China launched its most provocative military drills near Taiwan in decades, reacting to US House Speaker Nancy Pelosi’s visit to the island democracy. It’s arguable that neither Xi Jinping nor US President Joe Biden have an interest in triggering a wider conflict, but after some bellicose rhetoric, the Chinese leader is under pressure to deliver a strong response to secure an expected third term. So far, China has surrounded much of the island with ships and fired off missiles—reportedly for the first time over Taiwan itself—and imposed sanctions. But what next? Beijing could launch cyberattacks, try to take control of Taiwan’s airspace and adjacent seas or even seize one of its islands. But for all the tension surrounding Pelosi’s visit and its aftermath, the crisis may nevertheless spur new dialogue, Minxin Pei writes in Bloomberg Opinion. “The alternative,” he warns, “is too bleak to contemplate.”

While a recession in the UK appears to be a foregone conclusion, US job growth and wages surged past forecasts in July, with rock-solid labor demand tempering downturn fears and suggesting the Fed will continue steep interest-rate hikes to thwart inflation. A post-inflation “new normal could look a lot like the low-growth hole the US was in for years,” Eduardo Porter writes in Bloomberg Opinion.

Corn crops are shriveling in Europe. China is chewing through coal to meet electricity demands. Kentucky went from deadly floods to extreme temperatures. This summer’s global heatwave has fully illustrated the broader challenges of the climate crisis. And it will get worse: The snowpack of the US West is disappearing, erasing a major source of water for 76 million people. Urban centers around the globe are sweltering, but satellite maps of cooler neighborhoods may help save lives.

The last vote has been nailed down for the smaller version of Biden’s “Build Back Better” agenda—now called the “Inflation Reduction Act.” But Arizona Senator Kyrsten Sinema’s price was dropping a provision that would cost fund managers money. The Democratic Party’s prospects are brightening this midterm election year, what with a sudden burst of big legislation and unemployment at a 50-year low. But Clive Crook writes in Bloomberg Opinion that the best thing for Democrats come November could be a crushing defeat.

Two Goldman Sachs employees on a vaunted trading team submitted their resignations with plans to join a hedge fund—and the bank hit back. The saga offers a twist on Wall Street’s year-long war for talent and a rare look at a lucrative trading desk. Also, a warning for investment bankers who enjoyed lavish bonuses for 2021: Don’t expect a repeat this year.

Inflation hasn’t missed the luxury car market, but drivers are still buying. Ferrari, in the midst of an electrification drive, says its six-figure supercars will be even more expensive next year. Lamborghini has sold out of all its supercars for the next 18 months. And the Pebble Beach auto auction will have more consigned rare and luxury cars than ever, including a 1955 Ferrari 410 that could fetch $30 million.

A Very Dangerous Place to Be Pregnant

Thousands of hospitals across the US are closing their maternity wards, and Texas is the national leader. One fifth of all pregnant women in that state don’t get prenatal care until they’re five months along, and if you’re poor and pregnant, it’s hard to find a doctor or even a hospital. But while maternal health has declined, Texas officials have been busy enacting strict curbs on abortion.

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