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The World
Treasury Secretary Janet Yellen gave her most direct admission yet that she made an incorrect call last year in predicting that elevated inflation wouldn’t pose a continuing problem. “I was wrong about the path inflation would take,” Yellen said in an interview that aired Tuesday on CNN. “There have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that at the time I didn’t fully understand.” (Bloomberg)
The White House launched a new push to contain the political damage caused by inflation after President Biden complained for weeks to aides that his administration was not doing enough to publicly explain the fastest price increases in roughly four decades. Aiming to demonstrate to the public that it is responding to its concerns, Biden met with Federal Reserve Chair Jerome H. Powell in the Oval Office, wrote an op-ed in the Wall Street Journal about inflation and sent top aides across major networks to push the administration’s economic message. (Washington Post)
Joe Biden Op-Ed: My Plan for Fighting Inflation. I won’t meddle with the Fed, but I will tackle high prices while guiding the economy’s transition to stable and steady growth. (Wall Street Journal)
President Biden confirmed that his administration is sending medium-range advanced rocket systems to Ukraine, responding to a top request from Ukrainian officials who say the weapons are necessary to curb the advance of Russian forces in the east. Biden said the more advanced rocket systems and munitions will enable Ukraine “to more precisely strike key targets on the battlefield.” Ukrainian officials provided assurances they would not use the weapons to strike targets inside Russia, a senior U.S. official said. Such a move could risk an escalation in the conflict, potentially provoking Russian retaliation against U.S. forces or allies. (Washington Post)
Russian energy giant Gazprom said it had fully cut off supplies to Dutch trader GasTerra after it failed to make payments for gas delivered in April. Gazprom said in a statement that the payments should be done in line with the gas-for-rubles scheme, ordered by Russian President Putin. (Deutsche Welle)
The US intelligence community is trying to determine whether North Korea tested a ballistic missile with properties the US has not seen before earlier this week, according to three US officials. North Korea's launch of three ballistic missiles last Wednesday included one that flew an unusual trajectory, according to the officials. The missile had a flight path that two officials described as a "double arc" with the missile ascending and then descending twice. The trajectory may indicate that the goal was to test North Korea's ability to fire a missile and have it re-enter into the Earth's atmosphere to reach a target. (CNN)
The Chinese military said it had conducted a combat "readiness patrol" in the seas and airspace around Taiwan in recent days, saying it was a necessary action to respond to "collusion" between Washington and Taipei. (Reuters)
Japan, U.S. and South Korea poised to enhance their nuclear umbrella strategy, as Washington and Seoul may resume drills involving B-52 bombers. (Nikkei Asia Review)
Shanghai ends lockdown: Noise, traffic and commuters return as China’s commercial hub swings back to life after two-month hiatus New infections fell for the 11th day to 15, while five cases showed symptoms, and no death was reported for the fifth day. (South China Morning Post)
How China’s lockdown policies are crippling the country’s economy: Chinese leaders have long believed they can bend nature to their will. Sixth-century Sui emperors and later Mongol rulers harnessed the Yangtze and the Yellow rivers via their 1,000-mile-long Grand Canal. In the 1950s, Mao Zedong demanded rats, flies, mosquitos and sparrows be eradicated. Deng Xiaoping’s one-child policy, introduced in the 1980s, imprinted state control on women’s reproductive rights. Now Xi, the most powerful leader in a generation, is battling another force of nature as he tries to keep the world’s most populous country free of Covid-19. (Financial Times)
A third dose of messenger RNA Covid-19 vaccine provides a key boost to immunity against the coronavirus, regardless of the original type of immunization, researchers said. (Bloomberg)
Former President Luiz Inacio Lula da Silva has reclaimed a double-digit advantage over incumbent Jair Bolsonaro ahead of Brazil's October election after another center-right candidate quit the race. The opinion survey, run by Instituto FSB with sponsorship from investment bank BTG, found that 46% of voters support Lula, up from 41% in April. Support for Bolsonaro was unchanged from a month ago at 32% in the survey. (Reuters)
Philippine President-elect Ferdinand Marcos Jr this week gave the first indication of his incoming administration’s stance on the South China Sea after vowing he would champion the country’s interests in the disputed waterway, in statements welcomed by analysts. Marcos told a select group of TV stations that he would use the 2016 UN arbitral ruling to assert “our territorial right” against Beijing’s sweeping claims in the South China Sea. “Our sovereignty is sacred and we will not compromise it in any way. We will not allow a single square millimetre of our maritime coastal … rights to be trampled upon,” he said, adding that he would pursue the issue through diplomacy “consistently with a firm voice”. (South China Morning Post)
Israel and the United Arab Emirates signed a comprehensive, “groundbreaking” free trade agreement in a bid to boost economic ties between the two countries, as trade hit about $2.5 billion in the less than two years since the US-brokered Abraham Accords were inked, according to recent estimates. (Times of Israel)
The baby formula shortage took a dramatic turn for the worse last week, according to data on 130,000 stores across the US. Out-of-stock rates spiked to 70% nationally for the week ending May 21, up from 45% the prior week, based on data from the retail-tracking firm Datasembly. In many cities and states, the situation was far more dire. More than two-thirds of states had shortage rates over 70%, with California, Missouri, Minnesota, Nevada, Montana, Louisiana, Arizona and Utah over 80%, and Utah hit hardest at 89%, up from 49% the week prior. (Bloomberg)
Economy
Inflation in the 19 countries of the eurozone soared to 8.1% in May from 7.4% in April, exceeding previous expectations. Prices have risen sharply in the past year, initially because of supply chain problems after the COVID pandemic but subsequently because of Russia's invasion of Ukraine. How do the figures break down? Energy prices jumped jumped by 39.2% as a result of a global energy crunch caused by the war. Food prices soared by 7.5%, while prices for other goods — such as clothing, appliances, cars, computers and books — were up 4.2% and the cost for services rose 3.5%. (Deutsche Welle)
Japan braces for further consumer price hikes starting June 1: Food prices are rising steadily in Japan, reflecting higher materials costs. While edible oil and mayonnaise prices have increased more than 10% since early 2021, the cost of instant noodles, ice cream, seasonings and other foodstuffs will continue their steady rise. (Nikkei Asia Review)
Citi may retain Russian banking license despite trying to sell commercial arm. Chief executive Jane Fraser says lender remains in country to help multinational clients wind up their businesses. (Financial Times)
The Crypto Bros are snapping up Manhattan real estate: The cryptocurrency market has been in a meltdown. Digital currencies, along with other blockchain-based properties, have plunged in value, lending credence to skeptics who have regarded the crypto phenomenon as a fad. But crypto companies appear to be here to stay in New York, at least for the foreseeable future, judging from the way they have been leasing Manhattan office space. (New York Times)
Dreaded commute to the city is keeping offices mostly empty: Urban areas where people live closer to work have a higher return-to-office rate, WSJ analysis shows. (Wall Street Journal)
Home Prices Rise More Than 20% Year-Over-Year, Biggest Surge in 35 Years: Case-Shiller index rose 20.6% as home-buying demand outweighed limited supply of homes for sale. (Wall Street Journal)
Technology
The Supreme Court blocked a Texas law that would ban large social media companies from removing posts based on the views they express. The court’s brief order was unsigned and gave no reasons, which is typical when the justices act on emergency applications. The order was not the last word in the case, which is pending before a federal appeals court and may return to the Supreme Court. The vote was 5 to 4, with an unusual coalition in dissent. The court’s three most conservative members — Justices Samuel A. Alito Jr., Clarence Thomas and Neil M. Gorsuch — filed a dissent saying they would have let stand, for now at least, an appeals court order that left the law in place while the case moved forward. Justice Elena Kagan, a liberal, also said she would have let the order stand, though she did not join the dissent and gave no reasons of her own. (New York Times)
Forget LinkedIn — your next job offer could come via Slack: Companies have embraced Slack to speed up office communication. Now, workers are using the messaging tool to fast-track job hunts. Slack enables teams, and entire workforces, to trade information instantly—one reason its use has soared with the rise of remote work. Slack also hosts independent channels for people who don’t work together, and in the past two years, Slack-based networking groups have grown, providing a way for far-flung members to swap career advice and tips. Many job seekers say they are turning to these invite-only networking forums to land new roles—often much faster than they would have through traditional job-application methods. (Wall Street Journal)
Paramount and Skydance’s huge weekend opener for “ Top Gun: Maverick” is now the biggest in Memorial Day weekend history. It's also the first movie starring Tom Cruise to debut with more than $65 million at the domestic box office. Why it matters: The smashing debut means we are "officially in the realm of consistent momentum, or at least in the realm of normalcy at the box office," said Comscore senior media analyst Paul Dergarabedian. The box office is still down 40% year-to-date compared to 2019. The highly anticipated sequel brought in $156 million at the domestic box office as of Monday morning, per Comscore, and $252.7 million worldwide, per Paramount. (Axios)
The U.S. regained a coveted speed crown in computing with a powerful new supercomputer in Tennessee, a milestone for the technology that plays a major role in science, medicine and other fields. Frontier, the name of the massive machine at Oak Ridge National Laboratory, was declared to be the first to demonstrate performance of one quintillion operations per second — a billion billion calculations — in a set of standard tests used by researchers to rank supercomputers. But the crown has a caveat. Some experts believe that Frontier has been beaten in the exascale race by two systems in China. (New York Times)
Smart Links
Executives ‘buy the dip’ at rate not seen since start of pandemic. (Financial Times)
Salesforce sales grow 24%, easing concerns about business demand. (Wall Street Journal)
Top Gun’s Maverick risks China’s anger with Taiwan flag on jacket. (Bloomberg)
Gender pay gap for registered nurses widened during pandemic. (Healthcare Dive)
American casino development has hit its saturation point. (Slate)
The crypto lobby faces a big test. (Protocol)
Safari now has an estimated 1B+ users, making it the second browser to pass the milestone, behind Chrome's 3.37B+. (Atlas VPN)