disappointing winter wheat harvest in June could drive food prices — already high because of the war in Ukraine and bad weather in Asia and the United States — further up, compounding hunger in the world’s poorest countries.

By one estimate, nearly 400 million people in 45 cities have been under some form of lockdown in China in the past month, accounting for $7.2 trillion in annual gross domestic product. Economists are concerned that the lockdowns will have a major impact on growth; one economist has warned that if lockdown measures remain in place for another month, China could enter into a recession.

European and American multinational companies have said they are discussing ways to shift some of their operations out of China. Big companies that increasingly depend on China’s consumer market for growth are also sounding the alarm. Apple said it could see a $4 billion to $8 billion hit to its sales because of the lockdowns.

struggle to find and keep jobs during lockdowns.

Even as daily virus cases in Shanghai are steadily dropping, authorities have tightened measures in recent days following Mr. Xi’s call last week to double down. Officials also began to force entire residential buildings into government isolation if just one resident tested positive.

The new measures are harsher than those early on in the pandemic and have been met with pockets of unrest, previously rare in China where citizens have mostly supported the country’s pandemic policies.

In one video widely circulated online before it was taken down by censors, an exasperated woman shouts as officials in white hazmat suits smash her door down to take her away to an isolation facility. She protests and asks them to give her evidence that she has tested positive. Eventually she takes her phone to call the police.

“If you called the police,” one of the men replies, “I’d still be the one coming.”

Isabelle Qian contributed reporting, and Claire Fu contributed research.

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Fed Confronts Why It May Have Acted Too Slowly on Inflation

Some Federal Reserve officials have begun to acknowledge that they were too slow to respond to rapid inflation last year, a delay that is forcing them to constrain the economy more abruptly now — and one that could hold lessons for the policy path ahead.

Inflation began to accelerate last spring, but Fed policymakers and most private-sector forecasters initially thought price gains would quickly fade. It became clear in early fall that fast inflation was proving to be more lasting — but the Fed pivoted toward rapidly removing policy support only in late November and did not raise rates until March.

Several current and former Fed officials have suggested in recent days that, in hindsight, the central bank should have reacted more quickly and forcefully last fall, but that both profound uncertainty about the future and the Fed’s approach to setting policy slowed it down.

Officials had spent years dealing with tepid inflation, which made some hesitant to believe that rapidly rising prices would last. Even as they became more concerned, it took the Fed’s large group of policymakers time to come to an agreement on how to respond. Another complicating factor was that the Fed had made clear promises to markets about how it would remove support for the economy, which made adjusting quickly more difficult.

8.5 percent from a year earlier, the fastest rate since 1981. Consumer price increases are expected to remain rapid when fresh data are released Wednesday.

And as high prices have lingered, inflation expectations have been creeping up, threatening to change household and business behavior in ways that perpetuate the problem.

Because inflation is eating away at paychecks and making it more difficult for families to afford groceries and cars, it has emerged as a major political issue for President Biden, whose approval ratings have fallen over concerns about his handling of the economy. During remarks at the White House on Tuesday, Mr. Biden called inflation his “top domestic priority” and said his administration was taking steps to contain it. He also sought to push back on Republicans, who have spent months blaming him for stoking inflation, saying their policy ideas were “extreme” and would hurt working families.

biggest increase since 2000, while broadcasting that two more large adjustments could be coming. They are also going to start shrinking their $9 trillion balance sheet of bond holdings next month.

If the Fed continues to rapidly adjust policy this year as it tries to catch up, policymakers risk slamming the brakes on a speeding economy. Such hard stops can hurt, pushing up unemployment and possibly tipping off a recession. Officials typically prefer to apply their policy brakes gradually, increasing the chances that the economy can slow down painlessly.

Still, several Fed officials pointed out that it was easier to say what the Fed should have done in 2021 after the fact — that in the moment, it was difficult to know price increases would last. Inflation initially came mainly from a few big products that were in short supply amid supply chain snarls, like semiconductors and cars. Only later in the year did it become obvious that price pressures were broadening to food, rent and other areas.

“I try to give some grace, and say: In a very uncertain time, with an unprecedented setting, with no real models to guide us, people are going to do the best they can,” Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, said in an interview Monday. Mr. Bostic was an early voice suggesting that the Fed should stop buying bonds and think about raising interest rates.

Officials have said it was the acceleration in inflation data in September, followed by rising employment costs, that convinced them that price gains might last and that the central bank needed to act decisively. The Fed chair, Jerome H. Powell, pivoted on policy in late November as those data points added up.

a complicating factor: Mr. Powell was waiting to see if he would be reappointed by the Biden administration, which did not announce its decision to renominate him until mid-November.

“Banking With Interest” podcast episode last week, said reacting to the data was “hard to do until there was clarity as to what the leadership going forward of the Fed was going to be.”

Plus, the Fed had promised to withdraw policy in a certain way, which prevented a rapid reorientation once officials began to fret that inflation might last. Policymakers had pledged to keep interest rates at rock bottom and continue to buy huge sums of bonds until the job market had healed substantially. They had also clearly laid out how they would remove support when the time came: Bond purchases would slow first, then stop, and only then would rates rise.

The point was to convince investors that the Fed would not stop helping the economy too early and to avoid roiling markets, but that so-called forward guidance meant that pulling back support was a drawn-out process.

“Forward guidance, like everything in economics, has benefits and costs,” Richard H. Clarida, who was vice chair of the Fed in 2021 and recently left the central bank, said at a conference last week. “If there’s guidance that the committee feels bound to honor,” he added, it can be complicated for the Fed to move through a sequence of policy moves.

Christopher Waller, a governor at the Fed, noted the central bank wasn’t just sitting still. Markets began to adjust as the Fed sped up its plans to remove policy support throughout the fall, which is making money more expensive to borrow and starting to slow down economic conditions. Mortgage rates, one window into how Fed policy is playing out into the economy, began to move up notably in January 2021 and are now at the highest level since the 2008 housing crisis.

Mr. Waller also pointed out that it was hard to get the Fed’s large policy-setting committee into agreement rapidly.

“Policy is set by a large committee of up to 12 voting members and a total of 19 participants in our discussions,” he said during a speech last week. “This process may lead to more gradual changes in policy as members have to compromise in order to reach a consensus.”

Loretta Mester, the president of the Federal Reserve Bank of Cleveland, said in an interview on Tuesday that different people on the committee “looked at the same data with different lenses, and that’s just the nature of the beast.”

But the Fed seems to be learning lessons from its 2021 experience.

Policymakers are avoiding giving clear guidance about what will come next for policy: Officials have said they want to quickly get rates up to the point that they start to weigh on the economy, then go from there. While Mr. Powell said the Fed was thinking about half-point increases at its next two meetings, he gave no clear guidance about what would follow.

“It’s a very difficult environment to try to give forward guidance, 60, 90 days in advance — there are just so many things that can happen in the economy and around the world,” Mr. Powell said at a news conference last week. “So we’re leaving ourselves room to look at the data and make a decision as we get there.”

The war in Ukraine is the latest surprise that is changing the outlook for the economy and inflation in ways that are hard to predict, Mr. Bostic from Atlanta said.

“I have been humbled, chastened — whatever — to think that I know the range of possible things that can happen in the future,” he said. “I’ve really tried to back off of leaning into one kind of story or path.”

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Fed hawks Waller, Bullard push back on ‘behind the curve’ view

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May 6 (Reuters) – Two of the Federal Reserve’s most outspoken policy hawks on Friday pushed back on the view that the U.S. central bank missed the boat on the fight against high inflation, citing a tightening of financial conditions that began well before the Fed began raising interest rates in March.

“How far behind the curve could we have possibly been in terms of time if, using forward guidance, one views rate hikes effectively beginning in September 2021?” Fed Governor Christopher Waller said, noting that yields on the two-year Treasury note rose last fall as the Fed began to signal the end of its super-easy policy.

The movereflected the equivalent of two Fed rate hikes through December, he said.

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Speaking at the same Stanford University conference, titled “How monetary policy got behind the curve,” St. Louis Fed President James Bullard argued that the Fed is “not as far behind the curve as you might have thought.”

Earlier this week the Fed raised its policy rate to a range of 0.75% to 1%. Critics say that is far too low to fight inflation running at three times the Fed’s 2% target.

Bullard said he agrees, calling inflation “far too high,” and call for ratesto rise “expeditiously,” toperhaps 3.6%, to bring inflation under control. But he noted that markets are already pricing much of that increase in.

Traders of rate futures are currently pricing in a Fed funds rate of 3% to 3.25% by year end.

“It’s going in the right direction … hopefully we’ll be able to get away from this behind-the-curve characterization soon,” Bullard said.

The two were among the first Fed policy makers last year to call for a rapid removal of easy monetary policy and a quicker start to raising interest rates.

Bullard, in fact, dissented on the Fed’s March quarter-point rate hike as too little.

But both joined their colleagues in approving the half-point rate hike delivered this week. Fed Chair Jerome Powell, speaking after the rate decision was announced, signaled further increases ahead, including half-point rate hikes in both June and July.

Waller used his talk Friday to trace how economic data first seemed to ratify, then challenge, his own view from last spring: that inflation would prove transitory as supply chains healed and one-time fiscal stimulus faded, and that the labor market was primed to roar back as COVID-19 receded.

Most of his colleagues shared in the first view; opinions were more divided on the second. In the end, Waller said, inflation proved to be much higher and more persistent than he had thought.

At the same time he described the “punch in the gut” he felt as two weaker-than-expected monthly jobs reports in August and September seemed to undercut the thesis of labor market healing.

As it turned out, later data revisions showed the U.S. labor market had been stronger than the real-time data suggested.

“If we knew then what we know now, I believe the (Fed) would have accelerated tapering and raised rates sooner,” Waller said. “But no one knew, and that’s the nature of making monetary policy in real time.”

By early November, most policymakers had come around to the view that high and rising inflationwould not drop quickly enough on its own, and business demand for workers was far outpacing a slow-to-recover labor market supply.

“It was at this point … that the FOMC pivoted,” Waller said. The Federal Open Market Committee, known as the FOMC, is the Fed’s policy-setting body.

The conference featured several former Fed policymakers and economists who argued that the Fed had fallen so far behind the curve that it would almost surely end up causing a recession as it sought to catch up by raising rates faster. read more

Former Fed Vice Chair of Supervision Randal Quarles, who says he was the Fed’s most hawkish member until Waller joined late last year, told the conference that in hindsight it’s clear “it would have been better to start raising rates last September.”

It wasn’t a failure of nerve, or politics, or stupidity, he said Friday. “It was a complicated situation with little precedent, and people make mistakes.”

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Reporting by Ann Saphir; Editing by Leslie Adler and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

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The Stock and Bond Markets Don’t Yet Know How to Cope With the Fed

On Wednesday, the S&P 500 stock index jumped 3 percent, as though all was right with the world. On Thursday, stocks collapsed, with the tech-heavy Nasdaq index plunging 5 percent as though the end of times was in sight.

Things on Friday were only slightly better. The S&P fell again, but only by 0.6 percent, and the Nasdaq lost a mere 1.4 percent. It was the fifth consecutive weekly decline in the S&P 500, its longest streak of losses since June 2011.

If you are looking for patterns in the market’s wild swings, the answer is simple: The financial markets are coming to grips with a stunning policy change by the Federal Reserve.

Over the last two decades, financial markets may have become so accustomed to encouragement from the Fed that they just don’t know how to react, now that the central bank is doing its best to slow down the economy.

news conference on Wednesday that the central bank was really and truly committed to driving down inflation. A transcript of Mr. Powell’s words is available on the Fed site. So is the text of the Fed’s latest policy statement. Check for yourself.

The Fed is willing to increase unemployment in the United States if that is what’s required to get the job done. And while they would much prefer that the United States doesn’t fall into a recession, Fed policymakers are willing to take the heat if the economy falters.

This may be hard to accept, and for a good reason.

millions of casualties worldwide, and it’s not over. From the narrow viewpoint of economics, the pandemic threw supply and demand for a vast variety of goods and services out of whack, and that has baffled policymakers. How much of the current bout of inflation has been caused by Covid, and what can the Fed possibly do about it?

Then there are the continuing lockdowns in China, which have reduced the supply of Chinese exports and dampened Chinese demand for imports, both of which are altering global economic patterns. On top of all that is the oil price shock caused by Russia’s war in Ukraine and by the sanctions against Russia.

Until late last year, the Fed said the inflation problem was “transitory.” Its response to an array of global challenges was to flood the U.S. economy and the world with money. It helped to reduce the impact of the 2020 recession in the United States — and it contributed to great wealth-creating rallies in the stock and bond markets.

But now, the Fed has recognized that inflation has gotten out of control and must be significantly slowed.

This is how Mr. Powell put it on Wednesday. “Inflation is much too high and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down,” he said. “We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”

But its tools for reducing the rate of inflation without causing undue harm to the economy are actually quite crude and limited, he later acknowledged, in response to a reporter’s question. “We have essentially interest rates, the balance sheet and forward guidance, and they’re famously blunt tools,” he said. “They’re not capable of surgical precision.”

As if that were not scary enough, for an operation as delicate as the Fed is attempting, he added: “No one thinks this will be easy. No one thinks it’s straightforward, but there is certainly a plausible path to this, and I do think there, we’ve got a good chance to do that. And, you know, our job is not to rate the chances, it is to try to achieve it. So that’s what we’re doing.”

Well, fine. The Fed needs to make the attempt, but given the precariousness of the situation, the high volatility in financial markets is exactly what I’d expect to see.

The Federal Reserve is committed to continuing to raise the short-term interest rate it controls, the Fed funds rate, to somewhere well above 2.25 percent. Only a few months ago, that rate stood close to zero, and on Wednesday, the Fed raised it to the 0.75 to 1 percent range. The Fed also said it would begin reducing its $9 trillion balance sheet in June by about $1 trillion over the next year, and it continues to issue cautionary “forward guidance” — warnings of the kind that Mr. Powell made on Wednesday.

Watch out, he was essentially saying. Financial conditions are going to get much tougher — as tough as needed to stop inflation from becoming entrenched and deeply destructive. The Fed will be using blunt instruments on the American economy. There will be damage, inevitably. People will lose their jobs when the economy slows. There will be pain, even if it isn’t intended.

In the financial markets, short-term traders are unable to make sense of all this. The day-to-day shifts in the markets are about as informative as the meandering of a squirrel. But for those with long horizons, the outlook is straightforward enough.

A period of wrenching volatility is inescapable. This happens periodically in financial markets, yet those very markets tend to produce wealth for people who are able to ride out this turbulence.

It is important, as always, to make sure you have enough money put aside for an emergency. Then, assess your ability to withstand the impact of nasty headlines and unpleasant financial statements documenting market losses.

Cheap, broadly diversified index funds that track the overall market are being hit hard right now, but I’m still putting money into them. Over the long run, that approach has led to prosperity.

Count on more market craziness until the Fed’s struggle to beat inflation has been resolved. But if history is a guide, the odds are that you will do well if you can get through it.

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Fed Raises Interest Rate Half a Percentage Point, Largest Increase Since 2000

Deciding how quickly to remove policy support is a fraught exercise. Central bankers are hoping to move decisively enough to arrest the pop in prices without curbing growth so aggressively that they tip the economy into a deep downturn.

Mr. Powell nodded to that balancing act, saying, “I do expect that this will be very challenging — it’s not going to be easy.” But he said the economy had a good chance “to have a soft, or soft-ish, landing.”

He later elaborated that it could be possible to “restore price stability without a recession, without a severe downturn, and without materially higher unemployment.”

The balance sheet plan the Fed released on Wednesday matched what analysts had expected, which probably also contributed to the sense of market calm. The Fed will begin shrinking its nearly $9 trillion in asset holdings in June by allowing Treasury and mortgage-backed debt to mature without reinvestment. It will ultimately let up to $60 billion in Treasury debt expire each month, along with $35 billion in mortgage-backed debt, and the plan will have phased in fully as of September.

By reducing its bond holdings, the Fed is likely to take steam out of financial markets — bond prices will fall, causing yields to rise, and riskier investments like stocks will become less attractive. It also could help to cool the housing market by pushing up longer-term borrowing costs, which follow bond yields, reinforcing the effect of the central bank’s interest rate increases.

In fact, mortgage rates have already begun to push higher, climbing nearly two percentage points since the start of the year. The rate on a 30-year fixed-rate mortgage averaged 5.1 percent for the week that ended last Thursday, according to Freddie Mac, touching its highest level in more than a decade.

The Fed’s moves “will quickly make financing big-ticket purchases more challenging.” Jonathan Smoke, chief economist at Cox Automotive, wrote in a research note after the meeting. “This is exactly what the Fed wants to see. As demand for homes, cars and other durables declines in response to declining affordability, the rate of price increases should slow as well.”

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COVID expected to hit China economic activity in March data, article with image

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Workers watch as a crane lifts a structure at a construction site in Shanghai, China January 14, 2022. REUTERS/Aly Song

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  • China Q1 GDP growth seen at 4.4%, vs Q4’s 4.0%
  • March data likely deteriorated sharply on COVID lockdowns, April expected to be worse
  • Q1 GDP, March activity data due Monday at 0200 GMT
  • C.bank expected to ease policy to cushion slowdown

BEIJING, April 17 (Reuters) – China is expected to report a sharp deterioration in economic activity in March as COVID-19 outbreaks and lockdowns hit consumers and factories, although first-quarter growth may have perked up due to a strong start early in the year.

Data on Monday is expected to show gross domestic product (GDP) grew 4.4 in January-March from a year earlier, a Reuters poll showed, outpacing the fourth-quarter’s 4.0% pace due to a surprisingly solid start in the first two months.

But on a quarterly basis, GDP growth is forecast to fall to 0.6% in the first quarter from 1.6% in October-December, the poll showed, pointing to cooling momentum.

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Separate data on March activity, especially retail sales, is likely to show an even sharper slowdown, analysts say, hit hard by China’s strict efforts to contain its biggest COVID outbreak since the coronavirus was first discovered in the city of Wuhan in late 2019.

Analysts say April readings will likely be worse, with lockdowns in commercial centre Shanghai and elsewhere dragging on. Some economists say the risks of a recession are rising.

The government is due to release the Q1 and March figures on Monday at 0200 GMT, with investor speculation mounting over whether there will be more moves to stimulate the economy.

Late on Friday, China’s central bank said it would cut the amount of cash that banks must hold as reserves for the first time this year, releasing about 530 billion yuan ($83.25 billion) in long-term liquidity. read more

The move was largely expected after the State Council, or cabinet, said on Wednesday that monetary policy tools – including cuts in banks’ reserve requirement ratios (RRRs) – should be used in a timely way.

Policymakers need to ensure nothing goes wrong before a twice-a-decade meeting of the ruling Communist Party in autumn, when President Xi Jinping is almost certain to secure a precedent-breaking third term as leader, policy insiders said.

But Beijing’s strict zero tolerance policy on COVID-19 is taking an increasing toll on the world’s second-largest economy, and is starting to disrupt supply chains globally ranging from cars to iPhones. read more

“In the run-up to the Party Congress, we think the central bank will prioritise growth, especially as the COVID battle drags on and housing markets fail to rebound,” analysts at Barclays said in a note.

Retail sales, a gauge of consumption which has been lagging since COVID-19 first hit, likely shrank 1.6% in March from a year earlier. That would be the worst showing since June 2020, reversing a 6.7% rise in the first two months, the poll showed.

Industrial output likely grew 4.5% in March from a year earlier, slowing from 7.5% in the first two months, while fixed-asset investment may have expanded 8.5% in the January-March, slowing from 12.2% in the first two months.

The Reuters poll forecast China’s growth to slow to 5.0% in 2022, suggesting the government faces an uphill battle in hitting this year’s target of around 5.5%. read more

Barclays estimates that the second-quarter GDP growth could dip to 3%, dragging 2022 growth to 4.2%, if Shanghai’s extended lockdown were to last for one month and partial lockdowns in the rest of the country remained in place for two months.

Reflecting weakening domestic demand and COVID-related logistical snarls, China’s imports contracted in March, while exports — the last major growth driver — are showing signs of fatigue. read more

The government has unveiled more fiscal stimulus this year, including stepping up local bond issuance to fund infrastructure projects, and cutting taxes for businesses.

But analysts are not sure if rate cuts would do much to arrest the economic slump in the near term, as factories and businesses struggle and consumers remain cautious about spending. More aggressive easing could also trigger capital outflows, putting more pressure on Chinese financial markets.

“I don’t think this RRR cut (on Friday) matters that much for the economy at this stage,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, noting it was less than markets had expected.

“The main challenge the economy faces is the Omicron outbreaks and the lockdown policies that restrict mobility. More liquidity may help on the margin, but it doesn’t address the root of the problem. Manufacturers face the daunting risk of supply chain disruptions.

“Unless we see effective policies to address the mobility problem, the economy will slow. I expect GDP growth in Q2 to turn negative.”

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Reporting by Kevin Yao; Editing by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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Live Updates: Missile Strike on Train Station Kills 50 People Seeking to Escape Fighting

One moment, they were packed onto the platforms at the Kramatorsk train station, hundreds of women, children and old people, heeding the pleas of Ukrainian officials imploring them to flee ahead of a feared Russian onslaught.

The next moment, death rained from the air.

At least 50 people were killed and many more wounded in a missile assault on Friday morning that left bodies and luggage scattered on the ground and turned the Kramatorsk station into the site of another atrocity in the six-week-old war.

“There are just children!” one woman cried in a video from the aftermath.

The missile struck as officials in Kramatorsk and other cities in eastern Ukraine had been warning civilians to leave before Russian forces mount what is expected to be a major push into the region, where their troops have been regrouping after withdrawing from areas around Kyiv, the capital.

President Volodymyr Zelensky of Ukraine said that Russia had hit the station with what he identified as a Tochka-U short-range ballistic missile as “thousands of peaceful Ukrainians were waiting to be evacuated.”

Credit…Fadel Senna/Agence France-Presse — Getty Images

“Lacking the strength and courage to stand up to us on the battlefield, they are cynically destroying the civilian population,” Mr. Zelensky said. “This is an evil that has no limits. And if it is not punished, it will never stop.”

Russian officials, denying responsibility, said a Ukrainian battalion had fired the missile in what they called a “provocation.” The Russian Defense Ministry said that Tochka-U missiles are only used by the Ukrainian armed forces and that Russian troops had not made any strikes against Kramatorsk on Friday.

A senior Pentagon official said the United States believed Russian forces had fired the missile. “They originally claimed a successful strike and then only retracted it when there were reports of civilian casualties,” said the official, who spoke on condition of anonymity to discuss a confidential intelligence assessment.

The train station was hit as a top European Union delegation was visiting Mr. Zelensky’s government, and the images of yet another mass killing provoked new Western outrage.

Whether one or more missiles struck the station was not immediately clear, and there was no way to independently verify the origin of the attack. Several parked cars were also hit, catching fire and turning into charred hulks. The waiting area was strewn with bodies and belongings.

After the strike, the Ukrainian police inspected the remains of a large rocket next to the train station with the words “for our children” written on it in Russian. It was unclear who had written the message and where the rocket had come from.

The mayor of Kramatorsk, Oleksandr Honcharenko, said 4,000 people had been at the station when it was attacked, the vast majority of them women, children and elderly people. At least two children were among the dead, he said.

The head of the military administration in the region, Pavlo Kyrylenko, said 50 people had been killed, including 12 who died in the hospital. Another 98 were wounded, including 16 children, he said.

After the attack, Kramatorsk officials said they were trying to find cars and buses to evacuate civilians to western areas presumed to be less vulnerable to Russian attacks.

Credit…Andriy Andriyenko/Associated Press

Ukraine’s railway service said that evacuations would proceed from nearby Sloviansk, where shelters and hospitals have been stocked with food and medicine in anticipation of an imminent Russian offensive.

Western countries, which have been shipping arms to Ukraine and tightening sanctions on Russia to punish President Vladimir V. Putin for the invasion, saw the Kramatorsk slaughter as new justification to intensify their efforts.

“The attack on a Ukrainian train station is yet another horrific atrocity committed by Russia, striking civilians who were trying to evacuate and reach safety,” President Biden said on Twitter. He vowed to send more weapons to Ukraine and to work with allies to investigate the attack “as we document Russia’s actions and hold them accountable.”

President Emmanuel Macron of France called the strike “abominable.”

“Ukrainian civilians are fleeing to escape the worst,” he wrote on Twitter. “Their weapons? Strollers, stuffed animals, luggage.”

The station was hit as the Slovak president, Eduard Heger, and the president of the European Commission, Ursula von der Leyen, were traveling to Kyiv in a show of support for Mr. Zelensky and his country’s bid for European Union membership.

Mr. Heger announced that Slovakia had given Ukraine an S-300 air defense system to help defend against Russian missiles and airstrikes.

Credit…Andriy Andriyenko/Associated Press

To make the transfer possible, the Pentagon said it would reposition one Patriot missile system, operated by U.S. service members, to Slovakia. It was the latest buildup in arms and troops along NATO’s eastern flank, as the alliance seeks to deter any Russian incursion.

“Now is no time for complacency,” Mr. Biden said in a statement announcing the Patriot repositioning. “As the Russian military repositions for the next phase of this war, I have directed my administration to continue to spare no effort to identify and provide to the Ukrainian military the advanced weapons capabilities it needs to defend its country.”

The attack on the railway station came after Russian forces had spent weeks shelling schools, hospitals and apartment buildings in an apparent attempt to pound Ukraine into submission by indiscriminately targeting civilian infrastructure, ignoring Geneva Convention protections that can make such actions war crimes.

Last month, an estimated 300 people were killed in an attack on a theater where hundreds had been sheltering in the battered port of Mariupol, Ukrainian officials said. In recent days, growing evidence has pointed to atrocities in the devastated suburbs of Kyiv, where Ukrainian troops found bodies bound and shot in the head after Russian forces had retreated.

Ms. von der Leyen visited one of those suburbs, Bucha, on Friday before meeting with Mr. Zelensky.

“It was important to start my visit in Bucha,” she wrote on Twitter. “Because in Bucha our humanity was shattered.”

Russia has said its troops have been falsely accused and that the evidence against them is fake.

The repercussions of the fighting are spreading far beyond Europe. The United Nations reported on Friday that world food prices rose sharply last month to their highest levels ever, as the invasion sent shock waves through global grain and vegetable oil markets. Russia and Ukraine are important suppliers of the world’s wheat and other grains.

Credit…Andriy Andriyenko/Associated Press

The report of rising prices came as the British government said Russia was heading for its “deepest recession since the collapse of the Soviet Union,” estimating that the economy could shrink by as much as 15 percent this year.

On Friday, the European Union formally approved its fifth round of sanctions against Moscow, which included a ban on Russian coal and restrictions on Russian banks, oligarchs and Kremlin officials. The coal ban, which will cost Russia about $8.7 billion in annual revenue, takes effect immediately for new contracts. At Germany’s insistence, however, existing contracts were given four months to wind down, softening the blow to Russia and Germany alike.

Nevertheless, Prime Minister Boris Johnson of Britain, meeting with the German chancellor, Olaf Scholz, in London on Friday, applauded what Mr. Johnson called the “seismic decision” by Germany to turn away from Russian fuel. Britain has pushed for a total ban on Russian energy, a move that Germany, which heats half its homes with Russian gas, has resisted.

Mr. Johnson acknowledged the obstacles to transforming Germany’s energy system “overnight,” but said “we know that Russia’s war in Ukraine will not end overnight.” Mr. Scholz said Mr. Putin had tried to divide European powers, but “he will continue to experience our unity.”

On Friday, Russia retaliated for some of the punishments from the West, declaring 45 Polish Embassy and Consulate staff “persona non grata,” and ordering them to leave Russia. Poland had expelled the same number of Russian diplomats.

Russia’s Justice Ministry also said it had revoked the registration of several prominent human rights groups in the country, including Human Rights Watch and Amnesty International, which have accused Russian troops of committing war crimes in Ukraine. The ministry accused the groups of violating an unspecified Russian law. The decision means the organizations are no longer allowed to operate in Russia.

Human Rights Watch said that forcing its office to close would not change its determination to call out Russia’s turn to authoritarianism. The group said it had been monitoring abuses in Russia since the Soviet era.

“We found ways of documenting human rights abuses then, and we will do so in the future,” it said.

Credit…Anatolii Stepanov/Agence France-Presse — Getty Images

Megan Specia reported from Krakow, Poland, and Michael Levenson from New York. Reporting was contributed by Jane Arraf from Lviv, Ukraine, Aurelien Breeden from Paris, Ivan Nechepurenko from Istanbul, Matina Stevis-Gridneff from Brussels, Michael D. Shear and Eric Schmitt from Washington, and Mark Landler and Chris Stanford from London.

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Amid Sanctions, Putin Reminds the World of His Own Economic Weapons

LONDON — In the five weeks since Russia invaded Ukraine, the United States, the European Union and their allies began an economic counteroffensive that has cut off Russia’s access to hundreds of billions of dollars of its own money and halted a large chunk of its international commerce. More than 1,000 companies, organizations and individuals, including members of President Vladimir V. Putin’s inner circle, have been sanctioned and relegated to a financial limbo.

But Mr. Putin reminded the world this past week that he has economic weapons of his own that he could use to inflict some pain or fend off attacks.

Through a series of aggressive measures taken by the Russian government and its central bank, the ruble, which had lost nearly half of its value, clawed its way back to near where it was before the invasion.

And then there was the threat to stop the flow of gas from Russia to Europe — which was set off by Mr. Putin’s demand that 48 “unfriendly countries” violate their own sanctions and pay for natural gas in rubles. It sent leaders in the capitals of Germany, Italy and other allied nations scrambling and showcased in the most visible way since the war began how much they need Russian energy to power their economies.

Russian oil exports normally represent more than one of every 10 barrels the world consumes.

Europe’s ongoing energy purchases send as much as $850 million each day into Russia’s coffers, according to Bruegel, an economics institute in Brussels. That money helps Russia to fund its war efforts and blunts the impact of sanctions. Because of soaring energy prices, gas export revenues from Gazprom, the Russian energy giant, injected $9.3 billion into the country’s economy in March alone, according an estimate by Oxford Economics, a global advisory firm.

Ursula von der Leyen, said as much when she announced the new energy plan last month: “We simply cannot rely on a supplier who explicitly threatens us.”

Security concerns aren’t the only development that has undermined Russia’s standing as a long-term energy supplier. What seemed surprising to economists, lawyers and policymakers about Mr. Putin’s demand to be paid in rubles was that it would have violated sacrosanct negotiated contracts and revealed Russia’s willingness to be an unreliable business partner.

As he has tried to wield his energy clout externally, Mr. Putin has taken steps to insulate Russia’s economy from the impact of sanctions and to prop up the ruble. Few things can undermine a country as systemically as an abruptly weakened currency.

When the allies froze the assets of the Russian central bank and sent the ruble into a downward spiral, the bank increased the interest rate to 20 percent, while the government mandated that companies convert 80 percent of the dollars, euros and other foreign currencies they earn into rubles to increase demand and drive up the price.

S&P Global survey of purchasing managers at Russian manufacturing companies showed severe declines in production, employment and new orders in March, as well as sharp price increases.

500 foreign companies have pulled up stakes in Russia, scaled back operations and investment, or pledged to do so.

“Russia does not have the capabilities to replicate domestically the technology that it would otherwise have gained from overseas,” according to an analysis by Capital Economics, a research group based in London. That is not a good sign for increasing productivity, which even before the war, was only 35 to 40 percent of the United States’.

The result is that however the war in Ukraine ends, Russia will be more economically isolated than it has been in decades, diminishing whatever leverage it now has over the global economy as well as its own economic prospects.

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The Fed Bets on a ‘Soft Landing,’ but Recession Risk Looms

Jerome H. Powell, the Federal Reserve chair, emphasized this week that the central bank he leads could succeed in its quest to tame rapid inflation without causing unemployment to rise or setting off a recession. But he also acknowledged that such a benign outcome was not certain.

“The historical record provides some grounds for optimism,” Mr. Powell said.

That “some” is worth noting: While there may be hope, there is also reason to worry, given the Fed’s track record when it is in inflation-fighting mode.

The Fed has at times managed to raise interest rates to cool down demand and weaken inflation without meaningfully harming the economy — Mr. Powell highlighted examples in 1965, 1984 and 1994. But those instances came amid much lower inflation, and without the ongoing shocks of a global pandemic and a war in Ukraine.

The part Fed officials avoid saying out loud is that the central bank’s tools work by slowing down the economy, and weakening growth always comes with a risk of overdoing it. And while the Fed ushered in its first rate increase this month, some economists — and at least one Fed official — think it was too slow to start taking its foot off the gas. Some warn that the delay increases the chance it might have to overcorrect.

40-year high and continued to accelerate, but longer-term price growth expectations have nudged only slightly higher.

If consumers and businesses anticipated rapid price increases year after year, that would be a troubling sign. Such expectations could become self-fulfilling if companies felt comfortable raising prices and consumers accepted those higher costs but asked for bigger paychecks to cover their rising expenses.

But after a year of rapid inflation, it is no guarantee that longer-term inflation expectations will stay in check. Keeping them under control is a big part of why the Fed is getting moving now even as a war in Ukraine stokes uncertainty. The central bank raised rates a quarter point this month and projected a series of interest rate increases to come.

While officials would usually look past a temporary pop in oil prices, like the one the conflict has spurred, concerns about expectations mean they do not have that luxury this time.

“The risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher,” Mr. Powell said this week.

Mr. Powell signaled that the Fed might raise interest rates by half a percentage point in May and imminently begin to shrink its balance sheet of bond holdings, policies that would remove help from the U.S. economy much more rapidly than in the last economic expansion.

Some officials, including Mr. Bullard, have urged moving quickly, arguing that monetary policy is still at an emergency setting and out of line with a very strong economy.

But investors think the Fed will need to reverse course after a series of rapid rate increases. Market pricing suggests — and some researchers think — that the Fed will raise rates notably this year and early next, only to reverse some of those moves as the economy slows markedly.

“Our base case has the Fed reversing quickly enough to avoid a full-blown recession,” Krishna Guha, the head of global policy at Evercore ISI, wrote in a recent analysis. “But the probability of pulling this off is not particularly high.”

So why would the Fed put the economy at risk? Neil Shearing, the group chief economist at Capital Economics, wrote that the central bank was following the “stitch in time saves nine” approach to monetary policy.

Raising interest rates now to reduce inflation gives the central bank a shot at stabilizing the economy without having to enact an even more painful policy down the road. If the Fed dallies, and higher inflation becomes a more lasting feature of the economy, it will be even harder to stamp out.

“Delaying rate hikes due to fears about the economic spillovers from the war in Ukraine would risk inflation becoming more entrenched,” Mr. Shearing wrote in a note to clients. “Meaning more policy tightening is ultimately needed to squeeze it out of the system, and making a recession at some point in the future even more likely.”

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