Cleveland Federal Reserve Bank President Loretta Mester said she supports a 50-basis-point rate hike, but would favor a larger rate hike if inflation doesn't ease into the second half of the year. "We didn't rule out 75 basis points forever, did we? The rhythm we have right now seems right to me," Mester said in an interview with Bloomberg TV's Michael McKee on Tuesday. "We have to assess whether inflation is really coming down, and after a few moves, we'll have more information to watch," she said, referring to a 50 basis point hike. Mester, who votes on the Monetary Policy Committee this year, said she did not want to rule out any action. If inflation doesn't show signs of slowing by the second half of the year, "we may have to pick up the pace. But if we see inflation falling and demand falling more than expected, then we can adjust at that point."

U.S. President Joe Biden blamed high inflation on the economic disruption caused by the pandemic and Russia's invasion of Ukraine, and he also acknowledged that rising prices are "hurting" American households. Biden again criticized the GOP's tax and economic package, saying his anti-inflation plan would lower prices, while the GOP seeks to raise taxes on Americans and "let corporations get away with it." Biden, speaking at the White House on Tuesday, said his economic policies have helped slash unemployment and boost wages. But "for every employee I meet who has gained a little breathing space to find a better-paying job, and every entrepreneur who has the confidence to realize their small business dreams, I know that families across America are suffering from Inflation hurts," he said. The solution starts with the Fed, he said, and he has nominated several Fed governors.

Wondering how much pressure the 5-month decline in the stock market has put on Wall Street? Just look at the analysts' situation to get a glimpse of the leopard. They used to be bullish in high spirits and are now scrambling to pull back. Researchers who follow individual stocks assign buy, hold, or sell ratings to stocks, tend to show up when company earnings are released, and are almost always bullish on share prices. But now, they are slashing S&P 500 target prices at the fastest pace since the 2020 pandemic crash. Their forecast for the S&P 500 target has fallen for 11 straight weeks, the longest losing streak in a decade, data compiled by Bloomberg show. That decline was paused on Tuesday as hard-hit tech stocks rebounded for the day. After a three-day losing streak, the S&P 500 rose 0.3%, barely closing above 4,000. While analysts' usual positive outlook doesn't make much sense for the market outlook, the speed of their downgrades does underscore the extent of the deterioration. The profitability of U.S. companies is threatened by supply chain bottlenecks and rising inflation, while the Federal Reserve’s promise of monetary tightening has capped stock valuations.

ECB Governing Council member Joachim Nagel said the ECB should raise its benchmark interest rate from a record low in July if new forecasts for next month continue to point to a strong inflation outlook. “As inflation in the euro zone continues to be high, we need to act,” Nagel said in a speech in Eltville, Germany, on Tuesday. He expects net bond purchases to stop at the end of June and "will advocate for the first steps towards normalizing ECB rates in July." The Bundesbank president said the risk of acting too late "is increasing significantly", Central bankers are urged to move away from old-fashioned thinking about inflation as the global economic landscape shifts. Like several of his recent colleagues, he sees a return to the price action that preceded Russia's invasion of Ukraine unlikely.

Ukraine's gas pipeline agency said Russian gas deliveries to Europe through a key entry point will be halted from Wednesday after occupying forces disrupted the operation of the compressor station. The Ukrainian gas transmission system operator announced on its website that the gas transmission through the Sokhranivka inlet had experienced force majeure from 7 am. There is still the possibility of delivering the gas to the Sudzha compression station via other routes, thereby fulfilling the European contract. European gas prices rose as much as 8.1%, reversing earlier losses. Prices then retreated, rising 1.7% to €95.35 per MWh as of 4:39 p.m. Amsterdam time.

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