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The world’s leading central bankers have warned that the era of low interest rates and moderate inflation has come to an end following the “massive geopolitical shock” of Russia’s invasion of Ukraine and the coronavirus pandemic.
Speaking at the European Central Bank’s annual conference, Christine Lagarde, its chairwoman, Jay Powell, chairman of the Federal Reserve, and Andrew Bailey, governor of the Bank of England, called for swift action to curb the ‘inflation.
They said failure to raise interest rates fast enough could allow high inflation to take hold and ultimately require more drastic action by central banks to bring back growth in the economy. prices at more moderate levels.
“The process is very likely to involve some pain, but the worst pain would be not dealing with this high inflation and allowing it to become persistent,” Powell said.
Speaking in Sintra, Portugal, central bank bosses said the pandemic and war in Ukraine were reversing many of the factors that had spurred more than a decade of ultra-low inflation in most developed economies. . They warned that the splintering of the global economy into competing blocs risked fracturing supply chains, reducing productivity, increasing costs and reducing growth.
Do you think central bankers are taking the right approach to rein in inflation? Why or why not? Tell me to [email protected]. Thanks for reading FirstFT Asia. Here’s the rest of today’s news — Emily
The latest news from the war in Ukraine:
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China: The Biden administration has placed five Chinese companies on an export blacklist for allegedly supporting Russian military and defense companies.
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American defences: The United States will dramatically increase military deployments in Europe in response to the Russian invasion of Ukraine.
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NATO: The Biden administration has voiced support for Turkey’s purchase of US fighter jets after Ankara dropped its veto over NATO offers from Finland and Sweden.
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Punishments: The UK has imposed sanctions on Vladimir Potanin, one of Russia’s wealthiest oligarchs, and several others.
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Kremenchuk attack: The attack on the mall will likely result in one of the worst civilian tolls in a single strike since Russia invaded Ukraine.
Five other stories in the news
1. Mukesh Ambani is preparing to hand over the Reliance empire to his children Asia’s richest man, Mukesh Ambani, has begun executing a succession plan for his oil-telecoms conglomerate Reliance Industries, with his twin children Akash and Isha running the telecoms and retail businesses.
2. Hedge fund manager Jim Chanos’ next “big short” The short seller, best known for predicting the collapse of energy group Enron two decades ago, is raising several hundred million dollars for a fund that will take short positions in US-listed real estate investment trusts, he told the Financial Times.
3. Philippines SEC Orders Shutdown of Rappler News Website The Philippine securities watchdog has ordered the shutdown of Rappler, the media website run by Nobel laureate Maria Ressa, in a move that will mark another blow to independent journalism in the South Asian country. -East.
4. Pro-China group attacks U.S. rare earth factory in fake social posts Pro-China government group Dragonbridge has posed as environmental activists on social media in a bid to undermine rare earth producers in the United States and Canada, according to a cybersecurity consultancy. Mandiant said the group used Facebook and Twitter to claim that a US government-funded rare earths refinery would “expose the region to irreversible environmental damage”.
5. Japan, South Korea and the United States agree to closer cooperation on North Korea The leaders of the three nations met on the sidelines of the NATO summit, agreeing to deepen their relations ‘Extended deterrence’ against North Korea following serious concerns about Pyongyang’s missile tests. (Reuters)
The day ahead
Ferdinand “Bongbong” Marcos Jr takes office The son and namesake of the notorious late dictator takes office as the new president of the Philippines.
Economic data Japan will release its May industrial production data. In the UK, final Q1 GDP figures and a report on consumer trends will be released.
Walgreens revenue The pharmacy chain will be in the spotlight when it reports results today, just days after the Walgreens Boots Alliance announced it had scrapped the process of selling the Boots chain in the UK after the turmoil in credit markets resulted in lower bids than his initial expectations. .
What else we read
Ships darken A new Financial Times investigation tracks ships exporting food from Crimea in a way that circumvents international sanctions and potentially smuggles goods out of Ukraine. The shipments became even more contentious after Ukrainian authorities claimed Crimean ports were being used to export grain looted from parts of the country occupied by Russian forces.
© Satellite images of ports
Hong Kong’s elite descend on Tokyo for bargain property purchases Real estate brokerage JP Invest will fly a group of investors from Hong Kong to Tokyo in August for the shopping trip of a lifetime. The group will embark on a hunt for real estate bargains fueled by the historic weakness of the yen, the unwavering policy of the Bank of Japan and sushi at 440 dollars a head.
China’s Marxism majors thrive amid labor market woes Chinese university graduates are struggling to find work in the country’s worst job market in years – unless they have degrees in Marxism. The obscure former major for students is enjoying a revival under President Xi Jinping, who has urged Chinese Communist Party cadres to “remember the original mission”.
Armed robbery shocks Tefaf art fair in Maastricht There were shocking scenes at Maastricht’s venerable Tefaf fair as a man with a sledgehammer smashed through the glass-encased stand of ultra-high-end jewelers Symbolic & Chase on Tuesday morning. The attacker was among a group of four well-dressed men, at least one of whom was seen carrying a gun, who stole unspecified items from the stand.
Free trade is under threat We have entered a third era of the post-war world economic order, writes Martin Wolf. The first was in the context of the Cold War. The second followed the fall of the Soviet Union. Now, in this age of disorder, we must consolidate the global commons – and the less powerful countries must take the lead.

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Learn more about the trade: None of the advanced economies really has a coherent policy combining trade and geopolitics in the Indo-Pacific, writes Alan Beattie. Premium subscribers can Register for Alan’s weekly Trade Secrets newsletter.
NFT
French footballer Kylian Mbappé follows fellow superstars Cristiano Ronaldo and Lionel Messi into the world of non-fungible tokens by becoming an investor in a SoftBank-backed fantasy football platform. Mbappé, 23, will also become a brand ambassador for Sorare, which operates an online game where players can create football teams based on the digital trading cards they own.
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