How bad is the BA.5 variant? Bad enough

Plus: Has inflation peaked? [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a complex trading society of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - The [BA.5 variant isn’t the worst](, but it isn’t great, either. - [Inflation may have peaked](, for real. - Twitter should [squeeze Elon Musk](. - Europe’s [drought is bad for energy](. Night of the Living Covid One silver lining of the interminable Covid pandemic is that it has revealed just how prepared humanity is for a zombie apocalypse. We’ve proven we can ignore any public-health menace provided it sticks around long enough. For example, there’s yet another Covid variant raging in New York, omicron BA.5, which some are calling the “[worst variant](” yet. But Manhattan lunch spots are at pre-pandemic crowding levels, with few masks in sight. A year from now, the omega BS.69.420 variant will evolve to form a complex trading society and begin enriching uranium, and we’ll likely pay more attention to whatever Elon Musk is doing.  The general attitude seems to be: - For God’s sake, please stop talking about Covid already; and - If you’ve had Covid already or are up to date on your shots, the worst you can fear from another infection is a really nasty cold, with an outside chance of feeling tired for the rest of your life. That still sounds bad to me! But also better than dying miserably, as so many did in 2020. Faye Flam suggests [BA.5 is not, in fact, the “worst” variant](, at least partly because immunity and treatments will keep it from being as severe as Covid alpha. But its annoying mutations mean it will reinfect a lot of people, raising the risks of complications for those people. We may learn to live with the zombies, but we should never forget they want to eat our brains. Cool Your Inflation Rage One interminable thing Americans haven’t gotten inured to yet is inflation. It makes us so, so angry! Today we [learned]( CPI in June was eleventy hundred thousand percent. Now markets are pricing in a rare eleventy-hundred-thousand-basis-point rate hike at the Fed’s next meeting. I am [pig-biting mad](! But what if a huge rate hike is overkill? What if the June inflation report is already obsolete and overreacting to it will cause a policy mistake, along with [jacking up the cost of servicing government debt](, as Kevin Muir notes? Matt Winkler points out consumers and bond traders have [already started betting on inflation falling](. Gas prices are [tumbling](. Home prices are [cooling](. Everything is on sale at [Target](. The weird “owners’ equivalent rent” component of CPI may be soaring, but actual rents are not, Conor Sen [noted]( on Twitter. And for all the moaning about how the Fed is hopelessly behind the curve, [foreign investors just keep putting their faith in it](, writes Shuli Ren. Meanwhile, industrial bellwether Fastenal said its [price-hiking days were likely over](, supply chains are unkinking and hiring is getting easier, notes Brooke Sutherland. It did warn of a dramatic drop in sales growth, from 20% all the way to 18%. So … somehow I have made myself less mad already, just writing these paragraphs. The pigs are safe. For now. Bonus Inflation Reading: - [A euro at parity with the dollar]( is an inflation nightmare for the ECB. — Marcus Ashworth - Our columnists are launching a new newsletter about energy, including that stuff you buy for $5 or $6 a gallon nowadays. [Sign up now](! An engineering problem. Elon Musk and Twitter Try to Own Each Other Aside from tweeting and [deleting]( memes, Elon Musk had a relatively quiet day on Twitter, probably because he was too busy reading the lawsuit filed against him by Twitter. The social-media company says it would like him to pretty please buy it for $44 billion like he promised, although Matt Levine points out [nobody in their right mind really wants Musk to hate-own Twitter]( at this point, including probably not even Elon Musk. But the board must keep pushing to wring as much money as it can from the world’s richest man, who has [broken]( it, after all. Telltale Charts As if Europe didn’t have enough problems already, a [drought will make its energy crisis even more crisis-y](, by hurting capacity for hydroelectric, nuclear and even coal power, warns Javier Blas. The recent downturn in commodities prices is a reminder that [normie investors never win investing in commodities](, writes Jonathan Levin. Further Reading The [Webb space telescope is a big, expensive, risky]( science project, and a smashing success. — Bloomberg’s editorial board The [GOP’s decision to boycott the Jan. 6 hearings]( is a massive own-goal. — Jonathan Bernstein  President Joe Biden [should stop indulging in nuclear talks with Iran](, which isn’t negotiating in good faith. — Bobby Ghosh Ousting the Rajapaksas is [just the start of what Sri Lanka must do]( to solve its deep problems. — Ruth Pollard  We need [global stablecoin standards]( to avoid systemic risks. — Jon Cunliffe and Ashley Alder ICYMI [Netflix will work with Microsoft]( to offer a cheaper, ad-based service. Delta [sent an empty plane]( to pick up luggage stranded in London. Chinese homebuyers are [refusing to pay their mortgages](. Kickers [Synthesizers have supply-chain problems](, too. New [pig-heart transplants work]( in brain-dead recipients. Most Americans [have Roundup in our systems](. Area distillery makes [whiskey out of invasive crabs](. Notes: Please send pig hearts and complaints to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. 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