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FirstFT: White House fights inflation threat

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Joe Biden’s administration is rushing to rein in inflation after official figures released yesterday showed consumer prices rose at their fastest pace in October for three decades.

The consumer price index jumped to 6.2 per cent, compared to the previous year, from 5.4 per cent in September. Driving the surge was an increase in costs for energy along with shelter, food, used cars and trucks and new vehicles.

The energy index rose 4.8 per cent from September, while the gasoline index increased by 6.1 per cent. On an annual basis, these sectors are up 30 per cent and 50 per cent, respectively.

Speaking on a visit to Baltimore yesterday afternoon Biden acknowledged that rising prices were a concern for US households. “Everything from a gallon of gas to loaf of bread costs more,” he said.

The rising prices threaten to undercut the US economic recovery, jeopardise the president’s spending plans and doom the Democratic party in next year’s midterm elections.

The Federal Reserve may also be forced to tighten monetary policy quicker than previously expected. The central bank has already announced the wind-down of its $120bn-a-month asset purchase programme at a pace that signals the stimulus will cease altogether by June. Economists and market participants are increasingly of the view that the Fed will raise interest rates soon after.

US government debt sold off sharply yesterday after the release of the inflation report, especially debt with short-term maturities which are more sensitive to interest rate expectations.

Thanks for reading FirstFT Americas. Here’s the rest of today’s news — Gordon

1. Elon Musk offloads nearly $5bn in Tesla shares Elon Musk sold nearly $5bn worth of his Tesla shares in the first three days of this week. The value of the sale was estimated to be equal to about 3 per cent of his total holding in the electric carmaker and was a response to the result of a Twitter poll.

2. Wall Street banks reap GE fees General Electric has paid more than $7bn in investment banking fees since 2000, as Wall Street lenders reaped rewards from a frenzied period of dealmaking that culminated in a sinking share price and the eventual break-up of the best-known US conglomerate.

3. Rivian roars ahead on stock market listing The Amazon-backed electric vehicle maker, which has yet to record any meaningful revenue, surged on its Nasdaq debut. The shares closed 30 per cent above the initial public offering price, giving it a market value of $88bn, above those of traditional vehicle makers General Motors and Ford.

4. McKinsey partner accused of insider trading US prosecutors have charged a partner at consulting firm McKinsey with securities fraud for alleged insider trading ahead of Goldman Sachs’ $2.2bn acquisition of online loans provider GreenSky.

5. Afghans face loss of aid support International aid agencies have warned there are only weeks left to deliver food and other life-saving assistance to mountainous provinces before winter sets in, cutting off remote regions as Afghanistan faces one of the world’s worst humanitarian crises.

COP26 digest

  • Negotiators at the UN climate conference are rushing to agree the rules governing a global market for carbon, the so called “Article 6”.

  • The US and China made a rare and unexpected pledge to co-operate on the “existential” climate crisis.

  • Are corporate “net zero” plans credible? Big business has been in a congratulatory mood at COP26 in Glasgow but critics say the voluntary greening steps taken by companies have not been enough and are too vague.

  • The economics of climate change represented “the biggest capital reallocation since the Industrial Revolution”, said economist Nicholas Stern.

The day ahead

China’s Singles’ Day China’s biggest online shopping festival kicks off today. But the giddiness of Alibaba’s annual sales bonanza has faded this year, as Jack Ma’s ecommerce group focuses on social welfare to please authorities in Beijing. (SCMP, Nikkei Asia)

Iran negotiator in London Ali Bagheri Kani, Iran’s deputy foreign minister and lead nuclear deal negotiator, visits London ahead of talks in Vienna at the end of the month.

EU growth update European Commission publishes its Autumn Economic Forecast for gross domestic product, inflation, employment and public finances today. Read more on the EU economy in our Europe Express newsletter.

US Veterans Day It is a public holiday in the US today for honoring military veterans, people who have served in the United States Armed Forces. President Joe Biden will participate in a wreath-laying service and delivers remarks at Arlington National Cemetery.

What else we’re reading

GE may be breaking up but conglomerates will survive The obituary of the conglomerate has been written many times and, somehow, it still survives, argues Brooke Masters.

Can the Vatican reform its finances? In this film, the FT investigates the Holy See’s finances and looks at how landmark proceedings linked to a controversial London property deal are seen as part of Pope Francis’s reforms in the city-state.

A history of aristocratic resilience Arcane, hereditary, all-male — and at the heart of British democracy. How can it be that, in the 21st century, a small, blue-blooded band of peers continues to cling to power in the House of Lords? George Parker explores the modern face of Britain’s centuries-old aristocracy.

‘Nein Danke’ Switzerland has the lowest Covid-19 vaccination rate in western Europe: 33.6 per cent of the country’s population has not had a first dose, as resistance to jabs intersects with anti-establishment and populist politics across wealthy, German-speaking Europe.

Iran’s social divisions on display at airport departures Iran’s widening social divisions are playing out at Tehran’s international airport, where pilgrims to Iraq’s holy town of Karbala stand shoulder to shoulder with tourists heading for a beach holiday in Antalya, on Turkey’s Mediterranean coast, writes Najmeh Bozorgmehr.

Thanks to readers who took our poll yesterday. Twenty-one per cent said that local Covid restrictions were still too stringent.

Books

What is your favourite book of 2021? The FT wants readers’ recommendations for the best reads of the year. Responses will be published as part of our Books of the Year series, in which FT writers and critics choose their favourites of the past 12 months.

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