On The Money — War, blockages increase the risk of inflation
Happy Monday and welcome to On The Moneyyour nightly guide to everything related to your bills, bank account, and bottom line. Subscribe here: thehill.com/newsletter-signup.
Today’s Big Deal: The US economy is facing roadblocks resulting from the Russian invasion and inflation. We will also look at Manchin’s decision to oppose the Fed’s pick of Biden and the Kremlin’s increasingly desperate financial moves.
But first, watch a interrupt an anti-war protester one of the most popular TV news in Russia.
Russian war and inflation weigh on US economy
The US economy is facing growing threats from abroad as war in Ukraine and a surge of COVID-19 in China threaten to fuel inflation and slow growth.
While most economists say the United States is still on track for stellar job gains and solid economic growth this year, downside risks have increased over the past two weeks.
- The war in Ukraine and weeks of mounting threats from Russia have already pushed crude oil prices – and related gasoline prices – to dizzying levels.
- Energy and food prices, which had risen steadily throughout 2021, are poised to rise even higher as Russia’s invasion threatens global supplies of oil, natural gas and in wheat.
- The spike in COVID-19 cases across China could now fuel the inflationary fire as factories, neighborhoods and entire cities shut down under the country’s strict coronavirus containment policies.
“If you have more disruptions in Chinese factories and imports, more bottlenecks in the supply chain, more shortages, higher prices, that adds to inflationary pressures,” said economist Mark Zandi. chief at Moody’s Analytics, in an interview on Monday.
“It’s just one more reason to be nervous about the outlook for the economy,” he said.
Sylvester explain here.
Read more: Russia’s ties to the global economy are rapid progress as crushing sanctions and the Kremlin’s response upend decades of post-Soviet reforms.
The Kremlin announced tough limits on banking and exports intended to support its currency’s fall in value this week at the expense of foreigners. Moscow has also pledged to seize the assets of any company leaving Russia and allow its companies to steal Western patents. Experts say the fallout could last long after the war in Ukraine ends and tarnish Russia’s reputation for decades, even if sanctions are eased.
Here is more by Sylvan and Karl.
Manchin to oppose Biden Fed pick on climate stances
Sen. Joe ManchinJoe ManchinAmerica can restore its energy jobs – and cut emissions Democrats plot strategy to defy expectations and limit medium-term losses Biden celebrates US bailout anniversary with visit to elementary school MORE (DW.Va.) said Monday he would not vote to confirm President BidenJoe BidenGas prices hit a new high of 0.43 a gallon, up 79 cents in two weeks Five key developments in Russia’s invasion of Ukraine Biden’s CIA chief leads the charge against war Putin’s information MORE‘s choice for a powerful position in the Federal Reserve Board over its criticism of the fossil fuel industry.
In a statement on Monday, Manchin said he opposed Biden’s nomination of Sarah Bloom Raskin as vice chairman of Fed oversight because of his “concerns about the critical importance of funding a comprehensive energy policy to meet our nation’s critical energy needs.”
- Raskin, a former Fed governor and deputy secretary of the Treasury Department, urged financial regulators and banks to pay greater attention to climate-related financial risks for years before Biden chose her to be chief executive. Fed regulations.
- She also warned against investing in fossil fuel projects and companies, noting environmental risks and financial volatility within the sector, and opposed the Fed providing emergency loans to companies. of fossil fuels at the height of the coronavirus pandemic.
Without Manchin’s vote, Raskin would need the unlikely support of at least one Republican senator to be confirmed by the upper house. Democrats narrowly control the Senate with 50 members plus Vice President Harris’ deciding vote. Manchin’s opposition will also bolster a Senate GOP blockade on Raskin’s nomination to the Senate Banking Committee, which has harassed her and four other Fed nominations.
Sylvain has the last one here.
PREPARE TO RUBLE
Russia threatens to pay foreign debts in rubles following sanctions
Russia is threatening to pay its foreign debts in rubles after several major Moscow banks were sanctioned in response to the country’s invasion of Ukraine.
The Russian government is expected to pay $117 million on Wednesday for a pair of its dollar-denominated bonds, according to Reuters.
- The Russian Foreign Ministry has reportedly agreed to a temporary course of action that gives banks the chance to repay their debts, but it now warns that resistance to such payments depends on sanctions.
- A number of major Moscow banks have been sanctioned following Russia’s invasion of Ukraine. Last month, the Treasury Department banned financial transactions with the Bank of Russia and the Russian Foreign Investment Fund, and the White House announced that the United States and its allies would oust some Russian banks from the international banking system SWIFT .
If payments cannot be made, the finance ministry has reportedly said it will repay eurobonds in rubles, which have fallen to record lows since the Russian invasion.
Read more here by Mychael Schnell of The Hill.
Lyft will charge temporary additional fees amid rising gas prices
Popular ride-sharing app Lyft confirmed on Monday that it will charge passengers extra fuel fees amid rising gas prices across the country.
The company told The Hill in an email that it is “closely monitoring rising gas prices and its impact on our driving community.”
- “Overall, driver earnings remain strong compared to last year, but given rapidly rising fuel prices, we will be asking passengers to pay a temporary fuel surcharge, which will go entirely to the drivers. “said a spokesperson. No details were shared on the amount charged to passengers. The spokesperson added that the company would soon share more information.
- This follows a similar move by Lyft rival Uber. who announced Friday that it will charge users a fuel fee to mitigate the impact of rising gas prices.
Uber customers will pay an additional $0.45 or $0.55 for Uber rides and an additional $0.35 or $0.45 for Uber Eats orders starting Wednesday. The total amount will go directly to the drivers.
The Hill’s Sarakshi Rai has more on this here.
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Virtual Event Invitation—The Future of Education—Thursday, March 17 at 1:00 p.m. ET/10:00 a.m. PT
After two years of virtual and blended learning, many students are still catching up. The federal government has provided billions of dollars in relief funds to school districts across the country. How do state officials use these funds and how do you address equity issues? Join us at The Hill’s annual Futures of Education Summit for headlining conversations with Education Secretary Miguel CardonaMiguel CardonaOn The Money — US suspends normal trade with Russia Hillicon Valley — Featured by Nokia — Google and Meta face new antitrust investigation On The Money — Prices Soar: Annual Inflation reached its highest level in 40 years MOREsen. Bill CassidyBill CassidyOn The Money — US suspends normal trade with Russia Hillicon Valley — Featured by Nokia — Google and Meta face new antitrust investigation On The Money — Prices Soar: Annual Inflation reached its highest level in 40 years MORE (R-La.), Rep. Jahana HayesJahana HayesOn The Money — US suspends normal trade with Russia Hillicon Valley — Featured by Nokia — Google and Meta face new antitrust investigation On The Money — Prices Soar: Annual Inflation reached its highest level in 40 years MORE (D-Conn.) and Governors. Jared PolisJared Schutz PolisDemocrats Divided Over Proposal to Halt Federal Gas Tax On The Money – US suspends normal commerce with Russia Hillicon Valley – Featured by Nokia – Google and Meta face new antitrust probe MORE (D-Colo.) and Chris SununuChris SununuOn Money – US suspends normal trade with Russia Hillicon Valley – Featured by Nokia – Google, Meta face new antitrust probe DNC sends cookie cakes to GOP governors to celebrate US bailout anniversary MORE (RN.H.). Book your place here.
Good to know
Non-white voters are more likely than white voters say that inflation has caused major financial pressure in their lives.
A Wall Street Journal poll found that 35% of black, Hispanic, Asian American and other voters who said they were anything other than white said inflation would put a significant strain on their lives. Among white voters, 28% said the same.
Here’s what else we’ve got our eyes on:
That’s all for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. See you on Tuesday.