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Adapted from the U.S. Department of Commerce; Chart: Axios Visuals

The Fed's preferred measure of inflation sank in the first quarter, coming in at 1.3% compared to 1.8% in the prior quarter, the Commerce Department said on Friday.

Why it matters: Inflation continues to drift further below the Fed's 2% target, despite strong economic growth and a booming labor market — strengthening the case to hold off on raising interest rates and potentially cut rates.

  • As of Friday afternoon, traders' bets that the Fed would cut rates by year-end jumped 1.3% higher from where they were yesterday. In the meantime, the odds of two rate cuts rose to 20% from 15%.

The backdrop: The Trump administration, including President Trump himself, has called on the Fed to cut interest rates and sought to fill vacant seats at the Fed with candidates who support this case.

  • The White House's top economic adviser Larry Kudlow said again on Friday that the Fed should cut rates, telling CNBC: "The inflation rate continues to slip lower and lower."
  • Fed officials have also hinted at the possibility of a rate cut, as Bloomberg points out. Earlier this month, Chicago Fed president Charles Evans told reporters that if "inflation were to move down to, let's just say, 1.5%" that would mean interest rates at the current level were "holding back inflation, and so that would naturally call for a lower funds rate."

What's next: The Fed will hold a two-day policy meeting next week. No rate change is expected, but brace for plenty of questions about whether or not the Fed is concerned about the inflation slowdown.

Go deeper: The absence of inflation is forcing a wide-ranging rethink of long-held economic assumptions

Go deeper

The TikTok deal's for-show provisions and flimsy foundations

Illustration: Aïda Amer/Axios

The new deal to rescue TikTok from a threatened U.S. ban — full of provisions aimed at creating the temporary appearance of a presidential win — looks like a sort of Potemkin village agreement.

How it works: Potemkin villages were fake-storefront towns stood up to impress a visiting czar and dignitaries. When the visitors left, the stage set got struck.

  • Similarly, many elements of this plan look hastily erected and easily abandoned once the spotlight moves on.
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Over 3 million U.S. voters have already registered on social media

Illustration: Eniola Odetunde/Axios

An estimated 2.5 million+ Americans have registered to vote on Facebook, Instagram, and Messenger, Facebook announced Monday. More than 733,000 Americans have registered to vote so far via Snapchat.

Why it matters: The broad reach of social media platforms makes them uniquely effective at engaging voters — especially younger voters who may not know how to register to vote or be civically engaged.

Felix Salmon, author of Capital
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Wall Street: Recession is over

Illustration: Aïda Amer/Axios

U.S. economic activity fell more sharply in the second quarter of this year than during any other quarter in history. It's also going to grow more sharply in the third quarter of this year than during any other quarter in history.

  • The recession is over, according to Wall Street, with current forecasts showing sustained economic growth through 2021 and beyond.