I know but one freedom and that is the freedom of the mind. – Antoine de Saint-Exupery
THE DAY AT A GLANCE:
The economy is proving to be consistently volatile amid inflation, sanctions, and rising interest rates. The latest comments by Federal Reserve Chairman Jerome Powell caused stocks to plummet yesterday.
In a speech for the National Association For Business Economics, Powell said,
We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.
And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.
As reported by CNBC, “A basis point is equal to 0.01%. FOMC officials indicated that 25 basis point increases are likely at each of their remaining six meetings this year. However, markets are pricing in about a 50-50 chance the next hike, at the May meeting, could be 50 basis points.”
Powell’s comments alone caused stocks to dip, which illustrates the potential impact of the Federal Reserve’s upcoming decisions.
The recent economic activity has brought flashbacks to the economics of the 1970s.
As the US economy struggles amid uncertainty, other countries are distancing themselves from the dollar. New comments from the Institute for the Analysis of Global Security suggest central banks are beginning to question “putting all their eggs in one basket.” One in ten counties is under some form of US economic sanction. However, as sanctions and other economic punishments continue to be handed out like candy, the US dollar will continue to play less of a role in the global economy.
For instance, Saudi Arabia has already expressed interest in using the Chines yuan instead of the US dollar within oil deals. This decision, and those it inspires, will threaten US market dominance.
Meanwhile, Saudi Arabia recently warned it will not accept blame for international oil shortages after its facilities were targeted. Iran-backed Houthi rebels used drone and missile strikes to attack a liquified natural gas plant, water desalination plant, oil facility, and power station. The incident is predicted to cause more upheaval to the already stressed global oil market.
US relations with Saudi Arabia are also under threat as the Biden Administration seeks to revive the Iran Nuclear Deal. Similarly, relations with Russia are continuing to dwindle after President Biden called Putin a “war criminal.”
Russian correspondence to US officials suggests his comments put “Russian-American relations on the verge of rupture.”
Russia’s grave warning comes despite White House Press Secretary Jen Psaki’s lowly attempt to cover for Biden. She said the president was speaking from his heart, and the State Department is currently investigating whether or not Putin has indeed committed war crimes.
Biden has continued to express concern over Russia’s future attacks against the US. On Monday, he said,
The more Putin’s back is against the wall, the greater the severity of the tactics he may employ … one of the tools he’s most likely to use in my view, in our view, is cyberattacks. The magnitude of Russia’s cyber capacity is fairly consequential and it’s coming.
ALN will continue reporting on the Russia-Ukraine War and its impacts as they unfold.
One Last Thing:
Biden’s Supreme Court Nominee’s confirmation hearings are ongoing and will continue throughout the week.
Ketanji Brown Jackson is currently under investigation by the Senate Judiciary Committee due to her previous legal decisions, including light sentencing for sex offenders in three cases regarding child pornography. She is also an extreme abortion advocate and has approved partial-birth abortions.
National Security Adviser Nancy McEldowney is the latest Kamala Harris staffer to leave her office. The VP has a history of quickly churning out staffers due to a reportedly chaotic environment.
Thank you for reading today’s brief.