Weekly Market Update - 20 June 2022

FED Hikes Rates The Most Since 1994

The Federal Reserve raised interest rates by 75 basis points — the biggest increase since 1994 — and Chair Jerome Powell signaled another big move next month, intensifying a fight to contain rampant inflation. 

He said another 75 basis-point hike, or a 50 basis-point move, was likely at the next meeting of policy makers. They forecast interest rates would rise even further this year, to 3.4% by December and 3.8% by the end of 2023. Wall Street analysts increasingly see a recession on the horizon. And that may be bad news for President Joe Biden.

Xi and Putin Back In Talks

Chinese President Xi Jinping held his second phone call with Vladimir Putin since his Russian counterpart invaded Ukraine, in which he reiterated support for Russia’s security concerns.

A report of the conversation largely repeated China’s prior comments on Russia, including a call for Putin and other nations to work toward a solution. Putin in turn offered his support for China on issues including Xinjiang, Taiwan and Hong Kong, saying Russia opposes any interference in China’s affairs. The conversation comes days after China issued one of the country’s strongest warnings yet about the risk of war over Taiwan.

Travel Bounce

Cathay Pacific is planning to recruit 4,000 staff between now and the end of 2023 to replenish its severely depleted workforce and gear up for an anticipated recovery in air travel, according to CEO Augustus Tang.

The carrier’s workforce has shrunk by about 40% during the Covid-19 pandemic. In case you missed it, this is why your airline tickets are so expensive right now. In other Covid news, New Zealand is scrapping its Covid test rule for people entering the country; Shanghai plans to mass test the entire city every weekend until the end of July; and US regulators have given the nod to Covid vaccines for children as young as six months.