Fed officials remain committed to wrestling America’s rapid inflation lower, and they have raised interest rates at the quickest pace since the 1980s to try to slow the economy and bring supply and demand into balance — making supersize rate moves of three-quarters of a percentage point at each of their past two meetings. Another big adjustment will be up for debate at their next meeting in September, policymakers have said.
But investors interpreted July’s unexpectedly pronounced inflation slowdown as a sign that policymakers could take a gentler route, raising rates a half-point next month. Stocks soared more than 2 percent on Wednesday, as Wall Street bet that the Fed might become less aggressive, which would decrease the chances that it would plunge the economy into a recession.
“It was as good as the markets and the Fed could have hoped for from this report,” said Aneta Markowska, chief financial economist at Jefferies. “I do think it removes the urgency for the Fed.”
Still, officials who spoke on Wednesday remained cautious about inflation. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, called the report the “first hint” of a move in the right direction, while Charles Evans, president of the Federal Reserve Bank of Chicago, said that it was “positive” but that price increases remained “unacceptably high.”
Policymakers have been hoping for more than a year that price increases will begin to cool, only to have those expectations repeatedly dashed. Supply chain issues have made goods more expensive, Russia’s invasion of Ukraine sent commodity prices soaring, a shortage of workers pushed wages and service prices higher and a dearth of housing has fueled rising rents.
toward $4 in July after peaking at $5 in June, based on data from AAA. That decline helped overall inflation to cool last month. The trend has continued into August, which should help inflation to continue to moderate.
But it is unclear what will happen next. The U.S. Energy Information Administration expects that fuel costs will continue to come down, but geopolitical instability and the speed of U.S. oil and gas production during hurricane season, which can take refineries offline, are wild cards in that outlook.
declined in July, perhaps in part because borrowing costs rose. Mortgage rates have increased this year and appear to be weighing on the housing market, which could be helping to drive down prices for appliances.
slow hiring. Wages are still rising rapidly, and, as that happens, so are prices on many services. Rents, which make up a chunk of overall inflation and are closely linked to wage growth, continue to climb rapidly — which is concerning, because they tend to change course only slowly.
Rents of primary residences climbed 0.7 percent in July from the prior month, and are up 6.3 percent over the past year. Before the pandemic, that measure typically climbed about 3.5 percent annually.
Understand Inflation and How It Affects You
Those forces could keep inflation undesirably rapid even if supply chains unsnarl and fuel prices continue to fall. The Fed aims for 2 percent inflation over time, based on a different but related inflation measure.
“The Covid reopening and revenge travel pressures have eased — and are probably going to continue easing,” said Laura Rosner-Warburton, senior U.S. economist at MacroPolicy Perspectives. But she also struck a note of caution, adding: “Under the hood, we’re still seeing pressures in rent. There’s still sticky inflation here.”
And given how high inflation has been for more than a year now, Fed policymakers will avoid reading too much into a single report. Inflation slowed last summer only to speed up again in fall.
“We might see goods inflation and commodity inflation come down, but at the same time see the services side of the economy stay up — and that’s what we’ve got to keep watching for,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said during a recent appearance. “It can’t just be a one month. Oil prices went down in July; that’ll feed through to the July inflation report, but there’s a lot of risk that oil prices will go up in the fall.”
Ms. Mester said that she “welcomes” a slowdown in some types of prices, but that it would be a mistake to “cry victory too early” and allow inflation to continue without taking necessary action.
For many Americans who are struggling to adjust their lifestyles to rapidly climbing costs at the grocery store and dry cleaners, an annual inflation rate that is still more than four times its normal speed is unlikely to feel like a big improvement, even as lower gas prices and rising pay rates do offer some relief.
Stephanie Bailey, 54, has a solid family income in Waco, Texas. Even so, she has been cutting back on meals at local Tex-Mex restaurants and new clothes because of the climbing prices, which she sees “everywhere.” At Starbucks, she opts for cold, noncoffee drinks, which in some cases are cheaper.
Her son, who is in his 20s, has moved back in with his parents. Rent had become out of reach on his salary working at a vitamin manufacturer. He is now teaching at a local high school.
“It’s just so expensive, with housing,” Ms. Bailey said. “He was having a hard time making ends meet.”
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The pandemic, and now the war in Ukraine, have altered how America’s economy functions. While economists have spent months waiting for conditions to return to normal, they are beginning to wonder what “normal” will mean.
Some of the changes are noticeable in everyday life: Work from home is more popular, burrito bowls and road trips cost more, and buying a car or a couch made overseas is harder.
But those are all symptoms of broader changes sweeping the economy — ones that could be a big deal for consumers, businesses and policymakers alike if they linger. Consumer demand has been hot for months now, workers are desperately wanted, wages are climbing at a rapid clip, and prices are rising at the fastest pace in four decades as vigorous buying clashes with roiled supply chains. Interest rates are expected to rise higher than they ever did in the 2010s as the Federal Reserve tries to rein in inflation.
History is full of big moments that have changed America’s economic trajectory: The Great Depression of the 1930s, the Great Inflation of the 1970s and the Great Recession of 2008 are examples. It’s too early to know for sure, but the changes happening today could prove to be the next one.
kept at it.
Now, Russia’s invasion of Ukraine threatens the global geopolitical order, yet another shock disrupting trade and the economic system.
For Washington policymakers, Wall Street investors and academic economists, the surprises have added up to an economic mystery with potentially far-reaching consequences. The economy had spent decades churning out slow and steady growth clouded by weak demand, interest rates that were chronically flirting with rock bottom and tepid inflation. Some are wondering if, after repeated shocks, that paradigm could change.
“For the last quarter century, we’ve had a perfect storm of disinflationary forces,” Jerome H. Powell, the Fed chair, said in response to a question during a public appearance this week, noting that the old regime had been disrupted by a pandemic, a large spending and monetary policy response and a war that was generating “untold” economic uncertainty. “As we come out the other side of that, the question is: What will be the nature of that economy?” he said.
began to raise interest rates this month in a bid to cool the economy down and temper high inflation, and Mr. Powell made clear this week that the central bank planned to keep lifting them — perhaps aggressively. After a year of unpleasant price surprises, he said, the Fed will set policy based on what is happening, not on an expected return to the old reality.
“No one is sitting around the Fed, or anywhere else that I know of, just waiting for the old regime to come back,” Mr. Powell said.
The prepandemic normal was one of chronically weak demand. The economy today faces the opposite issue: Demand has been supercharged, and the question is whether and when it will moderate.
Before, globalization had weighed down both pay and price increases, because production could be moved overseas if it grew expensive. Gaping inequality and an aging population both contributed to a buildup of savings stockpiles, and as money was held in safe assets rather than being put to more active use, it seemed to depress growth, inflation and interest rates across many advanced economies.
Japan had been stuck in the weak-inflation, slow-growth regime for decades, and the trend seemed to be spreading to Europe and the United States by the 2010s. Economists expected those trends to continue as populations aged and inequality persisted.
Then came the coronavirus. Governments around the world spent huge amounts of money to get workers and businesses through lockdowns — the United States spent about $5 trillion.
The era of deficient demand abruptly ended, at least temporarily. The money, which is still chugging out into the U.S. economy from consumer savings accounts and state and local coffers, helped to fuel strong buying, as families snapped up goods like lawn mowers and refrigerators. Global supply chains could not keep up.
were able to raise prices without losing customers, they did so. And as workers saw their grocery and Seamless bills swelling, airfares climbing and kitchen renovations costing more, they began to ask their employers for more money.
Companies were rehiring as the economy reopened from the pandemic and to meet the burst in consumption, so labor was in high demand. Workers began to win the raises they wanted, or to leave for new jobs and higher pay. Some businesses began to pass rising labor costs along to customers in the form of higher prices.
The world of slow growth, moderate wage gains and low prices evaporated — at least temporarily. The question now is whether things will settle back down to their prepandemic pattern.
The argument for a return to prepandemic norms is straightforward: Supply chains will eventually catch up. Shoppers have a lot of money in savings accounts, but those stockpiles will eventually run out, and higher Fed interest rates will further slow spending.
As demand moderates, the logic goes, forces like population aging and rampant inequality will plunge advanced economies back into what many economists call “secular stagnation,” a term coined to describe the economic malaise of the 1930s and revived by the Harvard economist Lawrence H. Summers in the 2010s.
The Russia-Ukraine War and the Global Economy
Fed officials mostly think that reversion will happen. Their estimates suggest that low inflation and slow growth will be back within a few years, and that interest rates will not have to rise above 3 percent to achieve that moderation. Market pricing also suggests inflation will slow with time, albeit to higher levels than investors expected in 2018 and 2019.
But some of today’s trends look poised to linger, at least for a while. Job openings are plentiful, but the working-age population is growing glacially, immigration has slowed, and people are only gradually returning to work from the labor market’s sidelines. Labor shortages are fueling faster wage gains, which could sustain demand and enable companies to charge higher prices.
a recent essay.
Global forces could exacerbate those trends. The past year’s supply chain issues could inspire companies to produce more domestically — reversing years of globalization and chipping away at a force that had been holding down wage and price growth for decades. The transition to greener energy sources could bolster investment, pushing up interest rates and at least temporarily lifting costs.
“The long era of low inflation, suppressed volatility and easy financial conditions is ending,” Mark Carney, a former head of the Bank of England, said of the global economy in a speech on Tuesday. “It is being replaced by more challenging macro dynamics in which supply shocks are as important as demand shocks.”
Russia’s invasion of Ukraine, which has the potential to rework global trade relationships for years to come, could leave a more lasting mark on the economy than the pandemic did, Mr. Carney said.
“The pandemic marks a pivot,” he told reporters. “The bigger story is actually the war. That is crystallizing — reinforcing — a process of de-globalization that had begun.”
Mr. Summers said the current period of high inflation and repeated shocks to supply marked “a period rather than an era.” It is too soon to say if the world has fundamentally changed. Over the longer term, he puts the chances that the economy will settle back into its old regime at about 50-50.
“I don’t see how anyone can be confident that secular stagnation is durably over,” he said. On the other hand, “it is quite plausible that we would have more demand than we used to.”
That demand would be fueled by government military spending, spending on climate-related initiatives and spending driven by populist pressures, he said.
In any case, it could take years to know what the economy of the future will look like.
What is clear at this point? The pandemic, and now geopolitical upheaval, have taken the economy and shaken it up like a snow globe. The flakes will eventually fall — there will be a new equilibrium — but things may be arranged differently when everything settles.
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Behind a set of imposing metal doors in an easy-to-miss office building in a New York City suburb, a small team manages billions of dollars for a Russian oligarch.
For years, a group of wealthy Russians have used Concord Management, a financial-advisory company in Tarrytown, N.Y., to secretly invest money in large U.S. hedge funds and private equity firms, according to people familiar with the matter.
A web of offshore shell companies makes it hard to know for sure whose money Concord manages. But several of the people said the bulk of the funds belonged to Roman Abramovich, a close ally of President Vladimir V. Putin of Russia.
Concord is part of a constellation of American and European advisers — including some of the world’s largest law firms — that have long helped Russian oligarchs navigate the Western financial, legal, political and media landscapes.
both said they were leaving Russia. A spokeswoman for another large firm, Debevoise & Plimpton, said it was terminating several client relationships and would not take any new clients in Moscow. Ashurst, a large London-based law firm, said it would not “act for any new or existing Russian clients, whether or not they are subject to sanctions.”
The accounting giants PwC, KPMG, Deloitte and EY — which have provided extensive services to oligarchs and their networks of offshore shell companies — also said they were leaving Russia or severing ties with their local affiliates.
wrote a letter to the White House arguing that Russia’s Sovcombank shouldn’t face sanctions, citing the bank’s commitment to gender equity, environmental and social responsibility.
Sovcombank had agreed to pay the lobbyist’s firm, Mercury Public Affairs, $90,000 a month for its work.
The Biden administration recently imposed sanctions on Sovcombank. Within hours of the announcement, Mercury filed paperwork with the Justice Department indicating that it was terminating its contract with Sovcombank.
As recently as mid-February, the British law firm Schillings represented the Russian oligarch Alisher Usmanov, a longtime ally of Mr. Putin.
Two weeks later, the European Union and the U.S. Treasury placed sanctions on Mr. Usmanov. Nigel Higgins, a spokesman for Schillings, said the firm is “not acting for any sanctioned individuals or entities.”
say on its website that it represents “some of Russia’s largest companies,” including Gazprom and VTB. The firm said it was “reviewing and adjusting our Russia-related operations and client work” to comply with sanctions.
In Washington, Erich Ferrari, a leading sanctions lawyer, is suing the Treasury on behalf of Mr. Deripaska, who is seeking to overturn sanctions imposed on him in 2018 that he claims have cost him billions of dollars and made him “radioactive” in international business circles.
And the lobbyist Robert Stryk said he had recently had conversations about representing several Russian oligarchs and companies currently under sanctions. He previously represented clients targeted by sanctions, including the administrations of President Nicolás Maduro of Venezuela and former President Joseph Kabila of the Democratic Republic of Congo.
Mr. Stryk said he would consider taking the work if the Treasury Department provided him with the necessary licenses, and if the prospective clients opposed Russia’s aggression in Ukraine.
online profiles of current and former Concord employees.
The Russia-Ukraine War and the Global Economy
Wall Street bankers and hedge fund managers who have interacted with Concord and its founder, Michael Matlin, said it oversaw between $4 billion and $8 billion.
It isn’t clear how much of that belongs to Mr. Abramovich, whose fortune is estimated at $13 billion.
Mr. Abramovich has not been placed under sanctions. His spokeswoman, Rola Brentlin, declined to comment on Concord.
Over the years, Concord has steered its clients’ money into marquee financial institutions: the global money manager BlackRock, the private equity firm Carlyle Group and a fund run by John Paulson, who famously anticipated the collapse of the U.S. housing market. Concord also invested with Bernard Madoff, who died in prison after being convicted of a vast Ponzi scheme.
panel focused on European security, requested that the U.S. government impose sanctions on Mr. Abramovich and seize the assets at Concord, “as this blood money presents a flight risk.”
The work performed by law, lobbying and public relations firms often plays out in public or is disclosed in legal or foreign agent filings, but that is rarely the case in the financial arena.
While Russian oligarchs make tabloid headlines for shelling out for extravagant superyachts and palatial homes, their bigger investments often occur out of public view, thanks to a largely invisible network of financial advisory firms like Concord.
Hedge fund managers and their advisers said they were starting to examine their investor lists to see if any clients were under sanctions. If so, their money needs to be segregated and disclosed to the Treasury Department.
Some hedge funds are also considering returning money to oligarchs who aren’t under sanctions, fearful that Russians might soon be targeted by U.S. and European authorities.
Paradise Papers project, involved the files of the Appleby law firm in Bermuda. At least four clients owned private jets through shell companies managed by Appleby.
When sanctions were imposed on companies and individuals linked to Mr. Putin in 2014, Appleby jettisoned clients it believed were affected.
The Russians found other Western firms, including Credit Suisse, to help fill the void.
Ben Freeman, who tracks foreign influence for the Quincy Institute for Responsible Statecraft, said Russians were likely to find new firms this time, too.
“There is that initial backlash, where these clients are too toxic,” Mr. Freeman said. “But when these lucrative contracts are out there, it gets to be too much for some people, and they can turn a blind eye to any atrocity.”
David Segal contributed reporting. Susan Beachy contributed research.
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ZARANJ, Afghanistan — From their hide-out in the desert ravine, the migrants could just make out the white lights of the Iranian border glaring over the horizon.
The air was cold and their breath heavy. Many had spent the last of their savings on food weeks before and cobbled together cash from relatives, hoping to escape Afghanistan’s economic collapse. Now, looking at the border they saw a lifeline: work, money, food to eat.
“There is no other option for me, I cannot go back,” said Najaf Akhlaqi, 26, staring at the smugglers scouring the moonlit landscape for Taliban patrols. Then he jolted to his feet as the smugglers barked at the group to run.
Since the United States withdrew troops and the Taliban seized power, Afghanistan has plunged into an economic crisis that has pushed millions already living hand-to-mouth over the edge. Incomes have vanished, life-threatening hunger has become widespread and badly needed aid has been stymied by Western sanctions against Taliban officials.
Aid organizations estimate that around 4,000 to 5,000 people are crossing into Iran each day.
European Union last fall pledged over $1 billion in humanitarian aid for Afghanistan and neighboring countries hosting Afghans who have fled.
“We need new agreements and commitments in place to be able to assist and help an extremely vulnerable civil population,” Jonas Gahr Store, the Norwegian prime minister, said in a statement at the U.N. Security Council’s meeting on Afghanistan last month. “We must do what we can to avoid another migration crisis and another source of instability in the region and beyond.”
But Western donors are still wrestling with complicated questions over how to meet their humanitarian obligations to ordinary Afghans without propping up the new Taliban government.
As the humanitarian situation worsened, the United States also issued some exemptions to sanctionsand committed $308 million in aid last month — bringing the total U.S. assistance to the country to $782 million since October last year.
But aid can only go so far in a country facing economic collapse, experts say. Unless Western donors move more quickly to release their chokehold on the economy and revive the financial system, Afghans desperate for work will likely continue to look abroad.
Crouching among the migrant group in the desert, Mr. Akhlaqi steeled himself for the desperate dash ahead: A mile-long scramble over churned-earth trenches, a 15-foot-high border wall topped with barbed wire and a vast stretch of scrubland flush with Iranian security forces. Over the past month, he had crossed the border 19 times, he said. Each time, he was arrested and returned over the border.
A police officer under the former government, Mr. Akhlaqi went into hiding in relatives’ homes for fear of Taliban retribution. As the little savings that fed his family ran dry, he moved from city to city looking for a new job. But the work was scarce. So in early November, he linked up with smugglers in Nimruz Province determined to get to Iran.
asylum claims in Europe, after Syria, and one of the world’s largest populations of refugees and asylum seekers — around 3 million people — most of whom live in Iran and Pakistan.
Many fled through Nimruz, a remote corner of southwest Afghanistan wedged between the borders of Iran and Pakistan that has served as a smuggling haven for decades. In its capital, Zaranj, Afghans from around the country crowd into smuggler-run hotels that line the main road and gather around street vendors’ kebab stands, exchanging stories about the grueling journey ahead.
At a parking lot at the center of town known as “The Terminal,” men pile into the backs of pickup trucks bound for Pakistan while young boys hawk goggles and water bottles. On a recent day, their sales pitches — “Who wants water?” — were nearly smothered by the sounds of honking cars and the angry shouts of haggling men exchanging tattered Afghani bank notes for Iranian toman.
Standing in line to climb into the back of a pickup, Abdul, 25, had arrived the day before from Kunduz, a commercial hub in northern Afghanistan that was wracked with fighting last summer during the Taliban’s blitz offensive. As the thuds of mortar fire engulfed the city, his business sputtered to a halt. After the takeover, his shop stood empty as people saved the little money they had for basics like food and medicine.
As the months dragged on, Abdul borrowed money to feed his own family, plunging further and further into debt. Finally, he decided leaving for Iran was his only option.
“I don’t want to leave my country, but I have no other choice,” said Abdul, who asked that The Times use only his first name, fearing that his family could face retaliation. “If the economic situation continues like this, there will be no future here.”
As the economic crisis has worsened, local Taliban officials have sought to profit off the exodus by regulating the lucrative smuggling business. At the Terminal, a Taliban official sitting in a small silver car collects a new tax — 1,000 Afghanis, or about $10 — from each car heading to Pakistan.
At first, Taliban officials also taxed the city’s other main migrant route, a smuggler-escorted journey across the desert and over the border wall directly into Iran. But after accusations in September that a smuggler had raped a girl, the Taliban reversed course, cracking down on this desert route.
Still, such efforts have done little to deter smugglers.
Speeding through a desert road around midnight, one smuggler, S., who preferred to go by only his first initial because of the illegal nature of his work, blasted Arabic pop music from his stereo. A music video with a woman swaying in a tight black dress played on the car’s navigation screen. As he neared his safe house, he cut the back lights to avoid being followed.
Moving people each night requires a delicate dance: First, he strikes a deal with a low-ranking Iranian border guard to allow a certain number of migrants to cross. Then, he tells other smugglers to bring migrants from their hotel to a safe house in the desert and coordinates with his business partner to meet the group on the other side of the border. Once the sun sets, he and others drive for hours, scoping the area for Taliban patrols and — once the route is clear — take the migrants from the safe house to the border.
“We don’t have a home, our home is our car, all night driving near to the border — one day my wife will kick me out of home,” S. said, erupting in laughter.
Crossing the border is just the first hurdle that Afghans must overcome. Since the takeover, both Pakistan and Iran have stepped up deportations, warning that their fragile economies cannot handle an influx of migrants and refugees.
In the last five months of 2021, more than 500,000 who entered these countries illegally were either deported or voluntarily returned to Afghanistan, likely fearing deportation, according to the U.N.’s International Organization for Migration.
Sitting on the ragged blue carpet of one hotel was Negar, 35, who goes by only one name. She had climbed over the border wall into Iran with her six children two nights before desperate to start a new life in Iran. For months, she had stretched out her family’s meager savings, buying little more than bread and firewood to survive. When that cash ran out, she sold her only goat to make the journey here.
But once she touched Iranian soil, a pack of border guards descended on the group of migrants and fired shots into the pre-dawn darkness. Lying on the ground, Negar called out to her children and had a horrifying realization: Her two youngest sons were missing.
After two agonizing days, smugglers in Iran found her sons and sent them back to her in Zaranj. But shaken by losing them, she was at a loss over whether to attempt to cross again.
“I’m worried,” she said. “What if I can never make it to Iran?”
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Inflation came in strong and wage growth remained elevated at the end of 2021, setting the stage for a challenging economic year in which the Federal Reserve and White House will try to maintain momentum in the job market while wrestling price gains under control.
The Personal Consumption Expenditures index, the Fed’s preferred inflation gauge, came in at 5.8 percent in December, up from 5.7 percent the prior month. That beat out the prior month to become the fastest pace since 1982.
climbed 4 percent in the year through the fourth quarter, with its wages and salaries measure picking up by 4.5 percent.
That marked the fastest pace of increase for both the overall compensation and the wages and salaries measure since the data series started two decades ago.
taken steps aimed at relieving pressure on choked supply chains, the job of slowing down demand to bring prices under control rests primarily with the Fed.
produced by the Federal Reserve Bank of New York that incorporates backlogs, delivery times and inventories.
Inflation sped up starting last year as people bought more goods, aided by repeated government relief checks and other federal benefits. The world’s factories and shipping lines have struggled to keep up with demand, resulting in rising prices for cars, lumber and clothing. While spending has moderated somewhat recently — it fell in December as Omicron spread, as goods consumption declined — it is unclear whether that is a blip caused by the pandemic or a lasting pullback.
Fed officials have been watching for signs that inflation, which they have projected will ease to less than 3 percent by the end of the year, might instead linger.
“We are attentive to the risks that persistent real wage growth in excess of productivity could put upward pressure on inflation,” Jerome H. Powell, the Fed’s chair, said during a news conference on Wednesday. Friday’s data could offer officials some slight reprieve.
Mr. Powell had in December specifically cited the previously Employment Cost Index reading — which came in high during the third quarter — as one reason that the Fed had decided to shift from stoking growth to preparing to fight back if inflation becomes long-lasting.
The fact that the measure did not pick up as sharply as expected in the final quarter of the year could give investors some confidence that the central bank’s policy-setting group, the Federal Open Market Committee, will not further speed up its plans to withdraw economic help.
University of Michigan survey has shown sentiment faltering as prices have risen, and the Conference Board’s index ticked down in January.
Card 1 of 6
What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
“You have very high inflation, so people are seeing an erosion of their purchasing power,” said Dana M. Peterson, chief economist at The Conference Board, noting that the resurgent virus is also to blame. “People will have higher confidence once we’re beyond Omicron.”
For now, it is a moment of pronounced economic uncertainty.
Ashley Fahr, the owner of the culinary company and event space La Cuisine in Venice, Calif., said rising grocery costs began to bite at a difficult moment — just before Omicron began to surge, causing people to pull back from activities like the cooking classes and catering events she offers.
She noticed in December that her food bill had gone up by about 15 percent, chipping away at her margins, and passed about 5 percent of that on to customers while absorbing the rest of the increase.
“I didn’t want to quote a number people would balk at,” she said.
Ms. Fahr said she pays her workers — most of whom are independent contractors — competitive wages and that it’s hard to keep up with rising prices and still turn a profit. She is watching to see what other local caterers and cooking classes do with their pricing — and whether they begin to pass on the full increase to customers.
“If everyone else does it, I’ll do it too,” Ms. Fahr said.
That sort of logic is what economic officials worry about. If businesses and consumers begin to expect prices to steadily rise, they may begin to accept instead of resisting them — and when inflation gets baked into expectations, it might spiral upward year after year, economists worry.
“What we’re trying to do is get inflation, keep inflation expectations well anchored at 2 percent,” Mr. Powell, the Fed chair, said at his news conference this week. “That’s always the ultimate goal.”
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KABUL, Afghanistan — A young Taliban fighter with a pair of handcuffs dangling from his finger warily watched the stream of approaching cars as he stood in front of a set of steel barricades.
Friday prayers would begin soon at the Sakhi Shah-e Mardan shrine and mosque, a holy Shiite site in central Kabul that he was guarding.
There had been two bombings of Shiite mosques in Afghanistan by the Islamic State in recent months, killing dozens, and this 18-year-old Taliban fighter, Mohammad Khalid Omer, wasn’t taking any chances.
He and his police unit of five other fighters, colloquially known as the Sakhi unit after the shrine they defend, represents the Taliban’s vanguard in their newest struggle after the group’s stunning takeover of the country in August: They won the war, but can they secure the peace in a multiethnic country racked by more than 40 years of violence?
economic hardships gripping their countrymen, with the same threat of Islamic State attacks and with the raucous, puzzling, winding streets and back alleys of Kabul, a city of about 4.5 million people that they are practically strangers to.
The Sakhi unit lives full time next to the shrine in a small concrete room painted bright green with a single electric heater. Steel bunk beds line the walls. The only decoration is a single poster of the sacred Kaaba in Mecca.
the Taliban’s interim government, composed almost entirely of Pashtun hard-liners who are emblematic of the movement’s harsh rule in the 1990s, and who are perceived as anti-Hazara.
As he spoke in the unit’s cramped barracks, a small speaker often played “taranas,” the spoken prayer songs, without musical accompaniment, popular with the Talibs.
One of the group’s favorites was a song about losing one’s comrades, and the tragedy of youth lost. In a high thin voice, the singer intones, “O death, you break and kill our hearts.”
On a fall day last year as the Sakhi unit looked on, families gathered on the tiled terraces around the shrine, drinking tea and sharing food.
Some cautiously eyed the Talibs patrolling the site, and one group of young men rushed to put out their cigarettes as they approached. The Taliban generally frown on smoking, and the unit has at times physically punished smokers.
Another day, two teenage boys came to the shrine, brazenly strolling with their two girlfriends. They were confronted by the Sakhi unit, who asked what they were doing. Unsatisfied with their answers, the Talibs dragged the boys into their bunk room to answer for the transgression. In conservative Afghanistan, such public consorting is taboo, doubly so in a holy site under Taliban guard.
Inside their room, there was an argument among the Sakhi unit about how to handle the two boys: good cop versus bad cop. Hekmatullah Sahel, one of the more experienced members of the unit, disagreed with his comrades. He pushed for a verbal lashing rather than a physical one. He was overruled.
When the teenagers were finally allowed to leave, shaken by the beating they had just received, Mr. Sahel called out to the boys, telling them to come back again — but without their girlfriends.
The episode was a reminder to the shrine’s visitors that the Taliban fighters, while generally friendly, could still revert to the tactics that defined their religious hard-line rule in the 1990s.
For the group of six fighters, contending with flirting teenagers was just another indicator that their days of fighting a guerrilla war were over. Now they spend their time preoccupied by more quotidian policing considerations, like spotting possible bootleggers (alcohol in Afghanistan is banned), finding fuel for their unit’s pickup and wondering whether their commander will grant them leave for the weekend.
Mr. Omer had joined the unit only months before. “I joined the Islamic Emirate because I had a great desire to serve my religion and country,” he said.
But to some Talibs, Mr. Omer is what is derisively called a “21-er” — a fighter who only joined the movement in 2021, as victory loomed. This new generation of Talibs bring new expectations with them, chief among them the desire for a salary.
They and most other rank-and-file fighters have never received a salary from the movement. Despite seizing billions in American-supplied weapons and matériel, the Taliban are still far from being well equipped. Fighters are dependent on their commanders for basic supplies, and they have to scrounge for anything extra.
Mr. Sahel, at 28, is older than most of his comrades, slower to excite and more restrained. He spent four years studying at a university, working the whole time as a clandestine operative for the movement. “None of my classmates knew that I was in the Taliban,” he said. He graduated with a degree in physics and math education, but returned to the fight.
Relieved the war is over, he and his comrades still miss the sense of purpose it provided. “We are happy that our country was liberated and we are currently living in peace,” he said, but added, “we are very sad for our friends who were martyred.”
Every few weeks, the men are allowed to visit their families back in Wardak for two days. On a crisp morning in November, Mr. Inqayad sat in his home in the Masjid Gardena valley, a beautiful collection of orchards and fields hemmed in by mountain peaks.
He explained that many families in the area had lost sons to the fighting, and estimated that 80 percent of the families in the area were Taliban supporters.
Mr. Inqayad attended school until the seventh grade, but had to drop out. Religious studies filled in some gaps. He joined the Taliban at 15.
Recently married, he faces new challenges now that the movement is in power. The only potential breadwinner in his family, he needs a salary to support his wife, mother and sisters, but so far he has not been drawing one.
Back in Kabul, the Sakhi unit loaded up for a night patrol, bundling up to combat the cold wind that blows incessantly from the mountains ringing the city.
Mr. Omer rode in the bed of the unit’s truck, a machine gun resting on his lap and bands of ammunition wrapped around his neck like party beads.
But there was little to warrant the heavy weaponry meant for suppressing enemy troops. Their area of responsibility was quiet, and the men seemed bored as they spun around the city as packs of street dogs chased and snapped at the tires of passing cars.
Sami Sahak contributed reporting.
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JALALABAD, Afghanistan — Aref Mohammad’s war against the Islamic State ended earlier this fall when his unit of Taliban fighters was ambushed by the terrorist group in eastern Afghanistan. A bullet shattered his femur, leaving him disabled and barely able to walk, never mind fight.
But for the Taliban movement he served under, now the government of Afghanistan, the war against the Islamic State was just beginning.
“If we knew where they were from, we would pursue them and destroy them,” Mr. Mohammed, 19, said from his hospital bed in Jalalabad, the capital of Afghanistan’s eastern Nangarhar Province where the Islamic State has maintained a presence since 2015.
In the two months since the Taliban took control of the country, the Islamic State affiliate in Afghanistan — known as Islamic State Khorasan or ISIS-K — has stepped up attacks across the country, straining the new and untested government and raising alarm bells in the West about the potential resurgence of a group that could eventually pose an international threat.
Islamic State fighters carried out a coordinated attack with gunmen and at least one suicide bomber on an important military hospital in the capital, killing at least 25 people.
This has placed the Taliban in a precarious position: After spending 20 years fighting as an insurgency, the group finds itself wrestling with providing security and delivering on its hallmark commitment of law and order. This has proved especially challenging for the Taliban as they try to defend themselves and civilians in crowded cities against almost daily attacks with an army that was trained for rural guerrilla warfare.
once working together with the Americans and the former government to contain the terrorist group in the east — is on the diplomatic stage.
their origin story and their record as rulers.
In 2015, the Islamic State in Khorasan was officially established in Afghanistan’s east by former members of the Pakistani Taliban. The group’s ideology took hold partly because many villages there are inhabited by Salafi Muslims, the same branch of Sunni Islam as the Islamic State. A minority among the Taliban, who mostly follow the Hanafi school, Salafi fighters were eager to join the new terrorist group.
The draw of young fighters to the Islamic State is especially pronounced in Jalalabad, where Salafi mosques have sprung up in growing numbers in recent years, providing ample recruiting grounds for the terrorist group.
The Taliban have made a show of openness to the Salafists, accepting a pledge of allegiance from some Salafi clerics earlier this month. But there is still widespread unease within their community, especially in Jalalabad.
At one Salafi religious school in the city, the Taliban cracked down on the ideology by forcing the school’s founder to flee. They have allowed boys to continue their Quranic studies but have banned Salafist works from the curriculum.
For Faraidoon Momand, a former member of the Afghan government and a local power broker in Jalalabad, the worsening economic situation in the country is also driving the Islamic State’s recruitment.
“In every society if the economy is bad, people will do what they have to do to get by,” Mr. Momand said.
As dusk fell over Jalalabad on a recent day in October, a unit of Taliban fighters belonging to the intelligence agency rode through the streets in a modified Toyota pickup, a machine gun mounted in its bed, as the streets filled with commuters and evening shoppers.
The Talibs pulled up at key intersections and checkpoints, jumping out and assisting with the screening of cars and the ubiquitous yellow three-wheeled rickshaws that jostle and honk as they throng streets. They poked their heads in, shining flashlights inside, questioning passengers, and waved them on.
“We have a court for every criminal,” said Abdullah Ghorzang, a Taliban commander. “But there is no court for ISIS-K. They will be killed wherever they are arrested.”
Victor J. Blue reported from Jalalabad, Afghanistan; Thomas Gibbons-Neff from Doha, Qatar, and Christina Goldbaum from Kabul. Reporting was contributed by Eric Schmitt from Washington; Safiullah Padshah from Jalalabad; and Sami Sahak from Los Angeles.
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“The internet is answering a question that it’s been wrestling with for decades, which is: How is the internet going to pay for itself?” he said.
The fallout may hurt brands that relied on targeted ads to get people to buy their goods. It may also initially hurt tech giants like Facebook — but not for long. Instead, businesses that can no longer track people but still need to advertise are likely to spend more with the largest tech platforms, which still have the most data on consumers.
David Cohen, chief executive of the Interactive Advertising Bureau, a trade group, said the changes would continue to “drive money and attention to Google, Facebook, Twitter.”
The shifts are complicated by Google’s and Apple’s opposing views on how much ad tracking should be dialed back. Apple wants its customers, who pay a premium for its iPhones, to have the right to block tracking entirely. But Google executives have suggested that Apple has turned privacy into a privilege for those who can afford its products.
For many people, that means the internet may start looking different depending on the products they use. On Apple gadgets, ads may be only somewhat relevant to a person’s interests, compared with highly targeted promotions inside Google’s web. Website creators may eventually choose sides, so some sites that work well in Google’s browser might not even load in Apple’s browser, said Brendan Eich, a founder of Brave, the private web browser.
“It will be a tale of two internets,” he said.
Businesses that do not keep up with the changes risk getting run over. Increasingly, media publishers and even apps that show the weather are charging subscription fees, in the same way that Netflix levies a monthly fee for video streaming. Some e-commerce sites are considering raising product prices to keep their revenues up.
Consider Seven Sisters Scones, a mail-order pastry shop in Johns Creek, Ga., which relies on Facebook ads to promote its items. Nate Martin, who leads the bakery’s digital marketing, said that after Apple blocked some ad tracking, its digital marketing campaigns on Facebook became less effective. Because Facebook could no longer get as much data on which customers like baked goods, it was harder for the store to find interested buyers online.
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Paul Van Doren, a founder of Vans, the Southern California sneaker company that became synonymous with skateboarding almost by chance and then grew into a multibillion-dollar business, died on May 6 in Fullerton, Calif. He was 90.
His death, at the home of one of his children, was confirmed by a representative for VF Corporation, which now owns Vans. He lived in Las Vegas.
Mr. Van Doren founded the Van Doren Rubber Company in 1966 with the investor Serge D’Elia and soon brought on his younger brother James and Gordon Lee, a colleague from his years working for another sneaker manufacturer.
The idea was straightforward: sell high-quality but inexpensive sneakers from a store adjacent to a factory in Anaheim. The company handled production on-site, making it easy to fill orders of different sizes and allowing buyers to customize their shoes in a rainbow of colors and patterns.
Los Angeles magazine this year. “And here’s a company listening to them, backing them and making shoes for them.”
Vans provided Mr. Alva and Mr. Peralta with free shoes and sponsored them as part of a team of professional skateboarders, an arrangement that became a model in the skateboard shoe business.
The company went on to develop new styles, like the Old Skool, which has leather panels on the toe and heel for increased durability; the Sk8-Hi, an Old Skool with a padded high-top collar to protect ankles from errant boards; and a laceless canvas slip-on equipped with the signature Vans sole.
By the early 1980s the shoes were available in about 70 Vans stores, mostly in Southern California, and in outlets around the country. The shoes had earned a following among skateboarders, surfers and BMX bicyclists but were not widely known outside of those core markets.
Fast Times at Ridgemont High.”
Frank Ocean wore checkerboard slip-ons to the White House to meet President Barack Obama.
Vans has collaborated on custom shoes with the labels Kenzo and Supreme, companies like Disney, the music makers Public Enemy and Odd Future and the contemporary artist Takashi Murakami. Customers can design their own shoes on the company’s website.
But Vans remains tied to its original demographic, continuing to sponsor skateboarders, snowboarders, surfers and other athletes and run surfing and skateboarding contests around the world. For nearly 25 years it funded the Warped Tour music festival, which featured skateboarding demonstrations.
“We lost our founding father, but his roots run deep with us,” Mr. Alva wrote on Instagram after Mr. Van Doren’s death.
Paul Joseph Van Doren was born on June 12, 1930, to John and Rita (Caparelli) Van Doren and grew up in Braintree, Mass., south of Boston. His father was an inventor who designed fireworks and clothespins, and Mr. Van Doren learned valuable business lessons working alongside him.
He wrote that he dropped out of high school at 16 and for a time made a living at the horse track and in pool halls, work his mother could not abide. She helped him get a job at the Randolph Rubber Manufacturing Company, a Massachusetts concern that made canvas sneakers.
died in 2011 at 72.
His son Steve, daughter Cheryl and some of his grandchildren continue to work for the company he built.
Mr. Van Doren spent more than 15 years at Randolph Rubber. In 1964 he moved to Southern California to run a factory for Randolph there but left two years later to start Vans, having had disagreements with Randolph management.
He retired in the early 1980s, and his brother James took control of the company. James Van Doren tried to compete with companies like Nike and Adidas by expanding into different sports — running, basketball, wrestling and break dancing among them — only to bankrupt the company by 1984, Mr. Van Doren wrote.
Mr. Van Doren returned to lead Vans back to solvency. He refocused the company on its core offerings, and in a few years Vans paid back about $12 million in debt, he wrote.
mound wearing a pair of Sk8-Hi shoes customized with spikes, Mr. Van Doren wrote.
“The company doesn’t pay people to do these things; they happen organically,” he added. “Our customers, famous or not, just like the shoes.”
Alain Delaquérière contributed research.
Chad Kalepa Baybayan, a revered Hawaiian seafarer who was a torchbearer for the art of “wayfinding,” which ancestral Polynesian sailors used to navigate the Pacific Ocean by studying the stars, trade winds and flight patterns of birds, died on April 8 at a friend’s home in Seattle. He was 64.
His daughter Kala Tanaka said the cause was a heart attack. He suffered from diabetes and had had a quadruple bypass over a year ago.
Many centuries ago, oceanic tribes sailed the waters between the islands and atolls of Polynesia in double-hulled canoes. They plotted their course by consulting the directions concealed within sunrises and sunsets, ocean swells, the behaviors of fish and the reflections of land in clouds. As Polynesia was colonized and modernized, the secrets of celestial navigation were nearly forgotten.
Mr. Baybayan (pronounced “bay-BAY-an”) was a teenager when he joined the crew of the fabled Hokule’a (“Star of Gladness”), a voyaging canoe in which he learned to become a wayfinder under the tutelage of the Micronesian master navigator Mau Piailug.
At the time, traditional Hawaiian culture was in peril. Usage of the native language was declining, sacred lands were being desecrated and fewer ceremonies were being held. In 1973 the Polynesian Voyaging Society was formed in hopes of preserving the region’s seafaring heritage, and it built Hokule’a, a replica of an ancient deep-sea voyaging canoe.
In 1976, the vessel embarked on a historic trip from Hawaii to Tahiti without the aid of navigational tools, in what was intended as a display of wayfinding’s technical sophistication. The trip, which was led by Mr. Piailug and documented by National Geographic, also sought to disprove theories that Polynesia was settled accidentally by hapless sailors lost in an aimless drift. (Mr. Baybayan was too young to go on that famous voyage, although he served ceremonial drinks made from awa root to his crewmates before their departure.)
When Hokule’a finally made landfall in Tahiti, thousands of people had gathered on shore to greet the canoe, and the occasion was declared an island-wide celebration. The voyage’s success galvanized a revival of native culture, known as the Hawaiian renaissance, that included a celebration of slack-key guitar music and the hula.
told National Geographic in 2014, “I will never be a ‘master’ because there will always be more to learn.”
“What it truly does is sharpen the human mind, intellect and ability to decipher codes in the environment,” he added. “It’s also incredibly rewarding to navigate and make a distant landfall. For me, it’s the most euphoric feeling that I have ever felt.”
Pwo. The ritual commenced with the blowing of a conch shell, and Mr. Baybayan was given a bracelet of stinging coral to mark his new status. In 2014, he helped lead Hokule’a on a three-year circumnavigation of the globe.
In his late 30s, while raising a family and juggling jobs as a hotel porter and a ramp agent for United Airlines, Mr. Baybayan decided to pursue a higher education. He graduated with a B.A. in Hawaiian studies from the University of Hawaii at Hilo in 1997. He then earned a master’s degree in education from Heritage University in Toppenish, Wash.
Mr. Baybayan became an educator at the ‘Imiloa Astronomy Center, using its planetarium to teach visitors about celestial navigation. He also traveled to classrooms across the country to talk about wayfinding with the aid of an interactive star compass floor mat. In 2013, he gave a TEDx Talk that recounted the history of Hokule’a.
“There are only a few people in the world who can really navigate properly, and Kalepa was one of them,” Nainoa Thompson, a fellow Hokule’a master navigator, said in a phone interview. “But where Kalepa separates himself is how far he took things with education. He broke the rules.
said in an interview in 2000. “I knew that if there was anything in my life that I wanted to do it was sail on her.”
His daughter elaborated: “For him, seeing Hokule’a was like seeing this thing he’d only heard about in stories and history books, but then there it was and it was real. It wasn’t just a story anymore.”
When Mr. Baybayan first joined the crew, he was charged with tasks like washing and scrubbing the vessel. He began learning the techniques of wayfinding in his 20s, and he went on to guide voyages that took the canoe to Cape Town, Nova Scotia, Cuba and New York.
supporter of the construction of a $1.4 billion telescope on the dormant volcano Mauna Kea, a sacred site considered the resting place of gods. Called the Thirty Meter Telescope, it is expected to be one of the most powerful telescopes ever made, but activists have protested its construction for years.
“I’ve heard the comment that the protesters want to be on the right side of history,” Mr. Baybayan told The Associated Press in 2019. “I want to be on the right side of humanity. I want to be on the right side of enlightenment.”
In addition to his daughter Kala, Mr. Baybayan is survived by his wife, Audrey (Kaide) Baybayan; another daughter, Pukanala Llanes; a son, Aukai Baybayan; his mother, Lillian Suter; two brothers, Clayton and Lyle Baybayan; a sister, Lisa Baybayan, who now goes by Sister Ann Marie; a half brother, Theodore Suter; and six grandchildren.
Last month, Mr. Baybayan was in Seattle with his wife to visit some of his grandchildren when he collapsed suddenly one evening.
The night after he died, a group of his crewmates, including Mr. Thompson, gathered aboard Hokule’a for a moonlight passage in his memory. Mr. Thompson, who had studied celestial navigation alongside Mr. Baybayan as a young man, looked toward the stars as he honored his fellow wayfinder.
“I think Kalepa has gone to where the spirits go,” Mr. Thompson said. “Now he is up there with our ancestors who dwell in the black of the night.”