Dear valued client,
The Federal Reserve left rates unchanged following their meeting on Wednesday and dismissed expectations of a rate cut by March. Fed Chair Jerome Powell expressed skepticism, stating that the Fed is unlikely to have sufficient confidence in mitigating rising prices to implement rate reductions so soon but acknowledged the possibility of cuts later in the year. As a result, markets lost ground following the announcement as the Nasdaq suffered its most significant decline since October but rebounded in the latter part of the week to finish in positive territory.
In more tech news, top executives faced a tense hearing before the Senate Judiciary Committee. Senators grilled representatives from Meta, X, Discord, Snap, and TikTok over allegations of neglecting to protect children from exploitation on their platforms. Meta and TikTok, in particular, drew significant attention, with Meta currently facing multiple lawsuits for allegedly failing to safeguard children from the addictive nature of its apps. Mark Zuckerberg, Meta’s CEO, apologized during intense questioning from Sen. Josh Hawley, expressing regret for the suffering endured by the families of victims. Despite promises of increased efforts to prevent harm to children, critics argue that proposed changes are insufficient. The hearing highlighted senators’ push for legislation to enhance protection on the internet, though past attempts have seen limited progress. The impact of this dramatic hearing on influencing child protection policies at Meta and other companies remains uncertain.
In international news, more than a dozen countries, including Canada, the United States, Britain, Germany, and Italy, have claimed to suspend their funding to the United Nations Agency for Palestinian Refugees (UNRWA) due to allegations that some of the agency’s staff were involved in the Hamas’ Oct. 7th attack. Canada’s decision to suspend funding has faced criticism from human rights advocates and former high-ranking Canadian diplomats. However, it was revealed that the Trudeau government had already wired a promised $25 million payment to UNRWA, contradicting their announcement of a funding pause. International Development Minister Ahmed Hussen, when questioned, refused to clarify how Canada intended to pause UNRWA funding after already disbursing the funds ahead of schedule and potentially having no means of retrieving them. Speaking of disbursing funds, more has been uncovered this past week regarding the ArriveCan app Canadians were forced to download and use for travel during the pandemic. Originally budgeted at $80,000, the government’s smartphone app incurred a staggering cost of $54 million.The Office of the Procurement Ombudsman’s investigation uncovered multiple irregularities, notably the revelation that 76% of subcontractors did not contribute any work, indicating a persistent exaggeration of workforce requirements. Furthermore, the probe exposed contracts seemingly structured to favor a single company, GC Strategies Inc., securing a $25.3 million deal through what appeared to be a non-competitive bidding process. Approximately 41% of ArriveCan contracts lacked proper advertising, and 13 non-competitive contracts were awarded, bypassing standard bidding due to the urgent nature of the pandemic. The report highlighted GC Strategies’ subpar paperwork, including instances of text copied from the federal bid package, raising serious concerns about the transparency and integrity of the procurement process. The beauty of the marketplace is that the best product or service is often the outcome of competition. No such competition was at play in allocating your tax dollars in this instance.
“Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity.” – Nancy Pearcy
Have a terrific weekend,
PW
