The Week in Business: Escalating US Sanctions on Russia


At midnight on Wednesday, the Biden administration dropped an exemption in sweeping sanctions against Russia that had allowed the country to continue paying off foreign debts during its war with Ukraine. The Treasury Department released the announcement just hours before the deadline. Russia is now racing toward a landmark it intends to avoid: a default on its foreign debt for the first time in more than a century. Treasury Secretary Janet L. Yellen said Tuesday the exemption was still intended to be temporary. Still, the decision represents an escalation of US sanctions against Russia as Western countries try to increase pressure on its economy.

The mass shooting at a school in Uvalde, Texas last week that killed 19 children and two teachers shone a light on how corporations treat gun makers. But while many members of the public would like to see companies distance themselves from gun makers – and while many companies might wish to – a Texas law that went into effect last year made that position more complicated. The law prohibits state government entities from working with companies that “discriminate” against companies or individuals in the firearms industry. That means a company like JPMorgan Chase can be locked out of the state’s lucrative municipal bond market if it refuses to work with gun or ammunition manufacturers. Just this month, before the Uvalde massacre, Chase lawyers suggested in a letter to the Texas attorney general that the bank was willing to do more business with gun companies, saying the bank did not “discriminate against a firearms entity”.

Broadcom, the semiconductor maker, announced on Thursday that it would buy software maker VMware for $61 billion. Broadcom has offered VMware the equivalent of $138.23 per share, more than 40% higher than the company’s stock price before news of a possible acquisition began to spread. The deal would be just the latest in Broadcom’s expansion efforts, as its chief executive has acquired many companies responsible for the company’s IT infrastructure over the years. VMware, a major player in cloud computing, has more than 500,000 customers worldwide and partners with all the other major cloud providers, including Amazon and Google. By acquiring the company, Broadcom would own a range of popular computing tools, making it more competitive in data center technology and cloud computing.

Gasoline prices have jumped about 50 cents a gallon over the past month, meaning Memorial Day weekend drivers will struggle to find gas for less than $4 a gallon. . Russia’s war in Ukraine is the most immediate reason for the spike, as sanctions on Russian energy reduce global supplies. But driver habits can add to the pressure. Analysts say a travel boom, partly the result of Americans keen to get away from it all after postponing plans because of Covid, is helping to keep prices high. Travelers also don’t seem discouraged by high airfares: to offset rising fuel costs, many airlines have dramatically increased ticket prices and find that customers are still willing to pay. Southwest Airlines and JetBlue Airways said last week that their second-quarter revenue was on track to be higher than initially expected.

The Biden administration has already taken steps to immediately address the dire formula shortage, working with Abbott Laboratories to restart production at its shuttered formula factory and bringing in emergency supplies from Europe. But now the Federal Trade Commission wants to examine the conditions that led to the shortage in the first place: the agency announced last week that it was opening an investigation into consolidation in the industry, which is dominated by just four companies , and on whether federal government regulations and trade agreements prevent foreign companies from entering the market. The FTC will also review online formula resellers and seek information from families who believe they were scammed trying to purchase a formula or paid exorbitant prices.

For months, economists have expected the number of jobs in the United States, which continues to grow this year, to reach its peak. This week’s jobs report might be that point — or it might not. While Americans continue to bemoan inflation, many are still paying much higher prices for the goods and services they want and need. Consumption habits may change, but spending remains high, which usually means plenty of job opportunities. It is therefore possible that job growth will continue to improve, even if the Federal Reserve raises interest rates.

Twitter has been fined $150 million by the FTC for misleading users about how it handles their personal data. New data showed inflation slowed in April but remained near a four-decade high. And strong financial reports from retailers last week drove markets higher.


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