Bloomberg - Evening Briefing - Powell speaks, markets tank

U.S. Interest-rate hikes are coming “soon,” the Federal Reserve said at its first policy meeting of the year, as the central bank pivots to tighten policy. Chairman Jerome Powell didn’t rule out that an increase could come at every meeting in 2022, starting in March. That spooked the stock market, which had been higher all day, and a selloff ensued. Inflation that hit 7% in 2021, the most since the 1980s, and a tight labor market are forcing the Fed to take its foot off the gas after responding to the economic crash caused by Covid-19. Here’s your markets wrap. —Margaret Sutherlin

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

U.S. Supreme Court Justice Stephen Breyer is retiring, giving President Joe Biden a chance to fill his first vacancy on the court—an opening he’s pledged to fill with the court’s first-ever Black female associate justice. While his nominee could serve for decades if confirmed, they won’t shift the ideological balance of the Republican-appointee dominated court. Breyer, the oldest justice at age 83 and a renowned pragmatist, was appointed in 1994 by President Bill Clinton, a Democrat. Breyer is known for rulings affirming abortion rights (now under potential threat by the court) and legalizing gay marriage.

Stephen Breyer  Photographer: Erin Schaff/The New York Times

It’s been an ugly start to the year in the stock market, and many on Wall Street are bracing for it to get uglier. Pundits seem more shaken than usual, perhaps because for the first time in a while they’ll be forced to tough out losses without help from an accommodating Fed. Plus, with losses in assets all over the board, it’s almost as if the markets are holding a stress test to find out what’s real and what isn’t. 

Cryptocurrency firms Celsius, Voyager and Gemini are at the center of a broad inquiry by U.S. regulators. The firms are able to pay customers interest rates higher than most bank savings accounts by lending out their digital coins to other investors, a practice the Securities and Exchange Commission and states including New Jersey and Texas have said raises concerns about investor protection. 

The increasingly global crisis created by Russia as 120,000 of its troops surround Ukraine deepened as the U.S. again rejected Vladimir Putin’s demand that NATO bar any eventual Ukraine membership. Secretary of State Antony Blinken outlined the response to that demand and others in documents hand-delivered Wednesday in Moscow. Russia, which has fomented a war in Ukraine’s east that’s killed 14,000, said it would consider further arming its separatist proxies there. Follow the latest on the crisis. 

Vladimir Putin  Photographer: Andrey Rudakov/Bloomberg

China says it will start a nationwide crackdown on money laundering. Eleven government agencies are to be focused on the push over the next few years. 

In the race for electric-vehicle dominance, General Motors is doubling down. Despite a labor shortage, the carmaker said it would add another 8,000 jobs. 

Long Covid has been one of the most frustrating issues facing scientists during the pandemic. Who gets it? When? And why? A new study is offering more clues. Meanwhile, a new report suggests Hong Kong will remain cut off from the rest of the world through 2024 because of China’s Covid-zero approach. Here’s the latest on the pandemic. 

A health-care worker administers a Covid-19 swab test at a mobile clinic in Cleveland, Mississippi.  Photographer: Rory Doyle/Bloomberg

• Wall Street’s biggest bear has a dire prediction for the world. 
• Mark Zuckerberg’s cryptocurrency project Diem is unraveling.
• This $50 trillion industry is making a huge bet on blockchain. 
• The Beijing Olympics will test China’s climate commitments.  
• Apple won a restraining order against a woman stalking Tim Cook.
• Pharmacists are also burning out during the pandemic.
• Astronomers spotted a mysterious object unlike anything seen before.

Five times over three years, a desperate scenario has played out on Plum Island, an isolated spit of land just off the northeastern tip of New York’s Long Island. A large part of the power grid has gone down, leaving the population in the dark and critical facilities such as hospitals growing desperate. The goal: expose utilities accustomed to dealing with hurricanes, blizzards and other challenges to the threat of a successful cyberattack on the U.S. electrical grid.

High-voltage power lines in Crockett, California. Photographer: David Paul Morris/Bloomberg

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