Feeling the heat

The US Federal Reserve (Fed) hiked interest rates by 75 basis points and sent financial markets reeling. Not least because a 50 basis points hike had been signalled. It’s a clear message that the Fed aims to act decisively against red hot inflation. Meanwhile the World Bank cut GDP growth forecasts due to the speed of interest rate and energy price rises, once again raising the spectre of stagflation. The central banks of Switzerland and the UK swiftly followed the Fed’s hike, whereas China maintained an easy monetary policy following Covid lockdowns. 

Bot check

Tesla’s Twitter takeover hit a speedbump, as Elon Musk threatened to walk away from the deal. Why now? His ‘biggest concern’ is the number of bots or fake accounts on Twitter. The company is accused of a material breach of disclosure rules, despite insisting that the number of bots was less than 5% of its daily active users. It matters, as only genuine accounts have a value. Meaning the $44 billion bid for the company might need to be renegotiated. Meanwhile, Twitter employees were invited to a virtual meeting, where the world’s richest man reassured them that ‘exceptional’ staff would have nothing to fear.

Gas tap tightens

Although Russia blamed technical issues, Germany called its 60% reduction of gas supply to Europe an ‘economic attack’. Almost half of EU countries receive gas from Russia, with Germany and the Netherlands high on the customer list. And the restriction inhibits efforts to refill gas storage facilities before winter comes. Germany has moved to ‘alarm stage’, asking consumers to cut usage. But the imposition of a price cap on Russian oil by the G7 could mean the gas taps are closed completely. Leading the IEA (International Energy Agency) to urge Europe to prepare for the worst.