Inflation sparks global worries as Russia-Ukraine dispute continues

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High inflation in the U.S. should be blamed on those who set fiscal policy -- at least that's what monetary policymakers think. U.S. consumer prices have risen faster than other advanced economies, according to researchers at the Federal Reserve Bank of San Francisco, and one of the reasons may be the sheer amount of government support provided to the American people during the pandemic. "Fiscal support measures designed to address the significant economic impact of the pandemic could raise inflation by about 3 percentage points by the end of 2021, leading to this divergence," the San Francisco Fed noted. "However, without these spending measures, the economy could slip into outright deflation, with slower growth, the consequences of which would be harder to deal with," they wrote.

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The Turkish Foreign Ministry announced that a new round of face-to-face talks between Russia and Ukraine will be held in Istanbul, Turkey on the 29th local time. Turkish President Recep Tayyip Erdogan also said that Turkey has made its best efforts for peace, and revealed that before the negotiations on the 29th, the Turkish side will hold brief meetings with the delegations of both sides. Erdogan said that recently, he has continued to maintain telephone communication with Russian and Ukrainian leaders, and the current communication continues to develop in a "positive direction".

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OPEC+ has signaled that it sees no need to adjust oil supply plans even as the Russian-Ukrainian conflict has left markets facing the biggest turmoil in decades. "If there is a balance between supply and demand in the market, and resources are in the market, we will not add more resources," the UAE's energy minister told a conference in Dubai on Monday. He added that OPEC+ is not concerned about whether the reduction in Russian oil exports is causing imbalances. Several delegates said privately they expected OPEC+ to stick to their long-term plan and again approve a modest output increase when they meet on Thursday. The UAE says its partnership with Russia remains strong. The Saudi energy minister said that "Russia is an important member of OPEC+" and is likely to remain in OPEC. This is an alliance we need. "

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The rising risk of a hawkish Fed policy surprise could further dampen the interest of a group of gold buyers who see the Fed's pace of interest rate hikes lagging the inflation curve. Rumors that an inverted U.S. yield curve signaled a looming recession have returned. Now, the interest rate market is pushing the Fed to send an unexpectedly hawkish signal to the market, with growing expectations that the Fed will be willing to raise rates above the neutral rate to control inflation. Historical experience shows that in the interest rate hike cycle, there is little correlation between the flow of gold ETF funds and the US bond yield curve, and more to do with risk aversion. As Russia and Ukraine strive to reach a ceasefire agreement, the downside risk of gold prices increases. .

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The yen's monthly decline accelerated in March, sparking debate over whether the Japanese government might speak out or take action, even though some in Japan may be happy to see the currency depreciate. Even if Japan doesn't sell dollars outright and buy yen, there are options to help boost the exchange rate; the Bank of Japan has always intervened when the yen is under pressure to rise or fall. The last time was in 2011, on Monday, former senior finance ministry official Sakakihara Hideo said that if the yen fell below 130, the Bank of Japan should choose to intervene again; the yen's sharp decline brought its monthly decline against the dollar to 7%. It fell again on Monday, falling 2.3% intraday to a near seven-year low of 125.09. With the Russian-Ukrainian war pushing crude prices to their highest levels in more than a decade, the yen has not been supported by safe-haven demand like most crises, as Japan's economy is heavily reliant on energy imports.

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Gold prices fell on Monday, and the dollar's rise dented demand for the safe-haven asset; the dollar index climbed to a near three-week high, and the 2-year U.S. Treasury yield soared 14 basis points at one point, leading the yield curve higher; bond yields Rising will undermine the appeal of non-yielding gold; prices are still up more than 5% this year as ETF holdings increase for 10th straight week as Russia-Ukraine conflict boosts demand for safe-haven assets; Ukraine and Russia Face-to-face talks between negotiating teams will resume this week.

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Russian Foreign Ministry Spokesperson Zakharova commented on the decision of the "European Council recently announced the continuation of sanctions against Russia", saying that the sanctions imposed by the EU on Russia have damaged the economies of EU member states and made ordinary Europeans face high costs. The price of electricity and fuel, causing social welfare to give way to military spending, inflation surges and mass unemployment. Zakharova also pointed out that EU sanctions on Russia "will only benefit the United States", allowing the United States to profit from EU capital outflows, increased arms supplies to Europe and high-priced LNG supplies.

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The European Commission files a lawsuit against the WTO over the UK's green energy subsidy scheme. The European Commission said in a statement released on the same day that the UK government is using criteria in favour of British companies when it provides subsidies for its offshore wind projects. "This violates the core WTO principle that imported products must be able to compete on an equal footing with domestic products," the statement said. "This move also harms EU suppliers in the green energy sector, including numerous small and medium-sized enterprises."

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The Ministry of Foreign Affairs of India announced that the British Foreign Secretary Truss will visit India on the 31st of this month. India's foreign ministry said the two sides will hold consultations on bilateral, regional and global issues of mutual interest. The visit will help to further deepen cooperation between the two countries in various fields including trade and investment, science, technology and innovation, defense and security, climate cooperation, education and digital communications. In May 2021, Indian Prime Minister Narendra Modi and British Prime Minister Johnson held a virtual India-UK summit to elevate the relationship between the two countries to a comprehensive strategic partnership.