US passes 1 million COVID deaths – National & International News – WED 5May2022

US passes 1 million COVID deaths. Fed raises interest rates again to cool inflation. EU proposes ban on Russian oil.

NATIONAL NEWS

US passes 1 million COVID deaths

Today, the US marked its 1 millionth COVID death in the 27 months since the first case was detected in the country. This is the highest COVID death toll of any country in the world, with Brazil a distant second at 660,000. The US accounts for about 16% of the 6.24 million COVID deaths worldwide.

The grim milestone is a reminder that the pandemic is still with us. In New York, cases and hospitalizations are on the rise. In the past month, hospitalizations in the state have more than tripled (153%). For the first time since February, the state logged over 2000 hospitalizations today.

Even among those who have caught COVID and survived, there are those whom the disease continues to affect. British researchers have conducted a studying of 46 patients who received critical COVID care between March and June 2020. They found that in these patients, the effects of severe COVID on their cognitive abilities was equivalent to roughly 20 years of aging, or a loss of 10 IQ points.

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Fed raises interest rates again to cool inflation

The Federal Reserve announced today that it will raise its short-term interest rate by a half-percentage point to a range of 0.75% to 1%. This is the largest single hike on this rate since 2000. The Fed raised already this rate by one-quarter of a percentage point back in March. Since the early days of the pandemic recession, the rate had been near zero. The central bank also says it will start reducing its $9 trillion balance sheet, consisting mostly of Treasury and mortgage bonds. 

Both the offloading of bonds and the rise in interests rates mean that borrowers can expect to see higher costs on loans. This can affect mortgages, credit card debt and other kinds of borrowing. Just since the beginning of 2022, mortgage rates have already risen two percentage points to an average of 5.1% for a 30-year fixed mortgage. This means an already tight and expensive housing market is about to get even pricier.

The Fed hopes that gradually raising the cost of borrowing will tamp down spending to slow down rapid inflation. However, if they raise rates too quickly, they risk tipping the economy into recession. Federal Reserve Charmain Jerome Powell acknowledges that this is going to be a delicate balancing act.

With inflation still rising month by month, some experts are already seeing the early signs of a recession on the horizon.

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More: How higher rates will affect Americans’ finances (opens in new tab).

INTERNATIONAL NEWS

EU proposes ban on Russian oil

European Union President Ursula von der Leyen has proposed phasing out purchases of Russian crude and refined oil products within the bloc. The proposal would end purchases of crude within 6 months and refined oil products by the end of the year. The plan would require unanimous approval from all 27 member states, some of which are more dependent on Russian fossil fuels than others.

Overall, the bloc imports about one-quarter of its oil from Russia, totaling about $1 billion in purchases per day. Europe is Russia’s largest fossil fuel customer and relies on this income to continue its military campaign in Ukraine. Since the invasion, EU leaders had been debating the feasibility of replacing Russian oil with purchases from Middle Eastern producers or the US.

Germany is particularly reliant on Russian energy supplies and has resisted calls for a boycott on the grounds that it would devastate Germany’s own economy. However, the urgency of ending dependence on Russian oil increased after Russia’s state-owned fossil fuel supplier Gazprom abruptly announced it would no longer fulfill orders for Poland and Bulgaria. 

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