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The World
The Fed approved a rare half-percentage-point interest rate increase—the largest since 2000—and a plan to shrink its $9 trillion asset portfolio as officials kicked into higher gear a campaign to slow inflation, which is running at a 40-year high. The moves, approved unanimously at the end of a two-day policy meeting by the Fed’s rate-setting committee, will raise the central bank’s benchmark federal-funds rate to a target range between 0.75% and 1%. Fed Chairman Jerome Powell said at a news conference that officials broadly agreed that additional half-point increases could be warranted in June and July given current economic conditions. (Wall Street Journal)
The Bank of England looks poised to raise interest rates today for the fourth time since December, the fastest increase in borrowing costs in a quarter of a century as it tries to quell the danger from the leap in inflation. (Reuters)
Bitcoin jumps to $40,000 after Fed chair Powell rules out bigger rate hikes. (CNBC)
Hong Kong’s base rate rises by 50 basis points, as the cost of money makes its biggest one-time jump in more than two decades after US Fed’s decision. The city’s base rate rose to 1.25% after the 50-basis point increase, en route to the 4% expected by the end of 2023. (South China Morning Post)
The U.S. has provided intelligence about Russian units that has allowed Ukrainians to target and kill many of the Russian generals who have died in action in the Ukraine war, according to senior American officials. Ukrainian officials said they have killed approximately 12 generals on the front lines, a number that has astonished military analysts. (New York Times)
Sweden has received assurances from the U.S. that it would receive support during the period a potential application to join NATO is processed by the 30 nations in the alliance, Foreign Minister Ann Linde said. (Reuters)
Japanese Defense Minister Nobuo Kishi and American counterpart Lloyd Austin agreed to maintain U.S. nuclear deterrence and align the two nations' security strategies in light of new challenges that emerged after Russia's invasion of Ukraine. (Nikkei Asia Review)
North Korea fired a ballistic missile toward the sea off its east coast, South Korea and Japan said, about a week after Pyongyang vowed to develop its nuclear forces "at the fastest possible speed". The North's 14th known weapons test this year comes days before the South's new president, Yoon Suk-yeol, takes office on May 10. (Reuters)
After state abortion fights, corporate America braces for end of Roe: The nationwide shift would trigger profound logistics and cultural challenges for companies and workers. (Washington Post)
In India and Pakistan temperatures have soared above 120 degrees, creating hell on earth. It’s difficult to survive in those conditions without air conditioning, which around 85% of Indian households lack. Then there’s the issue of 70% of India’s electricity coming from coal, creating especially negative climate feedback loops. And there’s worse to come via a “devastating impact on crops, including wheat and various fruits and vegetables. In India, the yield from wheat crops has dropped by up to 50 percent,” reports Hannah Ellis-Petersen from Delhi. (Politico)
Economy
Rising mortgage rates starting to affect residential housing market: The combination of the limited number of homes for sale, continued double-digit price increases and the sharp rise in mortgage rates is taking a toll on home sales across the U.S. New home sales were down 12.6% in March compared with March 2021. (Washington Post)
Record low in U.S. say it is a good time to buy a house: 30% of U.S. adults say it is a good time to buy a house, down 23 percentage points from a year ago and the first time the figure has been below 50%. Gallup has asked the question since 1978, including annual updates since 2003. (Gallup)
American consumers are shopping, traveling and working out like it’s 2019: Airlines, restaurants and child-care centers, which relied on government loans to stay afloat during Covid-19’s peak, can now hardly keep up with demand. Live Nation, which owns Ticketmaster, said concert ticket sales were up 45% as of February 2022 compared with the same period in 2019, the last full prepandemic year. As of February, the company had 30% more concerts planned for 2022 than 2019. Membership levels at gym chain Planet Fitness in January surpassed prepandemic levels following a stretch in which some 25% of the nation’s gyms closed, according to industry data. Over two million people traveled by plane each day on average between April 17 and 23, according to the TSA. That figure averaged about 2.4 million in 2019. (Wall Street Journal)
The US public's view of the nation's economy is the worst it's been in a decade, with many Americans also saying they feel financial strain in their own lives. Only 23% rate economic conditions as even somewhat good, down from 37% in December and 54% last April. The last time public perception of the economy was this poor in CNN's polling was November 2011, when 18% called economic conditions good. (CNN)
From Estee Lauder to Apple, big companies say China’s Covid restrictions are hitting business. Starbucks, Apple and other major U.S.-listed companies have warned in quarterly earnings reports about the impact of China’s Covid lockdowns to their business. While companies like DuPont expect the situation to improve later in May, there is a second-quarter impact. Businesses face a number of challenges in addition to China’s Covid situation, and corporate sentiment among S&P 500 companies has fallen to the lowest since the second quarter of 2020, according to Bank of America’s proprietary model. (CNBC)
Technology
VW sells out of electric cars in Europe and US: Volkswagen, the world’s second-largest electric vehicle manufacturer by volume, has “sold out” of battery-powered models in the US and Europe for this year as persistent supply chain bottlenecks hit global production. The Wolfsburg-based group, which includes brands such as Porsche, Audi and Škoda, sold more than 99,000 electric models worldwide in 1Q22 as it was hit by a shortage of semiconductors and wiring harnesses made in Ukraine. Market leader Tesla delivered more than three times that number in the same quarter. (Financial Times)
Cameo, the celebrity video greetings startup, laid off 87 staffers, a move that CEO Steven Galanis described as “right-sizing.” The layoffs also affected some of Cameo’s most senior executives, Protocol has learned. Leadership departures included Cameo CTO Rob Post, top marketing executive Emily Boschwitz, CPO Nundu Janakiram and Chief People Officer Melanie Steinbach, according to a source close to the company. The team in charge of music partnerships saw big cuts. (Protocol)
Facebook plans to reduce hiring as revenue growth slows and inflation concerns increase. (CNBC)
Lyft shares sink 30% as it struggles to attract drivers. Uber shares also fell, sliding 4.6% even though the company more than doubled its revenue in the first quarter. (Washington Post)
NYC employees' pension funds sue Activision Blizzard, alleging CEO Bobby Kotick rushed the Microsoft deal to escape liability for misconduct at his company. (Axios)
Attention economy slowdown: After two years of unprecedented growth in social media and streaming, a post-pandemic reality is beginning to set in. (Axios)
Smart Links
Leave early on Fridays, PwC staff told. (The Times)
NYT says Wordle acquisition added "tens of millions of new users." (Axios)
Membership growth drives CVS profit up, despite less help from testing, vaccinations. (Healthcare Dive)
Netflix backs away from free-for-all pay policy. (The Information)
Carnival passengers quarantine in Seattle after outbreak on cruise. (Washington Post)