Hope you all had a good weekend. Bad News: many of us got one hour less of sleep yesterday. Good News: most of us now won't see the sun set before 5pm again until November.
Lots on the agenda this week: We're continuing to follow the latest in Ukraine, the fallout from an Iranian missile strike, how a COVID surge in China might impact the supply chain (again) and a big Fed decision as it tries to battle inflation here in the US.
On the lighter side, the brackets are now set for March Madness 2022. And somehow, the biggest sports story this morning is Tom Brady returning to the Tampa Bay Buccaneers next season after the shortest retirement in history. (40 days and 40 nights---pretty biblical, huh?).
See you tonight at 9pmET on my regular Mondays with Mosh Instagram Live, where I take all your questions.
A Russian request: U.S. officials say Russia has asked China for military and economic assistance for its nearly three-week old war in Ukraine. Multiple reports (Bloomberg, Financial Times, NY Times) suggest that Russia is in need of economic support to counteract Western sanctions as well as potential lethal aid as it faces stiffer than expected Ukrainian opposition (bolstered by Europe & the US). US officials tell the Financial Times there are signs that Russia was running out of some kinds of weaponry.
FWIW: A Chinese embassy spokesperson in DC told the Times he was unaware of any suggestions that China might be willing to help Russia, stating: “China is deeply concerned and grieved on the Ukraine situation...we sincerely hope that the situation will ease and peace will return at an early date.”
US National Security Adviser Jake Sullivan will meet Monday with China’s top foreign policy official. Sullivan told several Sunday news shows that he would warn China not to try to “bail out” Russia.
Until now, China has been trying to thread the needle here between the West and Russia. Direct involvement on behalf of Russia would significantly escalate the war.
US journalist killed: Brent Renaud, an award-winning American filmmaker, was killed when Russian forces opened fire at a checkpoint in Irpin, Ukraine. Documentary filmmaker Juan Arredondo was injured in the attack. See below, as he describes what happened:
Diplomatic mixed messages: Ukrainian and Russian officials are resuming talks today. According to the NY Times, "Both sides have said that the gap in demands has narrowed ahead of this round of talks." But over the weekend, Russian President Vladimir Putin held a 75-minute call with the leaders of Germany and France. A French official said Putin “did not appear ready to end the war.”
Russia is keeping up an assault on the capital of Kyiv this morning, where it has surrounded the city from three sides. They also began to strike western Ukraine--near the Poland border-- killing dozens Saturday. The Russians said they will start to attack weapons shipments from the US and Europe to Ukraine, raising the risk of a direct confrontation with NATO powers. ~ FT
Refugees: More than 2.7 million refugees have fled Ukraine since the start of the Russian invasion, 1.5 million of whom have gone to neighboring Poland. Now the mayors of Warsaw and Krakow, two of the biggest cities in Poland, are warning that they're running out of supplies and may no longer be able to absorb people fleeing Ukraine. ~ Washington Post.
Note that nearly 10 percent of the population of Poland's capital, Warsaw, is now Ukrainian refugees....and growing.
Gas price impact: Prices at the pump fell slightly over the weekend (literally by about a penny) from a record $4.331 a gallon to $4.325. Meanwhile, Uber announced it will add a "temporary fuel surcharge" to help its drivers offset the increasing cost of gas prices-- even for rides or deliveries done in electric vehicles. For Rides, customers will pay between 45 and 55 cents, and for Eats, customers will pay an additional 35 to 45 cents.
Uber says the surcharge could increase as gas prices rise. And the entire surcharge will be passed along to the drivers. They hope this will give drivers more incentive to transition to EVs. ~ The Verge
Iran says it's responsible for firing a barrage of 12 ballistic missiles into the northern Iraqi city of Erbil just after midnight Saturday. They landed a few miles from a new U.S. consulate (under construction) in the Kurdish regional capital. U.S. officials said no Americans were hurt and no U.S. facilities were hit. Kurdish authorities said only one civilian was hurt and no one killed.
In a statement, Iran's Revolutionary Guard Corps (IRGC) took direct responsibility for the attack, saying it was a response to an Israeli drone strike in Syria that killed two of its members last week. Iran says it aimed at "the strategic center of the Zionist conspiracies" inside Iraq. ~ Washington Post
The IRGC is an elite Iranian military group on the US terrorist watch list responsible for funding, training and arming terror groups across the region including in Lebanon, Syria, Iraq, Yemen and the Gaza Strip.
Iran Nuclear Deal: Negotiations are reportedly in the final stage to restore the Iran nuclear deal (The JCPOA: Joint Comprehensive Plan of Action), which lifted economic sanctions on Iran in return for their vow not to build nuclear weapons. The deal, which went into effect in 2015, included Europe, Russia, China and the US. However the US unilaterally withdrew from the JCPOA in 2018, with President Trump claiming Iran was not abiding by the agreement, including funding and supporting global terrorism.
There's been a last minute snag in negotiations to restore the deal; talks are now on "pause," according to some European countries, after Russia demanded a guarantee that Russian trade with Iran would not be affected by sanctions imposed on Moscow over its invasion of Ukraine. ~ PBS
What's next?: Some US congress members are now calling for an end to nuclear negotiations following the attack in Iraq. Rep. Liz Cheney tweeted, "The Biden Administration must end JCPOA negotiations immediately."
Saudi talks: Iran also recently suspended secret talks with Saudi Arabia-- happening in Iraq-- aimed at defusing years of tension between the two countries, after Saudi Arabia carried out its own mass execution. Three dozens Shiites were among those killed. ~ AP
Qassem Soleimani: The last time Iranian ballistic missiles were directed at U.S. forces was in January 2020 -- a retaliation for the U.S. assassination that month of IRGC head Qassem Soleimani.
OK, let's try to summarize all that again: Iran attacked what they claim were secret Israeli assets near a US military base inside Iraq Saturday. They claim it was retaliation for an Israeli attack on Iranian assets inside Syria. And that comes as the US and west are negotiating with Iran to restore the 'no nuclear weapons for no sanctions' deal that existed for 3 years. But there are a lot of skeptics that this weekend's attack mean Iran cannot be trusted. At the same time, an agreement and the lifting of sanctions could bring Iran's huge gas and oil supply back to the global market. Your reminder that the Middle East is never boring.
The first major step in the war to tackle inflation takes place this week. The Federal Reserve will hold its two-day policy meeting on Tuesday and Wednesday, where it is expected to raise interest rates. (The Fed cut rates to near zero in 2020 to lessen the impact of the pandemic. Since then, the economy has rebounded quicker than expected but rates are still at record lows.)
Fed Chair Jerome Powell has backed a quarter point rate increase but says he's ready to use larger rate hikes if inflation gets worse. Remember, if the Fed raises the cost of credit, the assumption is that debt-financed spending and investment go down. That means less money in circulation and slower price increases.
Inflation IS getting worse, now 3x the Fed's 2% target. And just last week, a government report showed that the price of many goods and services (gas, food, rent) jumped by an average of nearly 8% since last year.
📖 Mo News looked at the various tools the Fed and the government have to try to fight inflation in Friday's newsletter.
It's complicated: The Fed is now facing a triple whammy of skyrocketing inflation, the war/sanctions impacting the markets and the continued pandemic recovery. It need to raise rates to fight inflation but can't hike them too high or too quickly or risk bringing on a recession. Watch for their statement on Wednesday on how they are trying to do all that. ~ Reuters
And getting even more complicated: Breaking Overnight: China has imposed new lockdowns on two of its largest cities amid a Covid surge. It is shutting some factories and ports, impacting huge companies like Apple for at least a week, and potentially causing more global supply chain issues. We have more details below in OTHER HEADLINES.
IMPACT ON ECONOMY
Higher interest rates have ripple effects through the entire economy.
Mortgage rates will likely increase, potentially slowing down the red hot housing market. (Housing prices jumped nearly 20% last year.) There's still tons of demand for housing and not enough supply, so it's also possible that Americans will fork over a little more for their mortgage, and that the housing market will continue to soar.
Business loans are also become more expensive, potentially causing businesses to slow down or pause growth plans. ~ Forbes
** One other thing to note about the economy this week: Tuesday, March 15th is Equal Pay Day. It symbolizes how far into each year a woman must work to earn as much as a man earned in the previous year, on average.
The brackets are now set for the NCAA men's and women's basketball tournament known as March Madness. Your deadline to fill out your work or friend bracket is typically 12pmET on Thursday. However, there are four play-in games to make the field of 64 on Tuesday for those who take March Madness super seriously. ESPN has provided this helpful guide to tell you about every team that made the men's tourney.
On the men's side, the number one overall seed is Gonzaga. Arizona, Kansas and Baylor also have one seeds in their regions. Here's the BRACKET.
The last four teams to make the field of 68: Indiana, Notre Dame, Rutgers, Wyoming.
The first four out: Dayton, Oklahoma, SMU, Texas A&M. Some other teams that didn't make the field: Xavier, Wake Forest, BYU.
On the women's side, the number one seeds are South Carolina, NC State, Stanford and Louisville. Here's the BRACKET.
This is the first time there are 68 teams selected and that the women's tournament is using the March Madness and Final Four logos. ~ USA Today
The country is suffering its biggest surge in two years and is locking things down for nearly 40 million people in Shanghai (its most populous city) and Shenzhen (Guardian)
Economic Ripple Effect: Shenzhen, a city bordering Hong Kong that is the hub of China’s tech sector and electronics manufacturing industries, announced on Sunday night a lockdown for the next seven days... [which] might further disrupt global supply chains, because Shenzhen has one of the world’s largest ports. (NY Times)
"I just tested positive for COVID," he wrote on Twitter on Sunday. "I've had a scratchy throat for a couple days, but am feeling fine otherwise. Michelle and I are grateful to be vaccinated and boosted, and she has tested negative. It's a reminder to get vaccinated if you haven't already, even as cases go down." (NPR)
Summing up the feeling of many players and fans, the Denver Broncos tweeted this "Office" meme upon learning of Brady's "un-retirement." Brady said Sunday he's returning to the Tampa Bay Buccaneers for his 23rd season in the NFL after a 40-day retirement. The seven-time Super Bowl champion announced his decision on Twitter and Instagram, saying he has "unfinished business.'' (ESPN)
A woman in the crowd at the BNP Paribas Open yelled, “Naomi, you suck!” at Naomi Osaka following the first game of her match Saturday evening. The comment brought the four-time Grand Slam champion to tears on center court at the Indian Wells Tennis Garden. (USA Today)
The police released video that officials said showed the suspect, Gary Cabana, attacking the workers after his membership was revoked. (NY Times)
William Hurt, who became a top leading man in the 1980s, winning an Oscar for 1985’s “Kiss of the Spider Woman” and starring in “The Big Chill” and “Body Heat,” died Sunday of natural causes. He was 71. Hurt’s death was confirmed to Variety by his friend, Gerry Byrne. (Variety)
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[Top Photo Banner Credit: Christopher Furlong/Getty Images]