Fed raises rates by a quarter percentage point from near zero as central bank struggles with inflation, the war in Ukraine and Covid
The Federal Reserve has raised interest rates for the first time since 2018, as the central bank struggles with soaring US inflation, the impact of the war in Ukraine and the coronavirus crisis.
The Fed raised rates by a quarter percentage point from near zero, in what is expected to be the first in a series of raises in the coming months.
Continue reading...The Republican governor of Arizona, Doug Ducey, has come under fire for saying he needs the support of a far-right state senator who told a white nationalist event in Florida she fantasises about building gallows on which to hang her enemies.
State progressive groups said Ducey should “stop catering to hate”.
Continue reading...Authorities work on alternative travel routes as protest hits auto production and injunction sought to remove Ambassador Bridge demonstrators
The US government has urged Canada to use federal powers to ease the growing economic disruption caused by the blockade of the vital Ambassador Bridge by protesters opposed to coronavirus mandates.
The closure of North America’s busiest international land border crossing, a vital supply route for Detroit’s carmakers, has halted some auto output and left officials scrambling to limit economic damage.
Continue reading...Joe Biden acknowledged that rising prices in the US are having a significant impact on families’ budgets, even as the American economy more broadly continues to recover from the effect of the coronavirus pandemic.
“On higher prices, we have been using every tool at our disposal, and while today is a reminder that Americans’ budgets are being stretched in ways that create real stress at the kitchen table, there are also signs that we will make it through this challenge,” Biden said in a new statement.
Continue reading...Inflation has been driven higher by soaring demand and lack of supply caused by Covid pandemic’s global impact on trade
Inflation in the US climbed to its highest level in 40 years in January, with prices rising by 7.5% from a year ago, the Bureau of Labor Statistics reported on Thursday.
The rise in the consumer price index (CPI) survey – which measures the costs of a wide variety of goods – was the largest since February 1982. CPI rose 0.6% from December, higher than expected.
Continue reading...Analysis: From Pakistan to the US, Australia to Germany, the cost of living is rising to new highs and causing new hardships
After decades lurking in the shadows, inflation is back. On Amazon, you can find fridge magnets printed with words spoken 40 years ago by Ronald Reagan, before the election that swept him into the White House.
“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”
Continue reading...Activision Blizzard deal would help Xbox compete against PlayStation – but will regulators play along?
Microsoft’s planned takeover of Activision Blizzard puts the tech company at the centre of two big issues facing the sector: the metaverse and Washington’s determination to rein in big tech.
The metaverse is where the physical and digital worlds come together, although it is very much at the concept stage. The idea is that you will put on a virtual reality headset and a digital representation of yourself – an avatar – will interact with others at work and play in a combination of virtual and augmented reality.
Continue reading...Founder of blood-testing company Theranos spun ‘alluring narrative that everyone wanted to believe’
Just six years ago Forbes magazine declared her the “the world’s youngest self-made female billionaire” and the “next Steve Jobs”. Now, Elizabeth Holmes, 37, founder of the collapsed blood testing company Theranos, is facing decades in prison after being found guilty of conspiring to defraud her investors out of billions.
Holmes, a university dropout with no medical training, had fooled regulators and some of the world’s richest people, including Rupert Murdoch, Henry Kissinger and Larry Ellison, into believing she had figured out a way to test for a range of health conditions with just a pinprick of blood.
Continue reading...Analysis: issues of governance, rising debt, Covid and property market turmoil will delay Beijing’s quest to become the global economy’s No 1
“The east is rising, the west is declining”, according to the narrative propagated by the Chinese Communist party (CCP). Many outside China take its “inevitable rise” as read. On the way to becoming a “modern socialist country” by 2035, and rich, powerful, and dominant by 2049, the centenary of the People’s Republic, China wants to claim bragging rights as its GDP surpasses the United States, and project its power based on its expanding economic heft.
There is, however, a critical flaw in this narrative. China’s economy may fail to overtake the US as it succumbs to the proverbial middle-income trap. This is where the relative development progress of countries in relation to richer nations stalls, and is normally characterised by difficult economic adjustment and often by unpredictable political consequences.
Historically, China’s growth miracle has been remarkable. In the 30 years to 1990. The money GDP (the market value of goods and services produced in an economy) for China and the US in American dollar terms grew more or less in tandem at just over 6% and 8% per annum, respectively. . But in the next three decades, China’s GDP growth doubled to over 13%, while America’s halved to 4.5%. That pushed China’s GDP up from 5% of American GDP to 66%.
Yet, China’s growth spurt is now over, and the huge disparity in GDP growth has been eliminated. In the last few quarters, China’s GDP has been growing at half the rate of the US. Although that discrepancy is probably unsustainable, America’s $9tn GDP margin over China means that comparable rates of GDP growth in the future will sustain and even widen the margin. A Japanese thinktank has recently extended the date when it expects China to overtake the US, from 2029 to 2033. Deferrals like this are now a feature, and there will be more.
The issue though is less about the maths and more about why China is at a turning point.
In case you missed it yesterday: the House select committee investigating the Capitol insurrection issued five more subpoenas to right-wing political operatives, including former Trump associate Roger Stone and conspiracy theorist Alex Jones.
Hugo Lowell reports:
The subpoenas demanding documents and testimony expand the select committee’s inquiry focused on the planning and financing of the rally at the Ellipse, by targeting operatives who appear to have had contacts with the Trump White House.
House investigators issued subpoenas to the veteran operatives Stone and Jones, Trump’s spokesperson Taylor Budowich, and the pro-Trump activists Dustin Stockton and his wife, Jennifer Lawrence.
Continue reading...The president will sign $1tn package into law after House ended months-long standoff by approving bipartisan deal
Joe Biden saluted a “monumental step forward as a nation” on Saturday, after House Democrats finally reached agreement and sent a $1tn infrastructure package to his desk to be signed, a huge boost for an administration which has struggled for victories.
“This is a blue-collar blueprint to rebuild America,” Biden said, “and it’s long overdue.”
Continue reading...The US House of Representatives gave final approval on Tuesday to a Senate-passed bill temporarily raising the government’s borrowing limit to $28.9tn, putting off the risk of default at least until early December.
Democrats, who narrowly control the House, maintained party discipline to pass the hard-fought, $480bn debt limit increase. The vote was along party lines, with every yes from Democrats and every no from Republicans.
Continue reading...Cybersecurity comes down to which side has access to more information about the other and can utilize it best
This week, shares in China’s giant ride-hailing app Didi crashed by more than 20%. A few days before, Didi had raised $4.4bn in a massive IPO in New York – the biggest initial public offering by a Chinese company since Alibaba’s debut in 2014.
The proximate cause of Didi’s crash was an announcement by China’s Cyberspace Administration that it suspected Didi of illegally collecting and using personal information. Pending an investigation, it had ordered Didi to stop registering new users and removed Didi’s app from China’s app stores.
Continue reading...
Two-thirds of Americans believe democracy is under threat, polls finds
This is Lois Beckett, picking up our live US politics coverage from Los Angeles.
NEW: Two-thirds of U.S. adults believe that American democracy is under threat according to the latest @NewsHour/@NPR/@maristpoll. https://t.co/TnYS66pXqA
That’s it from me today. My west coast colleague, Lois Beckett, will take over the blog for the next few hours.
Here’s where the day stands so far:
Continue reading...Beijing says bill seeks to exaggerate ‘so-called China threat’ and is ‘full of cold war thinking’
China has denounced a US Senate bill worth about $250bn (£175n) that aims to boost American technology and manufacturing prowess as an example of the US hyping up “the so-called China threat”, and accused Washington of attempting to hinder its development.
The Senate on Tuesday overwhelmingly approved the Innovation and Competition Act, in a rare show of unity in a chamber often filled with political division between Democrats and Republicans.
Continue reading...As Covid vaccination rates rise entertainment events and rental homes and cars are selling out but companies are struggling to fill job vacancies
After more than 15 months in varying degrees of lockdown, the US is finally ready to reopen this summer – and the signs are that plenty of people are beginning to emerge into the light, with their wallets loaded and their hearts seeking song, dance and travel.
Sixty-three percent of US adults have now received at least one vaccine dose, and as life returns to “normal”, hotels and concerts are selling out, rental cars and rental homes are booked up, and visits to museums and events are soaring.
Continue reading...Biden administration scrambles to avoid shortages after Colonial Pipeline targeted in worst-ever attack on US infrastructure
The Biden administration has invoked emergency powers as part of an “all-hands-on-deck” effort to avoid fuel shortages after the worst-ever cyber-attack on US infrastructure shut down a crucial pipeline supplying the east coast.
The federal transport department issued an emergency declaration on Sunday to relax regulations for drivers carrying gasoline, diesel, jet fuel and other refined petroleum products in 17 states and the District of Columbia. It lets them work extra or more flexible hours to make up for any fuel shortage related to the pipeline outage.
Continue reading...Joe Biden did not appear downhearted by a disappointing jobs report: he said it would not be a sprint, but 'a marathon' after April's report severely missed economists' expectations.
The president noted his $1.9tn coronavirus relief package, which he signed into law in March, was meant to aid the US economy over the course of a year and insisted the country is 'moving in the right direction' as businesses begin to reopen
Continue reading...Analysis: why the president wants to build the US economy from the middle and bottom, not top down
Cut taxes on the rich. Unleash a wave of entrepreneurship. Growth will pick up and more jobs will be created. Everybody benefits. That, in essence, is trickle down – a theory of economics that Joe Biden wants to consign to the dustbin of history.
The US president was a young politician when the idea that cutting taxes on the well-off would be good for the poor first came into vogue in the 1970s. Now he has used his first address to a joint session of Congress to call on the US’s top 1% to pay for his $1.8tn (£1.3tn) American families plan – higher spending in areas such as education, childcare and infrastructure.
Continue reading...Shares rise by more than 30 points as China reports record economic growth
The FTSE 100 has closed above 7,000 for the first time since the Covid-19 pandemic triggered a collapse in global markets last year, driven by rising hopes for the world economy after record growth in China.
The index of leading UK company shares ended the day up 36 points on Friday, or 0.5%, at 7,019, the highest level since late February 2020 when the first wave of Covid-19 sent shock waves through financial markets around the world.
Continue reading...