This is Bloomberg Opinion Today, a philosophical investigation into Bloomberg Opinionâs opinions. Sign up here. The Federal Reserve isnât do [Bloomberg](
Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a philosophical investigation into Bloomberg Opinionâs opinions. [Sign up here](. Todayâs Agenda - The Federal Reserve [isnât done fighting inflation]( yet.
- [Bonus blues for bankers](.
- [South Africaâs problems]( run deeper than the presidentâs sofa.
- [Britainâs ailing workforce]( is hurting the nationâs economy.
The Recession Isnât Ready Yet Novemberâs 0.6% month-on-month increase in US wages âis going to be eye-popping for the Fed,â according to [Cliff Hodge](#BIO%2020583127), chief investment officer for Cornerstone Financial. Strong wage growth combined with Fridayâs higher-than-anticipated 263,000 gain in nonfarm payrolls mean the US central bank needs to continue tightening monetary policy in the coming months â with borrowing costs likely to head higher than [many investors are currently anticipating](, argues Bloombergâs editorial board. âThe Fed has been tightening very rapidly by its own past standards, and monetary policy is now much less accommodative than in the spring, but the policy rate isnât yet ârestrictiveâ in the ordinary sense,â the board writes. âConfidence in the central bankâs ability and determination to get inflation back down to 2% is one of its most powerful assets.â An official interest rate as high as 6%, up from 4% currently, may be required to curb consumer price increases. Within Fridayâs data, whatâs happening in the service industry is [crucial to the Fedâs thinking](. Annualizing the last three months of data suggests a trend rate of service-wage inflation of about 6.2%, according to Jonathan Levin. The Fed probably estimates the sustainable non-inflationary rate sitting somewhere below 3.5%. âWith the Fed committed to preventing inflation from becoming entrenched, policymakers are likely to err on the side of doing too much rather than too little,â Jonathan argues. âEvery time they get a piece of data like the wage gains, it only reinforces their will to stay the course.â Hold the Champagne In 2021, investment banks rewarded employees with generous bonuses after enjoying two boom years fueled by governments and central banks opening the money spigots to ameliorate the economic impact of pandemic lockdowns. This year, market volatility has boosted revenue in fixed income, currencies and commodities. So bonuses will be juicy once again, right? Wrong. Last year set â[an unusually high bar for bonuses](,â argues Paul J. Davies. Restraint in 2020 during the pandemic was replaced by largesse amid a war for talent, with banks jostling for staff with tech companies and private equity firms. Competition is much less fierce now. Meantime, some star performers were offered guarantees, which will leave less available for others this year. âExecutives will likely be telling traders to compare this yearâs bonuses to what they got in 2020 rather than in 2021,â Paul writes. Sofa, Not So Good Who among us hasnât earned $580,000 from selling buffalo and [tucked the proceeds down the cushions of a sofa]( ⦠only to have the cash stolen? The fate of South African President Cyril Ramaphosa hangs in the balance after an independent panelâs investigation into the robbery said there may be grounds for his impeachment. But the country is being held back by economic problems that run deeper than the political travails of the ruling African National Congress party, argues Dan Moss. Three decades after the end of apartheid, â[the worldâs love affair with South Africa has passed](,â Dan writes. Soaring unemployment has undermined efforts to lay the foundations for a strong economy. And political instability has deterred investors, undoing the countryâs 1990s status as an emerging market darling.  âIf the world begins an economic recovery in 2023, South Africa is unlikely to miss out entirely,â says Dan. âBut with a jobless rate approaching 33%, state-backed firms struggling to pay debts, streets without basics like electricity and water, it will take more than a global upswing to treat the countryâs ills.â Telltale Charts Ailing health and shoddy care are driving many older people [out of the workforce in the UK](. That poses a threat to Britainâs growth prospects, argues Therese Raphael. Further Reading The US and UK should be welcoming overseas talent, [not driving it away](. â Mihir Sharma ESG shouldnât convince anyone anymore. [Just look at the World Cup](. â Merryn Somerset Webb [Japanâs World Cup team]( does more than tidy up. â Gearoid Reidy Balenciaga wonât win [its bizarre lawsuit](. â  Stephen L. Carter Biden needs to put up or shut up on [replenishing US oil reserves](. â Liam Denning ICYMI Inside [Sam Bankman-Friedâs Bahamian penthouse]( after the collapse of his crypto exchange FTX. [Elon Musk suspended Ye from Twitter]( after the artist formerly known as Kanye West posted a depiction of a swastika embedded in a Star of David. McLaren sold some of its [prized vintage supercars](to stave off a liquidity crunch. Formula 1 [canceled its 2023 China Grand Prix](, citing âthe ongoing difficulties presented by the COVID-19 situation.â Kickers Beavertown Brewery has brewed a Christmas beer called [Frozen Neck](, which is infused with âedible glitter for a seasonal snowglobe effect in a glass.â (h/t Andrea Felsted) A [Beverly Hills cop]( was Californiaâs highest-paid municipal worker last year, earning $716,000. A device called a [SharkGuard]( shows promise in repelling sharks away from being hooked by industrial fishing vessels. Notes:  Please send sparkly ale and feedback to Mark Gilbert at magilbert@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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