In Print

Foreign Policy Logo 'FP'

The United States Is Fighting Inflation With History

Fed chief Jerome Powell wants the world to understand his present decisions are guided by past traumas. At the annual gathering of central bankers and economists in Jackson Hole, Wyoming, this year, all eyes were on U.S. Federal Reserve Chair Jerome Powell. Last year at the Jackson Hole conference, Powell had announced a new era in economic policy. This was premised on the assumption that we were in an era of low inflation. The Fed would, in the future, target average inflation, offsetting periods of low inflation below 2 percent per year with periods of more rapid price increase. Today, that world seems very remote. Inflation in the United States is running at more than 8 percent, the most rapid rate since the 1970s. Given this extraordinary turnaround, Powell needed to signal that the Fed was serious about stopping inflation. How to make the case?

Read More »
Foreign Policy Logo 'FP'

The World Is Seeing How the Dollar Really Works

By raising interest rates, the Federal Reserve strengthened the U.S. currency—and revealed its centrality to global order. 2022 has been a year of dollar power—power that manifests itself in both overt and subtler forms. In the spring, the financial sanctions slapped on Russia’s Central Bank following Russian President Vladimir Putin’s invasion of Ukraine demonstrated the extent of U.S. financial sway, especially when it is exerted in cooperation with America’s European partners. If you export far more than you import and thus hold really large foreign exchange reserves—like Russia’s $500 billion—there really is nowhere else to hold them other than dollars or euros. If it comes to a confrontation, that puts you at the mercy of the financial authorities of the United States and its alliance partners. NATO reveals itself to be a financial power. Russia has, so far, ridden out the storm, but to do

Read More »
Foreign Policy Logo 'FP'

The 1970s Weren’t What You Think

Yes, fiscal and monetary policy seemed stuck for too long in expansionary mode. But the era also saw the rebalancing of the world economy. Some historical analogies are playful. Some require elaborate academic justification. Others are native to our world. The lessons learned from them are so ubiquitous as to be part of our intellectual furniture. They are built into our very institutions. The European Union, for instance, repeatedly invokes

Read More »
The New Statesman logo

The second coming of Nato

In November 2019, from the salon doré of the Élysée Palace, where Charles de Gaulle once held court, Emmanuel Macron warned his fellow Europeans that Nato, the transatlantic alliance that had secured Europe since 1949, was on the point of “brain death”. President Donald Trump’s administration, to the horror of America’s own soldiers, had just unilaterally withdrawn support from the Kurdish forces in northern Syria, sacrificing them to Bashar al-Assad

Read More »
Foreign Policy Logo 'FP'

It’s Africa’s Century—for Better or Worse

Asia gets the attention, but the real economic revolution is the inevitable growth of an overlooked continent. In the coming decades, we face a revolutionary shift in the balance of world affairs—and it is likely not the one you are thinking of. Since the 1990s, the idea that we might be entering an “Asian century” has preoccupied and disorientated the West. However, once we take in view the long sweep

Read More »

Archive

The New Statesman logo
Does Ukraine need a Marshall Plan?

Amid the twisted girders, ruined walls and underground tunnels of the Azovstal plant, Ukraine’s defenders are making their last stand in the siege of Mariupol. The steel factory dates to 1933 and the era of

Read More »
The New Statesman logo
War at the end of history

Will Putin’s invasion of Ukraine lead to a new world order, or an era of grinding compromise? It was the French Revolution that defined the stakes in modern war as an existential clash between nations

Read More »
The New Statesman logo
The world is at financial war

The freezing of Russia’s central bank reserves has brought conflict to the heart of the international monetary system. Ukraine’s resistance to Russia’s invasion has changed everything. Analysts in the West did not expect the war

Read More »
The New Statesman logo
The Nord Stream 2 saga is not over

It may be an embarrassment now, but with $11bn spent you would be brave to bet against the pipeline eventually carrying Russian gas to the West. Somewhat incongruously, Germany has ended up at the forefront

Read More »
New Statesman
Can Europe tame pandemonium?

Covid-19 brought the EU together — the crisis in Ukraine may now tear it apart. As 2022 begins, Europe presents a Janus face. In the east, Russia’s military is massing on the border of Ukraine.

Read More »