The 10-Point: A Guide to the Day's Top News

All eyes on the Federal Reserve; U.S.-China trade talks; Democratic presidential candidates face off; the pound gets pummeled

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Today's guide to the WSJ Good Morning. In today's edition, all eyes on the Federal Reserve's policy statement this afternoon, the U.S. and China resume trade talks, and Democratic presidential candidates face off in Detroit. 1.   The Federal Reserve is expected to say today that it will lower its benchmark interest rate by one quarter percentage point. That would mark just the fifth time in the past 25 years that the central bank has switched to lowering from raising rates. The Fed's new policy statement is set to be released at 2 p.m. EDT. Yesterday, President Trump reiterated his call for easier monetary policy as Fed officials began their two-day meeting. The Commerce Department also reported that consumers continued to spend and stayed confident heading into the summer, while inflation remained soft. That data will likely reinforce the Fed's expected decision. As Fed policy makers gathered in Washington this week to weigh cutting interest rates, a big part of their decision had already been made by the European Central Bank, writes the Journal's Greg Ip. How should the U.S. protect its economy against possible threats from European economies? Join the conversation. From reporter Nick Timiraos: Because a rate cut is already expected, how Fed Chairman Jerome Powell frames the economic outlook and the policy debate could shape the market reaction to today's decision to cut rates. Analysts expect Mr. Powell to keep his options open about the policy path later this year without ruling out another rate increase. Fed officials don't expect a full-blown easing cycle is appropriate, but neither have recent comments indicated that this is "one and done." It's a tricky balancing act: Mr. Powell could face pressure from some colleagues to avoid signaling another cut and from markets that have become very sensitive to any sign of economic fragility or Fed stinginess. nick.timiraos@wsj.com 2.   The U.S. and China resumed trade talks, taking tentative steps to overcome mutual mistrust and limited political appetite for a breakthrough agreement after weeks of recriminations. The U.S. team, led by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, met with the Chinese side, led by Chinese Vice Premier Liu He, this week in Shanghai. Meanwhile, in Hong Kong, authorities charged 44 people with rioting, an offense that can carry a multiyear prison sentence, as the city's Beijing-backed government takes a tougher stance after weeks of increasingly volatile protests. In Beijing, senior government officials said the majority of people sent to re-education camps in China's Xinjiang region have been released and found work, defending a detention program targeting ethnic Uighurs and other Muslims even as officials didn't offer specific numbers or evidence to support their claims. Australian law-enforcement and intelligence agencies are scrutinizing the activities of one of Chinese President Xi Jinping's cousins as part of broad probes of organized crime, money laundering and alleged Chinese influence-peddling. 3.   Capital One Financial's shares plummeted after a massive data breach threatened to upend its reputation for digital prowess. The bank's shares fell 5.9% yesterday, after it said Monday that a hacker accessed the personal information of approximately 106 million card customers and applicants. Capital One was one of the first big banks to migrate reams of customer and corporate data onto Amazon's cloud services. That decision could prove to be a liability. The 33-year-old woman accused of executing the hack, a former employee at Amazon's cloud division, showed strange behavior online in recent months, at times bragging about her exploits and discussing deep struggles in her personal life. The high-profile data breach at one of cloud computing's top proponents could reignite debate among financial institutions about using such vendors. What the breach means for you: Here's what you need to know if you have a Capital One credit card or have applied for one in the past. From reporter AnnaMaria Andriotis: One of the most shocking aspects of this breach is that Capital One has long touted itself as a tech-savvy company that was on the cutting edge of storing and securing consumer data. Its drive to become more tech-centric was fueled in part by its CEO's view of the fintech lenders that emerged in the wake of the last financial downturn as a competitive threat. On some levels, the breach is another reminder that consumers' data is increasingly prone to being hacked as it becomes more digitized and moves to the cloud. Yet the extent of the financial information compromised appears to be unprecedented. This breach doesn't only involve names, dates of birth and addresses, which have become common data sets stolen in breaches. It also includes credit scores, credit limits and payment histories—information that can allow fraudsters to distinguish customers by their wealth and creditworthiness. annamaria.andriotis@wsj.com 4.   U.S. air-safety regulators conducted an internal risk analysis following the fatal crash of a Boeing 737 MAX jet last fall that showed the odds of a similar cockpit emergency occurring within months were high. The analysis by the Federal Aviation Administration showed that it "didn't take that much" for a malfunction like the one the Lion Air pilots confronted to occur, according to a person briefed on the analysis.  Based on the findings, the regulator decided it was sufficient to inform pilots about the hazards of an onboard sensor malfunction. The belief was that if pilots knew how to respond to the risk, it was OK to give Boeing and regulators time to design and approve a permanent fix to a flight-control system implicated in the crash, according to an agency official and people briefed on the findings. Boeing had been planning to complete changes by April. But on March 10, a second 737 MAX crashed, this time in Ethiopia. A Boeing spokesman said: "Boeing and the FAA both agreed, based on the results of their respective rigorous safety processes, that the initial action of reinforcing existing pilot procedures…and then the development and fielding of a software update, were the appropriate actions." Advertisement LEAVE THIS BOX EMPTY Share this email with a friend. Forward Forwarded this email by a friend? Sign Up Here 5.   Sanders, Warren fight back against moderates as Democratic hopefuls split on policy. WSJ's Eliza Collins looks at the key moments highlighting the divide between the Democrats' centrist and progressive wings. PHOTO: GETTY IMAGES Democratic presidential candidates clashed more with one another at Tuesday's debate than during the initial round last month, with progressive Sens. Elizabeth Warren (D., Mass.) and Bernie Sanders (I., Vt.) defending themselves against several moderates trying to keep their campaigns alive. The first of two debates in Detroit this week underscored the party's differing views on proposals to eliminate private health insurance, raise taxes, reshape the economy and confront some powerful American corporations. Both the top-tier Democratic hopefuls championed sweeping overhauls, and Ms. Warren said the best path to beating Mr. Trump is through big ideas, not incremental change. Mr. Trump was uncharacteristically silent on Twitter during the debate, even as several contenders took the opportunity to criticize the president. "I get a little bit tired of Democrats afraid of big ideas. Republicans are not afraid of big ideas." — Sen. Bernie Sanders 6.   Life can get weird when you're married to the Journal's Middle Seat columnist. Columnist Scott McCartney and his wife, Karen Blumenthal, at Dallas Love Field. PHOTO: JUSTIN CLEMONS FOR THE WALL STREET JOURNAL Traveling with WSJ columnist Scott McCartney can sometimes be trying for his wife, Karen Blumenthal. He travels with a tape measure for recording seat size and legroom. And he hasn't simply read airlines' contract of carriage, which is part of each ticket you buy. He's committed some parts to memory. The job of Mrs. Middle Seat: Remind him that he has a power greater than indignation when it comes to the woes of air travel. 7.   What We're Following Apple Earnings: The tech giant countered another quarter of weak iPhone sales with strong revenue growth from its supporting businesses, and CEO Tim Cook said Apple wants to make its new Mac Pro computer in the U.S. Missile Test: North Korea fired two short-range ballistic missiles, South Korea's military said. Pyongyang's second weapons test in under a week suggests the Kim regime is adding pressure on the U.S. as nuclear talks have hit an impasse. Brexit Turmoil: The new U.K. government's strident line on Brexit negotiations is pummeling the pound. President Trump: The president called on the House Oversight Committee to investigate "corrupt government" in Baltimore and singled out the committee's chairman, Rep. Elijah Cummings (D., Md.). Immigration Separations: U.S. federal immigration authorities have separated more than 900 children from their parents in the past year. Procter & Gamble Earnings: P&G posted its highest quarterly sales growth in more than a decade, though its results were marred by an $8 billion charge the company took to write down the value of its Gillette razor business. Samsung Earnings: Net profit for Samsung Electronics dropped 53% during its second quarter. The company has been dogged by a global spending pullback exacerbated by the U.S.-China trade fight.  8.   Trending Stories at WSJ.com Anxiety can look different in men, and that can mean more men go undiagnosed. (Read) "Follow the storm path": Risk-taking investors increasingly buy properties damaged in storms or fires and flip them for profit. (Read) A new line of diapers from Huggies maker Kimberly-Clark is made of plant-based material and costs roughly five times the least costly diaper on the market. (Read)  9.   What Else We're Reading Robots aren't just trading stocks, they're now persuading consumers to get credit cards. JPMorgan Chase said it signed a contract with Persado, a firm that develops artificial intelligence for creating marketing messages. (Bloomberg) A second Ebola case was confirmed in Goma, a city of more than two million people in Congo that hosts a busy international airport. (Associated Press) 10.   Today's Question and Answer In response to our question about whether you've ever taken an "unplugged" vacation or would in the future: William Webster, Florida I am a regular unplugged vacation-goer. My first experience was in 2011 in a single-room wooden cabin on the property of a monastery in the Bavarian Alps. The monks rent it out on a weekly basis, and they have a 12-month waiting list. The silence, the austerity, the solitude had an unexpected effect on me: It made me face myself, which was simultaneously wonderful and horrifying. In an age when connectivity is in oversupply, solitude and mindfulness grow in demand. Heather Hoyt, Utah My husband works in recreation and his work charges $140 a night for a yurt. They fill up most nights and he could probably charge more. I prefer tent camping, as it is much more affordable. But my favorite reason to camp is to see lots of new places, not to simply get away from my life and do nothing. I don't need to spend hundreds of dollars to unplug: We regularly unplug at home, turning off the TV and putting down our phones and enjoying what is around us. People sometimes will spend exorbitant amounts of money when they can find beauty, solitude, and peace in their own backyard. Philip Burger, Missouri In a word: Philmont, in Cimarron, N.M.  I've been twice as an adult leader. It's not costly, but you need to be a Scout volunteer. Backpacking trips are 12 days (plus any travel to and from). Taking a cell phone or tablet on the trail is worthless weight. As someone told me on the last trip, it's the most physically challenging, emotionally cleansing vacation he's ever had. Joan Lieberman, New York I must admit, I have trouble understanding why people have to travel to remote areas and pay extra to have an "unplugged vacation." I spent my summers growing up with parents who decided no TV in the beach house. We played games, read, took walks into town for ice cream and hung out. Now, as an adult, if I go away and want to unplug, I tell work that if you need to reach me urgently, call me; I will not be checking email. And if I didn't want to carry my cell phone, I'd leave the hotel information and leave my cell phone in the room. I think if you're a bit older (like me in my 50s), you remember how an unplugged vacation used to happen. I don't think it's where you go, it's your mental determination to really unplug and quiet that compulsive FOMO feeling that makes you want to check your phone on a regular basis. Matthew Sherman, Illinois Never gone on an unplugged vacation, but willing to come to people's homes to take their phone and other electronics away from them. Charge is $500/night. I have a good fence...uh...oops. Okay, this is kind of a permanent solution for those who REALLY want to unplug. Question for tomorrow's 10-Point:  Going back to our story about high-end diapers, would you invest in greener alternatives if it meant paying a premium, considering the volume of diapers a family goes through? Why or why not? Email us your comments, which we may edit before publication, to 10point@wsj.com, and make sure to include your first and last name and location. The 10-Point was the name given to the news column that runs on the front page of The Wall Street Journal. Today's newsletter was curated and edited by Eleanor Miller in New York and Tracy Gan in Hong Kong in collaboration with Editor in Chief Matt Murray. Let us know what you think by replying to this email. The 10-Point is a WSJ member benefit. If someone forwarded you this email, we invite you to join us and enjoy the full breadth of scoops, analysis and great storytelling from our journalists around the globe. Access WSJ‌.com and our mobile apps. Subscribe

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