Both companies are victims of US inflation which stays at 4-decade high, as well as China tariffs. Biden administration had only reinstated tariff exclusion on 352 Chinese products, compared to Trump’s tariff exclusion on 2,230 Chinese products. Retailers like Walmart and Target didn’t use soaring inflation rates and increasing cost pressure as an excuse to raise prices. Companies knew that consumers expect higher prices right now, but they tried to keep price stable to avoid unnecessary investigations.

The Commerce Department said Tuesday that retail sales rose a seasonally adjusted 0.9% last month compared with March. 

While consumers have continued to spend more, they are getting less due to rapidly rising prices. Is the US economy heading into a recession?

• Powell said that Fed will not hesitate to keep raising rates until inflation comes down. He repeated his commitment to getting inflation closer to the Fed’s 2% target, even if it requires pushing up unemployment. 

• Markets expect 50-bps Fed rate hike in June and July, however only 60% of market participants expect 50-bps rate hike in September. Investors find reassurance as Powell offers certainty on monetary policies in next two months.

• Musk said that Twitter’s CEO had refused to show proof that less than 5% of Twitter’s accounts were fake. Twitter said it is committed to completing the transaction on the agreed price and terms as promptly as practicable.

• Twitter has lost all its gains since Musk disclosed his stake. The company is now valued at a little over $29bn, or roughly $15bn below Musk’s agreed upon purchase price. Musk would be on the hook for a $1bn breakup fee if he abandons the deal.

• The average per-gallon price reached a new record of $4.52 on Tuesday, the American Automobile Association group said. Drivers in California are facing the biggest hit, with prices in the Golden State reaching a new record of $6.02 per gallon. Recent surge in gas prices is due to volatile crude oil prices and higher demand in summer.

• The Biden administration plans to ease sanctions on Venezuelan oil. US is also considering proposing that European countries impose a tariff on Russian oil to allay concerns about the security of supply and surging oil prices.

• Yellen on Wednesday criticized the Trump administration’s tariffs on China and voiced support for lifting some of the levies, in part to ease very high inflation pressuring the US economy. However, she signaled that no decision has been made on this issue and hinted at potential disagreement among US officials.

• Biden heads to Asia this week for the first time since taking office. On the trip, Biden will visit Japan and South Korea, and will also shore up a partnership with Australia and India and formally unveil an economic initiative designed to bolster trade and investment with the region.

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