A man shops at a supermarket in Foster City in California, the United States, April 12, 2022. [Photo/Xinhua]
The US Federal Reserve recently raised its benchmark interest rate by half a percentage point, shifting the target range to 0.75 percent to 1 percent, following a smaller increase in March. It was the Fed's biggest increase in 22 years.
Last fall, Fed Chairman Jerome Powell said rising prices were "transitionary" and would not leave "a permanent mark in the form of higher inflation". So, when inflation began to climb up after mid-2021, the Fed ignored it until it soared.
In March, the inflation rate in the United States accelerated to 8.5 percent, the highest since December 1981. It was partly fueled by rising energy and food prices, and the consumer price index, which shot to 6.5 percent, the most in four decades.
Typically, the rapidly increasing energy and food prices are being attributed to the Russia-Ukraine conflict. Effectively, they should be associated with economic sanctions which have turned a regional conflict with a limited, short-term trajectory into a global crisis with a broad, protracted horizon. That's the net effect of the hybrid proxy war in Ukraine.
Excluding volatile energy and food categories, the soaring inflation has been associated with pandemic-induced global supply disruptions and the recent COVID-19 outbreaks in China. New cases peaked in China in late April and are now coming down.
But disruptions in the global supply chains may penalize global economic prospects as long as the failed efforts to contain the virus in the West continue to give rise to new waves of variants.
Commodity prices peaked in early March, remain close to the peak level and have soared 39 percent since the beginning of the year. Food prices climbed to an all-time high in March, up nearly 20 percent year-on-year, and remain high in what UN Secretary-General Antonio Guterres has called the "hurricane of hunger and a meltdown of the global food system", while crude oil price reached a high of $125 per barrel in early March, increasing 43 percent since January.
In Europe, the most exposed region to Russian energy, natural gas price quintupled to a high of 230 euros ($239.04) per megawatt-hour and has dropped to 104 euros, as concerns over Russian supplies have dissipated somewhat, but only temporarily.
Russia is the world's 11th largest economy with GDP of $1.8 trillion. It is the world's largest gas exporter and the second-largest crude oil exporter, and given its key role in global energy supply, Goldman Sachs has warned that the global economy "could soon be faced with one of the largest energy supply shocks ever".
A benign scenario in the Ukraine crisis was possible, but it would have required rapid, proactive diplomacy. Unfortunately, that has not been the priority of the proxy war. As US Defense Secretary Lloyd Austin said in late April: "We want to see Russia weakened." It was a stunning admission.
The Biden administration is reviewing the excess tariffs imposed on Chinese products ahead of their expiration in July. In fact, some policymakers are calling for reductions in the tariffs in order to provide relief to American consumers struggling with rising prices. These calls are fueled by the fear of a potential Republican landslide win in the midterm elections.
The US' misguided trade wars against China and other large economies have caused irreparable harm to the world economy, by undermining global recovery since 2017. Currently, average tariffs on Chinese imports are levied around 19.3 percent and cover more than two-thirds of all goods the US buys from China.
Yet the US trade deficit has not shrunk, as the Donald Trump and Joe Biden administrations expected. In March, it widened sharply to a record high of $110 billion, due to a broad-based rise in prices, especially as energy imports increased by 10.3 percent to a record high of $352 billion.
The lessons are unambiguous. Unilateral tariffs can resolve neither multilateral challenges nor distortions in the US domestic economy. In effect, recent research suggests that a trade liberalization policy equivalent to a 2-percentage-point reduction in tariffs could reduce US inflation by 1.3 percentage points from the current rate.
However, the Biden administration's priorities have been geopolitical rather than economic. That's precisely why it has continued with Trump's tariffs since January 2021. But, ironically, hoping to kill two birds with one stone, the Biden administration now blames "Trump's tariffs" for the record high inflation. In a disingenuous face-saving measure, the incumbent administration hopes to reframe its economic failures to derail Republican advances in the impending midterm elections.
"Has US inflation peaked?" The New York Times asked several weeks ago. "Has US inflation finally started to slow?" seconded the Financial Times more recently. Recent headlines reflect optimistic but premature hopes that inflation peaked in March.
Yet the Ukraine crisis is far from over, thanks to Biden's proxy war. Moreover, the bottlenecks in the global supply chains are yet to be cleared and could again clog supplies with the emergence of new novel coronavirus variants.
These pressures are likely to weigh on commodity prices longer, particularly if the Biden administration opts for new, ill-advised trade wars and continued misguided sanctions.
Meanwhile, the Fed's aggressive and belated rate hikes are escalating economic challenges in the US and elsewhere. And these could worsen in July, when the Fed plans to start quantitative tightening by culling assets from its $9 trillion balance sheet.
The author is the founder of Difference Group and has served at India, China and America Institute (US), the Shanghai Institutes for International Studies (China), and the EU Centre (Singapore). The views don't necessarily reflect those of China Daily.
,40-year-high US inflat全球零距离 ion self-inflicted相关：
上海侦破百余起涉疫类经济犯罪案件 记者从上海市公安局了解到，近日，上海市公安局经侦总队会同长宁公安分局，在黑龙江警方的大力协助下，循线深挖货源，成功侦破一起通过虚假注册电商实施哄抬物价的跨省案件，抓获2名犯罪嫌疑人。 长宁警方在“黑骑手”专项整治行动中，发现有骑手配送的货物来自两家可疑网络店铺。店铺由杨某注册在黑龙江，系没有实际经营地的虚假店铺，且对外销售的民生商品价格畸高，存在哄抬物价的嫌疑。上海市公安局经侦总队随即会..
北京：社区防疫工作提速有技巧 社区防疫工作提速有技巧 北京疫情防控形势依然严峻，广大医务工作者、基层社区工作者根据最新的疫情防控要求闻风而动，迅速构筑起战疫的“前线堡垒”。 抗疫，是一场没有旁观者的全民行动，离不开市民群众的积极配合。近日，记者来到海淀区北太平庄街道支援社区核酸筛查等工作，在记录基层工作的同时，也注意并收集到基层防疫工作中的一些技巧和呼声。无论是志愿者、普通居民的举手之劳，还是相关部门在工作流程中..
城市路网气象一新 他们为城市“重启”做足“交通筹备” 今天上午，伴随着一旁“大白”们的忙碌身影，一面鲜红的党旗迎风飘扬在南浦大桥上。由隧道股份城市运营骨干党员组成的交通保畅“党员突击队”，正根据市道运局和道运中心的统一部署，加紧加快对本市越江大桥、隧道、高速公路等路网设施的养护维保作业，让城市路网焕然一新，为即将到来的上海复商复市、复工复产做好充分的“交通准备”。 据记者了解，隧道股份城市运营所管辖的全市29条越江设施已经正式进入复工复产“..
北京全力确保防疫与平易近生物资运递通顺 全力确保防疫与民生物资运递畅通 本报讯(记者 代丽丽)近日，北京邮政制定服务首都保供保通保畅工作方案，对50余款市民生活需求产品重点保供，全力确保应急运输绿色通道不断、群众生产生活必要物资运输不断，全力以赴做好保障北京市防疫和民生用品等保供物资运输配送畅通工作。 北京邮政已与北京市商务局建立了市区两级保供保畅工作联动机制，将充分发挥邮政寄递网络优势，全力做好运输、投递应急保障，全力实现“..
贝壳“夹”跑中介人撰文 | 何芙蓉编辑 | 吴先之“如果不是特别着急的情况，我现在基本不会在贝壳、自如这类平台租房。”姜丹是一位在北京工作的95后，老家在河南。毕业将近五年，开始工作并不稳定，前前后后也因此换了三次房子。“微博、豆瓣等租房论坛或群组，以及闲鱼、小红书、抖音等平台都是可以找房的，不过就是比较费时间，需要自己筛选，但很多房子更能满足我的需求，比如房东直租免中介费、可短租、押一付一等，都比较灵活。”如今像贝..
男童失踪入下水道失踪联超85小时 窨井为何能“吃人”？5月12日晚，西安一名3岁男童掉入下水道失联，至今已超85个小时。5月16日，搜救人员仍在全力搜救中。图片来源：华商网男童不慎掉进下水井搜救范围进一步扩大男童父亲杨先生表示，事发当时，自己牵着儿子走在前面，妻子牵着女儿走在后面，突然儿子掉进下水道，被水冲走。据华商网消息，搜救范围已从主管道5.3公里范围扩大至向东的第四污水处理厂内，在排查了污水处理厂管道后，5月16日凌晨，搜救人员、机器装备进入污水厂井内进行..
在超市直播杀人，美18岁男孩为何“由人变鬼”？他的目标很明确，就是杀光超市里的黑人。作者：郑敖天编辑：陈佳莉编审：苏睿对 55 岁的艾伦·萨尔特来讲， 2022 年 5 月 15 日 本该 是一个寻常的周日。他在美国 纽约州布法罗市（又叫水牛城） 当了 30 年“片儿警”，从警局退休 后 闲不住， 就 在家旁边的 “特友善超市”当上了保安。 在他眼里，这份工作 得心应手 ，每天还能和邻居打个招呼，比退休宅家好得多。· 艾伦·萨尔特（前）下午两点半，正..
麦当劳拟打包出售在俄营业 将计提约12亿-14亿美元损失踪麦当劳宣布退出俄罗斯市场，预计减计12亿至14亿美元。2022年5月16日，麦当劳宣布已启动出售其在俄罗斯业务的程序。麦当劳表示，退出俄罗斯市场，将使公司产生约12亿至14亿美元的非现金支出，并确认为“重大外币折算损失”。5月16日，麦当劳（NYSE:MCD）股价盘前小幅走低，今年迄今已下跌9%，同期道琼斯指数下跌11.4%。据美通社当地时间5月16日报道，麦当劳计划将其在俄业务打包出售给当地买家。“麦当劳认为，继续在俄罗斯运营业..
瑞典芬兰插手北约，会否激发核战风险进级？芬兰总统尼尼斯托和总理马林正式宣布加入北约直新闻：芬兰总统与总理昨天（15日）发布联合声明，宣布决定申请加入北约，纸质申请周三（18日）向北约正式提交，瑞典女首相周一（16日）也宣布，经议会辩论，瑞典政府将申请加入北约。管先生，你对此如何看？特约评论员 管姚：这意味着，芬兰与瑞典这两个北欧国家，打破多年保持的军事中立国家中立，选择投身北约这一全球最大的多边军事同盟，对国家发展路向进行了重大修正。瑞典女..
俄罗斯政府：三架飞往莫斯科的航班装有炸弹的信息不属实当地时间5月16日，俄罗斯政府表示，三架飞往莫斯科的飞机“受炸弹威胁”的信息不属实。目前，所有飞机均安全着陆并接受了排查，未发现任何爆炸物或引爆装置。16日早些时候，有匿名人士举报称，两架由圣彼得堡和叶卡捷琳堡飞往莫斯科的飞机装有炸弹。此外，从乌法飞往莫斯科的一架客机的机组人员也收到了类似信息。(总台记者 徐鸿波)