Economy

Fed officials reached consensus at their March meeting that they would begin reducing the central bank balance sheet by $95 billion a month, likely beginning in May.
There also were strong indications that half-percentage point, or 50 basis point, interest rate increases are ahead.

Federal Reserve officials discussed how they want to reduce their trillions in bond holdings at the March meeting, with a consensus around $95 billion a month, minutes released Wednesday showed.
Officials “generally agreed” that a maximum of $60 billion in Treasurys and $35 billion in mortgage-backed securities would be allowed to roll off, phased in over three months and likely starting in May. That total would be about double the rate of the last effort, from 2017-19, and represent part of a historic switch from ultra-easy monetary policy.

In addition to the balance sheet talk, officials also discussed the pace of interest rate hikes ahead, with members leaning toward more aggressive moves.
At the March 15-16 meeting, the Fed approved its first interest rate increase in more than three years. The 25 basis point rise— a quarter percentage point — lifted the benchmark short-term borrowing rate from the near-zero level where it had been since March 2020.
The minutes, though, pointed to potential rate hikes of 50 basis points at upcoming meetings, a level consistent with market pricing for the May vote. In fact, there was considerable sentiment to go higher last month. Uncertainty over the war in Ukraine deterred some officials from going with a 50 basis point move in March.
“Many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified,” the minutes said.
Stocks fell following the Fed release while government bond yields held higher. However, the market came well off its lows as traders adjusted to the central bank’s new posture.

The minutes were “a warning to anyone who thinks that the Fed is going to be more dovish in their fight against inflation,” said Quincy Krosby, chief equity strategist at LPL Financial. “Their message is, ‘You’re wrong.'”

Indeed, policymakers in recent days have grown increasingly strident in their views about taming inflation.
Governor Lael Brainard said Tuesday that bringing prices down will require a combination of steady hikes plus aggressive balance sheet reduction. Markets expect the Fed to increase rates a total of 250 basis points this year. The minutes noted, that, “All participants indicated their strong commitment and determination to take the measures necessary to restore price stability.”
Krosby said the policymakers’ position thus shouldn’t have come as much of a surprise.
“The Fed orchestrated a concerted effort to warn the market, telling the market in no uncertain terms that this is serious, this is paramount, we are going to fight inflation,” she said. “What they have on their side is a still-healthy jobs market, and that’s important. What you don’t want is the Fed making a policy error.”

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The central bank’s relative hawkishness extended to the balance sheet talk. Some members wanted no caps on the amount of the monthly runoff, while others said they were good with “relatively high” limits.
The balance sheet rundown will see the Fed allowing a capped level of proceeds from maturing securities to roll off each month while reinvesting the rest. Holdings of shorter-term Treasury bills would be targeted as they are “highly valued as safe and liquid assets by the private sector.”
While officials did not make any formal votes, the minutes indicated that members agreed the process could start in May.
Whether the runoff actually will hit $95 billion, however, is still in question. MBS demand is muted now with refinancing activity low and mortgage rates rising past 5% for a 30-year loan. Officials acknowledged that passive runoff of mortgages likely may not be sufficient, with outright sales to be considered “after balance sheet runoff was well under way.”
Also at the meeting, Fed officials sharply raised their inflation outlook and lowered their economic growth expectations. Surging inflation is the driving factor behind the central bank tightening.
Markets were looking to the minutes release for details about where monetary policy heads from here. Specifically, Fed Chairman Jerome Powell said at his post-meeting news conference that minutes would provide details on the thinking about balance sheet reduction.
The Fed expanded its holdings to about $9 trillion, or more than double, during monthly bond purchases in the wake of the pandemic crisis. Those purchases ended only a month ago, despite evidence of roaring inflation higher than anything the U.S. had seen since the early 1980s, a surge that then-Fed Chairman Paul Volcker quelled by dragging the economy into a recession.

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LONDON (Reuters) – More than one in five bankers earning at least 125,000 pounds ($164,000) a year in Britain have benefited from non-domiciled tax status, as have many high-paid workers in other sectors, a study showed on Thursday.Non-dom status – which exempts more than 75,000 mostly foreign nationals in Britain from tax on overseas income – has raised questions about the fairness of the tax system, as it overwhelmingly benefits the very rich.The research from the University of Warwick and the London School of Economics showed that just 0.3% of British taxpayers earning under 100,000 pounds in 2018 had claimed non-dom status at some point in the past 20 years. By contrast, 27% of taxpayers earning 1-2 million pounds had done so.Two in five top earners in the oil industry, one in four car industry executives and one in six top-earning sports and film stars also benefited from the status.”The biggest shock might be to bankers and others working in City jobs, when they realise how many of their colleagues are benefiting from a tax regime they don’t have access to,” said Arun Advani, an assistant economics professor at the University of Warwick.Non-dom status is only available to British residents who claim that their ‘domicile’ – the centre of their personal and financial interests – is outside the United Kingdom.The top three nationalities for non-doms in 2018 were the United States, India and France, and 93% were born outside the United Kingdom. Non-doms were most likely to live in central London and around 80% of them reported their main source of income was from employment or a pension, while 20% lived off investment income or other overseas earnings.”A significant minority of non-doms do appear to be the ‘rentier rich’,” the report said.The research is based on anonymised individual tax data from 1997 to 2018 provided by Britain’s revenue office.($1 = 0.7642 pounds) More

The administration is in a tight spot as fast inflation makes households unhappy. Trying to offset price pain can risk stoking demand.President Biden, under fire for rapid inflation and looking for ways to help cushion rising costs for households, extended a moratorium on student debt payments through August. While politically popular with Mr. Biden’s party, the move drew criticism for adding a small measure of oomph to the very inflation the government is trying to tame.America’s robust economic recovery from the deepest pandemic-era lockdowns has left consumers with the power to spend and has fueled fast price increases. Those rising costs are making voters unhappy, jeopardizing Democrats’ chances of retaining control of Congress come November.The moratorium extension stood out as an example of a more general problem confronting the administration: Policies that help households stretch their budgets could soothe voters, but they could also add a little bit of fuel to the inflationary fire at an inopportune moment. And perhaps more critically, analysts said, they risk sending a signal that the administration is not focused on tackling price increases despite the president’s pledge to help bring costs down.Inflation is running at the fastest pace in 40 years and at more than three times the Federal Reserve’s 2 percent goal, as rapid buying collides with constrained supply chains, labor shortages and a limited supply of housing to push prices higher.The administration’s decision to extend the student loan moratorium through Aug. 31 will keep money in the hands of millions of consumers who can spend it, helping to sustain demand. While the effect on growth and inflation will most likely be very small — Goldman Sachs estimates that it probably adds about $5 billion per month to the economy — some researchers say it sends the wrong message and comes at a bad time. The economy is booming, jobs are plentiful and conditions seem ideal for transitioning borrowers back into repayment.“Four months by itself is not going to get you dramatic inflation,” Marc Goldwein of the Committee for a Responsible Federal Budget said, noting that a full-year moratorium would add only about 0.2 percentage points to inflation, by his estimate. (The White House estimates an even smaller number.) “But it’s four months, on top of four months before that.”Extra help for student loan borrowers could, at the margin, work at cross-purposes with the Fed’s recent policy changes, which are meant to take away household spending power and cool down demand.The Fed in March lifted interest rates for the first time since 2018, and it is expected to make an even larger increase in May as it tries to slow spending and give supply chains some breathing room. It is trying to weaken the economy just enough to put inflation and the economy on a sustainable path, without plunging it into a recession. If history is any guide, pulling that off will be a challenge.A chorus of economists took to Twitter to express frustration at the decision on Tuesday, when news of the administration’s plans broke.“Wherever one stands on student debt relief this approach is regressive, uncertainty creating, untargeted and inappropriate at a time when the economy is overheated,” wrote Lawrence H. Summers, a former Democratic Treasury secretary and economist at Harvard who has been warning about inflation risks for months. Douglas Holtz-Eakin, a former Congressional Budget Office director who now runs the American Action Forum, which describes itself as a center-right policy institute, summed it up thusly: “aaaaaaarrrrrrRRRRGGGGGGGGHHHHHHHH!!!!!!!!!!”Yet proponents of even stronger action argued that the moratorium was not enough — and that the affected student loans should be canceled altogether. Senators Chuck Schumer of New York, the Democratic leader, and Elizabeth Warren of Massachusetts are among the lawmakers who have repeatedly pressed Mr. Biden to wipe out up to $50,000 per borrower through an executive action.That stark divide underlines the tightrope the administration is walking as the Nov. 8 elections approach, with Democratic control of the House and the Senate hanging in balance.“They’re buying political time,” Sarah A. Binder, a political scientist at George Washington University, said in an email. “Kicking the can down the road — with another extension, surely, before the elections this fall — seems to be the politically optimal move.”The administration is taking a calculated risk when it comes to inflation: Student loan deferrals are unlikely to be a major factor that drives inflation higher this year, even if they do add a little extra juice to demand at the margin. At the same time, continuing the policy avoids a political brawl that could tarnish the administration and the Democratic Party’s reputation ahead of the November vote.White House officials emphasized on Wednesday that the small amount of money the deferrals were adding to the economy each month would have only a marginal impact on inflation. But they could help vulnerable households — including those that did not finish their degrees and that have worse job prospects.Delivering packages in New York. The robust economic recovery from pandemic-era lockdowns has left consumers with the power to spend and has fueled fast price increases.Gabby Jones for The New York Times“The impact of extending the pause on inflation is extremely negligible — you’d have to go to the third decimal place to find it, and if you did, it would be .001,” said Jared Bernstein, a member of the White House Council of Economic Advisers.The Federal Reserve Bank of New York suggested in recent research that some borrowers might struggle under the weight of payments and post a “meaningful rise” in delinquencies once payments start again. Mr. Biden referred to that Fed data during his announcement. The Education Department suggested that borrowers would be given a “fresh start” that will automatically eliminate delinquency and defaults and allow them to begin repayment, once it resumes, in good standing.Student Loans: Key Things to KnowCard 1 of 4Payments delayed again. More

TOKYO (Reuters) -The International Monetary Fund (IMF) cut Japan’s economic growth forecast on Thursday and urged policymakers to consider preparing a contingency plan in case the Ukraine crisis derails a fragile recovery.While rising commodity costs could push up inflation, the Bank of Japan (BOJ) must maintain ultra-easy policy for a prolonged period to sustainably hit its 2% inflation target, the IMF said in a staff report after its Article 4 policy consultation with Japan.”Escalation of the Ukraine conflict poses significant downside risks to the Japanese economy,” the IMF said, pointing to the potential hit to trade and noting that rising commodity prices could stifle domestic demand.”In view of elevated uncertainty including from the pandemic and the conflict in Ukraine, the authorities could consider preparing a contingency plan that is readily implementable” in case its economy faces a severe shock, it said.The IMF said it now expects Japan’s economy to grow 2.4% this year, lower than a projection for 3.3% expansion made in January, due to an expected contraction in the first quarter and the spillover effects of the Ukraine war.Domestic demand will likely slow from surging commodity prices, while geo-political tensions and a sharper-than-expected slowdown in China’s growth were risks to exports, it said.On prices, the IMF said Japan will likely see inflation momentum pick up on higher commodity prices, and an expected rebound in consumption as coronavirus infection cases fall.”A prolonged period of monetary policy accommodation will be required,” however, as headline consumer inflation is expected to stay at 1.0% this year, it said.The IMF repeated its recommendation for the BOJ to make its policy more sustainable, such as by steepening the yield curve by targeting a shorter maturity than the current 10-year yield.The BOJ said it saw no need to adjust its current framework and “expressed concern” over the IMF’s recommendation to shorten the yield curve target, according to the staff report.Under a policy dubbed yield curve control (YCC), the BOJ guides short-term interest rates at -0.1% and the 10-year government bond yield around 0%. The 10-year yield cap has been criticised by some analysts for flattening the yield curve and crushing the margin of financial institutions.The IMF released the final version of its Article 4 staff report, signed off by its executive board, after issuing a preliminary finding in January. More

MILAN (Reuters) -Atlantia found itself at the centre of a potential bidding war on Wednesday between Spanish tycoon Florentino Perez and the Benettons, the Italian infrastructure group’s main investor.Perez’s construction company ACS said it was interested in buying Atlantia’s motorway concessions business, teaming up with two investment funds.But Italy’s Benetton family, investment fund Blackstone (NYSE:BX) and other long-time investors such as Italian banking foundation CRT were studying a counter-move to buy the whole infrastructure company and shield it from the attack led by the Spanish billionaire, three sources with knowledge of the matter said.Atlantia has just finalised a deal to sell its controlling stake in Italian motorway unit Autostrade per l’Italia and will pocket 8 billion euros by end-June from a consortium led by Italy’s state lender CDP.”The Benettons are united to shield the group and may decide to delist it to protect the cash due to arrive from Autostrade deal,” one of the sources said. In a statement after the market close, ACS said it has an exclusive agreement with two investment funds, GIP and Brookfield, for the potential acquisition of a majority stake in the motorway concession business of the Italian infrastructure company.”No decision has been taken to date”, ACS said in the statement where it did not clarify if it has discussed the eventual offer with Atlantia’s board or main shareholders, the Benetton family.”Atlantia is and will remain a strategic long-term asset for Benetton Holding Edizione”, a source close to the Benetton family told Reuters. Earlier on Wednesday, shares in Atlantia surged almost 9% after a Bloomberg News report that Spanish tycoon Perez was weighing an offer for the Italian roads and airports group.Any bid for Atlantia, which has a market capitalisation of more than 15 billion euros ($16.4 billion), would need the backing of Edizione, the holding company of the Benetton family, which recently increased its stake in the group to 33%. Atlantia was not immediately available for comment.Alessandro Benetton was appointed chairman of Edizione this year, tightening the family’s grip on its investments, including at Atlantia. Edizione said at the time it deemed its investment in Atlantia strategic.EXISTING TIESPerez, the president of Real Madrid soccer club, and the Benettons are already linked through their joint ownership of Spanish highway operator Abertis.Perez’s ACS, which itself has a market capitalisation of 7.2 billion euros, has been Atlantia’s partner in Abertis since the two groups’ joint acquisition of the company in 2017.As well as motorways, Atlantia also operates airports in Rome and southern France and is investing in technology to help regulate traffic flows.Through ACS, Perez previously pursued a bid for Atlantia’s Italian motorway unit Autostrade per l’Italia but did not manage to secure the backing of the Italian government to go ahead with a binding offer. Atlantia eventually sold the unit, the focal point of a dispute with the government following a deadly collapse of a bridge in 2018, to Italian state lender CDP and allies. Following the divestment, Atlantia kept highway assets in Spain, France and Latin America. ($1 = 0.9168 euros) More

John Lee, Hong Kong’s second-highest ranking official, has joined the race to succeed Carrie Lam as the Chinese territory’s leader, signalling Beijing’s increasing focus on security after pro-democracy protests rocked the city in 2019. Lee, a 64-year-old former security minister, resigned from his post as the top civil servant on Wednesday and is believed to have Beijing’s backing, according to people familiar with the process. The former police officer would be the first chief executive with a security background since the city’s handover from the UK to China in 1997 and has played a significant role in a crackdown on opposition following Beijing’s imposition of a sweeping national security law in 2020. Almost 200 activists have been arrested and multiple independent media outlets have closed, included the best-selling pro-democracy tabloid Apple Daily. More than 10,000 have been arrested since the 2019 protests.What’s your reaction to Lee joining the race to be Hong Kong’s chief executive? Share your thoughts with me at [email protected]. Thanks for reading FirstFT Asia. — EmilyThe latest on the war in Ukraine: Evacuation: Ukraine’s authorities have urged civilians in the Donbas region and around Kharkiv to evacuate after Russian forces stepped up their offensive in eastern Ukraine.Sanctions: The US has imposed its most severe level of sanctions on Russia’s largest financial institution and its biggest private bank. Italy and Spain led a fresh round of European expulsions of Moscow’s diplomats.Energy: Russian coal producers may struggle to redirect volumes to Asian markets if the EU proceeds with a threatened total import ban, analysts said.Debt: Russia moved one step closer to a potential default on its foreign currency debt after the country’s finance ministry said it was forced to make payments to holders of its dollar-denominated bonds in roubles.Intelligence: Declassifying information at a rapid pace has become a striking feature of the spy community’s response to the invasion of Ukraine.Opinion: Whatever the outcome of Vladimir Putin’s war, geopolitics is now divided between the west and a Chinese-Russian Eurasia, writes Edward Luce.Follow our live blog for the latest news on the conflict and our regularly updated maps are tracking Russia’s invasion of Ukraine. Five more stories in the news1. Scoop: Meta targets virtual currency market with ‘Zuck Bucks’ Meta has drawn up plans to introduce virtual coins, tokens and lending services to its apps, as Facebook’s parent company pursues its finance ambitions despite the collapse of a project to launch a cryptocurrency.

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2. Federal Reserve to slash balance sheet by $95bn a month The US central bank is set to start shedding $95bn of assets a month from its swollen $9tn balance sheet as it steps up efforts to curb soaring inflation in the US. An account of the Federal Open Market Committee’s last meeting showed officials finalising a plan to reduce the central bank’s presence in US government bond markets.3. Toshiba’s second-biggest shareholder pushes take-private deal 3D Investment Partners is pushing for the company to open talks on a possible sale to private equity after it was revealed last week that Bain Capital was poised to submit a buyout proposal for the $17bn Japanese conglomerate.4. Sri Lanka revokes emergency rule President Gotabaya Rajapaksa has ended emergency rule days after it was imposed as the government struggles to contain an economic and political crisis that has led to widespread protests.5. Le Pen’s poll surge rattles French bonds and bank stocks The risk of a victory for Marine Le Pen came into sharp focus yesterday as polls ahead of the first round of voting on Sunday showed the far-right candidate gaining ground on president Emmanuel Macron. Bank stocks fell and bond spreads between French and German government debt widened. Coronavirus digest China’s strict Covid lockdowns are exacerbating serious shortages of fertiliser, labour and seeds.The stake held by the founding family of one of China’s largest traditional medicine groups has rocketed in value to $4.5bn after the latest Covid outbreak.The day aheadWorld Health Day The World Health Organization is set to publish its annual World Health Report.G7 foreign minister’s meeting continues Officials will continue proceedings in Brussels, where Liz Truss, UK foreign secretary, is expected to call for tougher unified action and continued sanctions against Russia.What else we’re readingThe weaponisation of finance The first of a two-part series on the new era of financial warfare examines how the west unleashed “shock and awe” on Russia’s economy, and how sanctions on the country’s central bank wielded the omnipresence of the US dollar to penalise an adversary of Washington.Hong Kong takes aim at boardroom ‘boys’ club’ Xiaomi and Meituan may be world leaders when it comes to smartphones or online shopping, but China’s top companies are falling behind in a global movement to shake up all-male boardrooms. Now, Hong Kong’s stock exchange will require that its more than 2,500 listed companies have at least one female board member by 2024. Related read: In the first edition of our new weekly newsletter Working It, FT’s Sophia Smith looks at the secret — and thriving — world of alumni networks. Expats fleeing Hong Kong meet rising resentment in Singapore As Singapore eases its pandemic measures, it has become the obvious destination for many Hong Kongers. But the city-state’s reputation for openness is being undermined by locals who want to clamp down on immigration.A new kind of media baron charges into Twitter Elon Musk’s investment in the social media platform and subsequent appointment to the company’s board of directors gives the Tesla chief executive a unique position and influence normally associated with traditional press barons. Tech reporters Hannah Murphy and Richard Waters spoke to experts about this week’s surprise developments.Carbon removal ‘unavoidable’ as climate change alarm bells ring Once a fringe idea, carbon capture and storage has become a key part of decarbonisation plans the world over. But does this technology risk providing big polluters a licence to carry on as normal? The FT weighs the pros and cons.

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(Reuters) – U.S. Treasury Secretary Janet Yellen said on Wednesday that Russia should be expelled from the Group of 20 major economies forum, and the United States will boycott “a number of G20 meetings” if Russian officials show up.Her comments at a U.S. House Financial Services Committee hearing raised questions about the G20’s future role in the wake of Russia’s invasion of Ukraine.Since 2008, the club has served as a key international forum for issues from COVID-19 relief to cross-border debt and also includes China, India, Saudi Arabia and other countries that have been reluctant to condemn Russia’s actions.Yellen told lawmakers that Russia’s invasion of Ukraine and the killings of civilians in Bucha “are reprehensible, represent an unacceptable affront to the rules-based global order, and will have enormous economic repercussions in Ukraine and beyond.”The United States and its key allies have placed greater emphasis in recent months on the G7 grouping of industrial democracies, whose interests are more aligned, using G7 meetings to coordinate their response to Russia’s war in Ukraine.Yellen said that the Biden administration wants to push Russia out of active participation in major international institutions, but acknowledged that it was unlikely that Russia could be expelled from the International Monetary Fund given its rules. “President Biden’s made it clear, and I certainly agree with him, that it cannot be business as usual for Russia in any of the financial institutions,” Yellen said in response to a question. “He’s asked that Russia be removed from the G20, and I’ve made clear to my colleagues in Indonesia that we will not be participating in a number of meetings if the Russians are there,” Yellen said.Indonesia holds the presidency this year and will host a finance meeting in July and a leaders summit in November.A Treasury spokesperson later said that Yellen was referring to an April 20 G20 finance ministers and central bank governors meeting on the sidelines of the IMF and World Bank Spring Meetings in Washington and associated deputies meetings.The April finance meeting will be held both in-person and virtually and Russia’s participation is unclear at present.Russia has said that President Vladimir Putin intends to attend the G20 summit in Bali this year and has received China’s backing to stay in the group.ENERGY FLEXIBILITY Yellen’s testimony came as the Biden administration announced a new round of sanctions to punish Russia, including banning Americans from investing in Russia and locking Sberbank, Russia’s largest lender and holder of a third of its bank deposits, out of the U.S. financial system, along with other institutions.But transactions allowing European allies to purchase Russian oil and natural gas were exempted through special Treasury licenses.Yellen said that flexibility on Russian energy transactions was needed because many European countries “remain heavily dependent on Russian natural gas, as well as oil, and they are committed to making the transition away from that dependence as rapidly as possible.”But she acknowledged that this would take time. A complete ban on oil exports from Russia, the world’s third-largest producer after the United States and Saudi Arabia, would likely prompt “skyrocketing” prices that would hurt both the United States and Europe, Yellen said.She added that she hoped that currently high prices would entice oil companies in the United States and elsewhere to ramp up production in the next six months, which, along with the Biden’s release of oil from the U.S. Strategic Petroleum Reserve, may allow for tougher restrictions on Russian oil.CHINA WARNINGYellen also issued a warning to China that Treasury was prepared to turn its sanctions tools against Beijing in the event of Chinese aggression against Taiwan, which China claims as a wayward province. Asked if the United States would take such steps if Taiwan was threatened, she said: “Absolutely. I believe we’ve shown that we can. In the case of Russia, we threatened significant consequences. We’ve imposed significant consequences. And I think that you should not doubt our ability and resolve to do the same in other situations.” More

Levi Strauss does not expect to be able to reopen in Russia this year, its chief executive said on Wednesday, a month after the California jeans maker suspended operations there “temporarily” in response to Vladimir Putin’s invasion of Ukraine. “The way things are going now, I’m not optimistic we’ll be back in business in full force any time soon,” Chip Bergh told the Financial Times, adding that its forecasts now assumed no further revenues in 2022 from a market that contributed about 2 per cent of sales last year. Levi’s is still paying more than 800 employees in Russia, and has kept a couple of outlet stores open “to flush inventory”, he said, but “every day when you open the newspaper the situation looks worse”.Conditions for western companies in Russia were “really difficult”, Bergh said, noting authorities had assumed powers that could allow them to nationalise the operations of businesses that stop supplying Russian customers. “They could literally take our trademark,” he warned, echoing a concern other executives have voiced privately.A Boston Consulting Group survey, released this week, found that two-thirds of investors expected it would take at least two years before western companies were willing to operate in Russia again, including 39 per cent that said it would be five years or more. Few CEOs have made any public projections of how long they might be frozen out of Russia’s market, however.Despite the question hanging over Russia, Levi’s reaffirmed its full-year guidance after delivering first-quarter revenues and earnings per share that beat consensus estimates. “We grew the old fashioned way, by generating lots of demand and lots of full-price selling,” Bergh said, pointing to a 22 per cent jump in revenues to $1.59bn for the three months to February, above the $1.55bn Wall Street had expected. Record operating profit margins, up from 13.3 per cent to 14.7 per cent, boosted adjusted earnings per share more than a third to 46 cents, or 4 cents above expectations. Levi’s had increased average prices 10 per cent in a year to try to offset “across the board” inflationary pressures, Bergh noted. “We are planning for more [price rises] later this year because we know costs are going to continue to go up,” he said, adding that running businesses in high-inflation periods of the 1980s had taught him that “you’ve got to get in front of [inflation], because if you don’t you just can’t catch up”.Levi’s had offset much of the higher costs of cotton, shipping and wages by renegotiating leases and using its scale to agree better terms with vendors, said Harmit Singh, chief financial officer. Bergh expressed confidence in the outlook for US consumer demand, saying: “Despite the pandemic and everything we’ve been through, despite consumers seeing inflation hitting them at the gas pump and the grocery store, the confidence level is still quite high.”That said, he added, the fact that it was maintaining full-year guidance after beating expectations for the first quarter “infers we are maybe expecting the second half to be a little bit softer”. More