The Day at a Glance | Jun 17 2022

The Top

*The White House explores implementing limits on the exports of fuels to contain the rising prices.

*European inflation reaches 8.1% per year during May.

*Biden signs law to reduce maritime transportation prices; the law will regulate shipments and seek to avoid overpricing.

*Bank of Japan maintained its ultra-accommodative monetary policy at its meeting this Friday; Yen weakens.

*If inflation worsens, several aggressive rate hikes are likely to come: Klass Knot, ECB member.

*European Commission recommends giving Ukraine the status of candidate for EU membership.

*Fiscal deficit in China reaches a new high in the face of fiscal support due to new COVID outbreaks.

*Economic indicators: US Industrial Production is expected (0.4%e monthly).

Economic environment

Government efforts to contain inflation. President Joe Biden continues his efforts to control inflation through new legislation and attacks on private companies. During this week, Biden wrote a letter to oil enterprises claiming the high profits made at the expense of higher prices for consumers, which deteriorate the life quality of citizens. This morning, the President has signed a law to reduce the rising prices of maritime transportation. This law will regulate and guarantee that all the shipments use the available space for the goods movement. In addition, it will allow investigations on the prices granted by companies for transportation services. A substantial impact on inflation is not expected, but marginal; it just shows the Administration’s desperation to stop the biggest issue plaguing the US people, heading into the midterm elections in November. The World Shipping Council responded to the President’s actions, criticizing them for demonizing the shipping service companies and blaming them for a problem that goes beyond them. They suggested to the government that a more consistent action would be to increase investment in infrastructure to resolve bottlenecks. Additional reports suggest that the Biden Administration is considering implementing limits on fuel exports to stop the rise in gasoline prices, which exceeded 5 dollars per gallon. According to the presidential spokesman, Biden would use the power granted by the Defense Production Act to reduce gasoline prices; although the announcement of such measures is not imminent.