With high inflation souring Americans’ views of the economy and his presidency, Joe Biden has decided to act. This week, the president has embarked on a new effort to burnish his inflation-fighting credentials.
On Tuesday Biden invited Jay Powell, chair of the Federal Reserve, to the White House to offer his backing for the central bank to do what it takes to blunt inflation. Meanwhile, in an op-ed in The Wall Street Journal, Biden said he realised Americans were “anxious” about inflation, stressing that the country was battling high prices from a position of “strength” compared with the rest of the world. Top officials from his administration — including Janet Yellen, the Treasury secretary, who said she had been “wrong” on the issue — are also increasing their public appearances.
“I’m sure that [Biden] is disturbed by his 40 per cent approval rating when the economy has recovered so strongly,” said Don Beyer, a Democratic member of the House of Representatives from Virginia, who chairs the joint economic committee in Congress.
The inflation picture worsened further in the wake of the war in Ukraine and supply chain disruptions triggered by new coronavirus lockdowns in China. Now there are concerns that the fiscal and monetary tightening needed to bring down inflation will result in a sharp slowdown in the economy. Yesterday Jamie Dimon, chief executive of JPMorgan Chase, warned of an economic “hurricane” bearing down on the country.
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The latest from the war in Ukraine:
Saudi Arabia ready to pump more oil: The kingdom has indicated to western allies that it is prepared to raise oil production should Russia’s output fall substantially under the weight of sanctions, according to five people familiar with the discussions.
US military aid: As mentioned in yesterday’s newsletter, Washington has now said it will send Kyiv longer-range rocket systems and precision ammunition. What exactly are the systems, and how are they likely to affect Ukraine’s strategy in the war?
Russian debt: Moscow’s failure to pay interest on a bond will trigger an estimated $2.5bn of payouts for holders of credit default swaps, insurance-like contracts used to protect against defaults.
Five more stories in the news
1. Stakeholder capitalism is ‘not woke’, says JPMorgan’s Dimon Jamie Dimon has dismissed claims that stakeholder capitalism is “woke”, pushing back against conservative criticism of the environmental and social agenda that much of corporate America has embraced in recent years. The JPMorgan Chase chief executive described himself as “a red-blooded free-market capitalist” and said people had misinterpreted his push for stakeholder capitalism as chair of the Business Roundtable.
2. Sheryl Sandberg to step down from Facebook parent Meta Sheryl Sandberg is stepping down as the chief operating officer of Facebook’s parent company after 14 years, a major shake-up in which chief executive Mark Zuckerberg will lose one of his closest lieutenants.
3. US and Taiwan launch initiative to deepen economic engagement The Biden administration said the “US-Taiwan Initiative on 21st-century Trade” would “develop an ambitious road map” for negotiations in areas from agriculture and digital trade to climate. But the new “Road map” falls short of Taipei’s hopes for a full deal and Taiwan was not included in the Indo-Pacific Economic Framework, which Biden launched last week.
4. Musk demands 40 hours a week in the office Elon Musk has told his Tesla workers to show up for at least 40 hours a week in the office — clarifying that he does not mean “some remote pseudo office” — or said the employees should leave. The chief executive of the electric carmaker sent two emails to staff declaring that “remote work is no longer acceptable” and that manufacturing great products “will not happen by phoning it in”.
5. Pemex plans to repay $2bn to suppliers by offering new debt Mexico’s national oil company Pemex will offer to pay back about $2bn it owes big-ticket suppliers with new debt, potentially easing conditions for some of its biggest contractors. The company did not name which suppliers would benefit from the offer.
The day ahead
Trooping the Colour military parade UK celebrations, as well as public holidays today and tomorrow, are marking the Queen’s platinum jubilee — 70 years on the throne.
Opec+ meeting The oil producers’ group meets today and is widely expected to stick with its plan of raising production by about 400,000 barrels a month, a target that has been in place since last year.
Economic data EU producer price index figures and US factory orders data for April are published.
Corporate earnings Canadian athleisure brand Lululemon Athletica publishes first-quarter results while US food processing company Hormel Food reports second-quarter results.
What else we’re reading and listening to
The global nursing crisis In 2020, the World Health Organization estimated there was a global shortage of 5.9mn nurses — almost one-quarter of the current workforce of almost 28mn. Covid-19 has made things worse, with many suffering burnout and mental health challenges as they struggled to deal with the chaos of successive waves of the virus.
Fine dining faces its dark truths in Copenhagen In restaurants, two stories are being told. The first is in the dining room, a perfectly choreographed show of luxury. And then there is the story that you are never supposed to hear, of what happens on the other side.
“We found out that we have actually been victims of kidnapping from life, because the life we had been offered is not a life” — a chef from Ukraine
Record fundraising gives start-ups breathing space Investment in tech companies is stalling as valuations fall, with tech stocks dragging markets lower. However, start-ups still have reason to be hopeful, with forecasters believing demand for the tech products and services they provide will increase this year. Analytics, cloud computing and security groups should benefit most.
Tether’s path to the spotlight This episode of the Behind the Money podcast starts with a real-life fire that sends a business up in smoke. With the help of Financial Times reporters, we dig into the professional histories of the executives who sit atop two of crypto’s most important businesses: stablecoin issuer Tether and exchange Bitfinex.
How the Queen built her reign on principles of duty and detachment While recent opinion polls have suggested that younger Britons are more ambivalent about the role of the royal family, the overall majority in favour of the institution has remained relatively steady throughout Queen Elizabeth II’s reign and was still buoyant on the eve of her jubilee celebrations. “She has been the one constant in a rapidly changing world,” said royal commentator Penny Junor.
You can also snoop around the Queen’s kitchen with Tom Parker Bowles, stepson of Prince Charles.
Imposter ‘syndrome’
Don’t miss Jemima Kelly’s explanation of why we need to rethink imposterism. Should we start to think of it as a strength?
Source: Economy - ft.com
