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The U.S. dollar is soaring, Matt writes.

Why it matters: Exchange rates shape a whole bunch of economic activity — from trade flows, to where travelers take vacation, to the true value of corporate earnings generated overseas and then sent home.

• They also help shape global commodity prices and impact the ability of emerging market countries to repay their dollar-based debts.

State of play: The U.S. dollar index — which benchmarks the greenback against a basket of major currencies — rose more than 7% since mid-July.

How it works: Currency values fluctuate for a bunch of reasons, including the government's indebtedness, the prospects for growth, and the demand for trade and investment in the country.

• But perhaps the biggest driver of currency fluctuations is interest rate differentials.

Details: When a country's interest rates are relatively high — as they are in the U.S. at the moment — they act as a sort of financial magnet, attracting capital from all over the world to invest in that country.

• And since you need a nation's currency in order to invest in that country, people buy the currency, pushing its value up.

Good or bad? That depends on where you sit in the economy.

• If you're a U.S. corporation that does a lot of exporting, like Boeing or Deere for instance, the strong dollar is not your friend because it makes your goods more expensive for foreign buyers.
• The flip side: Companies that import supplies may find them cheaper.
• And if you're considering a vacation abroad, a strong dollar gives you more buying power when you're shopping on the Champs-Élysées.
• But if you're a person living in a poorer country, a surge in the dollar tends to wreak havoc on your economy.

What to watch: What executives have to say about the impact of the greenback on their bottom lines. We'll hear from a slew of them after the third-quarter earnings season begins next week.

• Profits at S&P 500 companies "are inversely correlated with the dollar, as international profits account for roughly a third of the total," wrote Morgan Stanley analysts in a note on Tuesday.
• "If higher-for-longer rates keep the dollar at recent levels, corporate profits will face a genuine headwind," they added.

🏥 75,000 Kaiser health care workers set to strike at 6am PT (9am ET) after contract talks stall. (Reuters)

💊 Pharma industry plays defense on merger guidelines. (Axios)

👓 Tech companies race to make AI you can wear. (Axios)

Those big wage hikes that unions are demanding — and some getting — are unlikely to set inflation soaring again, write Goldman Sachs analysts in a new paper, Emily writes.

Why it matters: The paper offers a straightforward response to concerns that union demands, like the UAW's initial ask for a 40% raise, will be a big hit to the economy — at least in terms of stoking inflation.

Zoom in: Union wage hikes are essentially an echo of the big wage increases we saw in the private sector over the past two years.

• That's because unionized workers are locked into longer-term contracts, and many couldn't immediately demand higher pay during the high inflation moments of 2021-2022. (That's partly why teacher pay is now lagging so far behind.)

Meanwhile: There just aren't enough unionized workers in the U.S. for their raises to make a huge difference to the economy. Just 10% of the overall workforce is unionized, a number that hasn't budged despite the recent flurry of high-profile organizing pushes.

• And the headlines about 40% raises are misleading — those numbers don't represent annual increases, but the percentage growth over the life of a multi-year contract.
• Some union workers have recently won their largest wage increases in decades, but these aren't double-digit gains. The latest union wage gains have averaged around 6% annually, Goldman points out.
• That's worth about 0.15 percentage points to the country's overall wage growth, the paper says.

The bottom line: Unions are now seeing the wage gains enjoyed by their nonunion counterparts last year, but their raises will have minimal impact on inflation.

It's the end of an era for the social media platforms X (formerly Twitter) and Facebook, as they mostly back away from elevating news content and instead focus on entertainment and viral trends, Axios' Sara Fischer writes.

• Traffic referrals to news sites from these platforms have collapsed.

The intrigue: Meanwhile, Campbell Brown, the veteran TV anchor who led Facebook's foray into news, is leaving the company, according to an internal note obtained by Axios.

Catch up fast: Under Brown's leadership, Facebook made a massive push into news, committing hundreds of millions of dollars to publishing partners on its platform.

• Amid regulatory pressure, the company started cutting funding for U.S. news publishers.
• For the media industry, that retrenchment — combined with a slower ad market — contributed to a record number of media job cuts this year.

What's next: Social's pullback could impact election season next year, as the ability of news outlets to provide voters with trusted information becomes more difficult.

"I get your point that [the CFPB's funding] is different, that it's unique, that it's odd, that they've never gone this far. But...not having gone this far is not a constitutional problem."

Why it matters: The Consumer Financial Protection Bureau may survive, after all.

• During oral arguments at the Supreme Court yesterday, justices on both sides of the aisle — including conservatives Thomas, Amy Coney Barrett and Brett Kavanaugh — appeared skeptical of the argument that the CFPB's funding is unconstitutional.

The rate on the 30-year mortgage is soaring — hitting 7.53%, the highest rate since December 2000, according to Mortgage Bankers Association data out this morning.

• "The rapid rise in rates pushed an increasing number of potential homebuyers out of the market," MBA's deputy chief economist said in a release. Mortgage applications for home purchases are at the lowest level since 1995.