Aurelia Butler

“I don’t see value in trying to shock the markets; we are not in a Volcker kind of moment,” Waller told CNBC in an interview. In the early 1980s, when inflation was last as high as it is now, Fed Chair Paul Volcker jacked up rates as much as four percentage points at a time.But Volcker, Waller noted, had to battle inflation that had been building for six or seven years; the current Fed is dealing with a surge in inflation that only began early last year.”Right now our main concern is getting these prices down and we can do that without causing a recession,” Waller said, noting that he supports raising interest rates by a half-a-percentage point in May and “possibly more” in June and July. “We don’t need to be shocking anything just to cause a shock…if inflation doesn’t cool off, we’ll keep going; we’ll do what it takes to get inflation back down” he said. “But we can do that in an orderly way without causing a lot of financial market stress.”The Fed raised interest rates last month for the first time in three years, but uncertainty stemming from Russia’s invasion of Ukraine kept it from raising rates more than a quarter-of-a-percentage point. Data since then – including a report on Tuesday showing consumer prices rose 8.5% in March, the biggest yearly rise since late 1981 – supports bigger rate hikes ahead, Waller said.”I think we want to get to above neutral certainly by the later half of this year, and get closer to neutral as soon as possible,” Waller said, noting that while inflation has “pretty much” peaked, the Fed still needs to tighten policy to reduce demand and take pressure off of prices. Traders continue to bet the Fed will raise interest rates by a half-point at both its May and June meetings, but in recent days have retreated from bets on a third half-point hike this year. Fed Governor Lael Brainard on Tuesday signaled she was heartened by a moderation in core inflation in March that could point to some cooling ahead, even as rising food and gas prices drove overall consumer prices up 8.5%. Rate futures prices last week were pricing in about a 75% chance the Fed’s policy rate would end the year in the range of 2.5% to 2.75%. On Wednesday traders were betting that year-end range was only slightly more likely than ending 2022 in a range of 2.25% to 2.5%, around the rate that most Fed policymakers see as neutral and that could be achieved with two half-point rate hikes in coming meetings. Waller’s remarks stood in contrast to his former boss St. Louis Fed President James Bullard, who supports raising rates to 3.5% by the end of the year and told the Financial Times that it is “fantasy” to think that inflation can be vanquished with more modest moves.To reach Bullard’s target would require half-point hikes at all six remaining Fed meetings this year. More

The yen fell to a 20-year low against the dollar as the Bank of Japan’s ultra-loose monetary policy piles pressure on the Japanese currency at a time when US policymakers at the Federal Reserve are signalling their intent to raise interest rates. The fall of about 0.5 per cent on Wednesday pushed the yen past ¥126 to the dollar, taking the currency almost 9 per cent lower for the year to date. The BoJ’s pledge to continue stimulus measures in order to bolster Japan’s economy contrasts sharply with the global consensus among central banks, particularly the Fed, where policymakers are expected to raise interest rates this year to rein in surging inflation. Japan’s stance also contrasts with New Zealand, whose central bank raised interest rates by half a percentage point yesterday — its biggest increase in 22 years — following worries about surging inflation exacerbated by Russia’s invasion of Ukraine.Thanks for reading FirstFT Asia. Do you think Japan should tighten its monetary policy? Tell me what you think at [email protected]. — EmilyThe latest from the war in Ukraine: Sanctions: US Treasury secretary Janet Yellen warned of economic and financial consequences for China and other countries that have maintained ties with Russia if they attempt to undermine sanctions unveiled by western allies. Energy: A full EU embargo on Russian energy would trigger a major recession in Germany, according to the country’s top economic institutes.Roman Abramovich: A court in the Channel Island of Jersey has imposed an order freezing more than $7bn in assets linked to the Russian oligarch.US policy: The US is funnelling extra weapons to Ukraine and sharing more intelligence with Kyiv ahead of a renewed Russian offensive expected in Donbas.Five more stories in the news1. Shanghai lockdown stokes global supply chains anxiety Dozens of producers of crucial electronic components yesterday halted production at their factories in Kunshan, a city close to Shanghai. Companies and analysts said the shutdown was unavoidable after lockdown rules initially applied only in Shanghai were extended to Kunshan.Related read: The world’s biggest luxury group LVMH reported stronger-than-expected sales growth in the first quarter despite the resurgence of Covid-19 disruptions in the key Chinese market.2. Khan launches campaign against removal from office Imran Khan has kicked off a defiant campaign against his removal as Pakistan’s prime minister, calling on thousands of his supporters to “hold regular public protests” to seek early elections.3. Subway attack suspect arrested in New York City The suspect in a New York City subway shooting that left 10 people wounded and traumatised the city was arrested by police and charged in federal court. Frank James, 62, was apprehended without incident in Manhattan’s East Village after a tip from a citizen, police said.Go deeper: James’s precise motives remain unknown, but the attack appeared calculated to unnerve a city where public safety has become an overriding concern for residents and businesses struggling to recover from the pandemic.4. South Korea signals nuclear fuel U-turn Won Hee-ryong, policy chief on President-elect Yoon Suk-yeol’s transition committee, said that outgoing president Moon Jae-in’s push to reduce the share of nuclear power in South Korea’s energy mix had increased greenhouse gas emissions and threatened to increase energy bills.5. New Zealand rules man accused of murder can be extradited to China New Zealand’s Supreme Court has ruled that a South Korean man accused of murdering a woman in Shanghai can be extradited to face trial in China, a judgment that human rights groups say places undue faith in Beijing’s diplomatic promises.The day aheadSikh festival of Vaisakhi The holiday marks the start of the Punjabi New Year. (BBC) Israel GDP figures fourth-quarter growth figures will be published today. The nation’s economy is forecast to grow 5.5 per cent this year. (Reuters) Results On a big day for US bank earnings Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo report first-quarter earnings. Ericsson, State Street and TSMC are also expected to report first-quarter results. What else we’re reading and listening toAsia jostles for rocket launch business In Japan’s Oita Prefecture, the local airport, which has struggled with the travel downturn caused by Covid, is rebranding as a spaceport for mid-air rocket launches. But rivals all over Asia are also joining this Earth-based space race.

Biden and Ukraine: from climate champion to oil price panic US president Joe Biden was elected with bold plans for the green transition. But ahead of midterm elections he is facing an energy crisis, writes our US energy editor Derek Brower.Breaking the silence on disability in the workplace The FT’s Working It podcast is about doing work differently. This week, host Isabel Berwick argues that while we have heard a lot about diversity and inclusion in workplaces, one group is often left behind: people with disabilities.The rise of South Africa’s xenophobic vigilantes The brutal murder of Mbhodazwe “Elvis” Nyathi, who was beaten and left to burn in the street, has highlighted the rise of xenophobic vigilantes as an organised political force in South Africa as President Cyril Ramaphosa’s government sees its authority wane and struggles to turn around a flagging economy. PropertyPrice per square foot, school catchment areas and good transport links have long featured at the top of most prospective homeowners’ checklists. Now, however, there is an altogether less visible factor in house-hunters’ decisions about where to move: the air they breathe.

In London, low-emissions schemes are helping to reduce NO2 levels  © Luke Dray/WENN.com More

WASHINGTON (Reuters) – With Sarah Bloom Raskin last month dropping out of the running for the Federal Reserve’s top regulatory role, President Joe Biden’s administration is hunting again for a new candidate.Raskin failed to garner enough support from moderate Democrats to be confirmed. Most notably, West Virginia Senator Joe Manchin said he would not back her, citing worries she would discourage banks from lending to oil and gas companies. The Fed Vice Chair for Supervision role is one of the most powerful banking regulators in government, and the next official is likely to take on a sweeping portfolio including climate finance risk, fintechs, and fair lending. Here are the candidates likely to be in the mix, according to analysts and Washington insiders. MICHAEL BARR, FORMER TREASURY OFFICIALMichael Barr, currently a professor at the University of Michigan Law School, was a central figure at the Treasury under President Barack Obama when Congress passed the 2010 Dodd-Frank financial reform law.As assistant secretary for financial institutions, Barr helped shape the Wall Street overhaul and now is a leading candidate to be nominated for the Fed role, according to two sources familiar with the matter.Barr had previously been in the mix for another bank regulatory post, heading up the Office of the Comptroller of the Currency. But opposition from some progressives, who cited his work with some fintech firms after leaving government, helped sink his consideration.Barr did not respond to a request for comment.RAPHAEL BOSTIC, ATLANTA FED PRESIDENTWith his appointment as president of the Atlanta Fed in 2017, Bostic became the first Black person to hold a regional Fed president role. He has been outspoken on racial diversity and economic inequality issues, both of which are key policy priorities for the Biden administration. An economist by training, Bostic previously held roles at the U.S. central bank in Washington, where he won praise for his work on community lending rules, and at the U.S. Department of Housing and Urban Development. However, Bostic represents a bit of an unknown regarding financial regulation, analysts said. Even so, some banks were keen on Bostic for the role when his name was first floated last year, according to two industry executives. A spokesperson for Bostic did not immediately provide comment.NELLIE LIANG, TREASURY UNDERSECRETARYLiang, a former Fed official who is now Treasury’s undersecretary for domestic finance, was instrumental in building the regulatory framework after the 2007-2009 recession and financial crisis. She spent decades at the Fed as a staffer, ultimately becoming the first director of the central bank’s Division of Financial Stability.She left the Fed in 2017 to join the Brookings Institution think tank, where she criticized Republican efforts to trim capital and liquidity requirements for large banks, among other changes. Liang was nominated for a seat on the Fed’s Board of Governors during the Trump administration, but she withdrew in 2019 after Republicans blocked her nomination over worries she would be too tough on Wall Street.However, some progressives are unhappy that Liang has not taken a tougher stance on cryptocurrencies, “so it is unclear whether she would be in any future conversation about this role,” Isaac Boltansky, policy director for brokerage BTIG, wrote in a note on Monday. A spokesperson for Liang did not immediately respond to a request for comment.MICHAEL HSU, ACTING COMPTROLLER OF THE CURRENCYCurrently acting comptroller of the currency, Hsu previously led big bank supervision at the Fed. In his current role, he has pushed Democratic priorities, including climate change risk and has warned banks against “over-confidence” coming out of the COVID-19 pandemic. While he would be a good fit for Fed supervision, Washington insiders said, it’s unclear if his stance on climate financial risk would be palatable to Manchin, a moderate who represents coal-producing West Virginia in the Senate.A spokeswoman for Hsu did not immediately respond to a request to comment.FORMER TREASURY UNDERSECRETARY MARY MILLERA new name floated on Monday was Mary Miller, who was at the Treasury from 2010 to 2014. She recently served as the interim senior vice president for finance and administration at Johns Hopkins University.During her stint at the Treasury, Miller was responsible for Treasury debt management, fiscal operations, and the recovery from the financial crisis. She played a central role in implementing the 2010 Dodd-Frank financial reform law, helping agencies write complex regulations like the “Volcker Rule” and standing up the new Financial Stability Oversight Council. Miller could not immediately be reached for comment.RICHARD CORDRAY, FORMER HEAD OF THE CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) A former Ohio attorney general, Cordray served as the first director of the CFPB. Under his leadership the agency took an aggressive stance in going after abusive mortgage and payday lenders, earning praise from progressives and criticism from Republicans who said he was overstepping the agency’s statutory remit.After leaving the agency, Cordray ran unsuccessfully for Ohio governor. He currently runs the Education Department’s federal student aid programs. Cordray was in the running for the supervision post late last year, Reuters reported. Cordray did not respond to a request for comment. More

IMF Managing Director Kristalina Georgieva announced approval of the Resilience and Sustainability Trust in a statement after the board meeting, and said it would take effect from May 1.She said the trust would amplify the impact of last year’s $650 billion allocation of IMF Special Drawing Rights by allowing richer members to channel their emergency reserves to countries where the needs are greatest. The target was to build a trust of at least $45 billion, she said. More

Texas governor Greg Abbott backed down on extra inspections for vehicles from part of Mexico on Wednesday as a domestic US clash over immigration policy created delays threatening billions of dollars in international trade.The additional checks introduced by Abbott last week — which he said were meant to reduce crime and increase vehicle safety — added hours to usual crossing times and led to long backlogs at important ports of entry along Texas’s more than 1,200-mile border with Mexico.Truck drivers south of the border had blockaded some of the entry points in protest at the onerous measures, adding to the chaos and further imperilling supply chains already under strainAt a news conference with Samuel García, governor of Mexico’s Nuevo León state, on Wednesday, Abbott said Texas would return to the previous practice of random inspections at the shared ports of entry. García said he had agreed that the portion of the border would be continuously patrolled by state police.“The bridge from Nuevo León and Texas will return to normal effectively immediately, right now,” Abbott said. By Wednesday afternoon most of the blockades appeared to have ended. Commercial traffic resumed at the Pharr International Bridge and El Paso’s ports were operating normally, US Customs and Border Protection officials said.Most of Texas’s southern border is shared with Coahuila, Tamaulipas and Chihuahua states. Abbott said he had been contacted by those governors and would hold talks starting as soon as Thursday, signalling his intent to resolve the trade dispute in piecemeal deals at the state level.“I look forward to working with all of them toward achieving results similar to what we are achieving today with Governor García,” he said, adding that in the meantime the additional checks would be in place.Abbott, who is up for re-election in November, introduced the additional checks amid a domestic battle with the Democratic Biden administration over federal immigration policy. The border check measures, however, drew the ire of local Republican business leaders.

Mexico, which is the US’s biggest trading partner, also protested that the more than $440bn in annual trade flows that crossed through Texas entry points were at risk.Jen Psaki, White House press secretary, said on Wednesday that Abbott’s measures were unnecessary, hurt jobs and raised prices.As the leaders were speaking, trucks were still facing delays at crossings. Industries from carmakers to agriculture have been affected. Daniel Gudiño, chief executive of Mexican lime exporter SiCar Farms, said his company had citrus stuck at crossings that was at risk of spoiling.“If this is prolonged it’ll break the supply chain and inventories,” he said. “The consumer at the end of the day will always be the most affected because the prices will stay high or rise again.” More