Raising rates while ensuring the economy continues to expand is the latest challenge facing Federal Reserve officials who have spent the past two years grappling with coronavirus shutdowns and the worst labor market shock in history.
Federal Reserve Chairman Jerome Powell has warned that war could fuel inflation and cause households to cut back on spending. But he also noted that the conflict did not change the central bank’s thinking on interest rates.
“To ensure the economy continues to expand and avoid a recession, I think it’s important to normalize interest rates,” Mark Zandi, chief economist at Moody’s Analytics, told the House Financial Services Committee on Tuesday.
“The key thing for low- and middle-income families is to avoid stagnation,” Zandi said.
Low-income families that are already struggling with higher prices will be hit hard by the downturn.
The trend of pandemic inflation began with products and services that have been associated with increased demand and disruption to the supply chain, such as automobiles. But the high prices quickly spread throughout the economy. The Bureau of Labor Statistics reported Thursday that in the year to February, US consumer prices rose 7.9% without seasonal adjustments. It was the largest increase since January 1982.
McDonald’s transformed Russia. Now the country is abandoned
When McDonald’s first opened its doors in Moscow, it was a big deal.
The location of Pushkin Square was enormous, with a capacity of hundreds of people. It was the largest McDonald’s restaurant in the world at that time. In most respects, it looked like any other McDonald’s of the era. But there was the hammer and sickle flag under the golden arches and an international theme inside, displaying a model of Big Ben in London in the dining room.
McDonald’s arrival in Moscow was more than a Big Mac and fries, noted Dara Goldstein, Wilcox B. and Harriet M. The most notable example of the work of glasnost was the attempt of Soviet President Mikhail Gorbychev to open his collapsing country to international relations.
“There was an obvious crack in the Iron Curtain,” she said. “It was very symbolic in terms of the changes that were happening.” After about two years, the Soviet Union will collapse.
After opening this first place, McDonald’s expanded its reach within the country. As of last week, there were about 850 sites operating in Russia.
But the Russian invasion of Ukraine prompted McDonald’s to change course, at least temporarily. On Tuesday, the company announced it would temporarily halt operations at those restaurants, following similar decisions by other Western companies and pressure from critics.
For Goldstein, this moment is merely symbolic, but much less hopeful.
“If the opening of McDonald’s in 1990 symbolized the beginning of a new era in Soviet life, an era of greater freedoms, then the current exit of the company represented not just the closure of business, but society as a whole,” she said.
Monday: Eurogroup finance ministers meeting
Tuesday: US producer price index; OPEC report
Wednesday: Federal Reserve rate decision; US retail sales earnings from BMW, Lennar and Williams-Sonoma; The International Energy Agency’s monthly report
Thursday: housing beginnings in the United States; US initial claims; Earnings from Dollar General, FedEx and GameStop; Bank of England interest rate decision; Inflation in the European Union
Friday: US existing home sales; Bank of Japan interest rate decision