Business week: prices go up on cars, groceries and even burritos
Good morning and have a nice Sunday. Here’s what you need to know in the business and tech news of the coming week. – Charlotte Cowles
What’s up? (June 6-12)
It’s not your imagination
Maybe you’ve noticed that clothes, cars, groceries, and even Chipotle burritos seem more expensive these days? That’s right, consumer prices rose 5% in May from the previous year. That’s a bigger jump than economists expected, and it follows another sharp rise in April (4.2%), raising greater concerns about inflation. Some investors and politicians fear that prices will continue to rise, potentially forcing the Federal Reserve to raise interest rates and slow economic growth. Others believe this is only a temporary bump and that prices will stabilize as the economy catches up after a year of pandemic-induced stagnation. (If you compare this year’s prices with those of 2019, May’s growth rate is only 2.5% – a much less frightening figure.)
Yes, it is obligatory
As employers begin to bring workers back to their offices, many are trying to define vaccination policies for their staff. And according to new guidelines from the US Equal Employment Opportunity Commission, companies have the right to require their employees to be vaccinated against the coronavirus. They may also require employees to provide documentation or other vaccination confirmation. What happens if an employee is not vaccinated because of a disability or religious beliefs? This worker may be entitled to special accommodations, provided that this does not cause “undue hardship” to the company.
The Justice Department has recovered most of the ransom Colonial Pipeline paid in Bitcoin last month to a Russian hacking group that shut down its systems and caused unrest in the fuel industry. This is good news for Colonial Pipeline, but bad news for Bitcoin, which was widely viewed by investors and consumers (and criminals) as untraceable and operating beyond the reach of government. It remains to be seen whether the government will be able to help JBS, the world’s largest meat processor, recover one of the $ 11 million in ransom it paid hackers in Bitcoin.
And after? (June 13-19)
The Senate overwhelmingly passed a bill on Tuesday that would devote nearly $ 250 trillion over the next five years to scientific research and technological development to bolster the United States’ competitiveness against China. (By comparison, the Chinese government has been doing the same to spur its own industrial and technological growth for years.) Now the legislation is heading to the House, where it faces harsher criticism but still benefits from bipartite support. He also has the support of President Biden. If it becomes law, it could be the most significant government intervention in industrial policy in decades.
Daily business briefing
A tense meeting
Mr Biden will meet Russian President Vladimir Putin in Switzerland this week and plans to confront him over sheltering the perpetrators of the recent wave of cyberattacks against companies operating in the United States. (Mr. Putin is known to take a hands-off stance on hackers – even while encouraging them – as long as they stand up for Russian interests and leave Russian businesses alone.) Before the summit, Mr. Biden will urge European Union leaders, allies and the Group of 7 Wealthy Nations to support a strong and unified position on Russia.
From G7 to G20
The United States succeeded in getting the Group of 7 Nations to agree to a global minimum tax rate of 15% that companies would have to pay regardless of where their headquarters are located. It is a step towards cracking down on companies that dodge taxes by setting up their headquarters in tax havens like the Cayman Islands. It would also potentially force tech giants like Amazon, Facebook and Google to pay taxes to countries based on where their goods or services are sold, whether or not they have a physical footprint there. But the next step – persuading the Group of 20, which includes China and Russia, to join them when their finance ministers meet next month – will be a much more difficult proposition.