The Fed attacks

The Federal Reserve raised interest rates by 75 basis points—the biggest increase since 1994—and Chair Jerome Powell said the central bank could go that much next month, too, in what increasingly looks like a pitched battle against inflation. Initially slammed for not anticipating the fastest price gains in four decades (“transitory” now being a dirty word) and then for being too slow to respond, the Fed on Wednesday brought out heavy artillery in its bid to cool prices. As for the prospect of a soft landing, even the Fed conceded that the US economy’s eventual touchdown may be a bit bumpier than previously hoped for. In other words, stow those tray tables. —David E. Rovella

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

The Congressional committee investigating the Jan. 6, 2021 attack on the US Capitol will hear from former Vice President Mike Pence’s top lawyer and a former federal judge on Thursday in its third public hearing. The proceedings are to focus on Donald Trump’s pressure on Pence to illegally block the transfer of power Joe Biden—part of what committee members have called an attempted coup.

These are strange times when it comes to supply and demand. On one hand, US retail sales fell in May for the first time in five months, restrained by a plunge in auto purchases and other big-ticket items—which arguably suggests demand is slowing thanks to high inflation. But on the other hand, a nationwide inventory glut in other goods has led to unexpected bargains for shoppers, especially for items that were hot sellers earlier in the pandemic. Everyone from Walmart to Target to the Gap has slashed prices on non-essential items that they stocked up on, but shoppers are no longer interested.

For all the greenwashers out there on Wall Street, the party may finally be over. The Securities and Exchange Commission’s full-scale effort to stamp out ESG exaggeration has commenced.

The Biden administration is sending another $1 billion in weapons and equipment to Ukraine, including for the first time vehicle-mounted Harpoon anti-ship missiles. The announcement comes as Ukrainian officials have pleaded for more weapons faster to stave off gradual Russian advances in the eastern part of the country. President Volodymyr Zelenskiy said the war may stagnate if deliveries of advanced weapons from Ukraine’s allies don’t accelerate.

Payton Gendron, the White man charged by New York prosecutors in the mass killing of 10 Black people at a Buffalo supermarket, now faces a US capital case. While the maximum sentence in New York is life in prison, some of the 26 new federal counts could, if Gendron is convicted, land the 18-year-old in the federal death chamber. Though the Biden administration has imposed an indefinite moratorium on federal executions, a US attorney overseeing the prosecution said that—in the case of Gendron—the death penalty is “on the table.”

The Buffalo attack, and a subsequent mass killing of 19 children and two teachers by 18-year-old Salvador Ramos in Uvalde, Texas, have moved the needle slightly among Republicans loath to cross the gun lobby after previous massacres. Momentum for federal legislation picked up this week, albeit for more mental health services, school safety and some enhanced background checks. No restrictions on the sale of military-style weapons regularly used in the most horrific American crimes are included—or even raising the age to purchase an assault weapon to 21, which is especially notable given the age of Ramos and Gendron. In Texas, where heavily armed state and local police left Ramos alone with a classroom of teachers and young children for 78 minutes—reportedly out of fear for their own safety—law enforcement agencies continue to change their stories and blame each other. Now, they’re also seeking to block public release of key evidence from their widely condemned response, which is already the subject of a federal investigation.

The European Union is restarting legal proceedings against the UK as Brussels prepares for a drawn-out fight over London’s move to override part of the Brexit deal. The simmering years-long dispute between the UK and EU is heating back up over proposed legislation that would give British ministers the power to unilaterally rewrite much of the Northern Ireland protocol, which keeps the area in the EU’s single market. “Let there be no doubt,” said Maros Sefcovic, the EU’s chief Brexit negotiator. “There is no legal, nor political justification whatsoever for unilaterally changing an international agreement.”

Bear markets tend to herald lean times in the investment business, but not at Wellington Management. Rather than retrench, Chief Executive Officer Jean Hynes is planning to add hundreds of people in the next two years. She sees the wipeout in stocks and bonds as an opportunity to expand while rivals face cuts. It’s a sentiment others subscribe to as well. Wesley Chan and Pegah Ebrahimi raised $450 million for a debut fund that launches their venture capital firm FPV—this despite the sour mood among private tech investors. Ebrahimi, a longtime employee of Morgan Stanley’s investment bank, and Chan, who worked at Alphabet’s venture arm, contend now is a good time for better companies to stand out. In a downturn, Chan proclaimed, “the winners become very obvious.”

For the ultra-rich living in some of the world’s most expensive cities, the surging prices of luxury items have taken a bite out of their vast purchasing power. In a few of those centers of obscene wealth, the higher cost of designer handbags, shoes, suits and watches doesn’t even keep up with inflation. It’s tough all over, apparently—even for the .1%. Here’s where it’s getting super expensive to be super rich.

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive the Evening Briefing in your mailbox daily along with our weekend edition on Saturday.

China is one of the world’s biggest stories. Sign up to receive Next China, a weekly dispatch on where China stands and where it's headed next.