A new artificial intelligence thingamajig called ChatGPT set the internet abuzz this week, Emily writes.

Why it matters: Essentially an artificial intelligence (AI) interface that texts you like a know-it-all human, ChatGPT could portend major disruptions ahead for Big Tech — particularly for the business of search.

How it works: Simply type a prompt into its interface, not unlike how you would use Google — and instead of returning links, ChatGPT writes you back in paragraphs.

• When asked "how do you crush inflation," ChatGPT gave an answer that Jerome Powell would probably feel OK about:
• "There are a few different ways to try to crush inflation, but most of them involve using monetary policy to manage the money supply and demand in the economy," went the opening of the bot's answer.

State of play: Experts are hailing ChatGPT, developed by a company called OpenAI, as a major breakthrough in the decades-long push to create a bot that texts with humans as though it were a person, too.

• ChatGPT works well enough that people are starting to grasp just how powerful a chatbot could be, as tech writer Alex Kantrowitz told me on the podcast What Next: TBD this morning.
• In its first five days, more than 1 million users signed up to try the ChatGPT, according to OpenAI president Greg Brockman.

🍪 The intrigue: When asked how to make chocolate chip cookies, ChatGPT gave me a short, clear recipe that looked pretty standard. Compare that to Googling, which returns links to long, overwritten blog posts that require endless scrolling before you get a recipe.

• This is part of why Google has spent so much money on chat AI. The tech giant pulled in $149 billion from its search business last year; more than half of total revenue.

Yes, but: ChatGPT has no idea whether anything it says is true.

• Axios' Ina Fried calls it "scary good," but also worries about the fact that ChatGPT doesn't say where it's getting its info and can be "confidently wrong."

Reality check: The future isn't here yet. Users already dug up flaws — like getting the bot to tell you how to shoplift.

• And, there are big red flags to watch for: AI is prone to reflecting the biases that humans have and to manipulation (like when a Microsoft chatbot started cheering Hitler.) ChatGPT seems to have done a somewhat better job of avoiding this so far.

What's next: Expect to see more bots from bigger players.

• "It's game time for Google," Kantrowitz said. "I don't think it can sit on the sidelines for too long."

Go deeper

⚖ FTX's Sam Bankman-Fried may be subpoenaed for ignoring a Senate request. (Axios)

💰 President Biden announced a $36 billion bailout for one of the biggest U.S. multi-employer pension plans. (Bloomberg)

👀 The SEC issued new guidance requiring public companies to disclose exposure to the crypto market. (CNBC)

After hitting a 20-year high this fall, the dollar is now weakening fast, Matt writes.

Driving the news: The U.S. dollar index — which tracks the buck against a basket of six other major currencies — is down more than 8% from its September peak.

• That's the most the dollar has fallen in a roughly 10-week time frame in over a decade.

Why it matters: The drop suggests markets now think the worst of the recent inflation is over, and therefore the Fed can soon start to slow down or even stop its rate-hiking program.

The big picture: Like pretty much everything in the markets this year, the dollar's rally — it was up nearly 19% at one point — is tied to the aggressive interest rate hikes the Fed imposed to try to rein in inflation.

• Currencies fluctuate for a bunch of reasons. But some of the most important drivers are known on Wall Street as "interest rate differentials."
• When a central bank in one country is raising its monetary policy rates, and a central bank in another country is not, the former's higher rates act as a magnet pulling capital into that country's currency.
• That's basically the story of the greenback in 2022.

Yes, but: Over the last couple months, the dollar started to tumble on news suggesting the Fed might not keep raising rates as fast as it has been.

• For instance, it tumbled when the October U.S. jobs report showed a rise in unemployment and weakening wage growth.
• And it dove on Nov. 10, when U.S. inflation data was weaker than previously expected.
• It slumped again on Dec. 1, when Fed chair Jerome Powell seemed to hint that the central bank would shrink the size of its next rate hike to a half-percentage point.

What we're watching: Next week's Fed meeting on Wednesday and whether Powell & Co. make the dovish pivot that many clearly expect.

The cost of shipping goods between Asia and the U.S. West Coast has plunged, as Chinese trade nosed dived due to COVID restrictions, Matt writes.

Why it matters: The unknotting of supply-chain snarls is another indication that inflationary pressures are moving in the right direction.

State of play: Spot prices for shipping containers in the key Asia-west coast corridor plunged 25% last week, finally dipping below where they sat for much of 2019, according to Freightos, a booking and payments platform for international freight.

• Freightos analysts noted that the decline came "as empty containers accumulate at Chinese ports" — an indication of just how sharp the downturn in activity has been in the Asian economic giant.

What we're watching: Whether China's industrial engine can start to rev again, now that the government just announced plans to scrap the harsh quarantine and testing rules that played havoc with the economy for much of 2022.

The average 30-year fixed mortgage rate fell for the fourth straight week, to 6.33%, according to Freddie Mac, Emily writes.

• It's a big pullback since rates went over 7% during early November.

Why it matters: Like the retreating dollar and shipping rates, this is — you guessed it — yet another sign that inflation worries are easing.

• Mortgage rates could still head back up, of course — but some experts, like Mike Fratantoni, chief economist at the Mortgage Bankers Association, are calling the top. "We think we're now past the peak on mortgage rates," he told Market News International earlier this week.

Zoom out: With rates double their year-ago levels, this recent decline won't snap the real estate market out of its doldrums. But it's not the worst news for anyone looking to buy a home.

• Forecasters are betting on more declines next year, maybe getting back to the 5% area.
• And home prices are falling — the past three months of declines in the S&P CoreLogic Case-Shiller index have been the steepest since the financial crisis.

What to watch: Next Tuesday, we'll see where inflation is when the Consumer Price Index for November is released.