World

West pledges more arms for Ukraine, as Russia and China renew ties

US Defense Secretary Lloyd Austin urged European allies to step up arms shipments to Ukraine on Wednesday, as Russia and China renewed their mutual support in the face of Western sanctions.

In eastern Ukraine, troops fired a volley of shells from French-supplied Caesar howitzers towards Russian positions, even as Western ministers met at NATO headquarters in Brussels.

Britain announced that its delivery of the advanced Multiple Launch Rocket System to Ukraine was now “imminent” — but still Kyiv pleaded that it is outgunned on the frontline and in need of quicker support.

“We can’t afford to let up and we can’t lose steam. The stakes are too high. Ukraine is facing a pivotal moment on the battlefield,” Austin told a meeting of allies in Brussels.

“We must intensify our shared commitment to Ukraine’s self-defence, and we must push ourselves even harder to ensure that Ukraine can defend itself, its citizens and its territory.”

Austin said that Moscow’s attack on its pro-Western neighbour “isn’t just a danger to Ukraine — it’s a menace to European security”. 

“So we must continue to rise to meet this challenge,” he said, sitting next to Ukraine’s defence minister Oleksiy Reznikov.

While the western allies debate how best to help Ukraine, China’s President Xi Jinping assured his Russian counterpart Vladimir Putin of Beijing’s support for Moscow.

China has refused to condemn Moscow’s invasion of Ukraine and has been accused of providing diplomatic cover for Russia by criticising Western sanctions and arms sales to Kyiv.

State media reported that China is “willing to continue to offer mutual support (to Russia) on issues concerning core interests and major concerns such as sovereignty and security”.

And the Kremlin said that, in a call, Xi and Putin had agreed to ramp up economic cooperation in the face of “unlawful” Western sanctions.

Earlier, Ukraine had delivered a message to the meeting on behalf of its embattled troops struggling to hold back a Russian offensive. 

“Brussels, we are waiting for a decision,” Mykhaylo Podolyak, senior aide to President Volodymyr Zelensky said, warning that Ukraine’s artillery is outgunned by 10 to one. 

“Daily, I receive a message from the defenders: ‘We are holding on, just say: when to expect the weapons?'” he said.

The industrial city of Severodonetsk is under intense bombardment as Russia focuses its offensive on the Donbas region in an effort to secure a swathe of eastern and southern Ukraine.

– ‘Critical situation’ –

But NATO chief Jens Stoltenberg, hosting the meeting of around 50 allies and partners, warned it would take time to get the latest hardware into service with trained Ukrainian troops.

“Ukraine is really in a very critical situation and therefore, it’s an urgent need to step up,” Stoltenberg told journalists ahead of a gathering of NATO ministers. 

The West has poured arms into Ukraine, but Kyiv complains it has only received a tenth of what it needs and is clamouring for heavier weaponry.

Stoltenberg said the allies had moved from sending older equipment to delivering “more long-range, more advanced air defence systems, more advanced artillery, more heavy weapons”.   

But he added “there will also be some time needed to just make the Ukrainians ready to use and operate these systems”.  

He said NATO members, such as the Netherlands, plan to offer training to Ukrainian forces to get them up to speed on the new heavy guns going in. 

Stoltenberg said alliance leaders should agree a “comprehensive assistance package” for Ukraine at a summit in Madrid later this month.

About 500 civilians are taking shelter in Severodonetsk’s Azot chemical plant, according to the head of the city’s administration.

At another location in eastern Ukraine, AFP reporters watched as Ukrainian forces paraded — and fired — their new French-supplied truck-mounted Caesar howitzers.

The commander of the system, who gave his name only as Glib, said it would help make Ukraine’s defences more agile, as gunners loosed three shells in the direction of Russian lines.

“This system is primarily very manoeuvrable and mobile,” the officer from the 55th brigade said. “In modern warfare, this is a crucial factor. 

“Our old systems are stationary, so to speak. This is truck-mounted artillery to put in the field,” he added. 

After its February invasion, Russia was driven back from Kyiv, prompting it to focus its offensive on Donbas, a mainly Russian-speaking region partly held by pro-Kremlin separatists since 2014.

Capturing Severodonetsk has become a key goal, as it would open the road to Sloviansk and another major city, Kramatorsk.

– NATO urges heavy weapons –

Kyiv’s forces face an increasingly desperate situation in Severodonetsk, with Ukrainian authorities estimating the Russians now control up to 80 percent of the city as they seek to encircle it. 

From an elevated position in Lysychansk, an AFP team saw black smoke rising from the Azot factory in Severodonetsk and another area in the city.

The Ukrainian military is using the high ground to exchange fire with Russian forces fighting for control of Severodonetsk, just across the water.

Lysychansk pensioner Valentina sat on the porch of her ground-floor apartment, where she lives alone, her two walking sticks to hand.

“It’s scary, very scary,” said the 83-year-old former farm worker. “Why can’t they agree at last, for God’s sake, just shake hands?”

Tesla driver-assistance involved in 273 US crashes: report

Tesla vehicles have been involved in most of the crashes involving “Level 2” driver-assistance systems reported to the government, according to US data released Wednesday.

The electric autos accounted for 273 of 392 crashes reported under a June 2021 National Highway Traffic Safety Administration directive requiring manufacturers to submit data on crashes for Level 2 driver-assistance programs, which aid with braking and steering but require the driver to remain fully engaged at all times.

NHTSA last week expanded a probe into Tesla’s “Autopilot” system, which Tesla Chief Executive Elon Musk has argued reduces the risk of accidents when used properly.

Crashes are reportable if the assistance system was used within 30 seconds of the incident and if the episode resulted in a fatality, a vehicle tow-away, airbag deployment or injury to a pedestrian or other “vulnerable” road user. 

“The data released today are part of our commitment to transparency, accountability and public safety,” said NHTSA Administrator Steven Cliff.

“As we gather more data, NHTSA will be able to better identify any emerging risks or trends and learn more about how these technologies are performing in the real world.”

NHTSA did not criticize Tesla or other automakers in the report and cautioned of imperfections in the data.

Some of the incidents may have been reported multiple times by the same entity.

“Consequently, the overall number of reports submitted does not equate to the total number of incidents and is not a meaningful safety metric,” NHTSA said in the report.

Another issue is that the manufacturers who are required to report the incidents can only do so if and when the vehicle owner reports the incident. As a result, some incidents may not have been reported, NHTSA said.

NHTSA last week said it widened a probe of Tesla to whether “Autopilot and associated Tesla systems may exacerbate human factors or behavioral safety risks by undermining the effectiveness of the driver’s supervision.”

The action moves NHTSA a step closer to a potential recall of Tesla vehicles.

UK could ditch European rights pact after Rwanda plan blocked

Britain’s government Wednesday refused to rule out abandoning a European human rights pact after a judge dramatically blocked its plan to fly asylum-seekers to Rwanda, sparking fury among Conservatives.

The last-gasp intervention by the European Court of Human Rights (ECHR) forced the government to cancel the first flight on Tuesday night, after the number of claimants aboard had already been whittled down by UK legal challenges.

Interior minister Priti Patel, however, told parliament the government “will not be deterred from doing the right thing” and that plans for further flights “have already begun”.

She attacked the “usual suspects” among lawyers’ firms and rights groups for defying the “will of the British people”, as well as “evil” gangs behind a flourishing cross-Channel trade in migrants.

The ECHR is unrelated to the European Union, which Britain left in January 2020. 

But Tory backbenchers, fresh from rebelling in large numbers against Prime Minister Boris Johnson’s leadership, said the ruling infringed on British sovereignty.

“Yes, let’s withdraw from European Court of Human Rights and stop their meddling in British law,” MP Andrea Jenkyns tweeted, echoing others in the party and banner headlines in right-wing newspapers.

– ‘Whatever it takes’ –

The government’s top law officer, attorney general Suella Braverman, said many in Britain would be frustrated at the role played by a “foreign court”.

“We are definitely open to assessing all options available as to what our relationship should be, going forward, with the European Court of Human Rights,” she told BBC radio.

The European convention was enshrined in UK law in 1998 by the Labour government of Tony Blair. 

It notably underpins the Good Friday Agreement of the same year, which brought peace to Northern Ireland after three decades of bloodshed.

The prime minister’s spokesman said “we keep all options on the table” to facilitate the deportation plan.

But he added: “We would do nothing that would in any way jeopardise the Good Friday Agreement.”

Johnson’s government is already in a bust-up with the EU over post-Brexit trading rules for Northern Ireland, and critics allege it is picking a separate fight over asylum-seekers to distract from economic trouble and political scandals.

The convention has been used frequently by human rights lawyers to frustrate Johnson and Patel’s hardline policy against illegal migrants.

Last month, in the “Queen’s Speech” opening a new session of parliament, the government committed to replacing the 1998 act with a new bill of rights.

– Johnson’s grandfather –

Johnson’s own maternal grandfather, James Fawcett, helped to write the European convention and was the commission’s president for a decade in the years after World War II.

Anneke Campbell, a cousin to Johnson’s late mother, wrote in the Byline Times newspaper last week that Fawcett would have been “appalled” at the government’s actions.

Under the UK’s agreement with Rwanda, all migrants arriving illegally in Britain are liable to be sent to the East African nation thousands of miles away for processing and settlement.

More than 10,000 migrants have crossed the Channel from northern France since the start of the year.

On Wednesday, officials said, around 150 more people including two dozen children were brought ashore in the English port of Dover from two dinghies that appeared partially deflated.

Enver Solomon, head of Britain’s Refugee Council, said the ever-rising numbers of crossings disproved the government’s claims that it was putting people-smugglers out of business.

Its determination to press on with the Rwanda plan heightened “the human suffering, distress, and chaos the threat of removal will cause with far-reaching consequences for desperate people”, he said.

The ECHR, ruling in favour of an Iraqi claimant, said his expulsion should wait until London’s High Court has taken a final decision on the policy’s legality at a hearing next month.

Various legal challenges had highlighted concern over human rights in Rwanda. But the government in Kigali insists it is a safe country.

“Rwanda remains fully committed to making this partnership work,” government spokeswoman Yolande Makolo told AFP.

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War in Ukraine: Latest developments

Here are the latest developments in the war in Ukraine:

– Russia urges Severodonetsk surrender – 

Russia’s defence ministry calls on Ukrainian fighters holding out at a chemical plant in the war-torn eastern city of Severodonetsk to halt their “senseless resistance” and surrender.

The Russian army also announces plans to organise evacuations on Wednesday for hundreds of civilians, including dozens of children, believed to sheltering inside the Azot plant. 

It says the evacuees will be taken to a part of the Lugansk region held by pro-Moscow separatists.

Ukraine had yet to publicly respond to the announcement, which comes after Russian forces destroyed the last bridge linking the city to the neighbouring city of Lysychansk in a bid to encircle it.

– No UK request on death row fighters, says Moscow –

The Kremlin says that London has not asked Russia to intervene and help save two Britons sentenced to death by pro-Moscow separatist authorities in eastern Ukraine.

“They have not asked,” Kremlin spokesman Dmitry Peskov tells reporters, saying any request should be lodged with the separatist authorities of the breakaway region of Donetsk which tried Aiden Aslin and Shaun Pinner for fighting with Ukrainian troops.

British Prime Minister Boris Johnson has said he is “appalled” at the death sentences. London has been pressing their case with Kyiv.

– Bodies of 64 Mariupol defenders returned –

Ukraine confirms Russia has returned the bodies of 64 soldiers who died defending the fallen city of Mariupol in an exchange that saw Ukraine return the remains of Russian troops. 

The 64 fighters died in the Azovstal steelworks, where Ukrainian troops held out under siege for weeks before finally surrendering to Russian forces last month.

The ministry said the swap took place in the southeastern Zaporizhzhia region and did not specify how many Russian soldiers’ bodies had been returned. 

– Russia blacklists top UK journalists –

Russia says it is blacklisting 49 UK citizens, including several top reporters whom it accuses of the “deliberate dissemination of false and one-sided information about Russia and the events in Ukraine and Donbas”.

Among the journalists who have been banned from entry to the country are Shaun Walker of The Guardian and Gideon Rachman of The Financial Times. 

– Ukraine grain circumvents blockade –

A Ukrainian grain shipment has arrived in Spain after successfully circumventing Russia’s blockade of the country’s Black Sea ports, a Spanish food association says.

The grain was transported overland to Poland, from where it was shipped to Spain via the Baltic Sea, the first time the northern sea passage has been used for Ukrainian grain, the Agafac food manufacturers association claims.

Before the Russian invasion, Ukraine was the world’s top producer of sunflower oil and a major wheat exporter, but millions of tonnes of grain exports remain trapped in silos and ports because of the blockade.

– Gazprom cuts Nord Stream deliveries –

Russia’s energy giant Gazprom says it will reduce daily gas deliveries via the Nord Stream pipeline to Germany due to the “repair” of compressor units by German company Siemens.

The deliveries from the Portovaya compression station near the northwestern city of Vyborg are set to be reduced by around one third. 

Along with many Western companies, German conglomerate Siemens announced its exit from the Russian market over Russia’s invasion of Ukraine.

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WTO talks extended in bid to seal elusive deals

The World Trade Organization’s ministerial conference will run over into a fifth day Thursday in the hope of striking thus-far elusive deals on fishing subsidies, food security and combating Covid-19.

The gathering of trade ministers at the WTO’s headquarters in Geneva was due to wrap up on Wednesday, with the global trade body hoping to prove it still has a role to play in tackling big global challenges.

But WTO chief Ngozi Okonjo-Iweala, who has hinged her leadership on breathing new life into the sclerotic organisation, said landmark deals were within reach if ministers ploughed on.

“Progress is being made but it needs a little more work and more time,” the director-general said.

“It requires that we work and work nights; whatever it takes.”

She said countries “feel that we really can cross the line on some of these things if we gave it a bit more time”.

The last WTO ministerial conference, in December 2017 in Buenos Aires, was widely considered a flop, closing without a major agreement.

The global trade body only takes decisions by consensus among all 164 members.

Okonjo-Iweala, who took office in March 2021, is keen to make the WTO a relevant player on the international stage.

– Fishing reform sunk? –

The former finance and foreign minister of Nigeria was hoping to pull off a coup by securing a long-sought deal on curbing harmful fishing subsidies.

Negotiations towards banning subsidies that encourage overfishing and threaten the sustainability of the planet’s fish stocks have been going on at the WTO for more than two decades.

Diplomats say a deal is closer now than ever before.

But India threw a spanner in the works late Tuesday, insisting it would not sign up without a 25-year exemption — far longer than many are comfortable with.

“Without agreeing to the 25-year transition period, it will be impossible for us to finalise the negotiations,” Commerce and Industry Minister Piyush Goyal said in a statement.

“This is completely unacceptable! And that is the reason India is opposed to the current text.”

Besides fisheries, the WTO conference is trying to strike deals on agriculture, food security, Covid-19 vaccine patents, the WTO’s response to pandemics, and reform of the organisation itself.

Despite the overtime, one diplomatic source close to the negotiations said it was “not yet clear that there is a deal to be had”.

Some emerging from the negotiating rooms are blaming Indian intransigence on not just fisheries but on every topic.

Citing their “destructive tactics”, the source said: “The question is are they really going to pull the whole edifice down, or whether they’re willing to go along with the views of the vast majority of members,” the source said.

On fishing, the source added: “Now is the time… civil society wants this, fishing communities want it, and our fish need it.”

– ‘Saving WTO, not lives’ –

Ministers are discussing the possibility of imposing a temporary waiver on Covid-19 vaccine patents.

But serious objections remain from some countries that host major pharmaceutical companies, like Britain and Switzerland, notably on the scope of the proposals.

NGOs believe the text does not go nearly far enough.

Civil society activists staged a “die-in” protest in the WTO’s atrium, accusing the EU, Britain, Switzerland and the United States of scuppering a meaningful Covid intellectual property waiver.

“The proposal on the table is intended to save the reputation of the WTO but it will not save a human life from the pandemic,” demonstration organiser Deborah James told AFP.

Swiss economy minister Guy Parmelin insisted he remained against a wide-ranging waiver, adding that “patents have not slowed access to vaccines — quite the opposite”.

As for whether the Swiss were isolated, he said many other nations were simply “hiding their cards”, with a touch of “hypocrisy in certain countries”.

A second pandemic-related text being negotiated seeks to tackle supply constraints faced by certain countries in getting hold of Covid-fighting tools.

WTO spokesman Daniel Pruzin said ministers were spending Wednesday in intensive talks.

“Significant progress has been made: we’re not far from agreements on many of these topics,” he told reporters.

Spanish airline to fly UK-made helium airships

Spain’s Air Nostrum has become the first airline to reserve 100-seat helium airships that emit just one tenth of harmful emissions produced by jet planes, their British manufacturer said Wednesday.

A spokesperson for Hybrid Air Vehicles told AFP that Air Nostrum signed a deal to lease 10 Airlanders scheduled for delivery from 2026 onwards in a transaction worth over $600 million.

The Spanish regional carrier aims to become HAV’s launch customer while also diversifying its domestic fleet, using the Airlander on domestic routes.

The UK group will create 1,800 jobs at its facility in South Yorkshire, northern England, when it starts production later this year.

The hybrid ship — which looks like two blimps stuck together — has a helium-filled hull and will be propelled by a hybrid of electric and fuel-burning engines, with the goal of going all-electric by 2030.

It can stay in the air for five days and travel at maximum speeds of 130 kilometres (80 miles) per hour, with a range of more than 7,000 kilometres.

“Airlander is designed to deliver a better future for sustainable aviation services, enable new transport networks and provide rapid growth options for our customers,” said HAV chief executive Tom Grundy in a statement.

“Our partnership with Air Nostrum Group, as the launch Airline for Airlander 10, leads the way towards that future.”

The airline said in a separate statement on Wednesday that the planned aircraft, which has not yet been certified by regulators, will use far less fuel than regular jets.

“We are exploring each and every possible way to reduce our carbon footprint,” added Air Nostrum boss Carlos Bertomeu.

“The Airlander 10 will drastically reduce emissions and for that reason we have made this agreement with HAV.”

Delivery will be staggered over a five-year period.

The first prototype, developed with US aerospace giant Northrop Grumman, took flight in 2012 as part of a project with Pentagon, which was cancelled due to technical and budgetary issues.

HAV transferred the 92-metre-long vehicle to Britain in 2013 to turn it into a civilian model, bigger than an A380 jumbo jet.

It was presented to the public for the first time in 2016, but it nosedived while landing on its second test flight, without causing any injuries.

US slaps sanctions on Russian, Swedish far-right extremists

The United States on Wednesday slapped sanctions on white nationalists from Russia and Sweden, warning they posed a threat and that one raised funds for Moscow’s invasion of Ukraine.

After decades focused on Islamist extremism, the United States has increasingly identified a threat from the far right, classifying in 2020 the Russian Imperial Movement as a terrorist organization, the first such action against a white supremacist group.

The State Department on Wednesday designated as a terrorist Anton Thulin, a Swede who allegedly traveled to Saint Petersburg for paramilitary instruction by the Russian group.

He was sentenced to prison in 2017 for setting off a bomb near a refugee center in Sweden and, after his release, was expelled by Poland, where authorities said he was seeking further training.

“The US government remains deeply concerned about the evolving racially or ethnically motivated violent extremist threat worldwide,” State Department spokesman Ned Price said.

“An element of it entails violent white supremacists traveling internationally to train and fight with likeminded individuals.”

The Treasury Department also blocked any US assets and criminalized financial transactions with two members of the Russian Imperial Movement, identified as Stanislav Shevchuk and Alexander Zhuchkovsky.

Shevchuk has traveled to the United States and Europe to unite far-right extremists, while Zhuchkovsky has used social media and online payment systems to buy military supplies for Russian troops in Ukraine, the Treasury Department said.

The Russian group denounced the US terrorist designation in 2020, insisting that it was only helping volunteers fighting on behalf of pro-Russian separatists in Ukraine.

Canada earlier this year followed suit by banning the Russian Imperial Movement as a terrorist organization along with the Proud Boys, a far-right group involved in the January 6, 2021, attack on the US Capitol.

Twitter holds firm on completing Musk buyout: board chairman

Twitter remains committed to closing Elon Musk’s $44 billion buyout bid, the firm’s board chairman said Wednesday, as doubts swirl about the billionaire’s intentions for the troubled deal. 

Bret Taylor, who is also co-CEO of the software company Salesforce, reiterated the Twitter position that the agreement should be finalized.

“The board is committed to the transaction,” Taylor said at a Paris tech conference, refusing to elaborate further.

Musk and Twitter have been in a standoff in recent weeks over the true number of users on the social media network, which has led to speculation the mercurial Tesla boss is trying to renegotiate or back away from the deal. 

He has threatened to withdraw his bid, accusing Twitter of failing to provide data on fake accounts, but the company has since reportedly agreed to give him access.

Musk is set to address Twitter employees for the first time on Thursday, as questions mount over the deal and the impact of his potential leadership of the platform.

Ukraine parades new French Caesar howitzer

Ukraine on Wednesday showed off one of its new French-made self-propelled howitzers, firing towards Russian-controlled areas, as Kyiv urges Western countries to provide more military hardware.

At a secret frontline location in eastern Ukraine, soldiers from the 55th brigade artillery unit drove the camouflaged truck-mounted Caesar into a muddy field and fired off three rounds, accompanied by deafening booms and bright flashes.

A watching military officer said the target was also a secret, while saying it would be within the range of 38 kilometres (24 miles). 

The heavy artillery system highly prized for its accuracy is part of the new arsenal of modern weaponry provided to Ukraine by multiple countries since Russia invaded on February 24.   

President Emmanuel Macron pledged to send several systems in April, later telling Ukrainian President Volodymyr Zelensky that arms supplies from Paris would “increase in intensity”.

The firing session watched by AFP journalists came as Macron on Wednesday called for “new in-depth discussions” with Ukraine, without confirming if he would travel this week to Kyiv as several media have reported.

While the US and other allies have also provided long-range howitzers, Kyiv has complained that it is still outgunned and pleaded for more heavy weapons. 

Built by France’s partly state-owned arms maker Nexter, the Caesar is a 155mm howitzer mounted on a six-wheeled truck chassis, capable of firing shells at ranges of more than 40 kilometres (25 miles).

– ‘Modern warfare’ –

The commander of the system, who gave his name only as Glib, said it helped make Ukraine’s defences more agile.

“This system is primarily very manoeuvrable and mobile,” he said. 

“In modern warfare, this is a crucial factor. 

“Our old systems are stationary, so to speak. This is truck-mounted artillery to put in the field,” he added. 

The soldier said the weapons will allow Ukrainian troops to “gain a lot of time, so that the enemy cannot attack us and fire back”.

Other similar systems, such as the US M777s that Ukraine has also received, need to be towed. 

Glib said he underwent a week of training in France on how to use the weapon, although there was “very limited time” and “I had to train fast and remember everything quickly”.

The officer said he could not disclose where in the country Kyiv was using the French howitzers.

Russian-backed separatists have claimed this month that Kyiv is using weaponry with 155-mm ammunition — standard for NATO artillery — to fire on the large city of Donetsk, which they control, and other nearby towns.

Glib denied such targeting.

“Security of civilians is one of our priorities so we do not fire on residential areas,” he said. 

US central bank ponders huge rate hike to combat price surge

The US Federal Reserve is set to announce a sharp increase in borrowing costs on Wednesday amid the troubling acceleration of inflation, and forecasters now expect officials to opt for the biggest rate hike in nearly three decades.

Until recently, the central bank seemed set to again increase the benchmark interest rate by 0.5 percentage points, but a resurgence of consumer and producer prices in May has fueled growing speculation of a 75-basis-point hike.

Economists say the rapidly changing situation means the Fed is behind the curve and needs to react strongly to prove its resolve to combat inflation

“It is possible that by Wednesday the only way for the Fed to surprise markets would be to raise rates by 50 bp,” Harvard economist and former White House advisor Jason Furman tweeted.

If policymakers decide on a giant step, it would be the first 75-basis-point increase since November 1994.

The Federal Open Market Committee resumed discussions on the second day of its policy meeting and is due to announce the rate decision at 1800 GMT. 

Fed Chair Jerome Powell will hold a press conference after the meeting to provide more details on the central bank’s plans, including signals on how aggressive policymakers will be in coming meetings.

President Joe Biden has fully endorsed the Fed’s battle against the steepest rise in prices in more than 40 years, as he watches inflation erode his popularity and deflect attention from other milestones, including a rapid recovery of the world’s largest economy and record job growth.

– Clear signals –

US central bankers began raising interest rates off zero in March as buoyant demand from American consumers for homes, cars and other goods clashed with transportation and supply chain snarls in parts of the world where Covid-19 remained — and remains — a challenge.

That fueled inflation, which got dramatically worse after Russia invaded Ukraine in late February and Western nations imposed steep sanctions on Moscow, sending food and fuel prices up at a blistering rate.

US gasoline prices have topped $5.00 a gallon for the first time ever and are setting new records daily.

Economists thought March was the peak for consumer price hikes, but the rate spiked again in May, jumping 8.6 percent in the latest 12 months, and wholesale prices surged as well, almost entirely due to soaring costs for energy, especially gasoline.

The Fed was caught off guard with the speed of the price increases, and while policymakers usually prefer to clearly telegraph any policy shift to financial markets, the latest data likely changed the calculus.

Powell had indicated policymakers were poised to implement another half-point increase in the benchmark borrowing rate this week and yet another next month, aiming to douse red-hot inflation without tipping the economy into recession and avoid a bout of 1970s-style stagflation.

“The 75bp hike… will be about making people/markets believe that they’re serious about continuing to have higher rates in 2023,” Furman said.

However, the central bank cannot influence supply issues, and rate hikes only work by cooling demand and slowing the economy — meaning policymakers are walking a fine line between having an impact and doing too much.

And the impact won’t be immediate.

“Monetary policy operates with lags, today’s inflation reflects decisions taken a year ago,” said Adam Posen, head of the Peterson Institute for International Economics and a former central banker.

“Had Fed hiked in 2021Q2/Q3, then inflation now would be different — not least (because) the current global shocks wouldn’t be piling on already high inflation,” he said on Twitter.

Biden has been scrambling to find a way to ease the pain on American families, including lambasting oil companies that are pulling in record profits.

In a letter to oil executives, he called the high windfall “unacceptable” and demanded ExxonMobil, Chevron and others “take immediate actions to increase the supply of gasoline, diesel, and other refined product,” according to media reports.

Biden on Tuesday again blamed Russia for inflation, which is afflicting countries worldwide, and criticized Republicans for blocking his efforts to provide help to families bearing the brunt of the impact.

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