The Taiwan call

President Joe Biden is to speak with Chinese leader Xi Jinping on Thursday amid fresh tensions over Taiwan. The first conversation between the two presidents since March will take place at a particularly difficult juncture for US-China ties: House Speaker Nancy Pelosi’s staff and security officials aren’t ruling out plans for her to visit Taiwan in early August. China meanwhile has been more strident than usual in its reaction to the third-highest U.S. elected official visiting the island democracy. Some in Washington worry a miscalculation could lead to conflict, while others argue the US can’t back down now. —David E. Rovella

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

Markets reacted joyously to the Fed’s expected rate hike Wednesday amid more news running counter to the predominant recession-is-looming narrative. The US economy managed to expand in the second quarter despite high inflation and central bank tightening, avoiding even the “technical” appearance of a downturn. Fed Chair Jerome Powell, speaking after the rate increase was announced, said a similar move was possible again and rejected any recession speculation. “Demand is still strong and the economy is still on track to continue to grow this year,” Powell said. Meanwhile Biden (and US semiconductor makers) won big with a rare bipartisan Senate vote in favor of the biggest government assist to American industry in a generation. One common cause in the deal for both political parties? China.

For analysts, the last Thursday of July is always one of the busiest days of the year, and tomorrow will be busier than usual. Firms in the US and Europe worth more than $9.4 trillion will report their latest figures at a time when concerns over the impact of high inflation on corporate profitability are high. Add in confusing signals from American consumers, any next-day hangover from the rate hike and a pile of major macro-economic data and you have the makings of a critical day for the global economy.

Congress has called for the replacement of Trump appointee Joseph Cuffari as lead investigator into possible destruction of Jan. 6 evidence by the US Secret Service. Text messages between agency employees on the day of the insurrection are being sought by Congressional investigators as part of their probe of Donald Trump’s role in fomenting the attack. Cuffari, the Department of Homeland Security’s inspector general and a former adviser to two Republican governors, failed for months to tell Congress that the Secret Service had erased the messages even after being ordered to preserve them. Cuffari announced his own probe of the matter shortly after a news report revealed his unexplained delay in notifying lawmakers. His investigation, however, has further hamstrung Congress in its probe: Cuffari ordered the Secret Service to effectively cease full compliance with the Jan. 6 committee, claiming it would interfere with his own inquiry.

A district on the outskirts of Wuhan has been shut down, the first time the Chinese city that saw the world’s first Covid-19 lockdown has imposed such a measure since 2020. While the coronavirus pandemic isn’t over, the economic implications of its aftermath are already coming into view: Around 110,000 British workers are off sick with long Covid symptoms, costing them £1,100 ($1,320) a month in lost earnings at a time of an escalating cost of living crisis. Worldwide, Covid-related deaths are rising again. In the US, Covid-related hospitalizations are also increasing as part of the current infection wave.

Ukraine continued its offensive against Russian forces in the south of the country, striking the main bridge that connects the city of Kherson to Russian-occupied territory across the Dnipro River. The region’s Russian-installed authorities said the link was shut after the attack. Ukraine also retook two villages in the area, its southern command said. Elsewhere, Russia shelled Dnipropetrovsk region overnight and hit Ukraine’s second-largest city of Kharkiv with missiles, according to local authorities.

Spirit Airlines and Frontier Group Holdings terminated a merger agreement that would have created the nation’s largest deep-discount carrier, opening the door to a rival bid for Spirit from JetBlue Airways.

Credit Suisse Group replaced its embattled chief executive officer and said it would embark on a new turnaround plan just nine months after the last one, as the Swiss bank indicated it aims to slash the size of its investment bank in the face of mounting losses. The firm tapped asset-management head Ulrich Koerner to be CEO starting next week, replacing Thomas Gottstein, who is resigning after a two-year tenure marked by scandal and huge losses.

There’s some good news on the ransomware front: by some accounts, there are fewer attacks happening. Victims aren’t paying ransoms as often. Some of the biggest ransomware gangs have gone dark. And law enforcement has had some success disrupting hackers’ flow of illegal money. But the data on hacking isn’t perfect, and no one knows yet if the positive trend will continue. In other words, it’s far too soon to proclaim: “Mission Accomplished.” Nevertheless, something strange seems to be afoot.

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive it in your mailbox daily along with our Weekend Reading edition on Saturdays.

Bloomberg Asia Wealth Summit: The definition of wealth has changed over time. Join us virtually or in-person in Singapore on Aug. 4 as leading investors, economists and money managers bring actionable intelligence to private investors and family offices. Register here to get the latest from international investor and author Jim Rogers, as well as leaders from Nomura, Pictet and more.