Hypersonic missile gap

Ukraine’s government urged people living in the regions of Kharkiv, Donetsk and Luhansk to immediately leave those areas as military officials prepare for a new assault by Russian forces. “It’s necessary now because people will be under fire and the threat of death,” Deputy Prime Minister Iryna Vereshchuk said. “It’s necessary to evacuate while it’s still possible.”

The White House followed through on a pledge to impose additional sanctions on Russia for its alleged role in atrocities, including the execution of Ukrainian civilians as its forces withdrew from around Kyiv. The U.S. said it will impose full blocking sanctions on Sberbank, Russia’s largest financial institution, and Alfa Bank, the country’s largest private bank. Also targeted will be two of Vladimir Putin’s daughters and the wife and daughter of Russian Foreign Minister Sergei Lavrov. Meanwhile, U.S. Treasury Secretary Janet Yellen warns that the Kremlin’s war poses grave economic consequences for everyone. —David E. Rovella

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

Russia slipped closer to a technical default after foreign banks declined to process about $650 million of dollar payments on its bonds, forcing it to offer rubles instead. While Russia’s finance ministry said it “fulfilled its obligations,” neither of the securities involved allowed payment in rubles. And both notes have a 30-day grace period. Russia has so far sidestepped its first external default in a century, but a Treasury move this week to halt dollar debt payments from the country’s accounts at U.S. banks has reignited investor concerns.

The Biden administration has warned India against further cozying up to Russia, saying the consequences of a “more explicit strategic alignment” with Moscow would be “significant and long-term.”

Less than a week after Hong Kong rolled back some of the world’s strictest inbound Covid-19 travel curbs, at least six airlines have had routes banned, creating havoc for travelers and further undermining the city’s role as a financial hub. In Europe, infections in England last month reached their highest level since the pandemic began, driven by the omicron subvariant BA.2 and waning immunity. And in the U.S., fears of a potential new wave weren’t enough to get $10 billion in emergency pandemic funding passed. The reason? Immigration policy.

The first U.S. hypersonic weapon will be delayed for as long as a year even as lawmakers protest the Pentagon lagging behind in a technology Russia has already used and China has demonstrated. The U.S. version, made by Lockheed Martin (whose hugely expensive F-35 fighter program has been riddled with defects, delays and cost overruns), failed three consecutive booster motor tests last year. Lockheed was awarded an initial $480 million development contract for the missile. It’s up to $986 million now.

It’s hard to know how much the U.S. Federal Reserve will need to do to get inflation under control, Bill Dudley writes in Bloomberg Opinion. But one thing is certain: To be effective, it will have to inflict more losses on stock and bond investors.

The Fed signaled it will reduce its massive bond holdings at a maximum pace of $95 billion a month, further tightening credit across the economy as the central bank raises interest rates to cool inflation.

It was another rough start to the year for investors in Gabe Plotkin’s Melvin Capital Management, with the hedge fund tumbling 20.6% in the first quarter. Melvin Capital is the latest in a string of equity hedge funds that have been struggling. Tiger Global Management’s flagship hedge fund ended the quarter with a 34% loss, while Coatue Management fell 10%.

The pandemic (as has been widely reported) is making people reconsider where their food comes from. This applies to chickens and their eggs. In the U.S., new legislation is propelling an historic shift in t​​​​he U.S. egg industry toward producing mostly cage-free eggs, a move that’s better for chickens but hard on small farmers. With all sorts of claims on packages in the supermarket egg cooler, this raises an interesting question.

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