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Paige Fusco

The Graphic Truth: 40 years of the Fed's damage control

In a bid to curb inflation, the Federal Reserve is likely to raise US interest rates by 0.5% at its May meeting. Chairman Jerome Powell also hinted that further rate hikes would follow. The May rise coupled with the quarter percentage point increase last month would be the first time since 2006 that the Fed has hiked the interest rate in consecutive meetings. Criticized by analysts for being slow to tackle inflation, the Fed has said it will begin reducing its $9 trillion asset portfolio by summer — a further effort to reduce stimulus and prices that have hit a four-decade high. We look back at those 40 years of the Fed’s efforts to battle inflation through rate hikes.

Russian Foreign Minister Sergei Lavrov & Ukrainian Foreign Minister Dmytro Kuleba meet in Antalya, Turkey.

Turkish Foreign Ministry/Handout via REUTERS

What We're Watching: Russia-Ukraine peace talks, EU & US fight inflation, Indian state elections

Ukraine peace talks fail, Putin pushes back

In the highest-level peace talks since the start of the war, Russia and Ukraine’s top diplomats met on Thursday in Turkey but failed to secure an agreement. The Ukrainians say the Russians refused a brief ceasefire to allow for evacuations of civilians from besieged cities. Russia, meanwhile, pointed fingers at Ukrainian “radicals” for occupying the Mariupol children’s hospital that was bombed on Wednesday. President Vladimir Putin, for his part, banned the export of Russian products to 48 countries in response to Western sanctions. The ban is largely symbolic as it excludes commodities such as oil and natural gas as well as minerals, wheat, and raw materials for fertilizer, all of which could make global prices soar further if the Kremlin removes them from the market. Separately, Russia also unveiled a new accelerated bankruptcy scheme for departing companies, stopping just short of nationalizing them altogether (for now). It seems Putin wants to keep some of his powder dry in case European countries decide to join the US ban on Russian oil imports, or more foreign corporations abandon the country.

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Biggest US Politics Moments of 2021 | US Politics In :60 | GZERO Media

Top five US political moments of 2021

Well, I can think of five. The first and most important was probably January 6th. Historically important moment, rioters breached the Capitol building in order to stop the legal counting of the presidential election results, but also, it was an important moment because it created a dividing line for Republicans who had to decide if they were with President Trump, who had a role in instigating the riot, or if they were against him. A lot of Republicans ended up choosing to be with him creating various forms of apologies for the rioters over time, and even to some degree making martyrs out of some of them. This will be a really important defining moment, not just in American history, but also for the Republican party.

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Russian president Vladimir Putin met Chinese president Xi Jinping in a virtual call on Wednesday Dec 15, 2021.

REUTERS

What We’re Watching: Putin-Xi heart each other, Boris survives Tory revolt, Fed may raise US interest rates

No new friends — Putin and Xi. The leaders of Russia and China held a conspicuously chummy video conference on Wednesday at a time when both are getting an earful from “the West.” Putin told his “dear friend” Xi that he will absolutely attend the Beijing Winter Olympics next February despite a US-led diplomatic boycott over China’s human rights abuses, and that China is right to be worried about Western military maneuvering in the Pacific. Xi, meanwhile, told his “old friend” Putin that China supports Russia’s demands for security guarantees from NATO. Both men reportedly discussed developing alternative financial structures in order to evade Western sanctions — the US and EU have threatened to shut Russia out of SWIFT if the Kremlin invades Ukraine (again). Russia-China relations have always been tricky — they have clashed over borders in the past and Moscow is perennially worried about being dwarfed economically by its more populous neighbor. But as the US gears up for a push against authoritarian countries, the two most influential important ones are closing ranks.

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Biden Sticks With Powell As Fed Chair Amid Rising Inflation | US Politics In :60 | GZERO Media

Biden sticks with Powell as Fed Chair amid rising inflation

Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

Why did President Biden renominate Jay Powell to be the chairman of the Fed, and who's his No.2, Lael Brainard?

Well, Powell by all accounts has done a pretty good job of managing the Fed through the coronavirus pandemic. He dusted off the playbook, first pioneered by Chairman Bernanke during the financial crisis, and he's largely continued the relatively easy monetary policy of his predecessor at the Fed, now Treasury Secretary, Janet Yellen. With inflation growing the way it has over the last several months, Biden now owns the policies of the Fed and is essentially endorsing what Powell has been doing and giving Powell the political cover to continue to keep rates low for longer, or as many people expect, raise them slightly over the next 12 months in order to fight inflation.

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Annie Gugliotta

What We’re Watching: Ethiopian emergency, Euro bubbly war, US Fed vs inflation

Things go from bad to worse in Ethiopia. Ethiopia's embattled PM Abiy Ahmed has imposed a state of emergency and called on ordinary citizens to take up arms, after a swift advance by the Tigrayan People's Liberation Front put the rebels within striking distance of the capital, Addis Ababa. For a year now, Abiy's forces have been at war with the TPLF over the militant group's demands for the Tigray region to have more autonomy from the central government. The TPLF ran all of Ethiopia for decades, but they lost power after a popular uprising led to Abiy's appointment in 2018. The current conflict has seen possible war crimes by all sides, but the allegations against Ethiopian government forces in particular have prompted the US to revoke the country's preferential trade status, effective next year. All of this puts Abiy in a very tough position: last November he launched what he thought would be a quick war to squelch the TPLF, but now he is losing ground badly and could soon lose a critical source of economic support. Does he pull out the peace pipe or look for bigger guns? It seems like ages ago this guy won a Nobel Prize, but no heroes are safe these days. And with neighboring Sudan in political turmoil as well, things are looking dicey in the strategically-significant Horn of Africa.

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Ari Winkleman

The Graphic Truth: 50 years of US inflation vs interest rates

Inflation in the US remains at its highest monthly level since the 2008 financial crisis. Right now most economists agree that rising prices are being driven by pandemic-related supply chain disruptions, which the government can do little about. This has given some oxygen to supporters of the Biden administration's big-spending agenda, who now insist that inflation will ease up once supply chain disruptions resolve. Deficit hawks, for their part, still say that the Federal Reserve is overheating the US economy by keeping interest rates low because it hopes inflation will be short-lived. We compare US inflation and interest rates over the past half century, a period in which America has suffered double-digit inflation figures more than once.

Minimum Wage May Not Go Up, But Expect Stimulus Checks In April | US Politics :60 | GZERO Media

Minimum wage may not go up, but expect stimulus checks in April

Jon Lieber, Managing Director of the United States for the Eurasia Group, shares his insights on US politics in Washington, DC:

Is the minimum wage going to $15 an hour?

Probably not. The House of Representatives did include it in the stimulus bill that they're going to pass as soon as next week, but when it gets over to the Senate it's likely to either be stripped out altogether because of a provision of the reconciliation process known as the Byrd Rule, or you could see some moderate Senate Democrats try to push a compromise measure which would raise the minimum wage from $7.25 an hour to something closer to $10 or $11 an hour.

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