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The interruption of wheat exports from Ukraine and Russia, which collectively account for 28 p.c of world exports, together with provide chain disruptions, a extreme drought in India that has induced it to ban shipments of grain and Covid-related lockdowns in China, are additionally inflicting meals costs to spiral and rising world starvation, significantly in Africa and the Center East.
The query for each American and European policymakers is easy methods to corral leaping costs with out sending their economies into recession. The Federal Reserve has begun elevating rates of interest to tame inflation in america, and its chair, Jerome H. Powell, has acknowledged that bringing costs down with out critically hurting the general financial system might be a problem. Ms. Yellen prompt on Wednesday that america was nicely positioned to face up to the turbulence, pointing to America’s sturdy labor market and wholesome family funds. She predicted that america wouldn’t fall right into a recession however that Europe might be a unique matter.
“I feel Europe is maybe a bit extra a bit extra susceptible, and naturally, extra uncovered on the power entrance than america,” she mentioned.
That conundrum accounts for the reluctance of the European Central Financial institution to boost charges. Within the plus column, the European Fee famous that unemployment within the eurozone was down, as have been authorities deficits, regardless that war-related prices have been rising.
Whereas meals costs are rising world wide, the extent of inflation varies extensively. Meals inflation was 2.5 p.c in France and Eire throughout the first three months of 2022 and 10 p.c in Jap European international locations, whereas in Turkey and Argentina, it was 60 to 70 p.c in March alone, based on an evaluation final week from ING.
In a speech to the Brussels Financial Discussion board on Tuesday, Ms. Yellen made the case that Russia’s actions are a reminder that nations shouldn’t commerce nationwide safety for affordable power. She argued that it’s essential to scale back reliance on Russia and China and to speed up investments in renewable sources.
“No nation controls the wind and the solar,” Ms. Yellen mentioned. “Let’s be sure that that is the final time that the worldwide financial system is held hostage to the hostile actions of those that produce fossil fuels.”
Alan Rappeport reported from Brussels and Bonn, Germany, and Patricia Cohen from London.
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