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June 27th, 2022 by Vbiz

Sri Lanka has run out of fuel, according to a report Monday in the country’s Daily Mirror newspaper. 

The 1,100 tons of petrol and 7,500 tons of diesel the country has would not last a day, the newspaper reported, citing anonymous sources in the Ceylon Petroleum Corporation Trade Union.

According to Reuters, which cited a top government official on Sunday, the country of 22 million people is down to just 15,000 tons of petrol and diesel to keep essential services running in  coming days. 

Without any deliveries of fuel, the newspaper said, Sri Lanka “will come to a complete standstill from this week, as even public transportation will come to a grinding halt.” 

The country’s energy crisis is compounded by a financial crisis. 

The Daily Mirror said Sri Lanka has been “blacklisted by international companies as it has defaulted on its debts and companies now require international bank guarantees for fresh orders.” 

However, Sri Lanka is sending two ministers to Russia, according to The Associated Press, for face-to-face negotiations to try to acquire the much-needed fuel. 

Some information for this report came from The Associated Press, Agence France-Presse and Reuters.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 27th, 2022 by Vbiz

U.S. President Joe Biden comes to the Group of Seven summit with the war in Ukraine showing no signs of stopping and China’s ambition spreading. The White House says they are committed to countering these issues. VOA White House correspondent Anita Powell reports from Telfs, Austria.

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June 26th, 2022 by Vbiz

Air traffic is booming this summer, but after European vacations are over will passenger demand hold up?

The question was the focus of the annual congress of the Airports Council International (ACI) Europe in Rome this week, held at the cusp of the approaching peak season.

The summer period is shaping up to be by far the best since the beginning of the coronavirus crisis that has severely affected the airline industry since 2020.

Some airlines, such as Ryanair, and countries, in particular Greece, have already recovered or even exceeded their 2019 daily flight numbers, according to Eurocontrol, a pan-European air traffic agency.

Across the continent, air traffic was last week at 86 percent of the same period in 2019, Eurocontrol said, and expected to reach up to 95 percent in August under its most optimistic estimate.

And companies are filling seats for the coming weeks despite the sharp rise in ticket prices, long lines in various airports from Frankfurt to Dublin to Amsterdam and strikes by flight attendants, pilots or air traffic controllers.

But after that?

“Visibility is low because there is a lot of uncertainty,” said Olivier Jankovec, director general of ACI Europe.

“We’re now in a war economy in Europe, we have the prospect of a quite harsh recession, we have inflation at record levels, so how all of this is going to play into consumer sentiment… the jury’s still out.”

The director general for transport and mobility at the European Commission, Henrik Hololei, echoed that thought.

“We really need to tighten the seatbelt because there’s going to be a lot of turbulence,” he told delegates.

“We are entering… a period of uncertainty which we have never experienced in the last decade. And that of course is the biggest enemy of the business,” he said.

Too many unknowns

Hololei listed the war in Ukraine, high energy prices and shortages of energy, food and labor.

“We have also interest rates which are going up for the first time in a decade,” he said.

The price of jet fuel has doubled over the past year, with a refinery capacity shortage compounding the explosion in crude oil prices.

Fuel accounts for about a quarter of the operating costs of airlines, which have passed them on to consumers in ticket prices as they seek to refill coffers drained by the two-year health crisis.

Still, strong demand has returned, confirmed Eleni Kaloyirou, managing director of Hermes Airports, which manages the airports of Larnaca and Paphos in Cyprus, where the high tourist season extends into November.

“People want to take their holidays,” she said, acknowledging, however, “we do worry about next year.”

The general manager of Athens International Airport, Yiannis Paraschis, similarly expressed fears that “the increase in energy costs and inflation will consume a great part of European households’ disposable income.”

The head of Istanbul International Airport, Kadri Samsunlu, voiced concerns about inflation’s effect in Western Europe.

And if consumer confidence is damaged, “We don’t know what’s going to happen to the demand,” he warned.

The last unknown hanging over European air travel in the medium term is a possible new outbreak of coronavirus.

“COVID has not disappeared, and it is not a seasonal flu either,” Hololei warned.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 26th, 2022 by Vbiz

Before the 2016 presidential election, Illinois farmer Brian Duncan looked to the Trans-Pacific Partnership (TPP) trade agreement between the United States and Asian countries, to boost demand for his crops, and in particular, prices for the thousands of hogs he raises annually.

“Pork is very much in demand in Asian countries, the Pacific rim,” he explained to VOA in a recent interview outside one of the sheds where he tends to his animals. “I was really looking forward to what opportunities could come for pork sales to that part of the world.”

But the TPP became politically problematic for both Democrats and Republicans who eventually distanced themselves from a trade agreement some voters believed would negatively affect U.S. manufacturing jobs. When Republican Donald Trump was elected president in 2016, hopes of passing the TPP ended.

“Part of TPP’s role was to counter China’s growing economic influence and position the United States to be a positive force in the region,” Duncan said. “Those countries have gone ahead without us, they left us behind on trade.”

Max Baucus, a former U.S. senator from Montana and former U.S. ambassador to China, agrees.

“When we pulled out of TPP, we really abdicated our leadership and created a huge vacuum in Southeast Asia,” said Baucus, now a co-chairman of the Farmers for Free Trade advocacy group, while attending a recent online meeting about the Biden administration’s efforts to engage Asian nations in new trade talks. “It’s important to establish an economic counterweight to China. That’s important. That was the whole point of TPP.”

Mark Gebhards, executive director of governmental affairs for the Illinois Farm Bureau, said, “We have been strongly encouraging the Biden administration to do more in terms of building true market access.”

Gebhards says Biden’s Indo-Pacific Economic Framework for Prosperity (IPEF) with 12 Asian countries — Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam — is a welcome development that could boost U.S. agriculture exports.

“The benefit for us is to increase the market access in extremely important countries which are very willing, very interested in our agricultural products. For our farmers, for our members, there is a direct benefit here,” Gebhards told VOA in an interview at the Illinois Farm Bureau headquarters in Bloomington, Illinois.

“It’s great to talk, it’s a great first step, but we really feel that we need more actual trade agreements put in place especially in light of the Ukrainian conflict and all the things that are happening in the world today. The Indo-Pacific Framework, it is important to note, it is not a trade agreement with these 12 countries that are involved in it. It is really along the lines of a framework to sit down and talk about trade issues. It’s not negotiation that you would enter into in a trade agreement, especially in a bilateral approach that we have with many of these countries.”

Duncan said, “Something is better than nothing, that’s where I’m at with it. Sixty percent of … the world’s population is going to be in those Indo-Pacific countries.”

The White House says the 12 nations in the IPEF also account for about 40% of global GDP.

But Duncan is aware of the limitations of the current talks. “It’s just a framework. We hope it provides a mechanism to go forward and build upon. When I see this framework, it at least answers one of the questions — we haven’t given up on a multilateral agreement in the Pacific Rim, and I think that’s good news. So now, we hope that’s a start, we hope there’s dialogue, and we hope we can build upon this and get people to realize that multilateral agreements are not evil, they can work, and they have worked in the past.”

As he waits — and hopes — for trade talks to turn into trade negotiations, Duncan sees the IPEF as meaningful change in U.S. trade policy.

“I think there’s hope again and realization of the importance of international trade.”

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 25th, 2022 by Vbiz

Chinese President Xi Jinping pledged this week to help advance four economic powers, despite pandemic problems at home and knock-on effects from Russia’s war in Ukraine. Analysts expect the pledges to take time, with no immediate results.

Xi made his remarks Thursday at the virtual BRICS Summit hosted by Beijing.

The other countries are Brazil, Russia, India and South Africa, which together with China make up the grouping known as BRICS. These large emerging economies see themselves as an alternative to the U.S.-led world order.

The leader of China advocated BRICS cooperation in cross-border payments and credit ratings, the official Xinhua News Agency in Beijing reported Thursday. The report says he further recommended “facilitation” of trade, investment and financing.

Xi as host of the group’s 14th summit said he would work with the BRICS countries to support global development that is “stronger, greener and healthier,” Xinhua added.

The leader urged more countries to join the New Development Bank, a concessional lender founded by BRICS countries in 2015. He called, too, for improving the group’s emergency balance-of-payments relief mechanism, the Contingent Reserve Arrangement, Xinhua added.

View toward future deals

Substantive progress on these goals will likely take time, analysts say, as the member countries do not always get along with one another and China’s ambitions may take time to evolve given issues at home and abroad.

“At the highest level, there’s a little bit of a discussion, then that may lead to further opportunities to be further engaged down the road,” said Song Seng Wun, a Singapore-based economist in the private banking unit of Malaysian bank CIMB.

China’s economy has outgrown the others after decades of export manufacturing for much of the world. But the keeper of a $17.5 trillion GDP has teetered this year amid lockdowns to contain a COVID-19 surge — which snarled world supply chains originating in China.

BRICS member Russia faces economic sanctions from the West over its war in Ukraine, which has sparked food shortages and inflation. China still faces tariffs on goods shipped to the United States, fallout from a bilateral trade dispute.

India and China have their own differences. The world’s two most populous countries contest sovereignty over mountain territories between them, and China bristles at India’s geopolitical cooperation with the West.

Developing countries, including those among the BRICS, can easily turn to Japan, the European Union and other alternatives to China for economic support, said Stuart Orr, School of Business head at Melbourne Institute of Technology in Australia. Those choices will slow China’s ambitions to sow BRICS cooperation as developing states prefer not to over-rely on Beijing, he said.

“There’s a lot of talk but probably not so much real progress in that regard and I suspect things will probably end up sort of getting pushed back to the next BRICS meeting for further progress once the dust has settled,” Orr said.

China still “struggles with health issues” while its historic political rival the United States is finding new suppliers and customers for soy exports, Orr said.

Officials in Beijing want to expand cooperation with other countries as the United States sanctions Russia over the war and China over trade, said Huang Kwei-bo, associate professor of diplomacy at National Chengchi University in Taipei.

The BRICS countries might reassure one another over energy and food shortages linked to the war, Song said. Later, he said, they could “flesh out” substantive agreements.

Anti-West position

China regularly offers economic aid, investments and COVID-19 vaccines to friendly developing countries from Africa into Central Asia. Its flagship is the Belt and Road Initiative, a 9-year-old, $1.2 trillion list of foreign infrastructure projects aimed at opening China-linked trade routes.

Chinese officials feel the BRICS nations will welcome their support, and in turn, accept some of their political views, analysts say. Of the BRICS states, only Brazil voted against Russia’s invasion of Ukraine at the United Nations earlier this year. China, India and South Africa abstained.

India, despite its West-leaning political activity and reservations about China’s Belt-and-Road, still takes Russian oil.

“India-China relations are very sensitive, but outside these existing relations, like in the Caribbean and Latin America, those spots are where India and China wouldn’t have clashes of interest,” Huang said.

Brazil in particular is looking for more international support to overcome the “devastating impacts” of COVID-19 in the country, Orr said.

“There should be some other countries that would think about joining this kind of regime,” Huang said. “Then, if a lot of those countries don’t have such good relations with the U.S. side, doesn’t that mean it’s one more thing causing a headache for the United States in terms of geopolitics?”

A declaration issued at the summit Thursday says the five countries support talking further about expanding their group. 

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June 25th, 2022 by Vbiz

President Joe Biden’s proposed Indo Pacific Economic Framework with key Asian nations signals a new approach for U.S. trade policy in the region. As VOA’s Kane Farabaugh reports, U.S. farmers are optimistic the Framework will provide new markets for their goods.
Camera: Kane Farabaugh Producer: Kane Farabaugh

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 23rd, 2022 by Vbiz

Cameroon’s President Paul Biya has for the first time sent a delegation to Europe to try to encourage well-off Cameroonians living there to invest back home. But members of Cameroon’s diaspora say undemocratic practices and corruption in Biya’s government put off investors.

Government officials say a delegation led by Youth Affairs and Civic Education Minister Mounouna Foutsou was dispatched to Germany this week to ask Cameroonians there to invest in their country of origin.

Foutsou said his wish is for all Cameroonians in the diaspora to put aside their differences and help develop Cameroon.

“The head of state reiterated his call to the Cameroonian diaspora to come and build Cameroon. We seize this opportunity to come and exchange with the whole Cameroonian diaspora here in Europe so that we can present the different opportunities offered by the president of the republic and his government so that the Cameroonian diaspora can come back and participate in the development of the nation,” said Foutsou.

Foutsou said the government will offer tax exemptions of up to 40 percent for diaspora investments in Cameroon, and loans of up to $10,000 with no interest rates for diaspora youths who return to invest in agriculture and livestock.

Kennedy Tumenta is a Cameroonian investor who lives in Germany. He said many in the diaspora find it hard to trust promises made by their government.

He said corruption, high taxes and a lack of confidence in President Biya, who has been in power for 40 years, scare investors.

“Freedom is restricted and they are afraid to move around in Cameroon and do their businesses and speak freely. Most diasporans believe that there is widespread corruption when it concerns opening businesses in the country or the Northwest-Southwest crisis is not being taken into consideration seriously by the government in place. It makes them frustrated and the only way to express this frustration is either to withdraw their investments in the country or attacking the head of state,” said Tumenta.

Separatists have been fighting to carve out an independent English-speaking state in mainly French-speaking Cameroon, since 2016. The U.N. says 3,300 people have died in the fighting.

Some disgruntled Cameroonians in the diaspora have become hostile to the government, and at least seven Cameroonian embassies have been attacked or ransacked since January 2020.  

Felix Mbayu is a top official with Cameroon’s Ministry of External Relations. He said Cameroonians taking part in such protests are hurting the country’s image.

“Those who left Cameroon unhappy and have not been able to make it there are those who would speak ill of Cameroon. Those who left Cameroon to better their lot in life and have made it there are those who come back to invest in Cameroon. That is why you see medical doctors who have built hospitals, built clinics, who bring back home medical supplies. You don’t see them in the idle marches abroad. In fact, when you talk ill of your own home, you tarnish your own image,” said Mbayu.

An estimated five million Cameroonians live abroad. The government says the largest diaspora population is in Nigeria where about two million live.

There are also high concentrations in Belgium, France, Germany, the United Kingdom and the United States.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 23rd, 2022 by Vbiz

The war in Ukraine is causing disruptions around the world, from what President Joe Biden terms a “Putin price hike” for American petroleum consumers to an impending global food crisis. On Wednesday, Biden said he was taking steps to try to offset the effects, something he said he’ll be focusing on ahead of two key summits and a Mideast trip. Anita Powell reports from the White House.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 23rd, 2022 by Vbiz

U.S. tariffs on Chinese goods offer a key element of leverage over Beijing, something Washington should be reluctant to relinquish, the top American trade official said Wednesday. 

Progress with China’s unfair trade practices has been elusive, which makes the tariffs an important tool, U.S. Trade Representative Katherine Tai told lawmakers. 

“The China tariffs are, in my view, a significant piece of leverage and a trade negotiator never walks away from leverage,” she said in testimony before the Senate Appropriations Committee. 

“The United States has repeatedly sought and obtained commitments from China, only to find that lasting change remains elusive,” she added. 

President Joe Biden has said he is considering lifting some of the tariffs imposed by his predecessor, Donald Trump, and also plans to talk with Chinese leader Xi Jinping. 

White House press secretary Karine Jean-Pierre said Wednesday that no decision has been made on the tariffs. 

“The president has been discussing this with his team,” she told reporters, adding that there is no timeline for an announcement. 

But any decision would likely have to come soon, as some of the tariffs are to expire starting July 6 unless they are renewed. 

Successive rounds of tariffs imposed by Trump eventually covered about $350 billion in annual imports from China in retaliation for Beijing’s theft of American intellectual property and forced transfer of technology. 

Treasury Secretary Janet Yellen is among those arguing that removing the tariffs could ease inflation, which has reached a 40-year high and is squeezing American families. 

“The tariffs we inherited; some serve no strategic purpose and raise costs to consumers,” Yellen said on Sunday. 

The administration is looking at “reconfiguring some of those tariffs so they make more sense and reduce some unnecessary burdens,” Yellen said. 

But Tai said there is a limit to what can be done to address rising prices in the short term. 

Meanwhile, U.S. homebuilders issued a statement urging the administration to remove tariffs on Canadian lumber to ease the pressure on homebuyers. 

“If the administration is truly interested in providing U.S. citizens relief from high inflation by removing costly tariffs, it should ensure that Canadian lumber is among the tariffs it targets for elimination,” Jerry Konter, chairman of the National Association of Home Builders, said in a statement. 

Washington lowered lumber tariffs in January to 11.64%, but NAHB calculates the duties have added more than $18,600 to the price of a new home since last August. 

Tai told lawmakers she regularly discusses the issue with her counterparts in Ottawa to try to resolve the issue. 

But she added: “That requires the Canadian government to be willing to address the fundamental challenges that we have with respect to an unlevel playing field for our industry with respect to how they govern their harvesting in their industry.”

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 23rd, 2022 by Vbiz

From multinational makers of clothing to consumer electronics, companies are reassessing their sources of raw materials, parts and factory assembly because of the pandemic, experts say.

That means countries in Southeast Asia and Latin America are becoming key go-to places in the global supply chain as businesses shift away from China post-pandemic.

China had attracted foreign-invested factories since the 1980s for cheap labor and high productivity. But since the pandemic, China’s traditional role as the world’s factory will be reduced, as American and European multinationals look for parts, labor and assembly at home for higher-end goods — nearby or wherever subsidies are available — according to Jayant Menon, a visiting senior fellow with the ISEAS-Yusof Ishak Institute’s Regional Economic Studies Program in Singapore.

“Countries like China that mismanage COVID will suffer greatly,” Menon told VOA via WhatsApp. “That’s because their zero COVID approach has been very disruptive to supply chains.”

While Southeast Asian countries including Vietnam, Thailand and Indonesia have been lifting pandemic restrictions this year, China reinstated lockdowns in two major cities. The lockdowns upset factory orders — and raised consumer prices — because of shipping slowdowns and worker shortages.

Seeking alternatives to China

In addition to pandemic-related disruptions in China, delays caused by worker shortages at major global ports and airports, including South Korea and the United States, have stifled the flow of consumer goods into Europe, North America and parts of Asia.

Taiwan-based PC developer Acer, for example, is addressing lockdown-driven supply chain problems by qualifying “second sources for materials where needed,” a spokesperson told VOA. The world’s No. 5 PC vendor by market share manufactures largely in China. The second sources will “come from various countries,” the spokesperson said without giving details.

American firms intend to stay in China overall but diversify, said Douglas Barry, communications vice president with the U.S.-China Business Council advocacy group in Washington. “We hear over and over that it’s a mistake to put all your eggs in one basket,” Barry said. “China’s response to COVID and growing geopolitical tensions are reminders of this truism.”

Southeast Asia

Nations such as Vietnam and Thailand were taking business from China before 2020, as investors faced rising Chinese labor costs and higher tariffs thanks to the Sino-U.S. trade dispute that began in 2018.

“I think Southeast Asia will clearly be a beneficiary of all this reconfiguration taking place. Countries like Vietnam, and to a lesser extent Thailand and Malaysia, have already seen gains from restructuring of supply chains,” Menon said.

Vietnam, he said, has a lead because of its workforce talent, pro-business reforms and network of free trade agreements. Electronics giant Samsung and American chip developer Intel both operate in Vietnam, as do foreign-invested car factories.

Malaysia is trying to capture more multinational tech, he noted. Last month, a subsidiary of giant Taiwanese electronics assembler Foxconn Technology signed an agreement with its Malaysian partner Dagang NeXchange to set up a factory, possibly for electric vehicles.

Malaysia, along with Thailand, Indonesia and the Philippines, offer “moderate wages” compared to China, said Rajiv Biswas, Asia-Pacific chief economist with S&P Global Market Intelligence in Singapore.

Multinationals, he said, are likely to expand industrial capacity in multiple places but stay in China for its market of a billion-plus people.

“They will still continue producing in China, but they will create additional production capacity in other hubs, and because of what we’ve seen during the pandemic when you can see disruptions in multiple locations, the resilience in the supply chain comes from having multiple production facilities, which also, I think, includes producing outside of Asia,” Biswas said.

Latin America

In Latin America, especially its industrial hub Mexico, products have been selling to the all-important U.S. market as a border nation. Mexico stands to benefit more from a trend known as near-shoring, analysts say.

A shared border, common time zones and linguistic similarities bring Mexico especially close to the United States, said Evan Ellis, a research professor of Latin American studies at the U.S. Army War College Strategic Studies Institute. The workforce is relatively educated, too, he said.

“Mexico is generally more accessible to many businesses in the United States in terms of the language and the culture and things than, for example, setting up shop in some cases in an Asian country or some other country that’s out of the hemisphere,” Ellis said.

Mexico has attracted American firms since the 1990s and retains “strong advantages,” Ellis said, but drug crimes and electricity costs loom as drawbacks.

Mexico is enticing some investors because its goods can enter the United States duty free under trade agreement rules, communications executive Barry said.

Brazil makes sense for companies that need its natural resources, such as ore or petroleum — or that sell cars for example — to its market of 212 million people, many in middle class cities, Ellis said. He noted that costs and regulations, however, challenge investors in Brazil.

“Manufactures are competing for limited supply of key commodities and logistical capacity, leading to consumers experiencing empty shelves and long purchase lead times,” stated professional services firm KPMG on its website. Now, it adds, “industry is evaluating and investing in their long-term supply chain strategies, paving the way for a new post pandemic normal,” which includes finding alternative customers, markets and suppliers to avoid overdependence on just one.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 22nd, 2022 by Vbiz

Drivers around the world are feeling pain at the pump with fuel prices soaring, and costs are surging to heat buildings, generate power and operate industries.

Prices were elevated before Russia invaded Ukraine on February 24. But since mid-March, fuel costs have surged while crude prices have increased only modestly. Much of the reason is a lack of adequate refining capacity to process crude into gasoline and diesel to meet high global demand. 

How much can the world refineries produce daily?

Overall, there is enough capacity to refine about 100 million barrels of oil a day, according to the International Energy Agency (IEA), but about 20% of that capacity is not usable. Much of that unusable capacity is in Latin America and other places where there is a lack of investment. That leaves somewhere around 82 million to 83 million bpd in projected capacity. 

How many refineries have closed? 

The refining industry estimates that the world lost 3.3 million barrels of daily refining capacity since the start of 2020. About a third of these losses occurred in the United States, with the rest in Russia, China, and Europe. Fuel demand crashed early in the pandemic when lockdowns and remote work were widespread. Before that, refining capacity had not declined in any year for at least three decades.

Will refining pick up?

Global refining capacity is set to expand by 1 million bpd per day in 2022 and 1.6 million bpd in 2023.

How much has refining declined since before the pandemic? 

In April, 78 million barrels were processed daily, down sharply from the pre-pandemic average of 82.1 million bpd. The IEA expects refining to rebound during the summer to 81.9 million bpd as Chinese refiners come back online. 

Where is most of the refining capacity offline, and why? 

The United States, China, Russia and Europe are all operating refineries at lower capacity than before the pandemic. U.S. refiners shut nearly 1 million bpd of capacity since 2019 for various reasons.

Nearly 30% of Russia’s refining capacity was idled in May, sources told Reuters. Many Western nations are rejecting Russian fuel. 

China has the most spare refining capacity. Refined product exports are allowed only under official quotas, mainly granted to large state-owned refining companies and not to smaller independent companies that hold much of China’s spare capacity.

As of last week, run rates at China’s state-backed refineries averaged around 71.3% and independent refineries were around 65.5%. That was up from earlier in the year, but low by historic standards.

What else is contributing to high prices? 

The cost to carry products on vessels overseas has risen because of high global demand, as well as sanctions on Russian vessels. In Europe, refineries are constrained by high prices for natural gas, which powers their operations.

Some refiners also depend on vacuum gasoil as an intermediate fuel. Loss of Russian vacuum gasoil has prevented certain refineries from restarting certain gasoline-producing units. 

Who is benefiting from the current situation? 

Refiners, especially those that export a lot of fuel to other countries, such as U.S. refiners. Global fuel shortages have boosted refining margins to historic highs, with a key spread nearing $60 a barrel. That has driven big profits for U.S.-based Valero and India-based Reliance Industries. 

India, which refines more than 5 million bpd, according to the IEA, has been importing cheap Russian crude for domestic use and export. It is expected to boost output by 450,000 by year-end, the IEA said. 

More refining capacity is set to come online in the Middle East and Asia to meet growing demand.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 22nd, 2022 by Vbiz

Sri Lanka’s debt-laden economy has “collapsed” after months of shortages of food, fuel and electricity, its prime minister told lawmakers Wednesday, in comments underscoring the country’s dire situation as it seeks help from international lenders.

Prime Minister Ranil Wickremesinghe told Parliament the South Asian country is “facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.”

While Sri Lanka’s crisis is considered its worst in recent memory, Wickremesinghe’s assertion that the economy has collapsed did not cite any specific new developments. It appeared intended to emphasize to his critics and opposition lawmakers that he has inherited a difficult task that can’t be fixed quickly, as the economy founders under the weight of heavy debts, lost tourism revenue and other impacts from the pandemic, as well as surging costs for commodities.

Lawmakers of the country’s two main opposition parties are boycotting Parliament this week to protest against Wickremesinghe, who became prime minister just over a month ago and is also finance minister, for not having delivered on his pledges to turn the economy around.

Wickremesinghe said Sri Lanka is unable to purchase imported fuel, even for cash, due to heavy debt owed by its petroleum corporation.

“Currently, the Ceylon Petroleum Corporation is $700 million in debt,” he told lawmakers. “As a result, no country or organization in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash.”

Wickremesinghe took office after days of violent protests over the country’s economic crisis forced his predecessor to step down. In his comments Wednesday, he blamed the previous government for failing to act in time as Sri Lanka’s foreign reserves dwindled.

The foreign currency crisis has crimped imports, creating severe shortages of food, fuel, electricity and other essentials such as medicines, forcing people to stand in long lines to obtain basic needs.

“If steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we lost out on this opportunity. We are now seeing signs of a possible fall to rock bottom,” he said.

So far, Sri Lanka has been muddling through, mainly supported by $4 billion in credit lines from neighboring India. But Wickremesinghe said India would not be able to keep Sri Lanka afloat for long.

It also has received pledges of $300 million-$600 million from the World Bank to buy medicine and other essential items.

Sri Lanka has already announced that it is suspending repayment of $7 billion in foreign debt due this year, pending the outcome of negotiations with the International Monetary Fund on a rescue package. It must pay $5 billion on average annually until 2026.

Wickremesinghe said IMF assistance seems to be the country’s only option now. Officials from the agency are visiting Sri Lanka to discuss a rescue package. A staff-level agreement is likely to be reached by the end of July.

“We have concluded the initial discussions and we have exchanged ideas on various sectors such as public finance, finance, debt sustainability, stability of the banking sector and the social security network,” Wickremesighe said.

Representatives of financial and legal advisers to the government on debt restructuring, Lazard and Clifford Chance, are also visiting the island and a team from the U.S. Treasury will arrive next week, he said.

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June 22nd, 2022 by Vbiz

U.S. President Joe Biden is due to speak Wednesday about gas prices and economic effects of Russia’s war in Ukraine as he considers whether to support suspending the nation’s federal gas tax. 

Biden has said he would make his decision by the end of the week. 

The gas tax is set at 18.4 cents per gallon, with most of the money going toward road construction projects. 

Average gas prices in the United States are at about $5 per gallon. Fuel prices around the world have risen in recent months, with rebounds in demand, refining capacity challenges, and sanctions against major oil producer Russia among the contributing factors. 

White House press secretary Karine Jean-Pierre told reporters Tuesday that the issue is a top priority for Biden and “all options are on the table.” 

“He’s going to do everything that he can to make sure he relieves some pain and some pressure that Americans are feeling at the pump,” Jean-Pierre said. 

Opponents of suspending the tax, including some Democratic lawmakers, say the move would not address supply problems and would take money away from infrastructure needs. 

Some information for this report came from The Associated Press and Reuters.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 21st, 2022 by Vbiz

A group of U.S. solar energy project developers on Tuesday said they would jointly spend about $6 billion to support expansion of the domestic solar panel supply chain. 

The U.S. Solar Buyer Consortium, which includes developers AES Corporation AES.N, Clearway Energy Group, Cypress Creek Renewables and DE Shaw Renewable Investments, said in a statement that the funds would address current supply chain issues. 

Since the start of the pandemic, companies that buy solar panels for large power plants have struggled with global supply chain disruptions that have driven up costs, as well as potential U.S. tariffs on imported panels from Asia. Duties on those products, which supply most U.S. projects, would make solar energy more expensive and less competitive with power produced by fossil fuels. 

The consortium will invest $6 billion as it recruits solar panel manufacturers in a long-term strategic plan to supply up to 7 gigawatts (GW) of solar modules per year from 2024 — which could power nearly 1.3 million homes. 

“Our joint commitment to procure at this scale can provide the certainty suppliers need to ramp up capacity and overcome current supply chain constraints,” David Zwillinger, chief executive of DE Shaw Renewable Investments, said in a statement. 

The United States installed 23.6 gigawatts of solar capacity in 2021, according to industry trade group the Solar Energy Industries Association. 

Asian imports account for most U.S. panel demand from solar facility developers. In response, the tiny domestic manufacturing sector in recent years has sought tariffs on Asia-made panels repeatedly, saying their products cannot compete with cheap overseas-made components. 

U.S. President Joe Biden this month waived tariffs on solar panels from four Southeast Asian nations for two years and invoked the Defense Production Act to spur solar panel manufacturing at home. 

In their statement, the panel consortium said more needed to be done and called on Congress to pass proposed legislation to support domestic solar manufacturing. 

 

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 21st, 2022 by Vbiz

A British subsidiary of mining and trading giant Glencore on Tuesday formally pleaded guilty to seven counts of bribery in connection with oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.

At a Southwark Crown Court hearing in London, Glencore Energy admitted to paying more than $28 million in bribes to secure preferential access to oil and generate illicit profit between 2011 and 2016. The company will be sentenced on Nov. 2 and 3, the U.K. Serious Fraud Office, or SFO, said.

Glencore, a Swiss-based multinational, has already said it expects to pay up to $1.5 billion to settle allegations of bribery and market manipulation and three subsidiaries in the United States, Brazil and Britain have now pleaded guilty to criminal offenses.

U.S. authorities will see the bulk of those funds after Glencore agreed to a $1.1 billion U.S. settlement last month to resolve a decade-long scheme to bribe foreign officials across seven countries — and separate charges alleging a trading division manipulated fuel oil prices at U.S. shipping ports.

But the guilty plea by a corporate heavyweight in London is a much-needed boost for the SFO, which has faced sharp criticism and awaits the outcome of a “forensic” government-ordered review after senior judges overturned two convictions in its Unaoil bribery investigation because of disclosure failings.

“The SFO’s success with Glencore will certainly not protect it from any flak that comes its way,” said Syed Rahman, a partner at Rahman Ravelli. “But the result it has in this case is an indicator of what the agency is capable of when it does not make mistakes.”

Helen Taylor, a legal researcher at pressure group Spotlight on Corruption, urged the SFO now to investigate and prosecute senior executives who had condoned the wrongdoing.

The SFO said only that its Glencore investigation was ongoing.

Glencore is also paying $29.6 million directly to state-run Brazilian oil company Petrobras in compensation for defrauding the company and roughly $10 million to authorities in civil penalties, prosecutors have said.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 21st, 2022 by Vbiz

“I’m in a cryptocurrency chat group at work,” software engineer Adam Hickey of San Diego, California told VOA.

Over the last few days, Hickey said, members of the group have been writing things like, “Bloodbath” and, “Are we still good?”

“It shook me, honestly,” he admitted. “I just had to stop looking at my balance. At one point, months ago, my investment in crypto had tripled. Now I’m down 40%.”

Hickey is far from alone. Serious and casual investors across the United States have seen the value of their investments in the publicly available digital asset known as cryptocurrency shrink dramatically in recent months, with steep plunges recorded in just the last week.

The value of bitcoin, the most popular form of cryptocurrency, has dropped more than 70% since its peak in November of last year, erasing more than 18 months of growth and causing many investors to wonder if this is the bottom, or if the worst is still to come.

“I have to remind myself that when I got into bitcoin in 2017, it was more of something I just kind of hoped would be the next Amazon.com,” Hickey said. Like many others, Hickey dreamed cryptocurrency could be a way to get rich in the long-term, or at least would be a part of his retirement savings.

“I’ve always seen it as a long-term investment. Still, this is the most nervous I’ve been about it,” he said. “You hear people on social media saying this is all a Ponzi scheme. Now I’m having thoughts like maybe those warnings are right – that the people pushing bitcoin so hard are the ones who bought it at the earliest low prices. Of course they want people to buy and drive the value back up. It’s good for them, but is it good for me?” 

Getting in 

Those skeptical of cryptocurrency point to its lack of regulatory oversight from government as a major reason for concern, making it susceptible to scams and wild price fluctuations.

“I’ve always seen it as a highly speculative investment,” said Marigny deMauriac, a certified financial planner in New Orleans, Louisiana. “This isn’t something any individual should have the majority of their wealth in unless they’re looking to take a significant amount of unnecessary risk.”

“I tell my clients to stay clear of investing any significant portion of their wealth in cryptocurrency, or any other highly speculative investment type,” deMaruiac told VOA. Many of the most ardent cryptocurrency supporters, however, invest precisely because it isn’t tied to governments as traditional currencies are. Digital currency’s demonstrated capacity for meteoric rises is a big part of its appeal. 

Steve Ryan, a self-employed poker player living in Las Vegas, Nevada, began investing in digital currency nearly a decade ago. “I’ve been in it for so long, I understand this stuff much better than your average person who only read about it on the internet a year or two ago,” he said.

Ryan invested on the advice of entrepreneurial friends; back when a single bitcoin sold for only a couple of hundred dollars as opposed to the tens of thousands they sell for today.

“Most of my money is in crypto, and I wish I had kept more in there rather than selling some of it,” he told VOA. “Even after this downturn, I’d be a multimillionaire had I kept it all in.”

Losing value 

U.S. inflation at 40-year highs has caused the Federal Reserve to raise interest rates, sending jitters throughout financial markets. At the same time, some Americans have lost their appetite for riskier investments.

Many have sold their cryptocurrency holdings and reinvested in safer, more stable assets. At the end of last week, the value of one share of bitcoin dropped below $18,000 from a high late last year of more than $64,000. The total crypto market value dropped from a peak of $3.2 trillion to below $1 trillion. 

“I’m definitely worried today,” Ryan said on Saturday as bitcoin reached its lowest point since December 2020. 

Still, Ryan maintained he still believes in bitcoin.

“I’m worried because we’ve got a war going on in Europe, huge amounts of inflation, we’re trying to recover from the impacts of a pandemic, and governments might try to regulate bitcoin,” he said. “But I’m not worried about bitcoin itself – I think it’s as solid as ever. That’s how cycles work and this could prove to be one of the best times in history to get into crypto.”

Casual cryptocurrency investors may not be so sure, but many seem willing to hold on to what they have in the hopes of a rebound. “Of course, when it rose to over $60,000, I had big dreams that I could earn enough money to go on a big trip or to make a down payment on a property,” said Joe Frisard, a semi-retired resident of Atlanta, Georgia.

The downturn has lowered Frisard’s ambitions, he acknowledged, but he still planned on hanging on to the cryptocurrency he hadn’t already sold when it was closer to its peak. “I’ve lost a good bit of money in the stock market, too,” he said, “but I’m not looking to dump my stocks. They’re a long-term investment and I see bitcoin in a similar way.”

Weathering the storm 

Gordon Henderson, a retired collegiate marching band director from Los Angeles, California, is also not panicking.

“I’m much more concerned about my stocks in my retirement fund than in my relatively small crypto holdings,” he said. Henderson remembers his father, at age 69 in 1987, converting his retirement fund to cash before a recession temporarily decimated the stock market.

“He was pretty proud of his timing,” Henderson recalled, “but in reality, he would have ended up with eight times more money if he had weathered the storm and kept his money in the stock market for another two decades. That’s how I look at cryptocurrency. I’ll hang onto it and maybe it will pay for college for my kids. If not, I was prepared for the loss.”

Colin Ash, an urban planner in New Orleans, Louisiana, has owned bitcoin for years, but said he thinks of it as “a fun gamble.”

“Of course, I wish I would have timed it perfectly and sold it all at the peak,” he said, “but it’s not realistic to think you can ever do that with any kind of investment. I think of it as something separate from the rest of my money. If something comes of it in the long run, then great. If not, at least I already sold some and paid off some debt.” 

For Hickey in San Diego, as well as many other investors, the key is to not invest more than you can afford to lose, particularly with an asset as speculative as cryptocurrency.

“Under the current circumstances, with everything falling so far down, I’ve decided to halt my weekly recurring purchase of bitcoin,” he said. “I think I’m done investing for now.”

He paused for a moment, and then said, “Now, that’s kind of hard, because if you want to make money you should buy low and sell high. Bitcoin prices are low, so I’ll probably be back in before you know it.”

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 21st, 2022 by Vbiz

British rail workers launched their biggest strike in decades on Tuesday. 

Last-minute talks to avoid the stoppage failed Monday, with the rail management and the Rail, Maritime and Transport Workers union unable to resolve a dispute about pay and job security. 

Union leaders say pay has failed to keep pace with inflation. 

British Transport Secretary Grant Shapps warned the strike would cause “mass disruption.” 

The union of more than 40,000 workers plans to strike on Thursday and Saturday as well. 

Some information for this report came from The Associated Press, Agence France-Presse and Reuters.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 20th, 2022 by Vbiz

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 20th, 2022 by Vbiz

An International Monetary Fund (IMF) team arrives in Sri Lanka on Monday for talks on a bailout program, but time is short for a country just days from running out of fuel and likely months from getting any relief money. 

Sri Lanka is battling its worst financial crisis since independence in 1948, as decades of economic mismanagement and recent policy errors coupled with a hit from COVID-19 to tourism and remittances, shriveling foreign reserves to record lows. 

The island nation of 22 million people suspended payment on $12 billion debt in April. The United Nations has warned soaring inflation, a plunging currency and chronic shortages of fuel, food and medicine could spiral into a humanitarian crisis. 

The IMF team, visiting Colombo through June 30, will continue recent talks on what would be Sri Lanka’s 17th rescue program, the IMF said on Sunday. 

“We reaffirm our commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies,” the global lender said in a statement. 

Colombo hopes the IMF visit, overlapping with debt restructuring talks, will yield a quick staff-level agreement and a fast track for IMF board disbursements. But that typically takes months, while Sri Lanka risks more shortages and political unrest. 

“Even if a staff-level agreement is reached, final program approval will be contingent upon assurances that official creditors, including China, are willing to provide adequate debt relief,” said Patrick Curran, senior economist at U.S. investment research firm Tellimer. “All considered, the restructuring is likely to be a protracted process.” 

Waiting for guess, for 

But the crisis is already overwhelming for average Sri Lankans, like autorickshaw driver Mohammed Rahuman, 64, who was recently standing in line for gasoline for more than 16 hours. 

“They say petrol will come but nothing yet,” he told Reuters. “Things are very difficult. I cannot earn any money, I cannot go home and I cannot sleep.” 

Snaking lines kilometers long have formed outside most fuel pumps since last week. Schools in urban areas have closed and public workers have been asked to work from home for two weeks. 

Bondholders expect the IMF visit to give clarity on how much debt Sri Lanka can repay and what haircuts investors may have to take. 

“This IMF visit is very important – the country will need every help and support it can get,” said Lutz Roehmeyer, portfolio manager at Berlin-based bondholder Capitulum Asset Management. “For many international bondholders, this will be a key requirement to ensure they come to the table and talk about a debt restructuring in the first place.” 

Prime Minister Ranil Wickremesinghe said this month an IMF program is crucial to access bridge financing from sources such as the World Bank and Asian Development Bank. 

Representatives from Sri Lanka’s financial and legal advisers, Lazard and Clifford Chance, are in Colombo.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 20th, 2022 by Vbiz

U.S. President Joe Biden is considering declaring a federal gas tax holiday and curbing some tariffs on imported Chinese goods to help Americans cope with the surging cost of consumer goods, Treasury Secretary Janet Yellen said Sunday. 

“President Biden wants to do anything he possibly can to help consumers,” Yellen told ABC’s “This Week” show. “Gas prices have risen a great deal and it’s clearly burdening households.” 

U.S. gasoline prices are at an all-time high of about $5 a gallon (3.8 liters), up more than 48% over a year ago. She said eliminating the 18.4-cent-per-gallon federal gas tax for a time was “an idea that’s certainly worth considering” and that Biden was willing to work with Congress to enact it. 

Biden last week called on major oil refinery companies to take “immediate actions” to increase supply, telling them in a new letter that “historically high” profit margins were unacceptable as prices at service station pumps for Americans continued to soar. 

American Petroleum Institute Chief Executive Mike Sommers rebuffed Biden’s complaint, saying, “The administration’s misguided policy agenda shifting away from domestic oil and natural gas has compounded inflationary pressures and added headwinds to companies’ daily efforts to meet growing energy needs while reducing emissions.” 

‘Caught unaware’

Yellen, on ABC, said, “What’s happened is production has gone down. Refinery capacity has declined in the United States and oil production has declined. I think producers were partly caught unaware by the strength of the recovery in the economy.  High prices should induce them to increase supply.” 

But she called the higher prices “a medium-term matter,” stressing the need to continue to move to renewable energy sources. 

Food prices, monthly rental payments, airline fares, housing and other costs of daily life in the United States have risen sharply, up 8.6% in May compared with a year ago, the fastest increase in 40 years.  

Analysts point to a variety of causes for the inflation: strong consumer demand, Russia’s invasion of Ukraine, worldwide supply chain disruptions and sizable government payments to most American consumers that put extra cash in their pockets as the coronavirus pandemic swept into the country.  

Yellen said Biden was also reviewing the tariff policy toward China because some tariffs imposed by the previous administration of former President Donald Trump served “no strategic purpose and raise costs to consumers.” 

“Inflation really is unacceptably high,” Yellen said. Part of the reason, she said, is that Russia’s war on Ukraine has boosted gas and food prices. 

She said American consumers cannot expect immediate relief, but “over time, I would certainly expect inflation to come down.” 

Yellen said she expected the American economy, the world’s largest, to slow in the coming months, but added, “I don’t think a recession [two successive three-month periods of declining growth] is at all inevitable.”

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 19th, 2022 by Vbiz

The price of bitcoin fell below $20,000 Saturday for the first time since late 2020, in a fresh sign that the sell-off in cryptocurrencies is deepening. 

Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping by as much as 9% to less than $19,000 and hovering around that mark, according to the cryptocurrency news site CoinDesk. 

The last time bitcoin was at that level was in November 2020, when it was on its way up to its all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000. 

Bitcoin has now lost more than 70% of its value since reaching that peak. 

Ethereum, another widely followed cryptocurrency that’s been sliding in recent weeks, took a similar tumble Saturday. 

It’s the latest sign of turmoil in the cryptocurrency industry amid wider turbulence in financial markets. Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation. 

The overall market value of cryptocurrency assets has fallen from $3 trillion to below $1 trillion, according to coinmarketcap.com, a company that tracks crypto prices. On Saturday, the company’s data showed crypto’s global market value stood at about $834 billion. 

A spate of crypto meltdowns has erased tens of billions of dollars of value from the currencies and sparked urgent calls to regulate the freewheeling industry. Last week, bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The crypto industry has also upped its lobbying efforts — flooding $20 million into congressional races this year for the first time, according to records and interviews. 

Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes Bitcoin’s fall under the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms. 

Cryptocurrency lending platform Celsius Network said this month that it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds. Another crypto lending platform, Babel Finance, said in a notice posted on its website Friday that it will suspend redemptions and withdrawals on products due to “unusual liquidity pressures.” 

“There is a lot of turbulence in the market,” Fracassi said. “And the reason why prices are going down is because there is a lot of concern the sector is overleveraged.” 

The cryptocurrency exchange platform Coinbase announced Tuesday that it laid off about 18% of its workforce, with the company’s CEO and co-founder Brian Armstrong placing some of the blame on a coming “crypto winter.” 

Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours. 

Crypto had permeated much of popular culture before its recent tumble, with many Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media. 

David Gerard, a crypto critic and author of “Attack of the 50 Foot Blockchain,” said the recent meltdowns show a failure by regulators, who he believes should have put more scrutiny on the industry years ago. Many nascent investors — especially young people — invested in crypto based on a false hope that was sold to them, he said. 

“There are real human victims here that are ordinary people.” 

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 17th, 2022 by Vbiz

After all-night talks, members of the World Trade Organization early Friday reached a string of deals and commitments aimed at limiting overfishing, broadening production of COVID-19 vaccines in the developing world, improving food security and reforming a 27-year-old trade body that has been back on its heels in recent years.

WTO Director-General Nzogi Okonjo-Iweala, after a pair of sleepless nights in rugged negotiations, concluded the WTO’s first ministerial conference in 4 1/2 years by trumpeting a new sense of cooperation at a time when the world faces crises like Russia’s war in Ukraine and a once-in-a-century pandemic that has taken millions of lives.  

“The package agreements you have reached will make a difference to the lives of people around the world,” said Okonjo-Iweala, landing what she called an “unprecedented package of deliverables” after 15 months in the job. “The outcomes demonstrate that the WTO is in fact capable of responding to emergencies of our time.”

The agreements could breathe new life into a trade body that faced repeated criticism from the administration of former U.S. President Donald Trump, which accused the WTO of a lack of fairness to the United States and was caught in a growing economic and political rivalry between the U.S. and China. In recent years, Washington has incapacitated the WTO’s version of an appeals court that rules on international trade disputes.

The WTO operates by consensus, meaning that all of its 164 members must agree on its deals — or at least not get in the way. The talks at times took place in backrooms or inside chats because some delegates didn’t want to be in the same space as their counterparts from Russia — as a way to protest President Vladimir Putin’s invasion of Ukraine, which has had fallout far beyond the battlefield, such as on food and fuel prices.

Among the main achievements Friday was an accord, which fell short of early ambitions, to prohibit both support for illegal, unreported and unregulated fishing and for fishing in overtaxed stocks in the world’s oceans. It marked the WTO’s first significant deal since one in 2013 that cut red tape on treatment of goods crossing borders — and arguably one of its most impactful.

“WTO members have for the first time, concluded an agreement with environmental sustainability at its heart,” Okonjo-Iweala said. “This is also about the livelihoods of the 260 million people who depend directly or indirectly on marine fisheries.”

The WTO chief said the deal takes a first step to curb government subsidies and overcapacity — too many operators — in the fishing industry.

More controversial was an agreement on a watered-down plan to waive intellectual property protections for COVID-19 vaccines, which ran afoul of advocacy groups that say it did not go far enough — and could even do more harm than good.

“The TRIPS waiver compromise will contribute to ongoing efforts to concentrate and diversify vaccine manufacturing capacity so that a crisis in one region does not leave others cut off,” Okonjo-Iweala said of the waiver of intellectual property protections.

U.S. Trade Representative Katherine Tai hailed a “concrete and meaningful outcome to get more safe and effective vaccines to those who need it most.”

“This agreement shows that we can work together to make the WTO more relevant to the needs of regular people,” she said in a statement.  

Her announcement a year ago that the U.S. would break with many other developed countries with strong pharmaceutical industries to work toward a waiver of WTO rules on COVID-19 vaccines served as an impetus to talks around a broader waiver sought by India and South Africa.

But some advocacy groups were seething. Aid group Doctors Without Borders called it a “devastating global failure for people’s health worldwide” that the agreement stopped short of including other tools to fight COVID-19, including treatments and tests.  

“The conduct of rich countries at the WTO has been utterly shameful,” said Max Lawson, co-chair of the People’s Vaccine Alliance and head of inequality policy at Oxfam.  

He said the European Union, United States, Britain and Switzerland blocked a stronger text.

“This so-called compromise largely reiterates developing countries’ existing rights to override patents in certain circumstances,” Lawson said.  

Indian Commerce Minister Piyush Goyal, whose tough negotiating stance had frustrated some developed countries during the talks, said the ministerial meeting was a “big boost for multilateralism” and showed progress on issues — like fisheries — that have been lagging for decades.

“India is 100% satisfied with the outcome,” he told reporters in Geneva. “I am not returning to India with any worries.”  

The meeting also agreed to lift export restrictions that have weighed on the U.N.’s World Food Program, which is trying to offset the impact of rising food prices and fallout from the war in Ukraine on shipments of wheat, barley and other food staples from the country that is a key producer.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 17th, 2022 by Vbiz

Fear swept through financial markets Thursday, and Wall Street tumbled as worries roared back to the fore that the world’s fragile economy may buckle under higher interest rates. 

The S&P 500 fell 3.3% in a widespread wipeout to more than reverse its blip of a 1.5% rally from a day before. Analysts had warned of more big swings given deep uncertainties about whether the Federal Reserve and other central banks can tiptoe the narrow path of hiking interest rates enough to get inflation under control but not so much that they cause a recession. 

The Dow Jones Industrial Average lost 2.4% and was briefly down more than 900 points, while the Nasdaq composite sank 4.1%. It was the sixth loss for the S&P 500 in its last seven tries, and all but 3% of the stocks in the index dropped. 

Wall Street fell with stocks across Europe after central banks there followed up on the Federal Reserve’s big interest-rate hike on Wednesday. The Bank of England raised its key rate for the fifth time since December, though it opted for a more modest increase of 0.25 percentage points than the 0.75-point hammer brought by the Fed. 

Switzerland’s central bank, meanwhile, raised rates for the first time in years, a half-point hike. Taiwan’s central bank raised its key rate by an eighth of a point. Japan’s central bank began a two-day meeting, though it has held out on raising rates and making other economy-slowing moves that investors call “hawkish.” 

Such moves and expectations for plenty more have sent investments tumbling this year, from bonds to bitcoin. Higher interest rates slow the economy by design, in hopes of stamping out inflation. But they’re a blunt tool that can choke off the economy if used too aggressively. 

“Another concern is that with the change in policy, there’s been weakening economic data already,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “That raises the odds of a recession in the latter part of 2022 into 2023.” 

The worries dragged the S&P 500 into a bear market earlier this week, meaning it had dropped more than 20% from its peak. It’s now 23.6% below its record set early this year and back to where it was in late 2020. That effectively erases 2021, which was one of the best years for Wall Street since the turn of the millennium. 

The S&P 500 fell 123.22 points to 3,666.77. The Dow lost 741.46 to 29,927.07, and the Nasdaq dropped 453.06 to 10,646.10. Thursday’s biggest losses hit the stocks of the smallest companies, a signal of pessimism about the economy’s strength. The Russell 2000 index of smaller stocks sank 81.30, or 4.7%, to 1,649.84. 

Not only is the Federal Reserve hiking short-term rates, it also this month began allowing some of the trillions of dollars of bonds it purchased through the pandemic to roll off its balance sheet. That should put upward pressure on longer-term interest rates. It’s another way central banks have been ripping away supports they earlier propped underneath markets to juice the economy. 

The U.S. economy is still holding up, driven in particular by a strong jobs market. Fewer workers filed for unemployment benefits last week than a week before, a report showed on Thursday. But more signs of trouble have been emerging. 

On Thursday, one report showed homebuilders broke ground on fewer homes last month. Rising mortgage rates resulting directly from the Fed’s moves are digging into the industry. A separate reading on manufacturing in the mid-Atlantic region also unexpectedly fell. 

“Corporate earnings estimates have not yet changed to reflect some of the softening economic data and that could lead to the second leg of this repricing,” Northey said. 

Treasury yields swung sharply on Thursday, with the 10-year yield down to 3.23% from 3.39% late Wednesday. It had climbed as high as 3.48% in the morning, near its highest level since 2011. 

Higher rates have been delivering the hardest hits this year to the investments that soared the most through the easy, ultralow rates of earlier in the pandemic, which now look to be among the most expensive and risky investments. That includes bitcoin and high-growth technology stocks. 

Big Tech stocks were among the heaviest weights on the market Thursday, but the sharpest losses hit stocks whose profits depend more on the strength of the economy and whether customers can keep up their purchases amid the highest inflation in decades. 

Cruise operators Norwegian Cruise Line Holdings, Royal Caribbean Group and Carnival all lost more than 11%. 

It’s all a sharp turnaround from a day earlier, when stocks rallied immediately after the Fed’s biggest hike to rates since 1994. Analysts said investors seemed to latch onto a comment from Fed Chair Jerome Powell, who said mega-hikes of three-quarters of a percentage point would not be common. 

Powell said Wednesday the Fed is moving “expeditiously” to get rates closer to normal levels after last week’s stunning report that showed inflation at the consumer level unexpectedly accelerated last month, which dashed hopes that inflation may have already peaked. 

The Fed is “not trying to induce a recession now, let’s be clear about that,” Powell said. He called Wednesday’s big increase “front-end loading.” 

 

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 17th, 2022 by Vbiz

President Joe Biden told The Associated Press on Thursday that the American people are “really, really down” after a tumultuous two years with the coronavirus pandemic, volatility in the economy and now surging gasoline prices that are slamming family budgets.

He said a recession is not inevitable and bristled at claims by Republican lawmakers that last year’s COVID-19 aid plan was fully to blame for inflation reaching a 40-year high, calling that argument bizarre.

As for the overall American mindset, Biden said, “People are really, really down.”

“They’re really down,” he said. “The need for mental health in America, it has skyrocketed, because people have seen everything upset. Everything they’ve counted on upset. But most of it’s the consequence of what’s happened, what happened as a consequence of the COVID crisis.”

Speaking to the AP in a 30-minute Oval Office interview, Biden addressed the warnings by economists that the United States could be headed for a recession.

“First of all, it’s not inevitable,” he said. “Secondly, we’re in a stronger position than any nation in the world to overcome this inflation.”

As for the causes of inflation, Biden flashed some defensiveness on that count.

“If it’s my fault, why is it the case in every other major industrial country in the world that inflation is higher? You ask yourself that? I’m not being a wise guy,” he said.

The president said he saw reason for optimism with the 3.6% unemployment rate and America’s relative strength in the world.

“Be confident, because I am confident we’re better positioned than any country in the world to own the second quarter of the 21st century,” Biden said. “That’s not hyperbole, that’s a fact.”

Biden’s bleak assessment of the national psyche comes as voters have soured on his job performance and the direction of the country. Only 39% of U.S. adults approve of Biden’s performance as president, according to a May poll from The Associated Press-NORC Center for Public Research, dipping from negative ratings a month earlier.

The president outlined some of the hard choices he has faced, saying the U.S. needed to stand up to Russian President Vladimir Putin for invading Ukraine in February even though tough sanctions imposed as a result of that war have helped caused gas prices to surge, creating a political risk for Biden in an election year. He called on oil companies to think of the world’s short-term needs and increase production.

Asked why he ordered the financial penalties against Moscow that have helped disrupt food and energy markets globally, Biden said he made his calculation as commander in chief rather than as a politician thinking about the election.

“I’m the president of the United States,” he said. “It’s what’s best in the country. No kidding. No kidding. So what happens? What happens if the strongest power in NATO, the organizational structure we put together, walked away from Russian aggression?”

Biden talked about the possibility of chaos in Europe if an unimpeded Russia kept moving deeper into the continent, China was emboldened to take over Taiwan and North Korea grew even more aggressive with its nuclear weapon ambitions.

Biden renewed his contention that major oil companies have benefited from higher prices without increasing production as much as they should. He said the companies needed to think of the world in the short term, not just their investors.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 16th, 2022 by Vbiz

Amid a major stock market downturn, sharply rising inflation, and plummeting consumer confidence, the Federal Reserve Board interest rate-setting body decided Wednesday to raise interest rates by three-quarters of 1% in the hope of taming runaway prices.

The decision by the Federal Open Market Committee (FOMC) to increase the target for the federal funds rate to between 1.5% and 1.75% marked the largest single-day increase since 1994. The move illustrates the grave concern among policymakers about inflation, which rose at an annual rate of 8.6% last month, a 40-year high.

In remarks delivered at a press conference after the FOMC meeting, Federal Reserve Board Chair Jerome Powell indicated that more rate hikes are on the horizon, with another a half- or three-quarter-point increase likely in July, and other increases in three further meetings before the end of the year.

“My colleagues and I are acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing and transportation,” Powell said, adding that the Fed is “strongly committed to returning inflation to our 2% objective.”

Trying to cool demand

Inflation drives up the cost of most items people buy on a regular basis, from gasoline to food to clothing. It can also drive up prices on big-ticket items, such as cars, appliances and furniture.

The strategy behind the Fed’s interest rate increases is to cool demand, which can help lower prices.

As interest rates increase, consumers become less likely to borrow money to make large purchases like cars and homes. In recent weeks, for example, the interest rate for a 30-year home mortgage loan in the U.S., which was under 5% in March, has spiked to above 6.7%. It also affects decisions by business owners to make new investments.

The central bank’s task is to cool demand enough to bring inflation back down to its target rate of 2% per year without pushing too far and causing a recession, which could lead to job losses and more economic pain.

‘Behind the curve’

Until last week, the assumption had been that the central bank would raise rates by half a point in this meeting, with other half-point increases in the pipeline later in the year. However, last week’s consumer price index report from the Bureau of Labor Statistics showed that rather than flattening out as expected, inflation had risen, from an 8.3% annualized pace to 8.6%.

The surprise report increased pressure on the central bank, which has been criticized for waiting too long to address rising prices, to take more dramatic action.

“The Fed is behind the curve on inflation and it knows it,” Greg McBride, senior vice president and chief financial analyst for Bankrate.com, told VOA. “Given the ugly inflation report from last week,” he said, a half-point increase would have felt insufficient.

The Fed tries hard not to surprise the financial markets and prefers to signal its rate changes well in advance through “forward guidance” that lets market participants know what to expect.

In his remarks Wednesday, Powell stressed that the circumstances under which the Fed took its decisions on rates was very uncommon, with the Labor Department’s surprising inflation data coming just days before the FOMC was set to meet.

Strong economy

During his remarks, Powell several times stressed that while inflation is high and consumer sentiment is low, the underlying U.S. economy is still strong, with demand for goods and services remaining high.

“We’re not seeing a broad slowdown,” he said. “We see job growth slowing, but it’s still at quite robust levels. We see the economy slowing a bit, but still, healthy growth levels.”

The Fed chair pushed back against concerns that higher interest rates could damage the economy, pointing out that while rates are rising, they are doing so from a historically low starting point — the Fed held rates at near zero through much of the pandemic and of the last decade.

“There’s a lot going on,” Powell said. “There are a lot of flows back and forth, but ultimately, it does appear that the U.S. economy is in a strong position, and well-positioned to deal with higher interest rates.”

Unemployment increase expected

As part of the post-FOMC meeting presentation, the Fed released its Summary of Economic Projections, which contains the committee members’ expectations about a number of economic indicators over the coming years, one of which is the unemployment level.

Employment levels in the U.S. have been one of the major success stories of the pandemic recovery. After spiking to a post-World War II high of 14.7% in April 2020, the jobless rate in the U.S. began to plummet and hit 3.6% in May, just one-tenth of a percent above the level in the months before the pandemic.

Looking forward, though, the members of the FOMC expect that the U.S. unemployment rate will begin rising as interest rates rise, perhaps to above 4% by 2024, with inflation rates down to 2%.

“A 4.1% unemployment rate, with inflation well on its way to 2%, I think that would be a successful outcome,” Powell said.

“We don’t seek to put people out of work,” he added. “Of course, we never think too many people are working and fewer people need to have jobs. But we also think that you really cannot have the kind of labor market we want without price stability.”

Recession worries remain

In their efforts to tame inflation, Powell and his colleagues at the Fed have been aiming for what economists characterize as a “soft landing.” That is, a cooling of demand that slows price rises but does not reverse economic growth and push the country into a recession.

Asked about the likelihood of a soft landing on Tuesday, Powell said, “That is our objective, and I do think it’s possible.”

However, he said that events such as supply shocks caused by Russia’s invasion of Ukraine and pandemic-related lockdowns in major Chinese manufacturing hubs make predictions difficult.

“Events of the last few months have raised the degree of difficulty and created great challenges,” he said, adding, “There’s a much bigger chance now that it will depend on factors that we don’t control.”

Despite the Fed chair’s assessment that it remains possible to avoid a recession, others said they were not convinced that getting back to 2% inflation by 2024 is possible any other way.

“It’s hard to see how we get to that level without a recession,” Bankrate’s McBride told VOA.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 16th, 2022 by Vbiz

The U.S. Federal Reserve announced Wednesday it would raise interest rates by the largest amount in nearly 30 years in an effort to cool inflation without tipping the economy into a recession. 

The central bank said it would raise its key interest rate by three-quarters of a percentage point, the largest amount since November 1994, and signaled more hikes to come. 

The rate increase comes as inflation, which measures the price of common goods such as food and fuel, rose by 8.6% over the 12 months ending in May — the highest rate in 40 years — driven by high post-pandemic demand for homes, cars, travel and other goods and services, global supply chain problems, strict COVID-19 lockdowns in China, and Russia’s invasion of Ukraine. 

In a statement announcing the rate hike, the Federal Open Market Committee, the Federal Reserve’s policy-setting board, said it remains “strongly committed to returning inflation to its 2% objective.” 

The three-quarter-point rate increase exceeds the one-half-point rate increase that Federal Reserve Chairman Jerome Powell had previously suggested would be imposed.  

He told reporters Wednesday that the latest information showed higher inflation than expected. 

“We thought strong action was warranted at this meeting,” he said, “and we delivered that.”

Shortly after the Fed’s announcement, Powell said if inflation shows no sign of abating, the central bank would likely impose either a half- or three-quarter-point increase at its next meeting in July.   

Some information for this report came from The Associated Press, Reuters and Agence France-Presse.  

 

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 15th, 2022 by Vbiz

President Joe Biden on Wednesday called on U.S. oil refiners to produce more gasoline and diesel, saying their profits have tripled during a time of war between Russia and Ukraine as Americans struggle with record high prices at the pump.

“The crunch that families are facing deserves immediate action,” Biden wrote in a letter to seven oil refiners. “Your companies need to work with my Administration to bring forward concrete, near-term solutions that address the crisis.”

Gas prices nationwide are averaging roughly $5 a gallon, an economic burden for many Americans and a political threat for the president’s fellow Democrats going into the midterm elections. Broader inflation began to rise last year as the U.S. economy recovered from the coronavirus pandemic, but it accelerated in recent months as energy and food prices climbed after Russia invaded Ukraine in February and disrupted global commodity markets.

The government reported on Friday that consumer prices had jumped 8.6% from a year ago, the worst increase in more than 40 years.

The letter notes that gas prices were averaging $4.25 a gallon when oil was last near the current price of $120 a barrel in March. That 75-cent difference in average gas prices in a matter of just a few months reflects both a shortage of refinery capacity and profits that “are currently at their highest levels ever recorded,” the letter states.

As Biden sees it, refineries are capitalizing on the uncertainties caused by “a time of war.” His message that corporate greed is contributing to higher prices has been controversial among many economists, yet the claim may have some resonance with voters.

Some liberal lawmakers have proposed cracking down on corporate profits amid the higher inflation. Sen. Bernie Sanders, a Vermont independent, in March proposed a 95% tax on profits in excess of companies’ pre-pandemic averages.

The president has harshly criticized what he views as profiteering amid a global crisis that could potentially push Europe and other parts of the world into a recession, saying after a speech Friday that ExxonMobil “made more money than God this year.” ExxonMobil responded by saying it has already informed the administration of its planned investments to increase oil production and refining capacity.

“There is no question that [Russian President] Vladimir Putin is principally responsible for the intense financial pain the American people and their families are bearing,” Biden’s letter says. “But amid a war that has raised gasoline prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain.”

The letter says the administration is ready to “use all reasonable and appropriate Federal Government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied.” It notes that Biden has already released oil from the U.S. strategic reserve and increased ethanol blending standards, though neither action put a lasting downward pressure on prices.

The president is sending the letter to Marathon Petroleum, Valero Energy, ExxonMobil, Phillips 66, Chevron, BP and Shell.

He also has directed Energy Secretary Jennifer Granholm to convene an emergency meeting and consult with the National Petroleum Council, a federal advisory group that is drawn from the energy sector.

Biden is asking each company to explain to Granholm any drop in refining capacity since 2020, when the pandemic began. He also wants the companies to provide “any concrete ideas that would address the immediate inventory, price, and refining capacity issues in the coming months — including transportation measures to get refined product to market.”

There may be limits on how much more capacity can be added. The U.S. Energy Information Administration on Friday released estimates that “refinery utilization will reach a monthly average level of 96% twice this summer, near the upper limits of what refiners can consistently maintain.”

The letter says that roughly 3 million barrels a day of refining capacity around the world have gone offline since the pandemic began. In the U.S., refining capacity fell by more than 800,000 barrels a day in 2020.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 14th, 2022 by Vbiz

Wall Street is back in the claws of a bear market as worries about inflation and higher interest rates overwhelm investors. 

The Federal Reserve has signaled it will aggressively raise interest rates to try to control inflation, which is the highest in decades. Throw in the war in Ukraine and a slowdown in China’s economy, and investors have been forced to reconsider what they’re willing to pay for a wide range of stocks, from high-flying tech companies to traditional automakers. Big swings have become commonplace and Monday was no exception. 

The last bear market happened just two years ago, but this is still a first for those investors who got their start trading on their phones during the pandemic. Thanks in large part to extraordinary actions by the Federal Reserve, stocks have for years seemed to go largely in only one direction: up. But the “buy the dip” rallying cry popular after every market slide has grown more fainter — a recent rebound in stock prices was wiped out by a furious bout of selling over the past four days. 

Here are some common questions asked about bear markets 

Why is it called a Bear Market?

A bear market is a term used by Wall Street when an index like the S&P 500, the Dow Jones Industrial Average, or even an individual stock, has fallen 20% or more from a recent high for a sustained period of time. 

Why use a bear to represent a market slump? Bears hibernate, so bears represent a market that’s retreating, said Sam Stovall, chief investment strategist at CFRA. In contrast, Wall Street’s nickname for a surging stock market is a bull market, because bulls charge, Stovall said. 

The S&P 500, Wall Street’s main barometer of health, slid 3.9% Monday to 3,749. That’s nearly 22% below the high set on Jan. 3. The Nasdaq is already in a bear market, down 32.7% from its peak of 16,057.44 on Nov. 19. The Dow Jones Industrial Average is more than 17% below its most-recent peak. 

The most recent bear market for the S&P 500 ran from February 19, 2020, through March 23, 2020. The index fell 34% in that one-month period. It’s the shortest bear market ever. 

What’s bothering investors?

Market enemy No. 1 is interest rates, which are rising quickly as a result of the high inflation battering the economy. Low rates act like steroids for stocks and other investments, and Wall Street is now going through withdrawal. 

The Federal Reserve has made an aggressive pivot away from propping up financial markets and the economy with record-low rates and is focused on fighting inflation. The central bank has already raised its key short-term interest rate from its record low near zero, which had encouraged investors to move their money into riskier assets such as stocks or cryptocurrencies to get better returns. 

Last month, the Fed signaled additional rate increases of double the usual amount are likely in upcoming months. Consumer prices are at the highest level in four decades and rose 8.6% in May compared with a year ago. 

The moves by design will slow the economy by making it more expensive to borrow. The risk is the Fed could cause a recession if it raises rates too high or too quickly. 

Russia’s war in Ukraine has also put upward pressure on inflation by pushing up commodities prices. And worries about China’s economy, the world’s second largest, have added to the gloom. 

So, we just need to avoid a recession?

Even if the Fed can pull off the delicate task of tamping down inflation without triggering a downturn, higher interest rates still put downward pressure on stocks. 

If customers are paying more to borrow money, they can’t buy as much stuff, so less revenue flows to a company’s bottom line. Stocks tend to track profits over time. Higher rates also make investors less willing to pay elevated prices for stocks, which are riskier than bonds, when bonds are suddenly paying more in interest thanks to the Fed. 

Critics said the overall stock market came into the year looking pricey versus history. Big technology stocks and other winners of the pandemic were seen as the most expensive, and those stocks have been the most punished as rates have risen. But the pain is spreading widely, with retailers signaling a shift in consumer behavior. 

Stocks have declined almost 35% on average when a bear market coincides with a recession, compared with a nearly 24% drop when the economy avoids a recession, according to Ryan Detrick, chief market strategist at LPL Financial. 

So I should sell everything now, right?

If you need the money now or want to lock in the losses, yes. Otherwise, many advisers suggest riding through the ups and downs while remembering the swings are the price of admission for the stronger returns that stocks have provided over the long term. 

While dumping stocks would stop the bleeding, it would also prevent potential gains. Many of the best days for Wall Street have occurred either during a bear market or just after the end of one. That includes two separate days in the middle of the 2007-2009 bear market where the S&P 500 surged roughly 11%, as well as leaps of better than 9% during and shortly after the roughly monthlong 2020 bear market. 

Advisers suggest putting money into stocks only if it won’t be needed for several years. The S&P 500 has come back from every one of its prior bear markets to eventually rise to another all-time high. 

The down decade for the stock market following the 2000 bursting of the dot-com bubble was a notoriously brutal stretch, but stocks have often been able to regain their highs within a few years. 

How long do bear markets last and how deep do they go?

On average, bear markets have taken 13 months to go from peak to trough and 27 months to get back to break even since World War II. The S&P 500 index has fallen an average of 33% during bear markets in that time. The biggest decline since 1945 occurred in the 2007-2009 bear market when the S&P 500 fell 57%. 

History shows that the faster an index enters into a bear market, the shallower they tend to be. Historically, stocks have taken 251 days (8.3 months) to fall into a bear market. When the S&P 500 has fallen 20% at a faster clip, the index has averaged a loss of 28%. 

The longest bear market lasted 61 months and ended in March 1942 and cut the index by 60%. 

How do we know when a bear market has ended?

Generally, investors look for a 20% gain from a low point as well as sustained gains over at least a six-month period. It took less than three weeks for stocks to rise 20% from their low in March 2020.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 13th, 2022 by Vbiz

U.S. Federal Reserve officials, beset by ongoing high inflation and a weakening growth picture, will lay out on Wednesday how they think their increasingly difficult goal of cooling the economy without sending it into a tailspin may play out in the months ahead.

That thorny predicament will be on display as Fed policymakers are expected to deliver their second half-percentage-point interest rate hike in a row and issue their latest projections through 2024 and beyond for economic growth, unemployment and inflation. As critically, they will signal the speed and scale of rate rises policymakers believe are needed to quash inflation at a 40-year-high.

What is certain is their forecasts are likely to bear little resemblance to those issued in March, which showed inflation going down without a rise in unemployment or policy being particularly restrictive.

The meeting comes two weeks after Fed Chair Jerome Powell and U.S. President Joe Biden met amid rising anxiety at the White House that a plentiful jobs picture is being drowned out by soaring costs for everything from rent and food to gasoline and airline tickets. 

Powell has previously said the central bank, which in March lifted interest rates for the first time in three years, will keep raising them until price increases ease in a “clear and convincing” way. Policymakers already signaled they plan to match this week’s expected rate increase with another half-point hike at their next meeting in July, bringing borrowing costs up to between 1.75% and 2.0% – right where just three months ago they thought they would be at year-end.

A hotter-than-expected inflation reading last Friday has even thrown some doubt on those expectations with economists at Barclays calling for a three-quarter-point move either this week or in July and Fed funds futures contracts now reflect better-than-even odds of a 75-basis-point rate hike by July, with a one-in-four chance of that occurring next week.

“It’s going to be a tricky meeting messaging-wise,” said Julia Coronado, a former Fed economist and president of MacroPolicy Perspectives. “It’s not a rosy outlook. They don’t have any easy choices to make.”

New forecasts, new questions

U.S. consumer price growth accelerated in May to 1.0% as gasoline prices hit a record high and the cost of services rose further, while core prices climbed 0.6% after advancing by the same margin in April, the Labor Department reported on Friday, underscoring the need for the Fed to keep its foot on the brakes. In the 12 months through May, headline inflation rose to 8.6%.

The new set of policymaker projections is set to reflect a faster pace of hikes, slower growth, higher inflation and a higher unemployment rate. The key will be how much for each.

All policymakers are now agreed the Fed needs to get its policy rate up to neutral – the level that neither stimulates nor constrains economic growth – by the end of this year. That rate is seen roughly between 2.4% and 3%.

The median dot for the end of 2022 could easily rise enough to signal at least another half-point increase in September given Friday’s worse-than-expected inflation reading. How far the Fed will have to raise rates overall will also move up, with most economists seeing them topping out between 3% and 3.5%.

For the unemployment rate over the next two years, the key is whether policymakers raise it by just a notch or two or show a material rise in layoffs, which would be at odds with their contention that inflation can be tamed without excessive joblessness.

Fed Governor Christopher Waller recently said if the Fed could bring down inflation to near its 2% goal while keeping the unemployment rate, currently at 3.6%, from rising above 4.25%, it would be a “masterful” performance.

“I don’t think it will change a lot but if it does … that’s a sign they’re worried about the possibility of a serious slowdown or recession,” said Roberto Perli, also a former Fed economist and head of global policy at Piper Sandler.

How much pain the Fed’s willing to swallow

Some of the factors keeping inflation so elevated, in particular supply shocks outside the Fed’s control due to Russia’s invasion of Ukraine that have caused a jump in food and oil prices, show no sign of abating. Overall the central bank still faces tremendous uncertainty on the outlook from that and other supply-chain disruptions caused by the COVID-19 pandemic.

Nor are officials getting much help yet on the demand side with the healthy finances of U.S. banks, companies and households a possible obstacle to curbing inflation as they raise rates in an economy able so far to pay the price.

The longer the Fed struggles to stifle demand and the longer inflation persists, the more likely the rate of price increases becomes embedded and the Fed needs to ramp up its action, reducing the chances of Powell’s hope for what he calls a “softish” landing.

Newly sworn-in Fed governors Philip Jefferson and Lisa Cook, who take their place among the 18-strong policymaking body for the first time, are unlikely to diverge from their colleagues’ resolve to lower inflation.

“While Cook and Jefferson are expected to be dovish additions to the Fed, that won’t matter much while inflation is 8%, and we doubt they will push back on the Fed’s tightening plans any time soon,” said Andrew Hunter, senior U.S. economist at Capital Economics.

If the committee consensus does not align with Powell’s view of what is needed, he has shown by his recent inter-meeting guidance that he is prepared to lead from the front to make sure inflation is decisively dented.

David Wilcox, a former Fed research director now director of U.S. economic research at Bloomberg Economics and a senior fellow at the Peterson Institute for International Economics, expects Powell to maintain a razor-sharp focus on the inflation side of the Fed’s mandate like Paul Volcker, the towering Fed chief who tamed inflation in the 1980s. 

“Powell has every intention of going down in history, if necessary, as Paul Volcker version 2.0,” said Wilcox. 

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 12th, 2022 by Vbiz

Legislation that Britain will unilaterally bring forward on Monday to scrap some of the rules that govern post-Brexit trade with Northern Ireland will not break international law, minister Brandon Lewis said on Sunday.

“The legislation that we will outline tomorrow is within the law; what we are going to do is lawful and it is correct,” the Northern Ireland Secretary told Sky News.

When Britain left the EU, Prime Minister Boris Johnson agreed a protocol that effectively left Northern Ireland in the EU’s single market and customs union to preserve the open border with Ireland specified in the Good Friday peace agreement.

Any unilateral move by London to override the treaty will inflame a simmering argument with the European Union.

Ireland’s Sinn Fein, the nationalist party that won a historic victory in the Northern Ireland Assembly election last month, said on Sunday Britain would “undoubtedly” break the law by imposing unilateral changes to the protocol.

Lewis said however the protocol needed to be changed because it was “fundamentally undermining” the Good Friday agreement.

He said it was disrupting the lives of people in Northern Ireland, was stopping government institutions functioning, and was not respecting the UK’s own internal market. 

Lewis declined to say how the protocol would be changed, but said the government would set out the legal basis on which it was bringing forward the legislation.

Sinn Fein president Mary Lou McDonald said London could work with Dublin and Brussels to improve the application of the protocol.

“There is a willingness here, there is a willingness to engage by the European Commission, but the British government has refused to engage,” she told Sky News from Dublin.

“It has not been constructive, it has sought a destructive path, and is now proposing to introduce legislation that will undoubtedly breach international law.”

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 12th, 2022 by Vbiz

The World Trade Organization chief voiced cautious optimism Sunday as global trade ministers gather to tackle food security threatened by Russia’s invasion of Ukraine, overfishing and equitable access to COVID vaccines.

Speaking just hours before the opening of the WTO’s first ministerial meeting in nearly five years, Ngozi Okonjo-Iweala acknowledged that “the road will be bumpy and rocky, there may be a few landmines on the way.”

But she told journalists she was “cautiously optimistic that we’ll get one or two deliverables,” adding she would consider that “a success.”

With its first ministerial meeting in years, the WTO faces pressure to finally eke out long-sought trade deals and show unity amid the still raging pandemic and an impending global hunger crisis.

Top of the agenda as the four-day meeting kicks off is the toll Russia’s war in Ukraine, traditionally a breadbasket that feeds hundreds of millions of people, is having on food security.

EU trade commissioner Valdis Dombrovskis said the bloc had been “working hard with all the members to prepare a multilateral food security package,” and slammed Russia for “using food and grain as a weapon of war.”

The WTO is hoping to keep criticism of Russia’s war in Ukraine to the first day of talks, when many of the more than 100 ministers due to attend are expected to issue blistering statements.

But with many flatly refusing to negotiate directly with Moscow, there are fears this could bleed into the following days, when the WTO wants to focus on nailing down elusive trade deals.

“There is a real risk that things could go off the rails next week,” a Geneva-based diplomatic source said.

Fisheries deal in sight?

The tensions have not curbed Okonjo-Iweala’s zeal to press for agreements on a range of issues during the first ministerial gathering on her watch, especially as the global trade body strives to prove its worth after nearly a decade with no new large trade deals.

There is cautious optimism that countries could finally agree on banning subsidies that contribute to illegal and unregulated fishing, after more than 20 years of negotiations.

The WTO says talks have never been this close to the finish line, but diplomats remain cautious.

The negotiations “have made progress recently, but these remain difficult subjects,” a diplomatic source in Geneva told AFP.

One of the main sticking points has been so-called special and differential treatment (SDT) for developing countries, like major fishing nation India, which can request exemptions.

A draft text sent to the ministers for review proposes exemptions should not apply to member states accounting for an as yet undefined share of the global volume of fishing.

The duration of exemptions also remains undefined.

Environmental groups say anything beyond 10 years would be catastrophic. India has demanded a 25-year exemption.

India ‘creating problems’

“Twenty-five years is an unreasonable length of time,” Isabel Jarrett, head of the Pew Charitable Trusts’ project to end harmful fisheries subsidies, told AFP, warning so much leeway would be “devastating for fish stocks.”

Colombian Ambassador Santiago Wills, who chairs the WTO fisheries subsidies negotiations, stressed the urgency of securing a deal.

“The longer we wait, the more the fish lose. And the more the fish lose, the more we all lose,” he said in a statement Saturday.

India however appears to be stubbornly sticking to its demands on fisheries and in other areas, jeopardizing the chances of reaching deals since WTO agreements require full consensus backing.

“There is not a single issue that India is not blocking,” a Geneva-based ambassador said, singling out WTO reform and agriculture.

A source with knowledge of the negotiations towards a text on food security also said “the Indians are still creating problems.”

Elvire Fabry, a senior research fellow at the Jacques Delors Institute, said India had appeared eager to “throw more weight around” in international organisations, warning New Delhi was capable of scuppering talks.

Patent waiver?

The ministers are also set to seek a joint WTO response to the pandemic, although significant obstacles remain.

Back in October 2020, India and South Africa called for intellectual property rights on Covid-19 vaccines and other pandemic responses to be suspended in a bid to ensure more equitable access in poorer nations.

After multiple rounds of talks, the European Union, the United States, India and South Africa hammered out a compromise that has become the basis for a draft text sent to ministers.

The text, which would allow most developing countries, although not China, to produce COVID vaccines without authorization from patent holders, is still facing opposition from both sides.

Britain and Switzerland are reluctant to sign up, arguing along with the pharmaceutical industry that the waiver would undermine investment in innovation.

Public interest groups meanwhile say the text falls far short of what is needed by covering only vaccines and not Covid treatments and diagnostics.

“The negotiations are still aeons away from ensuring access to lifesaving COVID medical tools for everyone, everywhere,” medical charity Doctors Without Borders warned.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 11th, 2022 by Vbiz

The World Trade Organization is facing one of its most dire moments, the culmination of years of slide toward oblivion and ineffectiveness. Now may be a chance to turn the tide and reemerge as a champion of free and fair trade — or face a future further in doubt.

For the first time in 4½ years, after a pandemic pause, government ministers from WTO countries will gather for four days starting Sunday to tackle issues like overfishing of the seas, COVID-19 vaccines for the developing world and food security at a time when Russia’s war in Ukraine has blocked the export of millions of tons of Ukrainian grain to developing nations.

Facing a key test of her diplomatic skill since taking the job 15 months ago, WTO Director-General Ngozi Okonjo-Iweala in recent days expressed “cautious optimism” that progress could be made on at least one of four issues expected to dominate the meeting: fisheries subsidies, agriculture, the pandemic response and reform of the organization, spokesman Fernando Puchol said.

Diplomats and trade teams have been working “flat out — long, long hours” to serve up at least one “clean text” for a possible agreement — that ministers can simply rubber-stamp and not have to negotiate — on one of those issues, Puchol told reporters Friday.

“It’s difficult to predict a result right now,” he said.

The Geneva-based body, barely a quarter-century old, brings together 164 countries to help ensure smooth and fair international trade and settle trade disputes. Some outside experts expect few accomplishments out of the meeting, saying the main one may simply be getting the ministers to the table.

“The multilateral trading system is in a bad way. The Ukraine situation is not helping,” said Clemens Boonekamp, an independent trade policy analyst and former head of WTO’s agricultural division. “But the mere fact that they are coming together is a sign of respect for the system.”

Alan Wolff, a former WTO deputy director-general, sounded optimistic that members could make at least some headway.

They might reach an agreement, he said, to help relieve a looming global food crisis arising from the war in Ukraine by ensuring the U.N. World Food Program receives a waiver from food export bans imposed by WTO countries eager to feed their own people.

Wolff, now senior fellow at the Peterson Institute for International Economics in Washington, expressed confidence in Okonjo-Iweala, saying, “I’m not willing to sell her short.”

He said members “seem to be making progress” on an agreement to scale back subsidies that encourage overfishing — something they have been trying to do for more than two decades.

“Do they wrap it up this time?” Wolff asked. “Unclear. It’s been a drama.”

One problem — among many — is that the WTO operates by consensus, so any one of its 164 member countries could gum up the works.

In short, the WTO has become an important diplomatic battleground between developed and developing countries, and some experts say reform is needed if it’s ever to get things done.

The trade body, created in 1995 as a successor to the General Agreement on Tariffs and Trade, has seen a slow unraveling. It hasn’t produced a major trade deal in years. The last big success was a 2014 agreement billed as a boost to lower-income countries that cut red tape on goods clearing borders.

Years ago, the United States started clamping down on the WTO’s appeals court, which in theory delivers the last word on trade disputes, such as a high-profile one between the U.S. and EU involving plane-making giants Airbus and Boeing.

Then, U.S. President Donald Trump came along, threatening to pull America out of the WTO over his insistence that it was unfair to the U.S. In the end, he didn’t, and simply bypassed the WTO — slapping sanctions on allies and foes alike and ignoring the trade organization’s rulebook and dispute-resolution system.

Once a champion of the WTO, the United States has rued the admission of China and insists Beijing has been violating the trade body’s rules too much. The U.S. accuses China of excessively supporting state-run companies and impeding free trade, among other things. China denies those allegations.

A generation ago, the WTO drew huge, vituperative, even violent protests — notably from anti-globalists and anarchists who detested its closed-door secrecy and elites-decide-all image.

William Reinsch, a former U.S. trade official, warned that the WTO is now in danger of becoming irrelevant. The best way to show that it still matters, he wrote this month, is to negotiate an agreement, perhaps on fisheries, COVID-19 vaccines or a more difficult issue: encouraging more free trade in farming.

Reinsch, now at the Center for Strategic and International Studies in Washington, said the United States needs to be doing more — including making compromises — to ensure the WTO can reach agreement on contentious issues.

“The future of the WTO is at risk,” he said. “Failure would be bad for the fish and the farmers, but it would also be bad for a rule-of-law-based global economy.”

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 11th, 2022 by Vbiz

An internet rumor blazed through the country that desperate people were selling their toes for cash. The false report became so widespread that the country’s Deputy Minister of Information Kindness Paradza visited street vendors in central Harare earlier this month to debunk it.

One-by-one the traders took off their shoes to show that they had all 10 toes, as Zimbabwe’s state media recorded the digital investigation.

Paradza declared the toes-for-money story a hoax, as did local and foreign fact-checkers. Police later arrested a street vendor who now faces a fine or 6 months in jail on charges of criminal nuisance for allegedly starting the story.

It’s starkly true, however, that Zimbabweans are finding it increasingly difficult to make ends meet. Since the start of Russia’s war in Ukraine, Zimbabwe’s inflation rate has shot up from 66% to more than 130%, according to official statistics. The war is blamed for rising fuel and food prices.

The war in Ukraine has exacerbated inflation around the world. Consumer prices in the 19 European Union countries that use the euro currency surged 8.1% in May, a record rate as energy and food costs climbed. In the U.S. and the United Kingdom, annual inflation hit or was close to 40-year highs of 8.3% and 9%, respectively, in April. Turkey approached Zimbabwe’s eye-watering prices, with inflation reaching 73.5% in May, the highest in 24 years.

In Zimbabwe, the impact of the Ukraine war is heaping problems on its fragile economy. The war “coupled with our historical domestic imbalances, has created challenges in terms of economic instability seen through the currency volatility and spilling over into price volatility,” Finance Minister Mthuli Ncube told Parliament in May.

Teachers “can no longer afford bread and other basics, this is too much,” tweeted the Progressive Teachers Union of Zimbabwe in early June. The three largest teachers’ unions are demanding the government pay their salaries in U.S. dollars because their pay in local currency is “eroded overnight.”

“Because of high inflation, the local currency is collapsing,” economic analyst Prosper Chitambara told The Associated Press. “Individuals and companies no longer trust the local currency and that has put pressure on the demand for U.S. dollars. The Ukraine war is simply exacerbating an already difficult situation.”

Many fear Zimbabwe could return to the hyperinflation of 2008, which was estimated at 500 billion percent, according to the International Monetary Fund. At that time, plastic bags full of 100 trillion Zimbabwe dollar banknotes were not enough to buy basic groceries.

The economic catastrophe forced then-President Robert Mugabe to form a “unity government” with the opposition and adopt a multi-currency system in 2009 in which US dollars and the South African rand were accepted as legal tender.

The U.S. dollar continues to dominate with prices in local currency often benchmarked to the rates for the American currency on the flourishing illegal market, where most individuals and companies get their foreign currency.

Across the country, currency traders line the streets and crowd entrances to shopping centers waving wads of both the local currency and U.S dollars.

Many Zimbabweans who earn in local currency such as government workers are forced to source dollars on the illegal market, where exchange rates are soaring, to pay for goods and services that are increasingly being charged in U.S. dollars.

Retailers said the rising rates for U.S. dollars on the illegal market are forcing them to frequently increase prices, often every few days, to allow them to restock.

The once-prosperous southern African country’s economy is battered by years of de-industrialization, corruption, low investment, low exports and high debt. Zimbabwe struggles to generate an adequate inflow of greenbacks needed for its largely dollarized local economy.

Ordinary Zimbabweans are returning to coping mechanisms they relied on during the hyperinflationary era such as skipping meals. Others now buy food items in smaller quantities, sometimes in such tiny packages they are enough for just a single meal. Locals call them “tsaona,” meaning “accident” in the local Shona language.

Promising better days ahead, Ncube, the finance minister, said the government “will not hesitate to act and intervene to cushion against price increases and exchange rate volatility.”

Many are skeptical of such vows from the government, saying nothing short of a miracle will pull Zimbabwe out of its economic crisis. Even while coping with constantly rising prices, many can’t help making grim jokes about the situation.

“I still have all my toes intact but it wouldn’t hurt selling one,” chuckled Harare resident Asani Sibanda. “I could still walk without it, but my family would at least get some food.”

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 11th, 2022 by Vbiz

Wall Street’s realization that inflation got worse last month, not better as hoped, sent markets reeling on Friday. 

The S&P 500 sank 2.9% to lock in its ninth losing week in the last 10, and tumbling bond prices sent Treasury yields to their highest levels in years. The Dow Jones Industrial Average lost 2.7%, and the Nasdaq composite dropped 3.5%. 

Wall Street came into Friday hoping a highly anticipated report would show the worst inflation in generations slowed a touch last month and passed its peak. Instead, the U.S. government said inflation accelerated to 8.6% in May from 8.3% a month before. 

The Federal Reserve has begun raising interest rates and making other moves in order to slow the economy, in hopes of forcing down inflation. Wall Street took Friday’s reading to mean the Fed’s foot will remain firmly on the brake for the economy, dashing hopes that it may ease up later this year. 

“Inflation is hot, hot, hot,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “Basically, everything was up.” 

The growing expectation is for the Fed to raise its key short-term interest rate by half a percentage point at each of its next three meetings, beginning next week. That third one in September had been up for debate among investors in recent weeks. Only once since 2000 has the Fed raised rates that much. 

“No relief is in sight, but a lot can change between now and September,” Jacobsen said. “Nobody knows what the Fed will do in a few months, including the Fed.” 

The nation’s high inflation, plus the expectations for an aggressive Fed, have sent the two-year Treasury yield to its highest level since 2008 and the S&P 500 down 18.7% from its record set in early January. The worst pain has hit high-growth technology stocks, cryptocurrencies and other particularly big winners of the pandemic’s earlier days. But the damage is broadening as retailers and others are warning about upcoming profits. 

The S&P 500 fell 116.96 points to 3,900.86. Combined with its losses from Thursday, when investors were rushing to lock in final trades before the inflation report, it was the worst two-day stretch for Wall Street’s benchmark in nearly two years. 

The Dow lost 880.00 points to 31,392.79, and the Nasdaq tumbled 414.20 to 11,340.02. 

Stock prices rise and fall on two things, essentially: how much cash a company produces and how much an investor is willing to pay for it. The Fed’s moves on interest rates heavily influence that second part. 

Since early in the pandemic, record-low interest rates engineered by the Fed and other central banks helped keep investment prices high. Now “easy mode” for investors is abruptly and forcefully being switched off. 

Not only that, too-aggressive rate hikes by the Fed could ultimately force the economy into a recession. Higher interest rates make borrowing more expensive, which drags on spending and investments by households and companies. 

One of the fears among investors is that food and fuel costs may keep surging, regardless of how aggressively the Fed moves. 

“The fact is that the Fed has very little ability to control food prices,” Rick Rieder, BlackRock’s chief investment officer of global fixed income, said in a statement. He pointed instead to mismatches in supplies and demand, higher costs for energy and wages and the crisis in Ukraine, which is a major breadbasket for the world. 

That raises the threat that central banks will overly tighten the brakes on the economy, as they push against a string “and essentially fall into a damaging policy mistake,” Rieder said. 

The economy has already shown some mixed signals, and a report on Friday indicated consumer sentiment is worsening more than economists expected. Much of the souring in the University of Michigan’s preliminary reading was because of higher gasoline prices. 

That adds to several recent profit warnings from retailers indicating U.S. shoppers are slowing or at least changing their spending because of inflation. Such spending is the heart of the U.S. economy. 

 

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 11th, 2022 by Vbiz

U.S. President Joe Biden said his administration is doing all it can to tackle inflation, placing blame for rising prices on oil and shipping companies, as new data show consumer prices have reached a four-decade high.

During a speech at the Port of Los Angeles on Friday, Biden said that oil companies are deliberately not increasing production to keep prices high.

He said oil companies “had 9,000 permits to drill. They are not drilling. Why aren’t they drilling?”

“Because they make money not producing more oil,” the president said.

Asked about Exxon’s profits, Biden said, “Exxon made more money than God this year.”

The president also criticized oil companies for spending billions to buy back the stock of their own companies and said the practice should be taxed.

Exxon objected to several of the president’s accusations.

Brian Deese, Biden’s chief economic adviser, met with the chief executives of Exxon and Chevron this week at the companies’ request, two people familiar with the matter told CNBC. Those discussions included prices, production and market conditions.

Exxon also said it plans a 50% increase in capital expenditures in the petroleum-rich Permian Basin in 2022 compared with 2021 and is boosting refining capacity for U.S. light crude oil to process about 250,000 barrels more per day, CNBC reported.

Labor Department data Friday showed that consumer prices rose 8.6% in May from the previous year. The cost of gas was up nearly 50% in one year, and groceries rose nearly 12% in that timeframe, the biggest such increase since 1979.

Biden said Friday that the major Asian shipping companies have increased their prices by as much as 1,000%. He called on Congress to consider taking action against them.

The president also repeated his view that inflation is being caused in part by Russian President Vladimir Putin’s war in Ukraine.

“We’ve never seen anything like Putin’s tax on both food and gas,” he said.

Biden touted his administration’s efforts to move cargo in and out of the Port of Los Angeles, which faced severe bottlenecks last year. However, while the number of ships waiting to enter the port for long periods of time has fallen by about 40%, according to the White House, inflation has not dropped.

The president is facing criticism from Republican lawmakers over his inability to stop prices from rising and is seeing decreasing support from voters. Two-thirds of Americans disapprove of Biden’s handling of the economy, according to a May poll from The Associated Press and NORC Center for Public Research.

The president argued Monday that the entire world is facing rising inflation and said, “America can tackle inflation from a position of strength.” He noted the country has a strong job market and an unemployment rate near historic lows.

During his speech Friday, Biden also addressed the January 6 attack on the U.S. Capitol after Thursday night’s first televised congressional hearing on the attack.

While Biden said he did not watch the hearing, he said the attack was “one of the darkest chapters in our nation’s history,” and said it is important the American public understands what truly happened. The hearings are scheduled to continue next week.

VOA’s Megan Duzor and The Associated Press contributed to this report.

Posted in Бізнес, Нерухомість, Новини, Фінанси

June 10th, 2022 by Vbiz

WASHINGTON – U.S. consumer prices accelerated in May as gasoline prices hit a record high and the cost of food soared, leading to the largest annual increase in nearly 40 1/2 years, suggesting that the Federal Reserve could continue with its 50 basis points interest rate hikes through September to combat inflation.

The faster-than-expected increase in inflation last month reported by the Labor Department on Friday also reflected a surge in rents, which increased by the most since 1990. The relentless price pressures are forcing Americans to change their spending habits and will certainly heighten fears of either an outright recession or period of very slow growth.

High inflation also poses a political risk for President Joe Biden and his Democratic Party heading into the mid-term elections in November.

“There’s little respite from four-decade high inflation until energy and food costs simmer down and excess demand pressures abate in response to tighter monetary policy,” said

Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “The Fed might still raise policy rates ‘just’ 50 basis points next week, but it could easily ratchet up the pace beyond then if inflation keeps surprising to the high side.”

The consumer price index increased 1.0% last month after gaining 0.3% in April.

Gasoline prices rebounded 4.1% after falling 6.1% in April. Prices at the pump shot up in May, averaging around $4.37 per gallon, according to data from AAA. They were flirting with $5 per gallon on Friday, indicating that the monthly CPI would remain elevated in June.

Food prices jumped 1.2%. Prices of dairy and related products rose 2.9%, the largest gain since July 2007. Food prices have soared following Russia’s unprovoked war against Ukraine.

China’s zero COVID-19 policy, which dislocated supply chains, is also seen keeping goods prices strong.

Economists polled by Reuters had forecast the monthly CPI picking up 0.7%. In the 12 months through May, the CPI increased 8.6%. That was the largest year-on-year increase since December 1981 and followed an 8.3% advance in April. Economists had hoped the annual CPI rate peaked in April.

The inflation report was published ahead of an anticipated second 50 basis points rate hike from the Fed next Wednesday.

The U.S. central bank is expected to raise its policy interest rate by an additional half a percentage point in July. It has hiked the overnight rate by 75 basis points since March.

U.S. stocks opened lower. The dollar rose against a basket of currencies. U.S. Treasury prices were mixed.

Strong underlying inflation 

Underlying inflation was equally strong last month as prices for services like rents, hotel accommodation and airline travel maintained their upward push. There had been hope that the shift in spending from goods to services would help to cool inflation.

But a tight labor market is driving up wages, contributing to higher prices for services.

Excluding the volatile food and energy components, the CPI climbed 0.6% after advancing by the same margin in April.

The so-called core CPI increased 6.0% in the 12-months through May. That followed a 6.2% rise in April. Inflation by all measures has far exceeded the Fed’s 2% target.

The core CPI was lifted by rents, with owners’ equivalent rent of primary residence, which is what a homeowner would receive from renting a home, rising a solid 0.6%. That was the largest increase since August 1990.

Airline fares increased 12.6% after surging 18.6% in April. Used cars and trucks prices rebounded 1.8% after declining for three straight months. New motor vehicle prices rose a solid 1.0%, while the cost of medical care increased 0.4%.

Consumers also paid more for household furnishings and operations as well as recreation. Apparel prices rose 0.7%. There were also increases in the cost of motor vehicle insurance, personal care, education and tobacco.

Posted in Бізнес, Нерухомість, Новини, Фінанси