The Promise and Peril of the Trump Trade

Long-term interest rates have risen sharply on his pledge to bolster the economy—but can he deliver?

President-elect Donald Trump has made a lot of big promises. If he fails to deliver quickly on the economy, his biggest promise might be a bust. PHOTO: GETTY IMAGES

Markets are predicting that President-elect Donald Trump will be able to juice the economy soon after he gets in office. That is putting extra pressure on him to succeed quickly before higher rates quash any economic liftoff.

Since the election, investors have embraced a view that the spending and tax-cut package Mr. Trump is promising will both boost growth and fan inflation. That has been good for stocks, but very bad for bonds, which have sold off sharply. The yield on the 10-year Treasury note is approaching 2.5%. Data Tuesday about rising labor costs coupled with last week’s 4.6% unemployment rate mean inflation, and yields, could rise further.

Rising interest rates change the longstanding dynamic in the economy and markets. The higher yields go, the more costly it becomes for companies and households to borrow. The higher yields go, the stronger the dollar is likely to become, widening the trade deficit and weighing on the economy. And the higher yields go, the more attractive bonds become relative to stocks.

If growth is accelerating, higher rates won’t matter to investors and businesses eager to cash in on the stronger economy. But if the Trump trade, which has already driven up 10-year Treasury yields by nearly a full percentage point, proves a mistake, or even just premature, higher rates and everything that comes with them could actually slow growth.

A simulation that forecasting firm Macroeconomic Advisers ran for The Wall Street Journal shows what happens if Treasury yields rise further, not because of an improving economy but because investors believe, based on an incorrect growth forecast or for whatever reason, that the Federal Reserve will raise rates more aggressively. The firm’s econometric model, which incorporates hundreds of variables, is widely used on Wall Street and elsewhere to test economic scenarios.

Marie Kondo: How to Choose Happiness

This is an article from Turning Points, a magazine that explores what critical moments from this year might mean for the year ahead.

Turning Point: An executive at Ikea declared that the West has reached “peak stuff,” with people owning too many things.

Monika Aichele

The Japanese word “tokimeku” means “to spark joy.” Someone who is adopting my method of tidying must take a possession of hers and ask: “Does this spark joy for me?” This question is the sole basis for choosing what things to keep in one’s home and what to discard.

But can we apply this notion of sparking joy on a larger scale? We live in a disorganized and chaotic world, much of it outside our control. I read recently that more than 80 billion articles of clothing are produced each year, but only a negligible few are recycled. As people’s buying habits shift and technology moves most everything to the cloud, people have been valuing experiences over material things. Some have even pointed out that we may have reached a critical point in terms of mass consumption — we’ve reached peak stuff. Though it sometimes may seem like our things are threatening to take over our world, we can focus our energy and determination on choosing what makes us happy, and ultimately change our lives. Asking ourselves whether something sparks joy seems like such a simple process — so simple that many people wonder whether it can really be effective. The strength of the “spark joy” standard, however, lies in its ambiguity.

Let’s consider, for argument’s sake, more precise standards for what to keep or discard, even for something as basic as clothing. Should the number of jackets you own be fewer than 10? Should you discard clothes that you haven’t worn in more than three years?Rules that adopt concise numerical values may appear to be more practical, which is why society often imposes specific standards on us, such as the amount of money we should earn, the ideal body weight we should maintain or the recommended quantity of food we should consume each day. But what makes one person happy, comfortable and healthy varies for the next, so your individual gold standard can be determined only through your own perspective. This is where the magic question — Does it spark joy? — comes into play.

Inside Oculus’ Quest to Design an Invisible VR Controller

This prototype embodies a trifecta of roads not traveled: it's worn rather than held; it employs a centered thumbstick and no buttons; and rather than a conventional trigger button, it opts for a rotary scroll wheel. JONATHAN SPRAGUE

the perfect time for getting some last-minute things done at the office, maybe finishing up holiday shopping. If you’re feeling particularly brave, you might even fight your way through airport crowds to visit your family. On December 22 in 2012, though, Nirav Patel was in China. A couple of months before, the young engineer had left Apple for a little company called Oculus, and now he was checking out production facilities that could help manufacture his new employer’s virtual-reality headset. Nirav being Nirav, he had a pocket notebook with him, and on this particular Christmas Eve Eve Eve, he sat down and started drawing.

Soon, he had sketched out two different views of the same object. From the top, it looked like a lima bean. In profile, it was the spitting image of a cyborg walrus with a tiny chef’s hat on. Scribbled around the drawing were annotations describing the various buttons and shapes festooning the object—“jog/scroll,” “vibe motor,” “piezo element,” “clicking analog”—and at the top of the page, in a space marked Project, Patel wrote the word “Controller.” As long as Oculus was making a VR headset, he reasoned, the company might as well think about the best way to play games in that headset.

Nearly four years later, Oculus has produced a pair of devices that share some key features in common with Patel’s sketch. But the Oculus Touch, which goes on sale today, is much more than a set of controllers—they are, in effect, your hands. And by being your hands, they provide the first glimpse of what virtual reality is fast becoming: a social universe.

Oculus engineer Nirav Patel’s 2012 sketch of what a VR input device might look like.

A New Level of Immersion

Patel’s 2012 sketches proved to be a bit premature. For the next year, pressure to make the Rift headset a reality would turn the controller into something Patel and other employees worked on during off hours—“not like a side project,” the company’s VP of product Nate Mitchell said to me in spring of 2014, “but that’s all the time people could find for it.” The company had outsourced early exploration work to Seattle firm Carbon Design Group. It was only in early 2014, after Facebook bought Oculus, that work on the controller began in earnest.

CEOs’ New Vow: Advancing More Women At Work

Paradigm for Parity aims to bring gender equality to the upper echelons of companies by 2030

Ellen J. Kullman, coalition co-chair and former head of DuPont Co., spoke at an event earlier this year. PHOTO: KIMBERLY WHITE/GETTY IMAGES

More than two dozen chief executives of companies, including Bank of America Corp.,LinkedIn Corp. and Newmont Mining Corp., have signed a pledge to speed women’s progress up the corporate ladder.

The corporate commitment is the opening salvo of “Paradigm for Parity,” a drive by a new group dedicated to achieving gender equality in the upper echelons of American companies by 2030.

Its game plan, to be announced Wednesday, demands that businesses set measurable targets for women’s representation at every level, train employees in spotting hidden biases, and ensure influential senior men sponsor promising women.

Alabama man loses job for calling Gatlinburg fire victims 'toothless, pond scum' Trump supporters

An Alabama man who referred to residents of Gatlinburg as "mouth-breathing, toothless, Trump-suckin' pond scum" in the wake of last week's deadly wildfires has lost his job and been targeted by social media users as a possible suspect in the blaze.

On Nov. 29, Coleman Bonner of Wessington in Chilton County posted a message to his personal Facebook page in regards to the wildfires in Gatlinburg, Pigeon Forge and Sevier County, Tennessee