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Key Events This Week: Central Banks Galore, Retail Sales In Store, PMIs And PPIs

Key Events This Week: Central Banks Galore, Retail Sales In Store, PMIs And PPIs

In the last busy week of the year, which sees no less than 20 central bank announcements, the Fed’s decision on Wednesday will be the focal point of the week….



Key Events This Week: Central Banks Galore, Retail Sales In Store, PMIs And PPIs

In the last busy week of the year, which sees no less than 20 central bank announcements, the Fed’s decision on Wednesday will be the focal point of the week. In terms of what to expect, DB's Jim Reid writes that the bank's US economists anticipate a doubling in the pace of tapering, which would bring the monthly drawdown of Treasury and MBS to $20bn and $10bn per month respectively (this is in line with what both Goldman and Morgan Stanley expect). That would see the process of tapering conclude in March, giving them greater optionality for an earlier liftoff. Bear in mind that this meeting will also see the release of the latest dot plot, as well as the projections for inflation, growth and unemployment. On that, DB economists see the median dot in 2022 likely showing two rate hikes, with risks of more, up from September when only half the dots saw any hikes by the end of 2022.

The ECB’s decision will then follow on Thursday, with economists noting that until the arrival of the Omicron variant, the ECB appeared on track to initiate a transition to a monetary policy stance based more on policy rates and rates guidance and less on liquidity provision. They were also set to create a policy framework with more optionality to better respond to inflation uncertainties. However, the Omicron variant reinforces the need for optionality, and until there’s greater clarity on what it means for the pandemic and the recovery, the ECB may stall the expected decisions in part or in whole until early 2022. As with the Fed, it’ll be interesting to see the December staff forecasts on inflation, which could influence the market view on lift-off timing.

The Bank of England’s decision will also take place on Thursday, and many - but not all - economists expect the MPC to raise Bank Rate by +15bps to 0.25%. DB is one of those arguing for a hike, noting that news of the Omicron variant has changed little on the medium-term economic outlook, with the labor market remaining as tight as it has been in recent memory, and inflation continuing to outpace staff forecasts. Nevertheless, the risks to this view are finely balanced, and risk management considerations may lead them to delay a rate hike again, as they instead opt to find out more information on Omicron’s impact.

Finally on the central bank front, the Bank of Japan will be holding their final monetary policy meeting of the year on Friday. Here, although there had been an expectation that the bank would revise their special pandemic corporate financing support program at this meeting, the emergence of the Omicron variant has changed the situation. Given the next meeting is only a month later, the view is now that they’ll maintain a wait-and-see stance in this meeting and adjust the policy in January, although a revision remains possible this week if more positive evidence is found on the new variant.

Moving on to the data, the main highlight will be the flash PMIs for December from around the world on Thursday which will offer an initial indication as to whether there’s been any economic reaction yet to rise in restrictions and the emergence of the Omicron variant. There’ll also be an increasing amount of hard data out of the US for November, including retail sales (Wednesday), industrial production, housing starts and building permits (all Thursday). In China, Wednesday will see the usual data dump release of retail sales and industrial production data for November, and in Germany on Friday there’s the Ifo’s business climate indicator for December. Finally on the inflation side, releases will include the US PPI data for November tomorrow, along with the UK and Canadian CPI readings for November on Wednesday.

Looking at the coming days, expect more geopolitical rumblings from the Russia-Ukraine border: Presidents Biden and Putin held a phone call to discuss tensions following the build-up of Russian forces on the Ukrainian border. The readouts following the call offered few details but signalled both sides would follow up. President Biden has cautioned severe economic sanctions would be levied should Russia invade Ukraine, including sanctions on Putin’s inner circle, energy companies, and banks. The US would also consider severing Russian access to the US-run international payments system, SWIFT.

Courtesy of DB, here is a day-by-day calendar of events

Monday December 13

  • Central Banks: ECB’s Centeno speaks, BoE release Financial Stability Report

Tuesday December 14

  • Data: UK October unemployment, Euro Area October industrial production, US November NFIB small business optimism index, PPI

Wednesday December 15

  • Data: China November retail sales, industrial production, UK November CPI, US November retail sales, December Empire state manufacturing survey, NAHB housing market index
  • Central Banks: Federal Reserve monetary policy decision, Bank of Canada governor Macklem speaks

Thursday December 16

  • Data: December flash PMIs from Japan, France, Germany, Euro Area, UK and US, Euro Area October trade balance, US weekly initial jobless claims, November housing starts, building permits, industrial production, capacity utilisation, December Philadelphia Fed business outlook, Kansas City Fed manufacturing index
  • Central Banks: Monetary policy decisions from the ECB, Bank of England, Bank Indonesia, Central Bank of Turkey and Bank of Mexico
  • Politics: EU leaders meet for European Council

Friday December 17

  • Data: UK December GfK consumer confidence, November retail sales, Germany November PPI, December Ifo business climate indicator, Euro Area final November CPI
  • Central Banks: Monetary policy decisions from the Bank of Japan and the Central Bank of Russia, ECB’s Rehn speaks

* * *

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the PPI report on Tuesday, the retail sales report on Wednesday, and the Philadelphia Fed manufacturing index on Thursday. The December FOMC meeting is this week, with the release of the statement at 2:00 PM ET on Wednesday, followed by Chair Powell's press conference at 2:30 PM.

Monday, December 13

  • There are no major economic data releases scheduled.

Tuesday, December 14

  • 06:00 AM NFIB small business optimism, November (consensus 98.4, last 98.2)
  • 08:30 AM PPI final demand, November (GS +0.6%, consensus +0.5%, last +0.6%); PPI ex-food and energy, November (GS +0.5%, consensus +0.4%, last +0.4%); PPI ex-food, energy, and trade, November (GS +0.5%, consensus +0.4%, last +0.4%): We estimate a 0.5% increase for PPI ex-food and energy and PPI ex-food and energy, and trade, reflecting a continued boost from supply chain bottlenecks, labor shortages, and commodity prices. We estimate that headline PPI increased by 0.6% in November.

Wednesday, December 15

  • 08:30 AM Empire State manufacturing survey, December (consensus +25.0, last +30.9)
  • 08:30 AM Retail sales, November (GS +0.4%, consensus +0.8%, last +1.7%): Retail sales ex-auto, November (GS +0.4%, consensus +0.9%, last +1.7%); Retail sales ex-auto & gas, November (GS +0.3%, consensus +0.8%, last +1.4%); Core retail sales, November (GS +0.3%, consensus +0.8%, last +1.6%): We estimate a 0.3% increase in core retail sales (ex-autos, gasoline, and building materials) in November (mom sa). The elevated level of retail sales—at +12.9% year-on-year in October—implies a high hurdle for incremental growth during the holiday season. Additionally, the pace of ecommerce purchasing slowed during Black Friday weekend, according to Adobe’s large panel of online retailers. Brick and mortar trends were more encouraging however, and in this week’s report, we expect firm gains in mall-based categories to partially offset a sequential decline in non-store sales. We estimate a 0.4% increase in headline retail sales, reflecting flat-to-down auto sales but higher auto and gas prices.
  • 08:30 AM Import price index, November (consensus +0.7%, last +1.2%)
  • 10:00 AM Business inventories, October (consensus +1.1%, last +0.7%)
  • 10:00 AM NAHB housing market index, December (consensus 84, last 83)
  • 02:00 PM FOMC statement, December 14-15 meeting: As discussed in our FOMC preview, we expect that the FOMC will double the pace of tapering to $30bn per month at its December meeting next week, putting it on track to announce the last two tapers at the January FOMC meeting and to implement the last taper in March. We now expect the FOMC to deliver rate hikes next year in May, July, and November (vs. June, September, and December previously).

Thursday, December 16

  • 08:30 AM Initial jobless claims, week ended December 11 (GS 222k, consensus 195k, last 184k); Continuing jobless claims, week ended December 4 (consensus 1,938k, last 1,992k): We estimate initial jobless claims increased to 222k in the week ended December 11.
  • 08:30 AM Housing starts, November (GS +2.5%, consensus +3.0%, last -0.7%); Building permits, November (consensus +0.4%, last +4.2%): We estimate housing starts increased by 2.5% in November, reflecting higher permits in October.
  • 08:30 AM Philadelphia Fed manufacturing index, December (GS 32.0, consensus 29.6, last 39.0): We estimate that the Philadelphia Fed manufacturing index declined by 7.0pt to 32.0 in December, partly reflecting reversion following an outsize jump in the prior month.
  • 09:15 AM Industrial production, November (GS +0.5%, consensus +0.7%, last +1.6%): Manufacturing production, November (GS +0.7%, consensus +0.7%, last +1.2%)
  • Capacity utilization, November (GS 76.7%, consensus 76.8%, last 76.4%): We estimate industrial production rose by 0.5% in November, with strong mining production offsetting weaker oil and gas production. We estimate capacity utilization rose by 0.3pp to 76.7%.
  • 09:45 AM Markit Flash US manufacturing PMI, December preliminary (consensus 58.5, last 58.3); Markit Flash US services PMI, December preliminary (consensus 58.7, last 58.0)
  • 11:00 AM Kansas City Fed manufacturing index, December (consensus 25, last 24)

Friday, December 17

  • There are no major economic data releases scheduled.

Source: Deutsche Bank, Goldman, BofA

Tyler Durden Mon, 12/13/2021 - 09:52

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Spread & Containment

Gates-backed PhIII study tuberculosis vaccine study gets underway

A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.
The Bill & Melinda Gates…



A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.

The Bill & Melinda Gates Medical Research Institute (MRI) will test a tuberculosis vaccine’s ability to prevent latent infections from causing potentially deadly lung disease. Last summer the nonprofit said it would foot $400 million of the estimated $550 million cost of running the 20,000-person Phase III trial.

It’s a pivotal moment for a vaccine whose origins date back 25 years when scientists identified two proteins that triggered strong immunity to the bacterium that causes tuberculosis. A fusion of those proteins, paired with the tree bark-derived adjuvant that helps power GSK’s shingles shot, comprise the so-called M72 vaccine.

Thomas Scriba

After decades of failures in the field, the vaccine impressed scientists in 2018 when GSK found that it was 54% efficacious at preventing lung disease in a 3,600-person Phase IIb study.

But the Big Pharma decided that a full-blown trial was too expensive to conduct on its own. Gates MRI stepped in to license the vaccine in early 2020, right before the Covid pandemic shifted global vaccine priorities towards the coronavirus, further stalling the tuberculosis shot.

“There’s been frustration that it’s taken so long to get this trial up and running,” Thomas Scriba, deputy director of immunology for the South African Tuberculosis Vaccine Initiative, told Endpoints News last summer.

At last, the vaccine is getting a chance to prove itself in a bigger study. If successful, it could lead to the first new shot for tuberculosis in over a century.

Emilio Emini, CEO of the Gates MRI, told Endpoints that the initial results may come in roughly four to six years. “Hopefully this will galvanize a refocus on TB,” he said. “It’s been ignored for many, many years. We can’t ignore it anymore.”

A substantial impact

Even though an existing vaccine helps protect babies and children against severe tuberculosis, the bacterium responsible for the disease still causes roughly 10 million new cases and 500,000 deaths each year.

Emilio Emini

By vaccinating adolescents and adults who test positive for infections but don’t have symptoms of lung disease, the Gates MRI hopes the shot will help prevent mild infections from becoming severe ones, curtail transmission of the bug, which is predominantly driven by people with lung disease, and reduce deaths.

“The impact would be substantial,” Emini said. But he cautioned that the biology behind mild and severe diseases is still mysterious. “The reality is that no one really knows what keeps it under control.”

The study, which will take place at 60 sites across seven countries, will include some people who are not infected with tuberculosis to ensure that the vaccine is safe in that broader population.

“Having to pre-test everybody is not going to make the vaccine easy to deliver,” Emini said. If the vaccine is ultimately approved, it will likely be used in targeted communities with high tuberculosis, rather than across a whole country, he added. “In practice, you would immunize everybody in those populations.”

Emini described the Gates MRI’s rights to the vaccine as “close to a worldwide license.” GSK retained rights to commercialize the vaccine in certain countries but declined to specify which ones.

A spokesperson for GSK said that the company “has around 30 assets under development specifically for global health … none of which are expected to generate significant return on investment.”

“It is not sustainable or practical in the longer term for GSK to deliver all of these alone. So we continue to work on M72, but in partnership with others,” the spokesperson added.

If the shot works, Emini said that the Gates MRI will sublicense it to a manufacturer that will be responsible for making and marketing the vaccine. The details are still being worked out, he noted.

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Choosing over the counter drugs for COVID 19? It’s complicated

COVID-19 illness may include symptoms such as a sore throat, fever, cough and fatigue. In January, the United States Centers for Disease Control and Prevention…



COVID-19 illness may include symptoms such as a sore throat, fever, cough and fatigue. In January, the United States Centers for Disease Control and Prevention (CDC) issued its most recent guidelines for the use of over the counter (OTC) drugs for COVID-19. Specifically, its guidelines state that most people with COVID-19 have mild illness and can recover at home while treating symptoms with OTC medicines such as acetaminophen (Tylenol) or ibuprofen (Motrin, Advil). 

Credit: Florida Atlantic University

COVID-19 illness may include symptoms such as a sore throat, fever, cough and fatigue. In January, the United States Centers for Disease Control and Prevention (CDC) issued its most recent guidelines for the use of over the counter (OTC) drugs for COVID-19. Specifically, its guidelines state that most people with COVID-19 have mild illness and can recover at home while treating symptoms with OTC medicines such as acetaminophen (Tylenol) or ibuprofen (Motrin, Advil). 

Researchers from Florida Atlantic University’s Schmidt College of Medicine and academic colleagues say it’s more complicated. They suggest that selecting an OTC medication to alleviate mild symptoms of COVID-19 should be based on the entire benefit-to-risk profile of the patient. Moreover, they say clinical decisions should be made by the health care provider for each of his or her patients.

In a review, published in The American Journal of Medicine, researchers take a closer look at both the potential benefits and risks of acetaminophen, non-steroidal anti-inflammatory drugs (NSAIDs) – such as ibuprofen, as well as aspirin for the selection of OTC drugs to treat mild symptoms of COVID-19.

Traditional nonspecific NSAIDs such as the shorter acting ibuprofen and longer acting naproxen have been used to treat COVID-19. These widely used OTC drugs reversibly and non-specifically inhibit both cyclooxygenase enzyme isoforms. This results in systematic reduction in the synthesis of prostaglandins resulting in anti-inflammatory and fever-reducing effects. The researchers caution, however, that both ibuprofen and naproxen have similar but greater side effect profiles than aspirin, such as gastroenteritis and peptic ulcers.

Acetaminophen is one of the most frequently used OTC drugs in the U.S. and worldwide as a treatment for fever, allergic symptoms, headaches, myalgia, symptoms of the common cold, and most recently COVID-19. Acetaminophen was originally marketed as an alternative to aspirin for treatment of mild to moderate pain based on reduced mucosal gastrointestinal side effects. The authors caution that even at daily doses of 4,000 milligrams per day, generally accepted as safe for adults, acetaminophen can be toxic to the liver and may result in the onset of acute liver failure. In the U.S., acetaminophen is the leading reason for calls to Poison Control Centers with more than 100,000 cases per year. These circumstances account for more than 2,600 hospitalizations and 450 deaths in the U.S. due to acute liver failure. 

Aspirin, or acetylsalicylic acid, inhibits the production of prostaglandins, which are responsible for mediating pain, inflammation and fever. The authors say that the beneficial effects of aspirin include anti-platelet, analgesic, antipyretic or anti-fever and anti-inflammatory properties. Aspirin is rapidly absorbed when taken orally and has a half-life of around four hours, after which it is mostly metabolized by the kidneys.

The researchers note that the anti-inflammatory benefits of aspirin should provide symptomatic relief of fever and body aches in COVID-19. They underscore, however, that health providers should view these in the context of the increased risks of bleeding, principally gastrointestinal. Further, COVID-19 itself may already predispose individuals to bleeding as well as to clotting abnormalities.

“We believe that health care providers should make individual clinical judgments for each of his or her patients in the selection of OTC drugs to treat symptoms of COVID-19. This judgement should be based on the entire benefit to risk profile of the patient,” said Charles H. Hennekens, M.D., Dr.PH, senior author, first Sir Richard Doll Professor and senior academic advisor in FAU’s Schmidt College of Medicine. “It is our belief that the individual health care provider knows far more about each of his or her patients than anyone, including expert members of guideline committees.”

The authors conclude that when the totality of evidence is complete, health care providers can make the most rational individual clinical judgements for their patients and policymakers for the health of the general public.

The authors believe that, at present, the totality of evidence is incomplete and requires reliable evidence from large- scale randomized trials designed a priori to do so, which is necessary to develop rational guidelines. They also believe that any guidelines should provide only guidance to health care providers. Currently, these considerations pose new clinical challenges for health care providers in prescribing OTC drugs to treat COVID-19. 

“The astute and judicious individual clinical decision making of health care providers for each individual patient based on all these considerations has the potential to do far more good than harm. Finally, guidelines should provide guidance to individual health care providers,” said Hennekens.

Study co-authors are Gage Collamore, a second-year medical student; Mark J. DiCorcia, Ph.D., an associate professor and associate dean for educational affairs and admissions; Yash Nagpal, a second-year medical student; and Larry Fiedler, M.D., a board certified gastroenterologist and an affiliate associate professor, all within FAU’s Schmidt College of Medicine; Michael A. Garone, M.D., a board-certified gastroenterologist and clinical assistant professor at George Washington University Hospital; and David L. DeMets, Ph.D., emeritus Halperin Professor and founding chair of biostatistics and informatics; and Dennis G. Maki, M.D., the Ovid O. Meyer Professor of Medicine; both at the University of Wisconsin School of Medicine and Public Health.

Hennekens and Maki served for two years as lieutenant commanders in the U.S. Public Health Service as epidemic intelligence service (EIS) officers with the CDC. They served under Alexander D. Langmuir, M.D., who created the EIS and directed the epidemiology program at the CDC, as well as Donald A. Henderson, M.D., chief of the Virus Disease Surveillance Program at the CDC. Langmuir and Henderson made significant contributions to the eradication of polio and smallpox using widespread vaccinations and public health strategies of proven benefit and had extraordinary collaborations with local, state, federal and international health authorities.   

– FAU –

About the Charles E. Schmidt College of Medicine:

FAU’s Charles E. Schmidt College of Medicine is one of approximately 157 accredited medical schools in the U.S. The college was launched in 2010, when the Florida Board of Governors made a landmark decision authorizing FAU to award the M.D. degree. After receiving approval from the Florida legislature and the governor, it became the 134th allopathic medical school in North America. With more than 70 full and part-time faculty and more than 1,300 affiliate faculty, the college matriculates 64 medical students each year and has been nationally recognized for its innovative curriculum. To further FAU’s commitment to increase much needed medical residency positions in Palm Beach County and to ensure that the region will continue to have an adequate and well-trained physician workforce, the FAU Charles E. Schmidt College of Medicine Consortium for Graduate Medical Education (GME) was formed in fall 2011 with five leading hospitals in Palm Beach County. The Consortium currently has five Accreditation Council for Graduate Medical Education (ACGME) accredited residencies including internal medicine, surgery, emergency medicine, psychiatry, and neurology.


About Florida Atlantic University:
Florida Atlantic University, established in 1961, officially opened its doors in 1964 as the fifth public university in Florida. Today, the University serves more than 30,000 undergraduate and graduate students across six campuses located along the southeast Florida coast. In recent years, the University has doubled its research expenditures and outpaced its peers in student achievement rates. Through the coexistence of access and excellence, FAU embodies an innovative model where traditional achievement gaps vanish. FAU is designated a Hispanic-serving institution, ranked as a top public university by U.S. News & World Report and a High Research Activity institution by the Carnegie Foundation for the Advancement of Teaching. For more information, visit

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Supreme Court’s questions about First Amendment cases show support for ‘free trade in ideas’

These cases have asked the justices to consider how to apply some of the most sweeping constitutional protections – those of free speech – to an extremely…



Clouds float over the Supreme Court building on March 15, 2024. Celal Gunes/Anadolu via Getty Images

This term, the U.S. Supreme Court has heard oral arguments in a total of five cases involving questions about whether and how the First Amendment to the Constitution applies to social media platforms and their users. These cases are parts of a larger effort by conservative activists to block what they claim is government censorship of people who seek to spread false information online.

The most recently heard case, on March 18, 2024, was Murthy v. Missouri, about whether the federal government’s direct communication with social media platforms, specifically about online content relating to the COVID-19 public health emergency, violated the First Amendment rights of private citizens.

The case stemmed from the Biden administration’s efforts to combat misinformation that spread online, including on social media, during the pandemic. The plaintiffs said White House officials “threatened platforms with adverse consequences” if they didn’t take down or limit the online visibility of inaccurate information – and that those threats amount to the unconstitutional suppression of free speech from private individuals who shared content that contained debunked conspiracy theories and contradicted scientific evidence.

It is not uncommon for government officials to informally pressure private parties, like social media platforms, into limiting, censoring or moderating speech by third parties. As Justice Amy Coney Barrett seemingly implied during the Murthy v. Missouri oral arguments, “vanilla encouragement” by government officials would be constitutionally permissible. But when the informal pressure turns into bullying, threats or coercion, it may trigger First Amendment protections, as the Supreme Court ruled in another case called Bantam Books v. Sullivan, from 1963.

But the Biden administration said its effort to fight COVID misinformation was normal activity, in which the government is allowed to express its views to persuade others, especially in ways that advance the public interest.

Two men in suits stand in a room with screens and flags.
President Joe Biden and Surgeon General Vivek Murthy attend a meeting in 2022. Kevin Dietsch/Getty Images

Several justices seemingly agreed with the Biden administration and accepted its view that ordinary pressure to persuade is permissible.

More broadly, the Supreme Court has wrestled with the application of the First Amendment to cases involving social media platforms. Earlier this term, the court heard several cases that involved content moderation – both by the platforms themselves and by public officials using their own social media accounts. As Justice Elena Kagan put it during one round of oral arguments: “That’s what makes these cases hard, is that there are First Amendment interests all over the place.”

Perhaps most fundamentally, the court seeks to evaluate the relationship between social media platforms and public officials.

A public official or a private social media user?

On March 15, the Supreme Court released its unanimous decision in Lindke v. Freed – another case involving social media platforms. The issue in that case was whether a public official can delete or block private individuals from commenting on the official’s social media profile or posts.

This case involved James Freed, the city manager of Port Huron, Michigan, and Facebook user Kevin Lindke. Freed initially created his Facebook profile before entering public office, but once he was appointed city manager, he began using the Facebook profile to communicate with the public. Freed eventually blocked Lindke from commenting on his posts after Lindke “unequivocally express(ed) his displeasure with the city’s approach to the (COVID-19) pandemic.”

The court ruled that on social media, where users, including government officials, often mix personal and professional posts, “it can be difficult to tell whether the speech is official or private.” But the court unanimously found that if an official possesses “actual authority to speak” on behalf of the government, and if the person “purported to exercise that authority when” posting online, the post is a government action. In that case, the official cannot block users’ access to view or comment on it.

The court ruled that if the poster either does not have authority to speak for the government, or is not clearly exercising that authority when posting, then the message is private. In that situation, the poster can restrict viewing and commenting because that is an exercise of their own First Amendment rights. But when a public official posts in their official capacity, the poster must respect the First Amendment’s limitations placed on government. The court sent a similar case, O'Connor-Ratcliff v. Garnier, back to a lower court for reconsideration based on the ruling in the Lindke case.

An illustration of a person surrounded by phone and computer screens spouting all manner of information and noise.
Online information can be a cacophony from which it is hard to discern truth and accuracy. Nadezhda Kurbatova/iStock / Getty Images Plus

Who controls what’s online?

At the root of the plaintiffs’ claims in both these cases is content moderation – whether a public official can moderate another user’s content by deleting their posts or blocking the user, and whether the federal government can interact with social media platforms to mitigate the spread of debunked conspiracy theories and scientifically disprovable narratives about the pandemic, for instance.

Ironically, though conservatives argue that the federal government cannot interact with the social media platforms to influence their content moderation, Florida and Texas – states governed by Republican majorities in the statehouse and Republican governors – enacted state laws that seek to restrict the platforms’ own content moderation.

While the laws in each state differ slightly, they share similar provisions. First, both laws contain “must-carry provisions,” which “prohibit social media platforms from removing or limiting the visibility of user content in certain circumstances,” according to the Knight First Amendment Institute at Columbia University.

Second, both laws require the social media platforms to provide individualized explanations to any user whose content is moderated by the platform. Both laws were passed to combat the false perception that the platforms disproportionately silence conservative speech.

The Florida and Texas laws were challenged in two cases whose oral arguments were heard by the Supreme Court in February 2024: Moody v. NetChoice and NetChoice v. Paxton, respectively. Florida and Texas argued that they can regulate the platforms’ content moderation policies and processes, but the platforms argued that these laws infringe on their editorial discretion, which is protected by well-established First Amendment precedent.

During oral argument in both cases, the justices appeared skeptical of both laws. As Chief Justice John Roberts stated, the First Amendment prohibits the government, not private entities, from censoring speech. Florida and Texas argued that they enacted these laws to protect the free speech of their citizens by limiting the platforms’ ability to moderate content.

But social media users do not have any First Amendment protections on the platforms, because private entities, like Facebook, are free to moderate the content on their platforms as they see fit. Roberts was quick to respond to Texas and Florida: “The First Amendment restricts what the government can do, and what the government’s doing here is saying you must do this, you must carry these people.”

Where are the online boundaries of free speech?

Collectively, these cases demonstrate the Supreme Court’s interest in defining the boundaries of First Amendment protections as they relate to social media platforms and their users. Moreover, the court seems focused on establishing the limits of the relationship between government and social media platforms.

The justices’ questions during the NetChoice cases suggest that they are skeptical of government regulation that forces social media platforms to carry certain content. In this way, the justices seem poised to affirm the principle that government cannot directly or formally force an individual or, in this case, a private company, to convey a message that it does not wish to carry.

But the justices’ questions during Murthy v. Missouri seem to suggest that it is not a violation of the First Amendment for government officials to informally interact or communicate with social media platforms in an attempt to persuade them not to carry material the government dislikes.

Considering all of these cases together, the court seems posed to further promote a robust “free trade in ideas,” which was a theory first invoked in 1919 by Justice Oliver Wendell Holmes in Abrams v. United States. In Lindke v. Freed, the court identified the distinction between private speech on social media platforms by a public official, which is protected by the First Amendment, and professional speech, which is subject to First Amendment limitations that protect others’ rights.

In the NetChoice cases, the court seems ready to limit a state’s ability to directly compel social media platforms to convey messages that they may moderate. And in Murthy v. Missouri, the justices seem ready to affirm that while indirect compulsion may be unconstitutional, ordinary pressures to persuade social media platforms are permissible.

This promotion of a robust marketplace of ideas appears to stem from neither giving the government extra powers to shape public discourse, nor excluding government from the conversation altogether.

Wayne Unger does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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