US consumer prices increased five percent last month! It doesn’t sound great but it’s all relative. Remember when Zimbabwe’s month-to-month inflation rate hit 79.6 billion percent? Five percent sounds quite good now doesn’t it.

The lowdown

• 🐌 US inflation rate falls to 5%, the slowest pace since May 2021.

• 🗿 SoftBank sells almost all of its remaining stake in Alibaba.

• 🪙 Bankrupt crypto exchange FTX has now identified $7.3 billion in assets.

Flex your finance muscle

Deposit beta

Deposit beta refers to the speed at which banks pass on central bank base interest rate increases to their depositors. In other words, it measures how quickly banks adjust the interest rates they offer on deposits in response to changes in the central bank's interest rates.

When deposit beta is high, banks quickly increase deposit rates in response to central bank rate increases, which can (but not always) attract more deposits and help banks meet their funding needs.

This blog post explains that the spread between the fed funds rate and the deposit rate is at a modern high of above 2%. Banks are therefore facing competition for savers from other vehicles that offer rates closer to the fed funds rate, such as money market mutual funds. So while interest rates on bank deposits are increasing, bank deposits may actually be falling. Bad luck banks.

Featured stories

Thoma Bravo bids the highest and loses

PE firm Thoma Bravo lost out on the acquisition of software company Qualtrics over antitrust concerns ($). Although Thoma Bravo offered a higher bid of $21 per share, Qualtrics accepted Silver Lake's lower bid of $18.15 per share to avoid potential regulatory scrutiny and possible deal blockage.

The deal would have allowed Thoma Bravo to eventually merge Qualtrics with its rival, Medallia (which it already owned), creating significant cost savings and, therefore, allowing Thoma Bravo to bid higher than rivals.

Firms like Thoma Bravo, which specialize in a particular industry may find the increased regulatory scrutiny particularly challenging – take, for example, a separate buyout of cybersecurity company ForgeRock. This was the third buyout of an identity company made by Thoma Bravo, so perhaps some competition scrutiny is desirable. Bravo regulators.

The content we're consuming today

• Reuters: Harley-Davidson CFO to step down, joins toymaker Hasbro.

• FT: Venture capital trusts reap more than £1bn from UK investors ($).

• Bloomberg: The Business of … Death ($).

Off-balance sheet items

• How is this Colin Farrell? I can’t see him at all. Have a look at the teaser for the next chapter in the rebooted Batman saga: The Penguin.

The bottom line