have been a key motivator.

Mr. Musk has previously raised questions about Mr. Biden’s age and once repeated one of Mr. Trump’s favorite jokes by claiming that the president “still sleepingafter Mr Biden failed to congratulate any of his companies. Mr Musk also nursed a grudge against the president after the White House did not invite Tesla to an event on electric vehicles in August 2021.

“Let’s not forget that the White House is killing Tesla and excluding us from the EV summit,” said Tesla CEO Musk. posted on X in December.

Mr Musk visited the White House in September to discuss issues surrounding artificial intelligence NBC News, which obtained visitor logs. Mr Biden and Mr Musk did not meet during the visit.

After purchasing Twitter in October 2022, Mr Musk reinstated Mr Trump’s account. The former president was barred from the stage after the Jan. 6 attack on the Capitol, a decision that Musk had previously suggested was a mistake.

Still, it was far from clear that Mr. Musk would support Mr. Trump’s presidential bid. Mr. Musk had indicated before the Republican nominating contest that he was lean in the direction supporting Florida Governor Ron DeSantis. Mr. DeSantis kicked off his formal candidacy in a live-streamed audio discussion with Mr. Musk on X last May, and there was widespread speculation that a donation from Mr. Musk to the super PAC supporting Mr. DeSantis would follow. But that never happened.

On Monday, Mr. Musk appeared to criticize television host Bill Maher, who said in a clip on X that he would vote for Mr. Biden over Mr. Trump under almost any circumstance.

“Trump Derangement Syndrome (TDS) is a very real disease,” Musk wrote answer on X.

Even if Mr. Musk does not ultimately decide to donate to a pro-Trump super PAC or spend money in other ways to help Mr. Trump, his own megaphone is substantial. Mr. Musk has 175 million followers on X and has the ability to shape messaging like few others in America.

Kitty Bennett research contributed.

I can’t remember the last restaurant in New York that frustrated me so much Noksu.

My frustration will not be widely shared, given that few people can afford to eat there. Dinner costs $225 for approximately 12 courses, before tax, tip or drinks. Drinks can be paired with any course for an additional $175 (with alcohol) or $100 (without).

It would be easier to fire Noksu if it weren’t for the chef, Dae Kim. This is the first kitchen he has run and he is full of talent, a star in the making. But his ideas need to be shaped and shaped, and the setting in which he works is so generic that it distracts from what is distinctive about his cooking.

Most of what’s holding Noksu back are things it shares with, and may have copied from, other expensive tasting menu restaurants. It tries so hard to fit in with Atomix, Kono, Chef’s Table at Brooklyn Fare and other places that it forgets to assert its own identity.

Noksu got some early press because of its location, one flight underground in the 34th Street-Herald Square subway station. Apparently the concept of $400 dinners a few feet from the turnstiles and rails seemed novel to many people. I’m not sure why. Another generation would have called it slumming.

A few minutes before each of the two nightly services, a rolling gate clatters up to reveal a locked door with a keypad. To enter, I entered a six-digit code I had received several hours earlier. Behind the door hung a heavy curtain from floor to ceiling. At this point I was willing to see something behind it. A private sex club? Agent Kuiper?

But there was no such thing, just the usual tasting menu layout, a striped marble counter opposite a stainless steel kitchen, where a half-dozen chefs in white coats stood attentively over rows of white porcelain bowls, heads bowed like monks.

They stayed in that position for about ten minutes, making minor adjustments to what was in those bowls. I had time to settle down, ask for a drink and look around. Time to wonder if Noksu’s secret door in a subway station reminded me of the secret door at Brooklyn Fare (in a supermarket near the jams and jellies) or the one at Frevo (behind one of the works of art displayed in a gallery hang on the store) or at Mr. Moto’s office (opened by a code embedded in a number).

And I had time to ask why so many restaurants with tasting menus, no matter how they hide their entrances, look the same inside: the long counter of polished stone, wood or steel; the upholstered stools that are so high and heavy that the waiters have to help you get in and out, as if you were a small child getting into a high chair; the empty, windowless walls.

Nowadays there are restaurants like this in almost every major city, imitation pearls on a string that go around the world. Once the door closes, you can be anywhere or nowhere. How did chefs who value both originality and a sense of place decide that the most appropriate backdrop for their food would be copycat rooms, decorated in a blank, global style?

Noksu’s design does Mr. Kim no favors. That also applies to the playlist, which runs through the most obvious megahits from the ’80s Toto, Don Henley, even Huey Lewis and the news. It’s like you accepted a dinner invitation from Patrick Bateman.

Mr. Kim has a collection of gifts that any young chef would long for: an eye for arranging dishes that invite you in by keeping a few secrets; an affinity for seafood, which is central to almost every course; an impressive technical control that allows him to spherify truffle juice and spin delicate rye tulips into Spirograph lattices.

Time and again, he prepared complex dishes that would be difficult in a kitchen twice the size of Noksu’s. There was a miniature tart not much bigger than a bottle cap, filled with plump raw tailfin, maitake mushrooms glazed with Madeira and crispy leek strands. Marinated rock shrimp were folded into a slice of raw bluefin tuna, scored for tenderness; this all-seafood wrap was surrounded by a dark and quietly spicy liquid that tasted like long-caramelized onions and carrots. (If this were one of those restaurants, it would be great with prime rib, too.)

Plum vinegar-cured sardines were topped with individual potato chips and strings of radicchio in an eerily smooth Caesar dressing. During many courses my eyes opened wide with something like wonder. There were filigree wildflowers, mysterious little tuna-bellied creatures with mustard seed eyes and microgreen antennae, and something that looked like a slice of black truffle but melted like butter.

I have never doubted Mr. Kim’s skill, patience or willingness to put in a tremendous amount of work on dishes that take less than a minute to eat. But I’m not entirely sure what he’s trying to say. He was born and raised in South Korea, and the first word spread by the restaurant suggested that he would interpret Korean cuisine. That doesn’t seem to be his goal. Kimchi and other Korean ingredients appear in small roles, but this is a modern, global cuisine with tasting menus built largely on Japanese and French foundations.

There were dishes so eerily delicious that I suspected Mr. Kim was receiving secret transmissions from another world, like the medium-rare piece of wild coho salmon with a pistachio-celery sauce on one side and a light swoosh of yuzu hollandaise on the other. . . And I wouldn’t have missed the moment when, after the soft, impressionistic brushwork of the seafood dishes, he suddenly becomes Damien Hirst, serving up a delicious and completely unadorned squab, its crispy skin lacquered with red vinegar and malt sugar like a duck in a Chinatown window with his fried head wedged between the curled toes of his foot.

The daring of that group represented tasting menu cuisine at its best. But one evening it was followed by a venison dish served at room temperature; I could only choose.

Lukewarm food is so common in this style of cooking that someone in the movie “The Menu” says to the autocratic chef, “Even your hot dishes are cold.” Some of the dialogue from the film returns almost verbatim to Noksu, such as when a waiter indicated that a dish is ‘so beautiful that I can’t eat it’. Each course was served with precise instructions on how to transport it from plate to mouth. Not that I blame the servers. When diners at these types of restaurants are not given instructions, they become so confused that they ask what “the chef recommends.” When you see a restaurant full of grown adults waiting for permission to eat with a spoon, you really wonder how humans haven’t gone extinct yet.

How can the people behind Noksu not see what was obvious to the creators of “The Menu”: that the conventions of tasting menus have become laughable clichés? There was a time when fine dining restaurants took pride in catering to diners’ preferences. Noksu won’t even change a dish due to a life-threatening allergy: a disclaimer on the website reads: “We cannot accommodate vegan/vegetarian/celiac diets, as well as any allergies or aversions to seafood, shellfish, dairy products or allium. Chef Dae has designed the menu so that it can be eaten in its entirety to maximize the flavor profile.”

I’m allergic to the term flavor profile, but I still wanted to love Noksu. Sometimes I convinced myself I could do it. However, I think its joys and shortcomings are hopelessly intertwined. If there is a secret code that can unravel them, I hope someone will send it to me.

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