or the i ss as you to touch down thursday night off the coast of the us state of florida. and a great view of dragon as it departs from the international space station. this is the w news life from berlin. business news is coming up next. i'm and you can mckinnon on behalf of the whole team here. thanks so much for watching d w. ah ah, ah, ah ah, ah, naturally spectacle in an improved world ah, the meeting of the loom whale sharks of the remote island of saint hold. mm. ah, it is

a testament to the quality of the artisans waters. one of the many success stories from a bastion of biodiversity stores may 20th on dw, ah, high interest rates take out high inflation as 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 plaza 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 or 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 to you as 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. ah, 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 allan 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 a quantitative easing. 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 current 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 our 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 are a symptom of that cove. it 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 war in 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 corresponding ins. court has been watching the reaction on the new york stock exchange as always. yeah. and these low rates had kept a lot of money flowing in the financial markets over the last couple 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 general 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 and we are still on a road to to more interest rates. kind of looking ahead, probably another 50 basis point 6, 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 importance of russian oil as part of a 6th round of sanctions on russia. european commission, president ursula vander land, 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 russian 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 import ban on all russian oil 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 2020 to 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 grapes 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 great grow as in wine makers, all over the country are facing a massive over supply. and he doing negotiations for rob forton contractors, the parents that is going to be i have to supply for gripes. unfortunately, i didn't have a contract for this property here. 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 dispute, and the position of the punitive terrace on this trying one. so that means that $1200000000.00 market is now closed talk is as could be $15000.00 tons left on the volunteering 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 higher stage. murphy and other wine makers who'd come to regard chinese wine drinkers as something of a cash cow. are now looking to diversify the markets. well, that was our show. thank you so much for watching the world ocean. what has changed in the text on the 29th of to the, to south to language. how fast? mm hm. and to look at your can your local, sustainable production was made in germany a d, w?

oh, so let's go between the 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 in 60 minutes, thought d. w with is increasing every year in many im gonna working on lunch with holiday destinations drowning in plastic white wine and alec at the cause of every year of the exports of $1000000.00 tons of plastic

with there. another way, after all, the environment isn't to recyclable. make up your own mind. d. w. made for mines. ah, ah, ah, ah, ah, ah, much out the world now wants to wash its hands of russian oil. as the word ukraine drags on, european countries are readying to ban imports of the fuel will take a look how rushes economy is faring under this barrage of sanctions. also in this edition of made in germany, the new silk road is russia.