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not the guests. you want to become a citizen in phil migrants, your platform for reliable information ah, high interest rates take out high inflation of consumer prices. so or the u. s. federal reserve analysis. it's biggest rate hike in more than 20 years. but is it enough to bring down costs will ask an expert. also on the show, the european union unveils a possible embargo on oil from russia. member states debate whether they can replace some 4000000 daily barrels of crude by new years and thousands of tons of grapes left to rot on the vine, australian wind farmers feel the pain of chinese trade penalties. welcome back to

dw business, i'm christy flats. and in berlin, the federal reserve in the united states has raised its benchmark benchmark interest rate by half a percentage point. the biggest hike in 2 decades is meant to battle inflation. currently at a 40 year high. the central bank also said it will begin reducing asset holdings on its 9 trillion dollar balance sheet. the fed had been buying bonds to keep borrowing cheap and money flowing through the economy. during the pandemic. fed chairman jerome powell said it was the painful surgeon prices that called for a dramatic policy change. the economy in the country have been through a lot over the past 2 years and approved resilient. it is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all. oh, christopher thornburg is a founding partner at beacon economics. he joins me from los angeles. christopher, i want to get down to brass tacks here. when will stuff get cheaper?

ah, never look. the increase in price is we're saying, of course, is, is largely driven by the $11.00 trillion dollars of stimulus that the federal reserve and congress has thrown up the u. s. economy candidly, vastly more than the economy needed relative to the type of economic shock that the pandemic created. the result of that, of course, is, is rapidly rising. prices were at 8 and a half percent inflation year over year. and a candidly, given the pent up demand and our economy right now take, for example, auto inventories that are basically 0. it's hard to see anything slowing down, given these relatively modest moves on the part of the fed. ergo, i don't think they're going to even come close to slowing inflation down a given this kind of policy. ok, well of course we know that more is coming down the road, but as you're saying things are pretty bleak already. i mean,

have they been far too slow in responding to inflation? what should they have done? what do you think? yeah, absolutely. i mean, look, a little historical context is always helpful here in the aftermath of the great recession, when, when the financial markets were really going through some tough times member nancy and jenny, ellen did about 3 and a half trillion dollars, a quantitative easing in the face of one of the most massive financial meltdowns this nation, and seen probably since the 19th thirty's. this time around a drone, paul started out with a 3 chilly trillion dollars quantitative easing. but within 3 months we knew a couple of things. a, the recession was already ending and be the financial market hits was nowhere near as profound, indeed was almost non existent compared to what happened a decade earlier. at that point in time, he should have started with drawing. instead, he put 2 trillion more into quantitative easing when he should have been going the

out of the direction. unfortunately, because of that mistake, my belief is a soft landing is no longer reasonable option. in other saying, there are some fundamentals are very strong in the u. s. economy right now, a lot of demand for example, but we also know that there are other issues like this worker shortage. the fact that supply chains are still suffering from the crone of virus pandemic. and now we have the war pushing up commodity prices as well. now with this move from the fed, what is the risk of a recession? we saw that there was a contraction last quarter, for example. right. um, well, i liked some of their questions, but some of i, i really didn't like at all. the reality is, is u. s. economy is, is completely overheated. there's, there's no 2 ways about it. the labor shortage you talk about is a symptom of that. the supply chain problems or a symptom of that covert isn't hurting supply chains. the problem is, the u. s. economy was never built to deal with this level of demand. it's as simple as that. and by the way, demand is so excessive, going back again to the 11 trillion dollars and stimulus they needlessly through

the economy. the problem in the u. s. right now is not the worn ukraine. the problem in the u. s. right now is americans are spending too much money and unfortunately, that is a political message that nobody a washington dc wants to deliver their particular voters. and that is, of course, the problem here. the reality is, is they over did it, but nobody in d. c wants that hot potato was christopher thornburgh, of beacon economics, there are financial correspondent ins. quarter has been watching the reaction on the new york stock exchange. as always, yes. these low rates had kept a lot of money flowing in the financial markets over the last couple of years and made a lot of investors, a pretty rich, at least on paper. what was the reaction to this change today? we saw an increase in to interestingly, the strong reaction to this effect meeting, christie, we saw the blue chips with all the s and p 500. gaining about 3 percent. that's

been the best trading day pretty much into a year. the reason might be that jermel impala hinted that he's not going to increase interest rates by 75 basis points that some of the next meeting. so that was what some market participants m theory. but then again, was really likely to see a 75 basis point increase. i would say, i doubt it, then we are still on a road to 2 more interest rates. looking ahead probably another 50 basis points next, the next meeting in june. so i would not read too much into the reaction on today's meeting. i've seen it in the past so many times what wall street initially says and how the traitors invest. react does not necessarily mean that they're moving on the market to face the same. the next training session, so i would say thursday really will be very telling if this a positive mood still remain them or not in your world, paul. you said one,

pretty interesting thing. he said, well, he can control partly the demand side with the monetary policy. but he has no influence on the supply side. so at the end of the day, it's really how inflation moves on forward. how the federal reserve will act in the month that well will of course be checking with any within with you on that tomorrow. yeah, of course, so thank you so much the you plans to end its imports of russian oil as part of a 6th round of sanctions on russia. european commission, president ursula vander lan, said the proposed sanctions would be the toughest yet it is the gets about one quarter of its oil from russia. it's a major source of revenue for moscow. but wait, there's more rushes largest bank, spare bank will also be disconnected from the swift payment system. and sanctions will be po, imposed on individuals including military officers accused of war crimes. here's

what ursula on land had to say. today we are addressing our dependency on washing oil, and let's be clear. it will not be easy because some member states a strongly dependent on russian oil, but we simply have to do it. so today we will propose to ban all russian oil from europe. this will be this will be a complete impulse ban on all russian oils, seaborne and pipeline crude and refined. jacobo kierkegaard, as a senior research fellow at the german marshall fund, we asked him how significant this decision by the european union is what i think it's very clear that given the timeframe we have a 6 to 8 month phase in time. it's not going to be very significant in the short run, meaning is not going to have, you know, any sort of decisive battlefield impacts in the month ahead. but as we look to the

medium and long run, it's going to be very significant because it basically is in my opinion, the permanent decoupling of you in a, you certainly oil supplies from russia. and when you add to that, the sanctioning also the swift thing of the biggest russian bank spirit a bank as well as the sanctions coming against european tanker carriers and insurance businesses or services for the trunk, the global transportation of russian crude oil. you know, you got to have, you know, towards the end of the year, a significant impediment on russian. a global oil export. now to some of the other global business stories making news. volkswagen nearly doubled its 1st quarter net profits compared to the same period last year. europe's

largest car maker raked in 6700000000 euros in the 1st 3 months of the year. it dodged a major hit from supply chain bottlenecks by providing factories in the u. s and china with unused semiconductors from europe. air bus says its 1st quarter net profits more than tripled compared to the same period last year. the european aircraft maker earned 1200000000 euros despite the impact of sanctions over the war and ukraine. it said it aimed to significantly increase production. i'll tens of thousands of tons of australia and wine grapes are being left to rot. after a chinese boycott of esther alien wine exports to china dropped from nearly $900000000.00 us dollars in 2022, just $20000000.00. last year it's forcing australia's wine makers to seek out new markets. but for this season it might be too late. it's autumn. and the grapes are ripe and ready to be picked. this year has delivered a bumper crop. normally

a reason to celebrate. but russell lynch, who grows gripes in the mold. you are a region of southeastern australia is facing the stock reality of leaving a $130.00 tons of his shiraz gripes on the ground. to rot. china's embargo on australian wine means that grape growers and wine makers all over the country are facing a massive over supply negotiations for robin for contractors. apparently it was going to be i have a supply for gripes. unfortunately i didn't have a contract for this property. he 2 years ago lynch was paid $700.00 estrella and dollars a tonne for his crop last year it was $400.00. now the total value for the harvest in this vineyard is 0 due to the tried to spirit, and the position of the punitive terrace on this trying one. so that means that $1200000000.00 market is now closed. torque is as could be $15000.00 tons left on the volunteer share in, in this region, which is now good. and it's certainly

a lot of bulk warner ran as well means latest warning, storage really has about a high stage murphy and other wine makers who'd come to regard chinese wine drinkers as something of a cash cow. now looking to diversify their markets. oh, that was our show. thank you so much for watching, hulu. oh, shoot the school. this spotlight goes down to worry about family members to ukraine. you notice found a sign into sports like they can forget about the war. at least for a few focus on d. w, abortion in europe. gold concealed prohibited the right

to the woman to determine her own pregnancy. generations full trouble. but now it's in more danger than ever or conservative governments create threatening situations for women, medical professionals, and institutions. 45 minutes on d, w o t, please listen carefully. don't know how with today go ah, feel the magic discover the world

around you. subscribe to d w documentary on youtube. ah ah, hello and welcome to focus on europe and we begin in russia where each may people marks the end of the 2nd world war in europe. festivities highlight the countries role as a great liberator from nazi germany. but now russia itself is pushing ahead with a brutal onslaught against its neighbor ukraine. heavy fighting continues, especially in.