Nutritix

Tag: Politics

  • Fed announces smaller rate rise as inflation cools

    Fed announces smaller rate rise as inflation cools

    The US central bank has raised interest rates again as it continues its fight to stabilize prices in the world’s largest economy.

    The Federal Reserve said it was raising its key rate by 0.25 percentage points.

    That marks the smallest increase since last March, after a series of aggressive rate hikes last year.

    But officials warned that they did not think they were finished raising rates, despite signs that price increases in the US are slowing. 

    The bank’s moves are closely watched around the world as the US drives a global shift after years of low-interest rates that followed the financial crisis.

    The Bank of England and European Central Bank are expected to announce their own rate increases on Thursday.

    The rate rise announced by the Fed on Wednesday was expected. It increases the bank’s benchmark rate to a range of 4.5%-4.75% – the highest since 2007.

    By pushing up borrowing costs, the Fed is trying to cool the economy and ease the pressures of pushing up prices.

    But officials risk triggering a painful recession, in which the economy slows so sharply that it prompts mass job cuts.

    Pressure has mounted on the bank to slow, or stop, its rate hike campaign, as the higher borrowing costs hurt sectors such as housing and the US economy, slows sharply. 

    Those voices have grown louder amid recent data showing inflation in the US dropping to 6.5% last month.

    Many investors have been betting that the bank will raise rates only once more after this meeting.

    But Federal Reserve chairman Jerome Powell said bank officials remained worried by data suggesting that the costs of many services – such as health care – are increasing far faster than the 2% pace considered healthy.

    He said the bank would rather raise rates too high than declare victory over the problem prematurely. 

    “The job is not fully done,” he said. “While recent developments are encouraging we will need substantially more evidence to be confident that inflation is on a sustained downward path.”

    In the statement announcing its decision, Fed officials said they continued to believe “ongoing” increases would be appropriate.

    Projections released in December showed they thought the bank’s benchmark rate could stand above 5% at the end of 2023.

    Mr Powell declined to say whether officials had changed their views, noting that there was a lot of “uncertainty” about the outlook. 

    Stocks rose during and after the news conference, with the S&P 500 ending up more than 1%. 

    The market gains could be a sign that investors are gaining confidence that the central bank will be able to stabilize prices without a recession, said Jay Bryson, an economist at Wells Fargo. 

    But Ronald Temple, chief market strategist at Lazard, said if investors get too optimistic that the rate rises are over, it may make the Fed’s job harder. 

    “Taken together with today’s report indicating near record level job openings, I believe markets remain too dovish regarding how high rates will go and how long they will stay there,” he said. 

    “The more markets resist the Fed, the tighter conditions will have to be to tame inflation.”

  • Blinken’s Jerusalem visit offers few solutions

    Blinken’s Jerusalem visit offers few solutions

    When Antony Blinken landed at Ben Gurion airport on Monday he said he had arrived at a “pivotal moment”.

    By the end of his two-day visit, it is clear he had more than one moment in mind. 

    Israel and the occupied West Bank are currently gripped by a level of violence unmatched in years, which shows signs of slipping much further out of control.

    But there are several “pivotal moments” converging and the Americans are worried. Their top diplomat might have been referring to any or all of them as he spoke on the tarmac with aviation fumes still blurring the air behind him.

    It is a long list. First is the accelerating rate of bloodshed. Next comes the most radically nationalist governing coalition in Israel’s history, led by Prime Minister Benjamin Netanyahu (who is on trial on corruption charges, which he denies). 

    The coalition is asserting “exclusive” Jewish rights to all the land (ie ending any idea of a future independent Palestinian state). It also proposes to change fundamentally the nature of Israel’s legal system (a full attack on Israeli democracy say those pouring on to the streets in protest). 

    Then there is a near complete collapse in control by the Palestinian Authority (PA) in parts of the occupied West Bank (seeing waves of Israeli military raids and helping create a new generation of armed militants), an aging and unpopular PA leader (whom this year marks Year 18 of his four-year elected term in office), and his announcement last week to ditch so-called security coordination with the Israelis (a move that could lead to a complete security collapse in the West Bank). 

    Much of this has been years in the making. And after the US made a series of unprecedented announcements for the region under former President Donald Trump, the Biden administration has been winding many of them back. It is left able to prioritize only what it thinks is possible in the immediate term. 

    Forget any sudden talk of pursuing a two-state solution – the long-held international formula for peace. This is crisis management. Mr. Blinken kept using two phrases, “calling for calm” and “upholding our shared values”. 

    On the first point, the death toll is among the worst in years. In the last 10 months, there have been waves of lethal Israeli military search and arrest raids in the occupied West Bank, a deadly round of fighting between Israel and Palestinian militants in Gaza, and a spate of deadly attacks by Palestinians against Israelis. More than 200 Palestinians and 30 Israelis were killed in 2022. In January alone this year, more than 30 Palestinians and seven Israelis have been killed.

  • Shell reports the highest profits in 115 years

    Shell reports the highest profits in 115 years

    Profits hit $39.9bn (£32.2bn) in 2022, double last year’s total and the highest in its 115-year history.

    Energy firms have seen record earnings since oil and gas prices jumped following the invasion of Ukraine.

    It has heaped pressure on firms to pay more tax as households struggle with rising bills.

    Opposition parties said Shell’s profits were “outrageous” and the government was letting energy firms “off the hook”. They also called for the planned increase in the energy price cap due in April to be scrapped. 

    Energy prices had begun to climb after the end of Covid lockdowns but rose sharply in March last year after the events in Ukraine led to worries over supplies.

    The price of Brent crude oil reached nearly $128 a barrel following the invasion but has since fallen back to about $83. Gas prices also spiked but have come down from their highs.

    It has led to bumper profits for energy companies, but also fuelled a rise in energy bills for households and businesses. 

    Last year, the UK government introduced a windfall tax – called the Energy Profits Levy – on the “extraordinary” earnings of firms to help fund its scheme to lower gas and electricity bills.

    Despite the move, Shell had said it did not expect to pay any UK tax this year as it is allowed to offset decommissioning costs and investments in UK projects against any UK profits.

    However, on Thursday it said was due to pay $134m in UK windfall tax for 2022, and expected to pay more than $500m in 2023.

    This may look small compared to its profits but Shell only derives around 5% of its revenue from the UK – the rest is made and taxed in other jurisdictions.

    However, critics point out that Shell is a UK-headquartered company and has been paying more to its shareholders than it spends on renewable investments.

    The government is currently limiting gas and electricity bills so a household using a typical amount of energy will pay £2,500 a year.

    However, that is still more than twice what it was before Russia’s invasion, and the threshold is due to rise to £3,000 in April. 

    The government’s windfall tax only applies to profits made from extracting UK oil and gas. The rate was originally set at 25%, but has now been increased to 35%.

    Oil and gas firms also pay 30% corporation tax on their profits as well as a supplementary 10% rate. Along with the new windfall tax, that takes their total tax rate to 75%.

    However, companies are able to reduce the amount of tax they pay by factoring in losses or spending on things like decommissioning North Sea oil platforms. It has meant that in recent years, energy giants such as BP and Shell have paid little or no tax in the UK.

  • Montessori: The world’s most influential school?

    Montessori: The world’s most influential school?

    Tech geniuses, nation builders, and famous artists have praised the benefits of a Montessori education – but does it hold up to scientific scrutiny? David Robson and Alessia Franco investigate.

    When considering the lives of the rich and famous, it is always tempting to look for the secrets of their successes. So here’s a brain teaser: what do the cook Julia Child, the novelist Gabriel García Márquez, the singer Taylor Swift, and Google’s founders Larry Page and Sergey Brin all have in common?

    The answer is that they all attended Montessori schools as young children. In the US, the schools’ influence in the art and tech world has long been noted. But the reach of the educational method goes far beyond that. Indian independence leader Mahatma Gandhi was a fan, and described how children taught with it “felt no burden of learning as they learned everything as they played”. Rabindranath Tagore, the Nobel Prize-winning poet, set up a network of Montessori schools to free children’s creative self-expression. 

    But does the method actually work?

    It is more than a century since the Italian doctor and educator Maria Montessori designed her famous principles, which encouraged children to develop autonomy from a young age. Her life offers an inspiring story of an early feminist who dared to defy the Fascist regime in the pursuit of her dream. And according to some estimates, there are now at least 60,000 schools across the world using the Montessori method.

4224140