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FirstFT: World’s central bankers call for quick action to curb inflation

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The world’s top central bankers have warned that the era of low interest rates and moderate inflation has come to an end after the “massive geopolitical shock” of Russia’s invasion of Ukraine and the coronavirus pandemic.

At the European Central Bank’s annual conference, Christine Lagarde, its president, Federal Reserve chairman Jay Powell, and Bank of England governor Andrew Bailey, called for swift action to curb inflation.

They said not raising interest rates fast enough could lead to high inflation becoming embedded and ultimately more drastic action by central banks to return price growth to more moderate levels.

“The process will most likely involve some pain, but the worst pain would be if you don’t deal with this high inflation and let it become intractable,” Powell said.

In Sintra, Portugal, central bank bosses said the pandemic and the war in Ukraine have reversed many of the factors that had caused more than a decade of ultra-low inflation in most developed economies. They warned that the fragmentation of the global economy into competing blocs would risk breaking supply chains, reducing productivity, increasing costs and reducing growth.

Do you think central bankers are taking the right approach to curb inflation? Why or why not? tell me on firstft@ft.com† Thanks for reading FirstFT Asia. Here’s the rest of today’s news — Emily

The latest on the war in Ukraine:

  • China: The Biden administration has blacklisted five Chinese companies from exports for allegedly supporting Russian military and defense companies.

  • American Defense: The US will significantly increase military deployment in Europe in response to Russia’s invasion of Ukraine.

  • NATO: The Biden administration expressed support for Turkey’s purchase of US fighter jets after Ankara vetoed NATO’s bids from Finland and Sweden.

  • sanctions: The UK has imposed sanctions on Vladimir Potanin, one of Russia’s wealthiest oligarchs, along with several other individuals.

  • Kremenchuk attack: The attack on the mall is likely to result in one of the worst civilian casualties in a single attack since Russia’s invasion of Ukraine.

1. Mukesh Ambani Prepares to Hand the Reliance Empire to His Children Asia’s richest man, Mukesh Ambani, has begun executing a succession plan for his oil-to-telecom conglomerate Reliance Industries, with his twin children Akash and Isha running its telecom and retail operations.

2. Hedge fund manager Jim Chanos’ next big short The shortseller, 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. Philippine SEC orders shutdown of Rappler news website The Philippine securities watchdog has ordered the shutdown of Rappler, the media website of Nobel laureate Maria Ressa, in a move that will mark another blow to independent journalism in the Southeast Asian country.

4. Pro-China Group Attacks US Rare Earth Factory in Fake Social Posts The pro-Chinese government group Dragonbridge impersonated environmentalists on social media in an effort to undermine rare earth producers in the US and Canada, according to a cybersecurity consultancy. Mandiant said the group claimed via Facebook and Twitter that a U.S. government-funded rare earths refinery “would expose the area to irreversible environmental damage.”

5. Japan, South Korea and the US agree to cooperate more closely in North Korea The leaders of the three nations met on the sidelines of the NATO summit and agreed to deepen their joint “comprehensive deterrence” against North Korea after deep concern over Pyongyang’s missile tests. (Reuters)

the next day

Ferdinand “Bongbong” Marcos Jr takes office The son and namesake of the infamous late dictator, takes office as the new president of the Philippines.

Economic data Japan will release its industrial production data for May. In the UK, final Q1 GDP figures and a consumer trends report will be released.

Walgreens Boots Alliance Earnings The pharmacy chain will be in the spotlight as it reports results today, just days after the Walgreens Boots Alliance announced it was exiting the sale process for the Boots chain in the UK after credit market turmoil resulted in bids falling below the initial expectations were .

What else do we read

Ships going dark A new Financial Times investigation is tracking ships exporting food from Crimea in ways that circumvent international sanctions — and potentially smuggle goods out of Ukraine. The shipments have become even more controversial after Ukrainian authorities alleged that Crimea’s ports were used to export grain looted from parts of the country occupied by Russian forces.

© Satellite images of ports

Hong Kong elite descend on Tokyo for real estate bargains Real estate brokerage JP Invest will fly a group of Hong Kong investors to Tokyo in August for the shopping trip of a lifetime. The group is on a real estate bargain hunt fueled by the historic weakness of the yen, the unwavering policies of the Bank of Japan and $440 per capita sushi.

China’s Marxist Majors Thrive Amid Labor Market Problems Chinese university graduates struggle to find work in the country’s worst labor market in years unless they have a degree in Marxism. The one-time obscure major for students is enjoying a resurgence under President Xi Jinping, who urged Chinese Communist Party cadres to “remember the original mission.”

Armed robbery shocks Tefaf art fair in Maastricht Shocking scenes at the venerable Tefaf fair in Maastricht when a man with a sledgehammer smashed the glass-lined stand of ultra-high-end jewelers Symbolic & Chase on Tuesday morning. The perpetrator was part of a group of four well-dressed men, at least one of whom had been a witness with a gun, who stole unspecified items from the stand.

Open trade is at risk We have entered a third era of the post-war global 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 strengthen the global commons – and less powerful countries must take the initiative.

Line chart of the trade balance between China and the US, as a percentage of the respective GDP, showing that China's surplus with the US has shrunk relative to GDP
  • More about trade: None of the advanced economies have truly coherent policies that combine trade with geopolitics in the Indo-Pacific, writes Alan Beattie. Premium subscribers can Sign Up for Alan’s weekly Trade Secrets newsletter.


French football player Kylian Mbappé follows fellow superstars Cristiano Ronaldo and Lionel Messi into the world of non-replaceable 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 in which players can create football teams based on the digital trading cards they own.

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