Aurelia Butler

WASHINGTON (Reuters) – A stronger-than-expected recovery from the COVID-19 pandemic will slightly delay the dates when Social Security and Medicare funds are depleted, trustees for the federal benefit programs said on Thursday, warning that growing economic uncertainty may alter the projections.Social Security’s Old-Age and Survivors Insurance Trust Fund will now be able to make timely scheduled benefits payments until 2034, the program’s annual trustees report said, one year later than estimated in last year’s report.The Social Security Disability Trust Fund, which pays disability benefits, is no longer likely to be depleted within the 75-year projection period. Last year’s report showed it running short of funds by 2057. The Medicare trustees report said the Hospital Insurance Trust Fund will be able to pay benefits until 2028, two years later than estimated last year. “The recovery of employment, earnings, and GDP from the 2020 recession has been faster and stronger than projected in last year’s report, resulting in higher payroll tax receipts and higher revenue from income taxation of Social Security benefits,” the trustees led by Treasury Secretary Janet Yellen said in a summary of the reports.U.S. tax collections, including the payroll taxes that support Medicare, have increased sharply in recent months, leading the Congressional Budget Office to forecast a $1.7 trillion reduction in the federal deficit for the current fiscal year as pandemic aid outlays fade.President Joe Biden sought to take credit for Social Security and Medicare fiscal improvements, saying in a statement: “The strong economic recovery driven by my economic and vaccination plans has strengthened programs that millions of Americans rely on.”The economic assumptions for the reports were frozen in mid-February, before Russia’s invasion of Ukraine spiked food and energy prices sharply higher and China imposed severe lockdowns in some major cities to fight COVID-19 outbreaks.”Developments since then have added to the uncertainty regarding the path of the COVID-19 pandemic and the economy in the near term,” the trustees said, adding they will monitor these developments and make necessary adjustments to later reports.The trustees said both programs face long-term financing shortfalls due to the rapid aging of the U.S. population. Medicare costs will continue to grow faster than U.S. GDP through the late 2070s due to projected increases in the “volume and intensity” of healthcare services provided, they said. More

How well did you keep up with the news this week? Take our quiz.Opec and its allies have agreed to accelerate oil production in July and August, as the cartel’s linchpin Saudi Arabia bowed to US pressure to cool a crude price rally that has threatened to stall the global economy. The cartel said it would increase output by almost 650,000 barrels a day in both months, up from planned increases of about 400,000 b/d. The move came days after the EU agreed to impose a partial ban on Russian oil imports, deepening fears of global energy shortages as Moscow’s invasion of Ukraine continues to rattle markets. Saudi Arabia and the United Arab Emirates, Opec’s two powerhouse producers, are likely to account for most of the supply increases, with Riyadh earlier signalling it was prepared to increase output to overcome Russian shortages. The extra supplies are the first time the Saudi-led Opec+ cartel has deviated from a measured supply policy agreed in the depths of the pandemic oil crash two years ago, and comes after months of high-level US diplomacy to repair relations between Riyadh and Washington.But don’t expect fuel prices to go down anytime soon. Oil prices are only going one way after Europe’s import ban, writes FT’s Derek Brower in our Energy Source newsletter. Thanks for reading FirstFT Asia. Share your feedback with us at [email protected]. Have a great weekend — Emily The latest from the war in Ukraine:Sanctions: The US has imposed new sanctions on middlemen and yachts linked to Vladimir Putin.Inflation: Ukraine’s central bank has raised its benchmark lending rate from 10 per cent to 25 per cent.Explainer: Why does Ukraine need longer-range weapons from the US?Russian business: Russian companies have been plunged into a technological crisis by western sanctions that have created severe bottlenecks in the supplies that power the nation’s data centres.Five more stories in the news1. China claims Covid victory in Shanghai despite recession risks Beijing declared victory in defending Shanghai from the coronavirus pandemic, despite officials clamping down on office and residential complexes and whisking people to state quarantine facilities in the international finance hub. 2. Hedge funds turn more bearish on stocks Hedge funds are growing increasingly pessimistic about the outlook for global equities, even though markets have already sold off sharply since the start of 2022. High-growth technology shares are a particular area of concern for top-performing managers including Lansdowne Partners’ Peter Davies and BlackRock’s Alister Hibbert.3. Xiaomi-linked companies halt IPOs after regulator scrutiny Smart mattress maker 8H, intelligent lighting company Yeelight and commercial operating system maker Shanghai Sunmi Technology have shelved IPO plans after increasing scrutiny from China’s regulators.4. Taiwan’s opposition tries to claw back America’s trust On a 12-day tour that began yesterday, Kuomintang chair Eric Chu will seek to rebuild relations with Taiwan’s most crucial security partner, which his party has neglected for years as it battles to regain its standing following a series of crushing election defeats.5. Biden to call for action on guns in primetime speech Joe Biden will use a rare primetime address to the American people today to push Congress to pass new gun control measures in the wake of a number of deadly mass shootings. His appeal comes on the heels of three high-profile deadly shooting rampages across the US in recent weeks.The days aheadDragon Boat Festival The traditional Chinese holiday will be held today as it is on each year on the fifth day of the fifth month of the Chinese calendar.US special envoy for North Korea visits Seoul Sung Kim is scheduled to meet his counterparts from Japan and South Korea in Seoul today to discuss how to deal with Pyongyang’s recent missile launches and the country’s Covid outbreak.Anniversary of Tiananmen Square massacre Normally at this time of year, the city would be preparing to mark the anniversary of the Tiananmen Square crackdown on pro-democracy protesters that took place on June 4, 1989. But Beijing’s tightening control of the city means that, for a third year in a row, no significant commemorations are being planned.What else we’re reading Toshiba agrees ceasefire with investors but fight is far from over For four years, Toshiba has been at war with its investors in an acrimonious conflict that has smashed the decades-old conventions of corporate Japan. But now, after a bruising series of clashes and defeats for the company in shareholder votes, Toshiba is poised to make history once again — with a ceasefire.Cloudy with chance of hurricanes for Wall Street, bankers say All of a sudden, everyone on Wall Street is talking about the weather. With the war in Ukraine and policy tightening by the US Federal Reserve making financial forecasting harder than unusual, JPMorgan Chase chief executive Jamie Dimon has focused attention on the heavens by employing meteorological metaphors to make sense of today’s economic turbulence.How the Queen built her reign on 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. You can also snoop around the Queen’s kitchen with Tom Parker Bowles, stepson of Prince Charles.

The official platinum jubilee portrait of the Queen, photographed at Windsor Castle © Royal Household/Ranald Mackechnie/via REUTERS

CBDCs now hold wholesale appeal for central bankers The terra and luna stablecoins collapse, and the tumbling price of tokens such as bitcoin, triggered establishment chatter about a “crypto winter”. What is sparking establishment interest, however, is using CBDC for wholesale cross-border payments, to move funds between financial institutions and central banks, writes Gillian Tett. 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.BooksTikTok clips seem an odd fit with the literary world. But publishers mindful of their bottom line would do well not to sniff at the recent BookTok trend. More

“Market pricing for 50 basis points potentially in June and July, from the data we have in hand today, seems like a reasonable path,” Fed Vice Chair Lael Brainard told CNBC. By September, she said, “if we don’t see the kind of deceleration in monthly inflation prints, if we don’t see some of that really hot demand starting to cool a little bit, then it might well be appropriate to have another meeting where we proceed at the same pace.” But even if price pressures are starting to abate, the Fed will still likely raise rates, just by a smaller amount, she signaled. “Right now it’s very hard to see the case for a pause,” she told CNBC, noting there is “a lot of work to do” to get inflation, running at a 40-year-high, down to the Fed’s 2% target.The U.S. central bank has raised interest rates by three quarters of a percentage point this year, and most Fed policymakers back raising interest rates another half of a percentage point at each of their next two meetings. Atlanta Fed President Raphael Bostic has suggested that by September the Fed ought to pause to assess the state of the economy before tightening policy further. Brainard’s remarks suggest that’s not the view of the core Fed leadership.Traders of interest rate futures are currently pricing in better than even odds of a year-end Fed’s policy rate in the range of 2.75%-3%, a full two percentage points higher than it is today. Speaking to the Philadelphia Council for Business Economics, Cleveland Fed President Loretta Mester called for Fed “fortitude” in the face of what could be volatile markets, slowing growth and even a rise in unemployment as the central bank ratchets rates higher to fight “unacceptably high” inflation.To Mester, the Fed needs to get rates to 2.5% as quickly as practical, she said Thursday, and then likely even higher. After two half-point rate hikes in June and July, the Fed’s policy rate will be in a range of 1.75% to 2%.”I will be reluctant to declare victory too soon,” she said, of high inflation. More

WASHINGTON (Reuters) – The Biden administration on Thursday issued a raft of new sanctions aimed at punishing Russia for its invasion of Ukraine, with targets including several yachts linked to Russian President Vladimir Putin, an oligarch who heads a major steel producer, and a cellist it says acts as a middleman for the Russian leader.The United States and other Western countries have imposed unprecedented sanctions on Russia’s economy since the Feb. 24 invasion, and Washington has pledged to take more measures as long as the war continues.In his State of the Union address in March, President Joe Biden said the United States would work to seize the yachts, luxury apartments and private jets of wealthy Russians with ties to Putin.The U.S. Treasury Department on Thursday identified two vessels, the Russian-flagged Graceful and the Cayman islands-flagged Olympia as property in which Putin has an interest. The Russian president, who was blacklisted the day after his Feb. 24 invasion of Ukraine, has taken numerous trips on the yachts, including one in the Black Sea with Belarusian President Aleksandr Lukashenko last year, the Treasury said. It also identified two other yachts, Shellest and Nega, it said were used by Putin and owned by a sanctioned Russian company.The Treasury also targeted Imperial Yachts, a brokerage based in Monaco that allows superyacht owners, including Russian oligarchs, to charter their boats when they are not using them, as well as an aviation company it said was involved in a scheme to transfer aircraft to an offshore company to avoid sanctions.PUTIN’S OFFSHORE WEALTHThe Biden administration also added Sergei Roldugin, a cellist and conductor already under European Union sanctions for his links to Putin, to its list of sanctioned individuals, saying Roldugin was “part of a system that manages President Putin’s offshore wealth.” The order froze Roldugin’s U.S. assets and barred U.S. people from dealing with them.Putin in 2016 defended Roldugin after he was named in the “Panama Papers” leaks, denying there was anything corrupt about his friend’s involvement in offshore companies.The State Department also imposed sanctions on five Russian oligarchs and members of the country’s elite, including Alexey Mordashov, one of Russia’s wealthiest people.The action blacklists Mordashov, members of his family and his companies including Severstal, a major steel producer, and gold miner Nord Gold. Severstal and representatives of Mordashov did not immediately reply to a Reuters request for comment. Nord Gold also did not reply to a request for comment.The State Department also sanctioned the spokesperson for the Russian Ministry Foreign Affairs, Maria Zakharova.”The United States will continue to support the people of Ukraine while promoting accountability for President Putin and those enabling Russian aggression,” Secretary of State Antony Blinken said in a statement.The Department of Commerce also added 71 parties in Russia and Belarus to its entity list, in a move meant to restrict the Russian military’s access to technology, the White House said in a fact sheet. A company placed on the entity list faces sweeping restrictions on shipments to Russia of both U.S. and foreign commodities, technology and software, if produced with U.S. equipment, technology or software.Putin sent his troops over the border on what he calls a special military operation on Feb. 24 to disarm and “denazify” Ukraine. Ukraine and its allies call this a baseless pretext for a war of aggression.(Refiling to fix typographical error in first paragraph to make it “at punishing” instead of “a punishing”) More

Though overall layoffs in the country reported by global outplacement firm Challenger, Gray & Christmas on Thursday fell 14.7% in May from April, thanks to strong demand in the labor market, the technology sector cut 4,044 jobs, up from the 459 between January and April.It is the highest monthly total since December 2020 when tech companies cut as many as 5,253 jobs.”Many technology startups that saw tremendous growth in 2020, particularly in the real estate, financial, and delivery sectors, are beginning to see a slowdown in users, and coupled with inflation and interest rate concerns, are restructuring their workforces to cut costs,” said Andrew Challenger, senior vice president of challenger, Gray & Christmas. U.S. tech layoffs and sector performance https://fingfx.thomsonreuters.com/gfx/mkt/gdpzyeeebvw/Pasted%20image%201654184823489.png The impact of the Ukraine crisis, a four-decade high inflation and rising interest rates has led to forecast cuts by companies such as Snap Inc (NYSE:SNAP) and Microsoft (NASDAQ:MSFT), while others like Meta Platforms Inc have slowed hiring to rein in costs.Fintech companies also announced 268% more job cuts in May than in the first four months of 2022, the report from Challenger, Gray & Christmas said.However, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week. Initial claims for state unemployment benefits fell 11,000 to a seasonally adjusted 200,000 for the week ended May 28, the Labor Department said on Thursday. More