“The fight against inflation…”

The Federal Reserve announced another massive interest rate increase in its fight against inflation, tightening its grip on the economy less than a week before midterm elections that will determine control of Congress.

Fed jacks up interest rates again, hints at smaller increases ahead

The Federal Reserve raised interest rates by three-quarters of a percentage point again on Wednesday and said its battle against inflation will require borrowing costs to rise further, yet signalled it may be nearing an inflection point in what has become the swiftest tightening of U.S. monetary policy in 40 years.

The double-sided message left open the possibility the U.S. central bank may raise rates in smaller increments in the future, ending its sequence of three-quarters-of-a-percentage-point hikes as soon as December in favour of more tempered increases of perhaps half a percentage point, while also leaving policymakers room to continue pushing rates higher if inflation doesn’t start to slow.

Fed Chair Jerome Powell, speaking in a news conference after the end of the central bank’s latest policy meeting, said he wanted no confusion on that point: Even if policymakers do scale back future increases, he said, they were still undecided about just how high rates would need to rise to curb inflation, and were determined to “stay the course until the job’s done.”

Regardless of how fast the Fed moves, “there’s some ground to cover” for the target federal funds rate to reach a “sufficiently restrictive” level that will slow inflation, Powell said. The final destination is “very uncertain … We’re going to find it over time.”

“The question of when to moderate the pace of increases is much less important than the question of how high … and how long to keep monetary policy restrictive,” he said, adding that it was “very premature” to discuss when the Fed might pause its increases.

Energy market turmoil shakes Europe’s green power plan

Europe’s plan to roughly double renewable power generation by the end of the decade to cut its emissions and reliance on imported Russian fuel is under threat from market turbulence that has shaken the economics of the shift to low carbon energy.

Russia’s war on Ukraine and the disruption of the gas supplies on which Europe had relied has injected urgency into the European Union’s move toward carbon-free energy.

It is negotiating a legally-binding target to generate 45% of energy from renewable sources by 2030, up from the existing target of 32% and renewable capacity of roughly 22% in 2021.

But even if the bloc’s 27 member countries reach agreement on the plan, to enforce it they must overcome rising costs and uncertainties linked to power market reforms triggered by the price surge linked to war in Ukraine.

As energy prices have increased all costs, including of the materials needed for renewable infrastructure, investment models built on low prices for renewably produced electricity are in doubt.

“This completely changes the dynamic as you need to sell your electricity for much higher prices, which could have a derailing impact on the whole energy transition,” David Swindin, Chief Executive Officer at Cubico Sustainable Investments, a renewables investor and developer, said.

The Paris-based International Energy Agency (IEA) last week anticipated reduced Russian fossil fuel exports would spur green investments, but it also said cost increases for clean energy technologies mark a distinctive break with the steady, and sometimes dramatic, reductions seen in recent years”.

Ukrainian officials say nuclear plant disconnected from grid as shelling damaged power lines

Russian attacks were reported across large areas of Ukraine on Thursday, with heavy shelling in numerous regions damaging infrastructure, including electricity supplies to Europe’s largest nuclear plant, Ukrainian officials said.

The Zaporizhzhia nuclear power in southern Ukraine has again been disconnected from the power grid after Russian shelling damaged the remaining high voltage lines, leaving it with just diesel generators, Ukraine nuclear firm Energoatom said.

The plant, in Russian hands but operated by Ukrainian workers, has 15 days’ worth of fuel to run the generators, Energoatom said.

Malta: Industrial Producer Price Indices

When compared to September 2021, the industrial producer price index increased by 4.38 per cent.

Price increases were registered in all the main industrial groupings except energy. The highest increase was registered in the consumer goods (8.73 per cent) followed by intermediate goods (3.30 per cent) and capital goods (3.12 per cent).

Industrial producer prices for the domestic market increased by 9.40 per cent. Price rises were recorded in the intermediate goods (19.67 per cent), capital goods (14.23 per cent) and consumer goods (11.48 per cent).

Non-domestic prices increased by 1.30 per cent. The prices of goods destined to the non-euro area rose by 2.01 per cent while those destined to the euro area dropped by 0.07 per cent

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