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The Fed fights inflation, Europe stagnates and the U.K. wants to diversify away from Russian oil.Fighting inflationThe Federal Reserve raise [View in browser]( [Bloomberg]( The Fed fights inflation, Europe stagnates and the U.K. wants to diversify away from Russian oil. Fighting inflation The Federal Reserve raised interest rates by 50 basis points for the first time since 2000 and flagged that similar moves were on the table for June and July. However, Chair Jerome Powell [pushed back]( against a larger 75-basis point increase. Stocks rejoiced on that assurance, rallying the most on the day of a Fed meeting in a decade. Europe stagnates European Central Bank Executive Board member Fabio Panetta said the euro area faces further “high costs” as policy makers battle record inflation. In the starkest warning yet from the ECB of the damage being wrought by the war in Ukraine, Panetta told Italy’s La Stampa newspaper that the region’s economy is [“de facto stagnating.”]( This comes as March [German factory orders]( dropped more than anticipated and the economy faces uncertainty over Russian energy supplies. By the way, Europe and the conflict in Ukraine is the theme of this week’s MLIV Pulse survey, [click here]( to participate. Russian oil U.K. Prime Minister Boris Johnson will meet his Japanese counterpart Fumio Kishida in London [where they are]( expected to discuss a plan to support Asian nations to find energy supplies to diversify away from Russian oil and gas. The EU plans to ban Russian oil over the next six months and refined fuels by the end of the year to increase pressure on Vladimir Putin over his invasion of Ukraine. Oil [advanced]( ahead of an OPEC+ meeting on supply strategy, extending a rally sparked by the European Union’s plan for a phased ban on Russian crude. Stocks futures dip U.S. stock futures [retracted some of their post-Fed gains](. S&P 500 futures slipped 0.6% and Nasdaq 100 contracts fell 0.7% as of 5:35 a.m. New York time. In Europe, stock indexes pared gains after an impressive jump at the open. The Stoxx 600 was up 1%, with tech, real estate, and basic resources leading gainers. Insurance underperformed other sectors. 10-year Treasury yields rose 2 basis points, again stalling below 3%. The dollar clawed back some of its losses. Gold and oil also trimmed some gains after rallying in the Asian session. Bitcoin fell. Coming up... Economic data today focuses on the U.S. weekly jobless claims release and preliminary labor costs at 8:30 a.m. We also have April's Challenger job cuts due at 7:30 a.m. Elsewhere, it's the Bank of England's turn to deliver it's monetary policy decision, due at 7 a.m, with Governor Andrew Bailey discussing the outcome at a press conference at 7:30 a.m. For the energy space, OPEC+ convenes virtually for a regular meeting. ConocoPhillips, Kellogg Co. And News Corp. are among the companies reporting earnings. What we've been reading Here's what caught our eye over the past 24 hours. - [Elon Musk and Cathie Wood]( say passive investing has gone too far. - Who will pick up the pieces if the [Supreme Court]( breaks Roe? - U.S. considers [sanctions on China](’s Hikvision. - [Uber’s push]( to electrify London. - [Formula One]( breaks into America. - [North Korea]( lifts a one-day lockdown. - SEC warns Chinese companies of [U.S. delisting]( And finally, here’s what Joe’s interested in this morning U.S. equities soared yesterday after the Fed did its expected 50-basis point rate hike. A few quick thoughts: -- It's striking that the big, bullish headline was that the Fed is not likely to do a 75-basis point move at the next meeting. It speaks to the extreme anxiety over inflation and rate hikes that are built into this market, that simply going 50 is now in the realm of a dovish surprise. -- With the S&P's 3% surge, the index is now once again less than 10% below its all time high. This really isn't very much. Some big names, particularly around tech and growth have gotten destroyed, but overall, it feels like there's a mismatch between the level of fear and bearishness, and the actual index-level declines. -- As I wrote about yesterday, the bull case is simply enough that inflation meaningfully starts coming down. We know that inflation is high, and at least some of that has been pandemic-driven. The more that can be attributed to the pandemic itself (supply chain disruptions, changes in consumption patterns, etc.) the more potential for rapid disinflation as things normalize. -- Speaking of normalization, I thought it was significant that yesterday's press conference was the first one to take place in person, since the pandemic began. One of the points I keep coming back to is that it's weird to call “transitory” wrong, when there are so many interruptions and disruptions going on. There are still some, but the number of restrictions is very low in the U.S., and to see the Fed resume in-person press conferences is an interesting symbol. Of course, the lockdowns in China and the war in Ukraine remain big wild cards with respect to commodities and supply chains. -- Also, while we're talking about commodities, the huge surge in the price of diesel is another thing that everyone should be paying attention to. -- In addition to taking 75-basis points off the table, the other important thing for the bulls is that Powell acknowledged tentative signs of improvement on the inflation front. Supply chain stress does appear to be easing. Hiring may be slowing down. [Yesterday](, there was a report that Facebook is dialing back its headcount plans. The month before, it was Amazon. Obviously, the hope for the Fed is that the economy is in a place where the demand for labor can ease, but it doesn't translate into an increase in the unemployment rate. We'll see. Meanwhile in tech land, the venture capitalist David Sacks [says sentiment]( is now the worst its been since the dotcom bubble. All things equal, this should translate to less startup funding, more cash preservation among money-losing companies, and therefore slower hiring. -- All in all, the door remains open for some kind of soft landing. -- One question I have is: suppose inflation does in fact roll over, and the Fed can ease off the rate hikes. Do people just go back to the old stuff, and start buying tech and growth again? Idk. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. 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