Economy

Workers are dumping their stock, companies are cutting costs, and layoffs abound as troubling economic forces hit tech start-ups.Start-up workers came into 2022 expecting another year of cash-gushing initial public offerings. Then the stock market tanked, Russia invaded Ukraine, inflation ballooned, and interest rates rose. Instead of going public, start-ups began cutting costs and laying off employees.People started dumping their start-up stock, too.The number of people and groups trying to unload their start-up shares doubled in the first three months of the year from late last year, said Phil Haslett, a founder of EquityZen, which helps private companies and their employees sell their stock. The share prices of some billion-dollar start-ups, known as “unicorns,” have plunged by 22 percent to 44 percent in recent months, he said.“It’s the first sustained pullback in the market that people have seen in legitimately 10 years,” he said.That’s a sign of how the start-up world’s easy-money ebullience of the last decade has faded. Each day, warnings of a coming downturn ricochet across social media between headlines about another round of start-up job cuts. And what was once seen as a sure path to immense riches — owning start-up stock — is now viewed as a liability.The turn has been swift. In the first three months of the year, venture funding in the United States fell 8 percent from a year earlier, to $71 billion, according to PitchBook, which tracks funding. At least 55 tech companies have announced layoffs or shut down since the beginning of the year, compared with 25 this time last year, according to Layoffs.fyi, which monitors layoffs. And I.P.O.s, the main way start-ups cash out, plummeted 80 percent from a year ago as of May 4, according to Renaissance Capital, which follows I.P.O.s.An Instacart shopper at a grocery store in Manhattan. The company slashed its valuation to $24 billion in March from $40 billion last year. Brittainy Newman/The New York TimesLast week, Cameo, a celebrity shout-out app; On Deck, a career-services company; and MainStreet, a financial technology start-up, all shed at least 20 percent of their employees. Fast, a payments start-up, and Halcyon Health, an online health care provider, abruptly shut down in the last month. And the grocery delivery company Instacart, one of the most highly valued start-ups of its generation, slashed its valuation to $24 billion in March from $40 billion last year.“Everything that has been true in the last two years is suddenly not true,” said Mathias Schilling, a venture capitalist at Headline. “Growth at any price is just not enough anymore.”The start-up market has weathered similar moments of fear and panic over the past decade. Each time, the market came roaring back and set records. And there is plenty of money to keep money-losing companies afloat: Venture capital funds raised a record $131 billion last year, according to PitchBook.But what’s different now is a collision of troubling economic forces combined with the sense that the start-up world’s frenzied behavior of the last few years is due for a reckoning. A decade-long run of low interest rates that enabled investors to take bigger risks on high-growth start-ups is over. The war in Ukraine is causing unpredictable macroeconomic ripples. Inflation seems unlikely to abate anytime soon. Even the big tech companies are faltering, with shares of Amazon and Netflix falling below their prepandemic levels.“Of all the times we said it feels like a bubble, I do think this time is a little different,” said Albert Wenger, an investor at Union Square Ventures.On social media, investors and founders have issued a steady drumbeat of dramatic warnings, comparing negative sentiment to that of the early 2000s dot-com crash and stressing that a pullback is “real.”Even Bill Gurley, a Silicon Valley venture capital investor who got so tired of warning start-ups about bubbly behavior over the last decade that he gave up, has returned to form. “The ‘unlearning’ process could be painful, surprising and unsettling to many,” he wrote in April.The uncertainty has caused some venture capital firms to pause deal making. D1 Capital Partners, which participated in roughly 70 start-up deals last year, told founders this year that it had stopped making new investments for six months. The firm said that any deals being announced had been struck before the moratorium, said two people with knowledge of the situation, who declined to be identified because they were not authorized to speak on the record.Other venture firms have lowered the value of their holdings to match the falling stock market. Sheel Mohnot, an investor at Better Tomorrow Ventures, said his firm had recently reduced the valuations of seven start-ups it invested in out of 88, the most it had ever done in a quarter. The shift was stark compared with just a few months ago, when investors were begging founders to take more money and spend it to grow even faster.That fact had not yet sunk in with some entrepreneurs, Mr. Mohnot said. “People don’t realize the scale of change that’s happened,” he said.Sean Black, the founder and chief executive of Knock. “You can’t fight this market momentum,” he said.Jeenah Moon for The New York TimesEntrepreneurs are experiencing whiplash. Knock, a home-buying start-up in Austin, Texas, expanded its operations from 14 cities to 75 in 2021. The company planned to go public via a special purpose acquisition company, or SPAC, valuing it at $2 billion. But as the stock market became rocky over the summer, Knock canceled those plans and entertained an offer to sell itself to a larger company, which it declined to disclose.In December, the acquirer’s stock price dropped by half and killed that deal as well. Knock eventually raised $70 million from its existing investors in March, laid off nearly half its 250 employees and added $150 million in debt in a deal that valued it at just over $1 billion.Throughout the roller-coaster year, Knock’s business continued to grow, said Sean Black, the founder and chief executive. But many of the investors he pitched didn’t care.“It’s frustrating as a company to know you’re crushing it, but they’re just reacting to whatever the ticker says today,” he said. “You have this amazing story, this amazing growth, and you can’t fight this market momentum.”Mr. Black said his experience was not unique. “Everyone is quietly, embarrassingly, shamefully going through this and not willing to talk about it,” he said.Matt Birnbaum, head of talent at the venture capital firm Pear VC, said companies would have to carefully manage worker expectations around the value of their start-up stock. He predicted a rude awakening for some.“If you’re 35 or under in tech, you’ve probably never seen a down market,” he said. “What you’re accustomed to is up and to the right your entire career.”Start-ups that went public amid the highs of the last two years are getting pummeled in the stock market, even more than the overall tech sector. Shares in Coinbase, the cryptocurrency exchange, have fallen 81 percent since its debut in April last year. Robinhood, the stock trading app that had explosive growth during the pandemic, is trading 75 percent below its I.P.O. price. Last month, the company laid off 9 percent of its staff, blaming overzealous “hypergrowth.”SPACs, which were a trendy way for very young companies to go public in recent years, have performed so poorly that some are now going private again. SOC Telemed, an online health care start-up, went public using such a vehicle in 2020, valuing it at $720 million. In February, Patient Square Capital, an investment firm, bought it for around $225 million, a 70 percent discount.Others are in danger of running out of cash. Canoo, an electric vehicle company that went public in late 2020, said on Tuesday that it had “substantial doubt” about its ability to stay in business.Baiju Bhatt, left, and Vlad Tenev, founders of Robinhood, at the New York Stock Exchange last year for the company’s initial public offering. Robinhood recently laid off 9 percent of its workers.Sasha Maslov for The New York TimesBlend Labs, a financial technology start-up focused on mortgages, was worth $3 billion in the private market. Since it went public last year, its value has sunk to $1 billion. Last month, it said it would cut 200 workers, or roughly 10 percent of its staff.Tim Mayopoulos, Blend’s president, blamed the cyclical nature of the mortgage business and the steep drop in refinancings that accompany rising interest rates.“We’re looking at all of our expenses,” he said. “High-growth cash-burning businesses are, from an investor-sentiment perspective, clearly not in favor.” More

Global catering group Compass said more people had returned to offices than it had expected allowing it to raise its revenue guidance and outline a £500mn share buyback programme.Chief executive Dominic Blakemore said on Wednesday that the average number of days workers were spending in offices was around 3.2 a week compared with 4.2 before Covid and that while he did not expect office attendance to return to 2019 levels, “it won’t be the catastrophe people thought it would be”.The FTSE 100 company, which is the world’s largest caterer, expects revenue growth of around 30 per cent this year, from an earlier range of 20 to 25 per cent, thanks to the reopening of offices and schools and the return of large sports events.It has also benefited from increased demand from hospitals and clinics, which are still very busy because of the pandemic, and from workplaces trying to tempt employees back by offering free food.The group also said that it had achieved its highest ever number of new contracts with first-time clients, as businesses and institutions turned to large companies with more buying power to counter rising prices.The total value of the new contracts in the 12 months to March 31 was £2.5bn. Overall revenues in the 6 months to the end of March were £11.5bn, up 36.3 per cent compared with the same period in 2021 and 6 per cent below the equivalent figure in 2019. Pre-tax profits were £632mn, up 375 per cent on last year.It is a sign of a return to normality for the group, which was badly hit by the pandemic with the widespread closure of workplaces and cancellation of large events. In May 2020, it undertook a £2bn rights issue — one of the largest fundraisings by a listed UK company during Covid.Blakemore said that the group was mindful that the recovery would not be easy, with widespread inflation affecting energy, food and payroll costs — a result of supply chain disruption during Covid and the war in Ukraine — putting margins under pressure.Cost inflation is currently 7 per cent for the group and Blakemore said he expected it to reach low double digit figures in the first half of next year.Compass is cutting the amount of red meat it provides to clients, using cheaper white meats such as turkey, and substituting some of the protein in burgers for ingredients like mushrooms, in an effort to counter price rises. Analysts at Barclays said that the group, which operates in 44 countries and says it serves 5.5bn meals a year, was “particularly attractive in light of the macro uncertainties today with limited revenue risks in a recession relative to most of the sector”.Compass shares gained nearly 10 per cent in early London trading on Wednesday, reversing its declines for the year. More

Arrival, the UK-based electric vehicle manufacturer founded by a former Russian government minister, is closing its Russian operations and has no plans to operate there in future, one of its top executives has said.Tom Elvidge, head of product, revealed the move on Wednesday at the Financial Times’ Future of the Car conference in London.The company was founded by Denis Sverdlov, a businessman who was Russia’s deputy communications and mass media minister under President Vladimir Putin for 15 months until he resigned in 2013. Although he has spent most of his adult life in Russia, Sverdlov, who remains chief executive, was born in Georgia.Arrival was valued at $13.6bn when it listed on the US’s Nasdaq exchange in March last year. The company is developing “micro-factories” in the UK and US and is focused on building electric delivery vans, buses and cars.Asked whether the company might face sanctions because of Sverdlov’s links with Putin, Elvidge stressed that Sverdlov opposed the war and that the company was shifting its Russian operations to Georgia.Elvidge said Arrival had “a team” in Russia but did not specify the nature of the operations there.“Denis has spoken publicly and made his statements very clear that he’s against [the war],” Elvidge said.Arrival had been moving its staff out of Russia to Georgia since Russia attacked Ukraine on February 24, Elvidge said.“We’ve transported now the majority of our team into Georgia,” Elvidge added. “We’ve set up offices in Tbilisi.”It would take “a few more months” to complete the transfer, Elvidge said.“We don’t plan to have any operations in Russia going forward,” he added. More

Europe’s largest asset manager is betting that the euro will fall to parity with the US dollar this year as the mounting threat of recession prevents the European Central Bank from lifting interest rates above zero. Vincent Mortier, chief investment officer at Amundi, said he expected the ECB to prioritise keeping a lid on government borrowing costs over fighting inflation. Such a decision would leave the eurozone central bank even further behind the US Federal Reserve in fighting inflation and knock the euro to $1 for the first time since 2002, Mortier said in an interview with the Financial Times. “We are facing lower growth or probably a recession in the eurozone,” Mortier said. “We see the euro at parity [with the dollar] in the next six months.”The French asset manager, which oversees more than €2tn of assets, is sticking with wagers in its portfolios that profit from a weaker euro even after the common currency has slumped 10 per cent against the dollar over the past six months, according to Mortier.The euro has steadied near the five-year low of $1.047 reached in late April after a fall that came as markets geared up for a series of aggressive interest rate rises from the Fed. The ECB is expected to follow suit, albeit more slowly, with opposition among some members of the central bank’s governing council to a July rate increase — the first since 2011 — softening in recent weeks amid soaring inflation. However, markets are overestimating how far the ECB will be able to lift interest rates before it is stymied by a faltering economy and concerns about rising borrowing costs for some of the eurozone’s more indebted member states, Mortier said. He expects just two quarter-point rises later this year from the current record low of minus 0.5 per cent before the ECB stops. Money markets are currently pricing in at least three such increases in 2022 and a further rise to roughly 1.5 per cent by mid-2024. The Fed, in comparison, has already lifted its policy rate by 0.75 percentage points so far this year to a range of 0.75 to 1 per cent. It is expected to continue tightening policy aggressively in the months to come.“We think they’ll get to zero on the [ECB] deposit rate and that’s it,” Mortier said. “In the meantime the Fed will have done much more. If the ECB were focused only on inflation, then 1.5 per cent would be very likely. But it’s not.”According to Mortier, the ECB’s official mandate — to keep inflation close to 2 per cent — has in effect become its third priority behind preserving “the integrity of the eurozone” by limiting the gaps in borrowing costs between member states, and supporting economic growth while the bloc reels from the fallout from Russia’s invasion of Ukraine.

The central bank is focused on “the level of debt, sovereign financing needs to pay for the energy transition and for defence”, Mortier said. “The ECB has no choice but to be pulled into this political project.”The ECB has said it could introduce a “new instrument” to keep a lid on the borrowing costs of weaker eurozone states, as the prospect of an end to central bank purchases drives a sharp increase in bond yields for Italy and Greece. But such a plan is unlikely to garner the necessary support from northern European members who worry about the use of monetary policy to finance government spending, Mortier said. In the absence of such a tool, the ECB will have little choice other than to slow the pace of interest rate rises, he added.A return to parity with the dollar would complete a long round trip for the euro, which sank below $1 shortly after its creation in 1999, but rose above the greenback in 2002 as its international usage grew rapidly.A weaker currency will exacerbate inflation in the euro area, which hit a record annual rate of 7.5 per cent last month, adding to the squeeze on the cost of living, according to Mortier.“Losing sight of the euro-dollar exchange rate is a big mistake when your inflation is mainly coming from imported goods,” he said. More

Financial institutions have been grappling with conflict-related sanctions and resultant risks for decades, including those that emerged in the wake of the 2001 terrorist attacks on the US and Moscow’s annexation of Crimea in 2014.Yet the economic restrictions that the US, acting with the G7 and the EU, has rolled out in response to Russia’s invasion of Ukraine are unprecedented in scale and scope. They represent “a new kind of economic statecraft with the power to inflict damage that rivals military might”, as US president Joe Biden put it, in a recent speech in Warsaw.To risk managers, this not only signals how finance is being weaponised for foreign policy aims, placing them firmly in the crosshairs of geopolitical tensions; it also piles pressure on their businesses to get the risk management associated with the war in Ukraine right — to avoid falling foul of sanctions regimes.“It’s providing stress on all systems,” says Charles Minutella, global head of customer and third-party risk intelligence at World-Check, a unit of data provider Refinitiv that specialises in due diligence for sanctions and anti-money laundering risk.The first difficulty for financial institutions is dealing with the sheer number of sanctions and entities involved.

There were already over 300 sanctions lists globally, in different languages and formats, involving different levels of specificity and compliance, before the Ukraine war. But the picture now is rather different, says Minutella: “The volume of names being added to sanctions lists because of Russia is monumental. The sanctions put in place after Crimea were a blip compared to this.”Lawyers point out another problem: that, when new sanctions come into force, or when existing ones are amended, there is often not much notice to comply.UK Finance, which represents banks in the UK, says its members have considerable experience and processes in place to implement sanctions swiftly. But it also says that “lack of alignment” on listings and the application of them from the UK, EU and US is “causing an already complicated area to become even more complex”.Jeremy Barnum, JPMorgan’s chief financial officer, told analysts on the bank’s latest earnings call in April that it had been dealing with economic sanctions “of unprecedented complexity with multiple directives from governments around the world”.One reason for the complexity is that sanctions against Russia have been extended beyond the traditional targets of individuals and entities to whole sectors, including oil and natural gas. This makes the task of identifying all the relevant companies and subsidiaries affected by sanctions still harder.

Sanctions against Russia have expanded to include oil and natural gas. © AFP via Getty Images

Moreover, UK Finance argues that the number of companies in continental Europe and the UK with Russian links is leading to unintended consequences. For example, businesses that employ mainly EU or UK nationals can still fall foul of ownership and control clauses introduced in response to the conflict.This was highlighted in March when UK-based health food chain Holland & Barrett reportedly found that a routine debt payment to creditors was held up by HSBC because the bank was reviewing the sanctions status of LetterOne, Holland & Barrett’s Russian-backed owner.For banks that have lent to companies that have been, or may be, sanctioned, there are other complex questions. Allen & Overy, a law firm, says these can include whether a borrower that has not been sanctioned can still access payment systems — such as Swift, the Belgium-based financial messaging system — if its own bank account is held at a sanctioned bank that is no longer permitted to use Swift.On top of this, financial institutions must contend with elevated cyber risks. In April, authorities in the US, Australia, Canada, New Zealand and the UK warned in a joint advisory notice that “evolving intelligence indicates that the Russian government is exploring options for potential cyber attacks”. They also noted that some cyber crime groups had pledged support for Russia.“Banks are going to need to take these threats seriously because these financial institutions are now a component of this conflict,” says Adam Meyers, a senior vice-president at CrowdStrike, a US-based cyber security company.

He identifies three main types of cyber threat: “computer network exploitation” by nation states — in this case, Russia — using ransomware to steal information; criminal hackers seeking to extract financial gain; and ideologically motivated “hacktivists” attempting to leak sensitive information to cause embarrassment for financial institutions.Meyers says that some banks may have become more vulnerable as a result of changes to their network architecture that were implemented to enable remote working — with the result that firewalls are sometimes not as effective as before.This means they have to pay more attention to who has access to data within the organisation. “Banks need a ‘zero trust’ defensive strategy but a lot of organisations aren’t doing this. It’s one of the things we are increasingly on our soapbox about,” Meyers says.As with cyber threats, other risks for financial institutions that existed before the Ukraine war have been exacerbated by the knock-on effects of the conflict. Chief among them is commodity price volatility. This has strained the financial market infrastructure that is designed to ensure smooth operations.Clearing houses, which use financial buffers known as margin to ensure a trade is completed even if one party defaults, are particularly affected.The amount of margin posted at a clearing house by market participants is designed to withstand significant market volatility. Yet recent exceptional swings in the prices of commodities, such as nickel, have prompted concern that shock events are becoming more frequent.This has potentially significant implications for how margin is set and, ultimately, how market risk is managed.Walt Lukken, president of the Futures Industry Association, whose members include futures exchanges, clearing houses and commodity traders, says: “We still think that margin is an important way to cover potential risk. But there appear to be more of these ‘black swan’ events happening and we need to find ways to anticipate that.” More

(Reuters) -Lisa Cook, an economics professor at Michigan State University known for her work on racial and gender inequality, on Tuesday won U.S. Senate confirmation to serve on the Federal Reserve Board, making her the first Black woman to serve on the Fed board in its 109-year history. Cook will join the U.S. central bank as it faces a monumental challenge: reining in 40-year-high inflation that is straining household budgets and sapping U.S. President Joe Biden’s approval ratings without undercutting a historically strong labor market or sending the world’s largest economy into recession. Senate Banking Committee Chair Sherrod Brown called Cook’s confirmation “historic.” Not a single Republican supported her, and the Banking Committee’s top Republican, Patrick Toomey, said he feared she would not be tough enough on inflation. Vice President Kamala Harris cast a tie-breaking vote in the evenly divided Senate, making the final tally 51-50. Cook’s term will run to January 2024. “That is fantastic news,” said Atlanta Fed President Raphael Bostic. “Lisa was a student of mine. She is a fantastic economist and will bring a welcome voice.” The Fed raised interest rates in March for the first time since 2018, and last week delivered the first in what is expected to be a series of half-point rate hikes, double the usual size, as policymakers try to slow supercharged demand for both goods and labor. Cook, who will help set U.S. monetary policy with the rest of the seven-member board and the heads of the 12 regional Fed banks, is not expected to change that trajectory.Cook was an adviser on the transition teams for both the Biden-Harris and Obama-Biden administrations. She has written extensively about racial disparities, documenting the negative impact of anti-Black violence and gender inequality on innovation and economic growth. “The Fed Board needs governors who understand how the economy works for Americans across race, gender and class, and Dr. Cook’s deep expertise makes her exceptionally qualified to serve,” said Michelle Holder, president of the Washington Center for Equitable Growth.The Senate last month confirmed Fed Governor Lael Brainard as the U.S. central bank’s vice chair, with several Republicans joining Democrats to confirm her.Two other nominees to the Fed – Jerome Powell, renominated to his current position as the central bank’s chair, and Davidson College dean of faculty Philip Jefferson, who like Cook is both Black and an economist – have bipartisan support but it is uncertain when the Senate will take up their confirmations.Biden plans to fill the last of the Fed board’s seven seats by nominating former Treasury official Michael Barr to be the Fed’s vice chair of supervision. His initial pick for that post, former Fed Governor Sarah Bloom Raskin, withdrew from consideration after Democrat Joe Manchin joined a united Republican front opposing her nomination. More

The Bank of England will need to raise interest rates to 2.5 per cent and keep them there until the middle of the decade in order to bring soaring inflation under control, according to a leading think-tank.The BoE’s monetary policy committee report released last week suggested that 2.5 per cent rates would lead to inflation undershooting its 2 per cent target, heavily implying that price stability could be achieved without raising rates to this level.But according to Stephen Millard, deputy director at the National Institute of Economic and Social Research think-tank that produced the forecast, the BoE could be overestimating how far demand headwinds will curb inflation.“We expect inflation to come down fairly quickly, and so do the bank, but on higher interest rates than are in the BoE forecasts,” said Millard at a press conference presenting NIESR’s research. Last week the bank announced an increase to its base interest rate of 0.25 percentage points, lifting it to 1 per cent, after inflation hit a fresh 30-year high of 7 per cent in March. NIESR forecast inflation peaking at 8.3 per cent, lower than the central bank’s prediction that price rises would pass 10 per cent this year.Despite the projection that higher rates would be necessary to contain inflation, NIESR said the central bank would have to navigate carefully the “treacherous waters” caused by a tension between “allowing inflation expectations to anchor and . . . plunging the economy into a deep recession”.

Millard acknowledged that the deep uncertainty facing the UK economy because of the impact of the war in Ukraine and a squeeze on lower real incomes, made any assumptions regarding future growth less than ironclad. “Since we closed the forecast we had results which indicate that consumer confidence has plummeted quite a bit. This might be associated with a rise in precautionary saving” which could mean that “consumption isn’t going to be as strong as we predict”.Millard cautioned that any predictions of strengthening household consumption should not be taken as an indication that all would be able to weather falling incomes. “While we expect consumption to grow overall due to households using their pandemic savings, aggregates can hide what’s happening at the disaggregate level,” he said.Adrian Pabst, a deputy director at NIESR, added that the current real-income squeeze was due to hit poorer households the hardest. “As you move down the income deciles, food and energy bills are going to be taking up a lot of real disposable income,” he noted.According to Pabst, around 1.5mn of the hardest-hit households are due to face food and energy bills “greater than their disposable income”. He said that their predicament required the government to respond in the form of targeted fiscal assistance.“A £25 per week universal credit uplift for at least six months” should be on the table, he said, as well as a “one-off cash payment of £250 in 2022-23” to support the “11.3mn households struggling to make ends meet”.  More

President Biden tried on Tuesday to deflect blame for rising prices with a direct attack on Republicans for pursuing what he called an “ultra-MAGA agenda,” a phrase he has used in recent days as a reference to former President Donald J. Trump’s “Make America Great Again” slogan.Mr. Biden’s critics have assailed the president for months as inflation has risen to 8.5 percent, the fastest 12-month pace since 1981. A news release from the Republican National Committee on Tuesday accused him of being “desperate to blame anyone but himself for the worst inflation in 40 years,” adding that “the American people know he is responsible.”Seeking to turn the debate over the economy against his opponents six months before the midterm congressional elections, Mr. Biden and his top White House aides insisted that “extreme” policy ideas from Republicans would make inflation worse, not better.“Look, the bottom line is this: Americans have a choice right now between two paths, reflecting two very different sets of values,” Mr. Biden said in a speech at the White House. “My plan attacks inflation and grows the economy by lowering costs for working families, giving workers well-deserved raises, reducing the deficit by historic levels and making big corporations and the very wealthiest Americans pay their fair share.”By contrast, he said, Republican policies would help the wealthiest Americans and big corporations while leaving working families to bear the brunt of cost increases.The president’s message on Tuesday was part of an attempt to change the national conversation about the economy in ways that Democrats hope will shield them from a punishing result at the ballot box in November.Mr. Biden delivered his remarks a day before another economic report was expected to show uncomfortably high prices. While the Consumer Price Index, which will be released on Wednesday morning, could show that inflation cooled somewhat from March, most economists still expect the report to show inflation running above 8 percent.Understand Inflation and How It Impacts YouInflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.Interest Rates: As it seeks to curb inflation, the Federal Reserve began raising interest rates for the first time since 2018. Here is what the increases mean for consumers.State Intervention: As inflation stays high, lawmakers across the country are turning to tax cuts to ease the pain, but the measures could make things worse. How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.But Mr. Biden has seized on a program set forth by Senator Rick Scott of Florida, the chairman of the National Republican Senatorial Committee, called the “11-Point Plan to Rescue America,” which critics have said would impose taxes on millions of Americans who pay none now and phase out programs like Social Security and Medicare after five years.Other Republicans, including Senator Mitch McConnell of Kentucky, the minority leader, have repudiated elements of the plan, which Mr. Scott put forward as a platform for the midterm elections. But the White House on Tuesday ignored any disagreement among Republicans, describing the proposal as the only comprehensive economic plan put forth by the party to deal with inflation.“This is not the last you’ve heard from us about Chairman Scott’s tax plan that will raise taxes,” Jen Psaki, the White House press secretary, promised. She pointed out that Ronna McDaniel, the chairwoman of the Republican National Committee, had praised Mr. Scott’s plan, as had some congressional Republicans.Ms. Psaki said it was Mr. Biden’s decision to use the phrase “ultra-MAGA” to refer to Mr. Scott’s plan and other Republican policies, saying he believed it added “a little extra pop” to his critique of the Republican agenda. And she said the president’s speech on Tuesday was just the beginning.“I can tell you, whether it’s tomorrow or in days and weeks ahead, you will all continue to hear him talk more about his concern about ultra-MAGA Republicans,” she said.Earlier Tuesday, the president sought to convince Americans that he understood the pain they were feeling from rising prices and that his administration was taking steps to address higher costs for fuel, food and other goods.“I know that families all across America are hurting because of inflation,” Mr. Biden said. “I understand what it feels like. I come from a family where, when the price of gas or food went up, we felt it.”He added, “I want every American to know that I’m taking inflation very seriously and it’s my top domestic priority.”Inflation F.A.Q.Card 1 of 5What is inflation? More