Your Weekend Reading: Next Year’s Ride Is Looking Pretty Bumpy
Get caught up.
All eyes will be on the US Federal Reserve and European Central Bank next week for their last policy meetings of the year, with likely 50 basis point rate hikes by both as they slowly gain ground against inflation. US short-term inflation expectations dropped to the lowest level in more than a year, helped by falling gasoline prices. But Europe’s energy problems are likely to persist. Even with glimmers of good news for the US, it’s still shaping up to be a rough 2023 for the global economy, according to Bloomberg Economics, with the euro area starting the year in recession and the US possibly ending it in one. By contrast, China is projected to expand more than 5%. Reflecting on the wild swings that have marked the year, Liam Denning writes in Bloomberg Opinion that he doubts anyone “predicted 2022 ending with oil prices down and the cost of batteries going up.”
Still on the back foot thanks to Ukrainian advances in recent months, Vladimir Putin is again making thinly veiled threats of nuclear war. Moscow’s atomic arsenal is a “deterrent factor,” Putin volunteered this week, only to later make an even graver proclamation that he’s considering making a nuclear first strike part of Russian military doctrine. Putin’s forces, which have spent the past nine months killing potentially tens of thousands of Ukrainian civilians, are continuing their bid to deprive the country of heat, water and power this winter by bombing infrastructure. It’s become a feature of daily life in Kyiv. But Putin did seek to claim a different kind of victory this week: In exchange for releasing WNBA player Brittney Griner, the US set free a notorious arms dealer with reported ties to Russian military intelligence. Viktor Bout, a former Soviet military officer, had been serving a 25 year term for conspiracy. At his sentencing, the judge said Bout “has sold weapons to some of the most vicious and violent regimes in the world.”