Economy

TOKYO (Reuters) – From inflation allowances to the reskilling of workers, firms in Japan are stepping up efforts to help employees fight rising prices and a labour crunch, even though some cannot afford pay hikes that do more than offset cost-push inflation.As annual “shunto” labour talks get into full swing, momentum from both labour and management is growing for firms to offer such hikes to cushion, even if not beat, consumer inflation, which hit a 41-year high of 4% in December.At the spring session of the labour talks, set to wrap in mid-March, major firms, such as Toyota Motor (NYSE:TM) Corp, negotiate with in-house unions to set wages for the coming fiscal year from April.Labour shortages and rising consumer inflation, which is double the central bank’s target of 2%, are spurring cautious firms, with a 500-trillion-yen ($3.85 trillion) hoard of internal reserves, to hike wages.About a quarter of Japanese firms have offered inflation allowances or plan to do so, said corporate credit research firm Teikoku Databank. Such allowances range from 6,500 yen ($50) for monthly payments to 54,000 yen in lump sums, on average. “I received the money just when we had our second baby,” said Shinichiro Mori, who received a one-off allowance of 150,000 yen last summer from groupware developer Cybozu Inc, one of about 800 employees to do so. “I appreciated the money,” Mori, 41, told Reuters. “We spent it on baby goods, utility bills and other living expenses, as we stayed home all day taking care of our baby.”News that Fast Retailing Co, operator of the Uniqlo clothing chain, will revise its pay system for employees, with raises as much as 40%, provides another example.The private sector expects the drive to help boost productivity, meshing with Prime Minister Fumio Kishida’s “new capitalism” initiative on wealth distribution that put a top priority on wage hikes.Such demands by Japanese policymakers come against the backdrop of 15 years of grinding deflation that saw firms shelve hikes in base salary from the early 2000s to the early 2010s, when rounds of stimulus spending failed to spark economic growth, but piled up public debt instead.SUSTAINABLE PAY HIKESOECD data shows Japanese workers’ wages have grown about 5% over a period of 30 years from 1990, during which U.S. pay rose 1.5 times and pay for South Koreans doubled.Takahide Kiuchi, a former member of the board of the Bank of Japan, called for wage hikes to be sustained over time so that cumulative pay rises could offset price hikes in the long run.”Bonuses or inflation allowances would have only a limited impact on easing the pain of cost-push inflation, as consumers tend to save one-off payouts rather than spend,” added Kiuchi, now an executive economist at the Nomura Research Institute.The government and the central bank say inflation must grow in tandem with wage growth to fuel private consumption, which accounts for more than half the economy, paving the way for the Bank of Japan to achieve its inflation target in a sustainable, stable fashion.But one-off payments do not make consumers more confident about increasing spending, although a rise in base pay, a salary component that is hard to reverse, is more likely to boost such confidence and set workers spending more.Real wages fell 2.5% in November, down for the ninth straight month, following the previous month’s decline of 3.8%, the latest data shows.Mori’s employer, Cybozu, has offered employees a record pay hike in the upper reaches of the 1% to 10% range this year.That would surpass the 3% target of Kishida’s government, and even the 5% sought by the Japan Trade Union Confederation (Rengo), while Japan’s biggest business lobby Keidanren urged companies to offer positive wage hikes, including base pay.”We always feel the need to respond to labour shortages of engineers, in particular,” said Yumika Nakane, the firm’s human resources head. “We set pay scales as we’re fully aware salary is one of the keys to attract workers.”Despite a jobless rate of 2.5% in November that reflects the tight labour market, and steady job availability, at a ratio of 1.35 per seeker, policymakers complain about the absence of demand-pull inflation that entails wage growth.  LABOUR TALKSAt this year’s shunto talks, large firms are likely to offer the biggest pay hikes in 26 years, or an average of 2.85% for the financial year starting in April, a poll of 33 economists by the Japan Economic Research Center (JERC) showed.However, small firms, which employ seven of every 10 workers, face a severe situation, and more than 70% of them have no plan to raise wages, a separate poll by the Jonan Shinkin Bank and the Tokyo Shimbun newspaper showed.To push small firms in this direction, authorities want to improve labour productivity and encourage more workers to switch to industries with better prospects for growth, provided that they will not lack for employment.Kishida’s government plans to tap 1 trillion yen over the next five years in human resources, providing new support for firms hiring mid-career workers as well as for reskilling efforts to spur labour turnover.Workers have high expectations from this year’s labour talks, which they hope will counter cost-push inflation while tackling the tight labour market to help boost the economy.Some companies are ready to take the initiative.For instance, Internet media firm Cyberagent’s “reskilling centre” has trained 200 information technology engineers, upgrading their skills to match its needs, besides wooing engineers from outside.From this spring, it will also raise the starting salary for new graduates by 12% to 420,000 yen.”As the IT industry faces a lack of engineers, we can contribute to resolving the labour crunch by cultivating human resources, which is our strength,” said Hiroto Minegishi, the firm’s general manager for technical human resources.”As a result, we can help wages growth and enhance productivity across the IT industry.”($1 = 129.9700 yen) More

The government survey is likely to say that growth is seen at 6.5% for 2023-24 under the baseline scenario, the person said, declining to be named as the matter was confidential. This would be the slowest in three years. Nominal growth is likely to be forecast at 11% for 2023-24, the source added.Growth in the financial year beginning April 1 will remain strong relative to most global economies, led by sustained private consumption, a pick-up in lending by banks and improved capital spending by corporations, the survey will likely say, the source said.An economic survey by Chief Economic Adviser V. Anantha Nageswaran will be tabled in the parliament on Tuesday by Finance Minister Nirmala Sitharaman, a day before she presents the budget for the next fiscal year.The Economic Survey is the government’s review of how the economy fared in the past year.India’s economy has rebounded since the COVID-19 pandemic, but the Russia-Ukraine conflict has triggered inflationary pressures and prompted central banks, including India’s, to reverse the ultra-loose monetary policy they adopted during the pandemic.The survey will likely take note of above-target inflation in India, estimated by the central bank at 6.8% in 2022/23, but is likely to argue that the pace of price increases is not high enough to deter private consumption or low enough to weaken investment.The survey will likely caution that pressure on the Indian rupee could continue due to the tightening of monetary policy, the source said. India’s current account deficit (CAD) may also remain elevated as imports could remain high due to a strong local economy while exports ease due to weakness in the global economy, the survey will likely caution.India’s CAD was 4.4% of GDP in the July-September quarter, higher than 2.2% a quarter ago and 1.3% a year ago, as rising commodity prices and a weak rupee increased the trade gap.Even growth of 6.5% could keep India among the fastest growing economies in the world, despite losing pace from an estimated 7% in the fiscal year that ends on March 31. It has grown at 8.7% in the previous year mainly due to pandemic-related distortions.The survey will likely point to an improvement in employment conditions in India due to stronger consumption but add that a further pick-up in private investment is essential for job creation. The government’s increased spending on infrastructure in the last two years should help, the document will argue.Unemployment in India had soared during the pandemic. The government’s economic research department will also likely point to improvement in the financial health of the Indian banking sector as a factor aiding economic growth. More

The Biden administration has stopped providing US companies with licences to export to Huawei as it moves towards imposing a total ban on the sale of American technology to the Chinese telecom equipment giant.Several people familiar with the discussions inside the administration said the commerce department had notified some companies that it would no longer grant licences to any group wanting to export American technology to Huawei. The move marks the latest prong in Washington’s campaign to curb the Shenzhen-based tech company, which US security officials believe helps China engage in espionage. Huawei denies any involvement in spying. The Trump administration in 2019 imposed tough restrictions on exporting American technology to Huawei by adding the group to a blacklist called the “entity list”. The move was part of a strategy to crack down on Chinese companies that Washington believed posed a risk to US national security.But the commerce department continued to grant export licences for some companies, including Qualcomm and Intel, to provide Huawei with technology that was not related to high-speed 5G telecom networks. Over the past two years, President Joe Biden has taken an even tougher stance on China than Donald Trump did, particularly in the area of cutting-edge technology. In October, he imposed sweeping restrictions on providing advanced semiconductors and chipmaking equipment to Chinese groups.Alan Estevez, head of the commerce department’s bureau of industry and security, has been leading a review of China-related policy in an effort to determine what further steps the administration should take to make it harder for the Chinese military to use US technology to develop weapons.The officials reviewing China policy include Thea Kendler, a former prosecutor who was involved in a criminal case that the US brought against Meng Wanzhou, the chief financial officer of Huawei. Meng was detained in Canada for three years following a request from Washington, but she later reached a deal with US prosecutors that allowed her to return to China.In December, the Biden administration placed several dozen more Chinese companies on the entity list, including Yangtze Memory Technologies (YMTC), a flash memory company that has emerged as a Chinese national champion.The Financial Times last year reported that the Biden administration was investigating claims that YMTC had violated US export controls by providing Huawei with chips containing American technology for its most advanced smartphones.Republicans on Capitol Hill, led by Michael McCaul, who recently became head of the House foreign affairs committee, have called on the Biden administration to stop providing export licences for Huawei.Martijn Rasser, a technology expert at CNAS, a think-tank, said the latest action was a “really significant move”. He said Huawei had branched out into new areas, such as developing undersea cables and cloud computing, over the past few years, raising fresh national security concerns.“The actions by the commerce department are partly driven by the fact that Huawei as a company is a very different animal than it was four years ago when it was focused on 5G,” said Rasser, a former CIA official.The development comes as secretary of state Antony Blinken prepares to travel next week to China in the first visit to the country by a member of Biden’s cabinet.The latest move on Huawei comes as the US steps up efforts with allies to slow China’s push to develop cutting-edge technology such as semiconductors that are used for everything from artificial intelligence and nuclear weapons modelling to the development of hypersonic weapons.

Washington last week reached a deal with Japan and the Netherlands that would see the US allies put restrictions on companies in their countries to prevent them exporting certain chipmaking equipment to China. The US in October imposed unilateral restrictions on American companies to stop them exporting semiconductor manufacturing tools.Estevez late last year suggested that the US was looking at a number of other areas. Asked about reports that the administration was considering restrictions on quantum and biotechnology, he told the CNAS think-tank: “If I was a betting person I would put down money on that.”A formal decision on whether or not to implement a total ban on the export of chips with US technology to China has not yet been taken. The commerce department declined to comment on the halting of licences but said the agency, along with other government departments, would “continually assess our policies and regulations and communicate regularly with external stakeholders”. Huawei declined to comment. Follow Demetri Sevastopulo on Twitter More

(Reuters) – A look at the day ahead in markets from Stephen Culp, New York stock market reporter.Wall Street’s downbeat start to an action-packed week has set a bumpy course for Asian markets on Tuesday.U.S. stocks appeared to take a breather near the end of a month of solid gains, dipping into red as market participants gird their loins for multiple central bank policy decisions and a spate of high profile megacap earnings, with the Labor Department’s hotly anticipated January employment report due on Friday.The Federal Reserve convenes its two-day monetary policy meeting on Tuesday, which is expected to culminate on Wednesday with a bite-sized 25 basis point hike to the Fed funds target rate.The Bank of England and the European Central Bank are poised to follow the Fed by hiking crucial interest rates by a more aggressive 50 basis points.On the earnings front, Caterpillar Inc (NYSE:CAT), General Motors Co (NYSE:GM), Pfizer Inc (NYSE:PFE), United Parcel Service Inc (NYSE:UPS) and McDonald’s Corp (NYSE:MCD) are expected before Tuesday’s opening bell.Meta Platforms Inc (NASDAQ:META) waits in the wings on Wednesday, with Apple Inc (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) Inc on deck for Thursday.Those earnings calls, along with Fed Chairman Jerome Powell’s post-rate-decision remarks, will be parsed and scrutinized by investors for clues regarding the likelihood, severity and timing of a potential recession.Elsewhere, the U.S. dollar gained ground against a basket of world currencies, crude prices plunged as the prospect of rate hikes and robust Russian exports dampened optimism over rebounding Chinese demand. Speaking of which, the world’s second-largest economy’s fiscal revenue growth decelerated sharply in 2022 to 0.6% from 10.7% in 2021, largely due to Beijing’s strict COVID-19 policies.Those policies have since been relaxed, sparking hopes of demand revival in China, which could take some of the sting of restrictive central bank policy. Here are some key developments that could provide more direction to markets on Tuesday:- South Korea and Japan are expected to post December industrial output and retail sales data- China due to release manufacturing and composite PMI reports for January- U.S. will follow Case-Shiller home prices (November), consumer confidence (January) and Chicago PMI (January) More

The Biden administration has stopped providing US companies with licences to export to Huawei as it moves towards imposing a total ban on the sale of American technology to the Chinese telecom equipment giant. Several people familiar with discussions inside the administration said the commerce department had notified some companies that it would no longer grant licences to export American technology to Huawei. The move marks the latest prong in Washington’s campaign to curb the tech company, which national security officials believe helps China engage in espionage. The Trump administration imposed severe restrictions on exporting technology to Huawei, but the commerce department had granted licences to some companies for products that were not related to high-speed 5G telecom networks. However Alan Estevez, head of the commerce department’s bureau of industry and service, has been leading a review of China-related policy in an effort to determine whether the US would take further steps to restrict such exports. The move comes as Washington steps up efforts to work with allies to slow China’s push to develop cutting-edge technology such semiconductors that are used in artificial intelligence and hypersonic weapons. The US last week reached a trilateral deal with Japan and the Netherlands that would impose restrictions on companies in those countries exporting certain chipmaking equipment to China.Five more stories in the news1. Abu Dhabi’s IHC to invest $400mn in Adani share sale Abu Dhabi’s International Holding Company plans to invest $400mn in a share sale by Indian billionaire Gautam Adani’s flagship group, a boost to a business empire rocked over the past week by allegations of fraud.Go deeper: How did one of world’s richest men become a short seller’s target?2. Central banks set to lift interest rates to 15-year highs The world’s leading central banks are poised to raise interest rates this week to their highest levels since the financial crisis, stoking anxiety among some investors that this month’s record bond market rally underestimates the growing evidence of persistent inflation.3. Nato chief calls on South Korea to provide military aid to Ukraine Jens Stoltenberg has called on South Korea to supply military assistance to Ukraine on a visit to Seoul today. He thanked the conservative government of President Yoon Suk-yeol for providing non-lethal aid to Ukraine but urged it to do more, stressing Kyiv’s “urgent need” for ammunition.4. Twitter pays first $300mn interest payment after Musk buyout The company settled the quarterly interest payment on Friday with a group of seven lenders led by Morgan Stanley, the people said. The looming bill had been closely watched as the first big test of Musk’s financial stewardship of Twitter and as concerns about its financial health have mounted.5. Renault and Nissan salvage alliance Renault and Nissan have hammered out a historic deal to salvage their troubled 24-year-old alliance and convince both sides that the partnership can survive without its former supremo, Carlos Ghosn. Read on for details of the proposed deal.The day ahead World Economic Outlook update The IMF publishes its twice yearly report in Singapore at 9:30am.Adani share sale to close Books are set to close on Adani’s offering today. Adani Enterprise said over the weekend that its follow-on public offering of shares would proceed as planned, despite concerns that it would struggle to attract investors following allegations from US short seller Hindenburg.India Economic Survey Data on how the economy fared in the last year and how it is projected to grow during the next fiscal year is set to be published. Federal Reserve meeting The US Federal Reserve is widely expected to slow its pace of interest rate increases at its meeting on today and tomorrow.Results Earnings are expected from companies including Caterpillar, ExxonMobil, Fujitsu, General Motors, McDonald’s, Mondelez, Pfizer Q4, Samsung Electronics, Snap, Spotify, UBS and UniCredit.To coincide with Martin Wolf’s new book, The Crisis of Democratic Capitalism, join Martin and other thought leaders online for a subscriber-exclusive event today. Register for free here.What else we’re readingChina’s film industry shoots for post-Covid recovery Will the end of Covid restrictions encourage one of the world’s biggest film audiences to return to the cinema? Declining financing, censorship and changing tastes could all scupper the industry’s hopes of a strong recovery after three years of lockdowns shut theatres across the country.Go deeper: Explore what China’s reopening means for markets.

How the war in Ukraine met the culture wars Vladimir Putin is flirting with an important constituency in the west — cultural conservatives who are so disgusted by the alleged decadence of their own societies that they are attracted to Putin’s Russia, writes Gideon Rachman. ‘Privacy has been extinguished. It is now a zombie’ Shoshana Zuboff took aim at the tech industry in 2019 with her book, The Age of Surveillance Capitalism, about how companies made billions by sucking up private data. In this interview with Henry Mance, Zuoff expresses her frustration with efforts to rein in Big Tech and calls for a right to sanctuary from data “theft”.The grim world of office spyware TimeCamp says it provides time-tracking software but the rest of us call it workplace spyware, bossware or tattleware. The company made headlines around the world this month when it appeared in a Canadian court case. Pilita Clark spoke to the founder of TimeCamp about his company’s new found notoriety. Why I’m only buying five new things in 2023 To combat climate change, experts advise we place strict limits on our spending habits. FT fashion editor Lauren Indvik offers her shopping list.Take a break from the newsWhat is the name of the British sitcom (2007-2016) written by Andy Hamilton and Guy Jenkin? Try your hand at 30-across in one of our latest crossword puzzles. More

If the debt limit is breached, investors expect Treasury to put bond payments first. It’d be politically and practically fraught.Washington’s debt limit drama has Wall Street betting that the United States will employ a fallback option to ensure it can make good on payments to its lenders even if Congress doesn’t raise the nation’s borrowing limit before America runs out of cash.But that untested idea has significant flaws and has been ruled out by the Biden administration, which could make it less of a bulwark against disaster than many investors and politicians are counting on.Many on Wall Street believe that the Treasury Department, in order to avoid defaulting on U.S. debt, would “prioritize” payments on its bonds if it could no longer borrow funds to cover all its expenses. They expect that America’s lenders — the bondholders who own U.S. Treasury debt — would be first in line to receive interest and other payments, even if it meant delaying other obligations like government salaries or retirement benefits.Those assumptions are rooted in history. Records from 2011 and 2013 — the last time the U.S. tipped dangerously close to a debt limit crisis — suggested that officials at the Treasury had laid at least some groundwork to pay investors first, and that policymakers at the Federal Reserve assumed that such an approach was likely. Some Republicans in the House and Senate have painted prioritization as a fallback option that could make failure to raise the borrowing cap less of a disaster, arguing that as long as bondholders get paid, the U.S. will not experience a true default.But the Biden administration is not doing prioritization planning this time around because officials don’t think it would prevent an economic crisis and are unsure whether such a plan is even feasible. The White House has not asked Treasury to prepare for a scenario in which it pays back investors first, according to multiple officials. Janet L. Yellen, the Treasury secretary, has said such an approach would not avoid a debt “default” in the eyes of markets.“Treasury systems have all been built to pay all of our bills when they’re due and on time, and not to prioritize one form of spending over another,” Ms. Yellen told reporters this month.Perhaps more worrisome is that, even if the White House ultimately succumbed to pressure to prioritize payments, experts from both political parties who have studied the temporary fix say it might not be enough to avert a financial catastrophe.Senator Ted Cruz, center, and other Republicans during a news conference on debt ceiling on Capitol Hill last week.Haiyun Jiang/The New York Times“Prioritization is really default by another name,” said Brian Riedl, formerly chief economist to former Republican Senator Rob Portman and now an economist at the Manhattan Institute. “It’s not defaulting on the government’s debt, but it’s defaulting on its obligations.”Congress must periodically raise the nation’s debt ceiling to authorize the Treasury to borrow to cover America’s commitments. Raising the limit does not entail any new spending — it is more like paying a credit-card bill for spending the nation has already incurred — and it is often completed without incident. But Republicans have occasionally attempted to attach future spending cuts or other legislative goals to debt limit increases, plunging the United States into partisan brinkmanship.Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

The automaker reduced the price of the Mustang Mach-E by up to $5,900 after Tesla slashed prices of its cars by as much as 20 percent.Ford Motor said on Monday that it was cutting prices on its top-selling battery-powered model, the Mustang Mach-E, and increasing production of the sport utility vehicle. It was the latest sign of intensifying competition in the electric car market.Two weeks ago, Tesla slashed prices of its electric cars by as much as 20 percent in response to softening demand around the world.The price cuts for the two most affordable versions of the Mach-E amounted to less than $1,000 each. Other models, with longer-range batteries and premium options, were reduced $3,680 to $5,900, reductions of 6 percent to 9 percent.“We want to make E.V.s more accessible, so we’re increasing production and reducing prices across the Mach-E lineup,” Ford’s chief executive, Jim Farley, said on Twitter. He added that “with higher production, we’re reducing costs, which allows us to share these savings with customers.”The lowest-priced Mustang Mach-E — a rear-wheel-drive model with a standard battery — now has a list price of $45,995, a reduction of $900. The high-performance Mach-E GT with an extended-range battery now sells for $63,995, a cut of $5,900.Tesla’s least expensive car is the Model 3, which is smaller than the Mustang Mach-E and starts at $43,990. The all-wheel-drive Model Y, a more direct competitor of the electric Mustang, starts at $53,490. An all-wheel-drive Mustang Mach-E with comparable battery range now lists for $53,995.Electric vehicles priced below $55,000 can qualify for federal tax credits of $7,500 that were made available starting Jan. 1 under the Inflation Reduction Act. Ford’s price cuts will make more versions of the Mach-E eligible for the credit.Ford said the new prices would automatically apply to customers who had placed orders and were waiting for their cars. Ford’s credit division is also offering subsidized interest rates as low as 5.34 percent on Mach E orders placed between Jan. 30 and April 3.Tesla has long dominated the electric car market, which it largely had to itself until the last couple of years, but is increasingly encountering stiff competition. Its rate of growth has slowed in China, where its is now outsold by a local manufacturer, BYD. In addition to Ford, Volkswagen, Hyundai, Kia and other automakers have introduced electric models in the United States that are selling well and are generally cheaper than Tesla’s luxury models.In 2022, Ford sold just under 40,000 Mach-Es, about 45 percent more than in 2021. That made the Mach-E the third-best-selling electric model after Tesla’s Model Y and Model 3.For much of the last two years, Tesla, Ford and other automakers raised prices of electric vehicles because demand for battery-powered cars far outstripped supply. But demand for cars and other big-ticket goods has weakened in recent months as the Federal Reserve has raised interest rates significantly. Fed policymakers are expected to slow their rate increases at their first meeting of the year on Wednesday. More

“We’re just coming through an unusual and difficult period, but I do not think we’re in any way back to the ’80s and ’70s,” she said in an interview, referring to an era of rising prices and wages.  While central banks still have a long way to go to smother the worst bout of inflation in decades, with prices on the downtrend the debate is now shifting to what happens after this fight is over. The risks of getting it wrong are high, economically and politically. Yellen, along with Federal Reserve Chair Jerome Powell and many in the US economic establishment, incorrectly predicted in 2021 that the burst of inflation would be “transitory.”She has since admitted getting that call wrong and supported the Fed’s efforts to rein in prices with aggressive interest rate hikes, which risk pushing the US into a recession. Unlike in the 1970s and early 1980s, Yellen said the current episode of high inflation hasn’t triggered a wage-price spiral, a dynamic in which workers demand raises in anticipation of higher prices, prompting firms to increase prices. Economists look for signs of such a spiral in inflation expectations.“Expectations have been well-anchored, and I believe they’re still pretty well anchored,” she said in the interview on Friday in Johannesburg, on the final leg of a three-nation visit to Africa. “So we’re not seeing a wage-price spiral. That’s not happening.”The annual increase in the consumer price index topped out at 9.1% in June, but has slowed to 6.5% as of last month in response to the Fed’s rate hikes, as well as easing supply chain stresses and sliding oil prices. Former Treasury Secretary Lawrence Summers and Kenneth Rogoff, an ex-chief economist for the International Monetary Fund, are among those who have warned the world’s economy is entering a period of geopolitical tensions and debt crises that risk making episodes of high inflation and high interest rates more common. Another former IMF chief economist, Olivier Blanchard, is more aligned with Yellen, arguing today’s inflation will not last and that central banks, including the Federal Reserve, will face a return to an environment where interest rates are uncomfortably close to zero. He’s proposed that central banks lift their inflation targets from 2% to 3% to counter that.Yellen spent a quarter century at the Fed, including four years as chair from 2014 to 2018. During almost that entire tenure, inflation was historically low thanks to demographics, technology and globalization. The Fed’s preferred gauge of inflation, the personal consumption expenditures index, rose by an annual average of 1.9% — below the Fed’s current target — from 1992 to 2019. Many policymakers have worried that was actually too low, forcing interest rates close to zero and robbing the central bank of the ability to fight recessions with deep rate cuts.That streak was shattered by Covid-19, marked by supply-chain disruptions and government aid in the US that jacked up demand, and then Russia’s invasion of Ukraine early last year triggered a spike in energy and food prices. Such jumps since the mid-1980s have tended not to last, she said.“The pandemic created such unusual disruptions in the economy,” she said. “There were just a lot of supply-chain problems. We really hit the wall in a bunch of different sectors and prices really skyrocketed.”Yellen didn’t say how long she thought it would take for inflation to return to target, nor did she comment on how the Fed should react if it did. More