1. Liftoff: Federal Reserve raises rates a quarter point, signals more hikes to come
The Federal Reserve raised interest rates by a quarter percentage point and signaled hikes at all six remaining meetings this year, launching a campaign to tackle the fastest inflation in four decades even as risks to economic growth mount. (Bloomberg). “Policy makers led by Chair Jerome Powell voted 8-1 to lift their key rate to a target range of 0.25% to 0.5%, the first increase since 2018, after two years of holding borrowing costs near zero to insulate the economy from the pandemic.” In its policy statement following the two-day meeting, the FOMC stated: “The implications for the U.S. economy are highly uncertain, but in the near term the [Russian] invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.”

2. Ukraine war update: Biden calls Putin “war criminal”
Ukrainian President Volodymyr Zelensky urged the U.S. Congress for more help to fend off the Russian invasion. Hours later, President Joe Biden offered $800 million worth of new weaponry. He also called Russian President Vladimir Putin a “war criminal.” Putin himself said the claim from Biden was unforgivable rhetoric. In other developments, A Russian plane bombed a theatre in the besieged southern city of Mariupol where hundreds of people have been sheltering, according to the city council, NATO continues supply of new weapons into Kyiv, and Ukraine has linked its electricity grid to Europe on a trial basis to help increase independence from Russia.

3. Tsunami of inflated prices on its way
The chief executive of the Australian Retailers Association, Paul Zahra, is warning consumers that a tsunami of inflated prices is coming for what we buy. The combined effects of the pandemic and how it has reduced supplies and raised costs, on top of the oil price increase from the Ukraine war, has sent costs to retailers sky high and Mr Zahra says these increases will soon have to be passed on to shoppers. The only good news is that the oil price is falling as peace talks progress. In a week, the oil price has fallen 22% and that’s the good oil.

4. House price slowdown, except for Brisbane
Leading economist, AMP Capital’s Shane Oliver, says forget about house price doubling over the next 10 years if you’re a buyer now. On the flipside, Oliver says people who bought houses in the middle of the pandemic are more likely to double their money over the next 10 years, compared with those buying now, as the market faces a longer downturn followed by a shallower upturn. And because prices have spiked 25% since the pandemic, house price rises will be contained by rising interest rates and the slow pace of wage increases. Of all the cities, Brisbane looks most likely to have the biggest rises.

5. Signs of peace prevail?
The chance of peace in Ukraine has increased according to the stock market, with European markets up strongly overnight. The gain for the German stock market was a big 3.76% and the French market was also up a huge 3.68%, which implies the fear of a European war breaking out is dissipating. Driving the positivity of investors was the news that there was renewed optimism of progress in talks between Russia and Ukraine. Our stock market is expected to open 73 points higher, with the AUD +1.3% to 72.91 US cents. 2-year yield: US +0.09% (1.94%) Australia -0.04% (1.27%). 10-year yield: US +0.03% (2.18%) Australia -0.02% (2.49%).