Powell’s opening salvo

The U.S. Federal Reserve delivered the biggest hike in interest rates since 2000 and announced it would start shrinking its massive balance sheet next month, deploying the most aggressive tightening of monetary policy in decades. The central bank raised its benchmark rate a half percentage point and will begin allowing its holdings of Treasuries and mortgage-backed securities to decline in June at an initial combined monthly pace of $47.5 billion, stepping up over three months to $95 billion. “Inflation is much too high and we understand the hardship it is causing and we are moving expeditiously to bring it back down,” Chair Jerome Powell said. Investors have been betting that an even bigger rate increase is in store for June. Treasury Secretary Janet Yellen predicted solid growth in the coming year and a possible “soft landing” for the economy as the Fed moves to bring down inflation. —David E. Rovella

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

Stocks jumped and bond yields fell with the dollar after Powell eased fears that the central bank would embark on an even more aggressive pace of tightening. Here’s your markets wrap.

Russia continues to struggle with dug-in Ukrainian forces on the long eastern front as it fired missiles at infrastructure targets across the country, killing scores of people to add to a 10-week civilian death toll reportedly in the thousands. It’s looking like Vladimir Putin is planning to annex the eastern part of Ukraine, or maybe even expand his war with a full mobilization. The European Union proposed a ban on Russian crude oil phased in over the next six months, part of a sixth package of sanctions that also bans Russians from buying European real estate and hits Kremlin ally Belarus. Germany threw its weight behind the EU plan, though Hungary said it won’t back the proposal. The EU is also proposing to cut off Sberbank and other Russian lenders from the international SWIFT messaging network used by financial institutions. For now, however, Russia has dodged a sovereign debt default. Another positive development for Moscow is that India wants to buy its oil; the bad news is the size of the discount New Delhi is demanding.

With U.S. senators calling some of the Supreme Court’s Republican-appointed justices liars for having testified under oath that they considered Roe v. Wade settled precedent, the draft opinion eliminating the federal right of women to end a pregnancy seems to have galvanized the Democratic electorate. Given that two of Donald Trump’s picks were seated on the court under highly controversial circumstances—one after Senator Mitch McConnell blocked President Barack Obama’s nominee for eight months and the other just as voters were electing Joe Biden—the court’s credibility is seen in some quarters as increasingly compromised. If the right-wing majority does indeed end the right to abortion, it would also fly in the face of broad American public opinion.

With many new variants of the coronavirus more transmissible than the ones that came before, the World Health Organization came out with some good news on Tuesday. It appears that current vaccines are effective against the newest crop of omicron sub-variants that are driving a surge in cases in South Africa.

Toronto home prices declined for the second straight month as higher borrowing costs start to bite in what has been one of the world’s hottest housing markets. In the U.K., the cost of mortgage borrowing jumped the most in at least six years in March, suggesting lenders are starting to respond to tighter Bank of England policy as officials battle inflation.

Bill Hwang’s lawyers couldn’t believe it. The fallen billionaire investor was sitting in federal custody in Manhattan, less than 48 hours after his legal team had visited prosecutors to talk them out of charges. The effort seemed to be going well until the feds scooped up Hwang to face 11 felony charges—and potentially the rest of his life in prison. All of Wall Street should pay close attention, as Hwang’s case marks an upswing of federal investigations into a slew of suspected trading abuses. Three other broad inquiries have emerged in recent months to examine so-called block trades, short sales and well-timed wagers. They all center on the same question: Whether the markets are rigged.

Everyone’s talking about the four-day workweek. So far, hardly anyone’s doing it. Executives consider a shortened workweek the most-wanted recruitment and retention strategy by far, but only 6% of them say they’re implementing it—or even planning to.

Founder of the real estate brokerage that bears her name, Barbara Corcoran says she’s putting her money on smaller U.S. cities. As the housing boom draws a flood of capital from institutional and mom-and-pop investors, Corcoran is betting on “secondary cities like Baltimore and smaller cities in the Midwest because the inflation rates are greatest there in real estate values.”

Bloomberg Invest-Focus on Africa: What are actionable ways in which Africa can plan its future? And what will it take for investors to deploy their capital in the continent? Join key corporate leaders and policymakers from IFC, Standard Chartered and TPG on May 17 as we explore key issues around Africa investing with an eye toward a post-pandemic world. Learn more here.