The Week in Business: Escalating U.S. Sanctions on Russia

What’s Up? (May 22-28)

U.S. Blocks Russian Bond Payments

On Wednesday at midnight, the Biden administration let lapse an exemption in the sweeping sanctions against Russia that had allowed the country to continue making payments on its foreign debts during its war on Ukraine. The Treasury Department issued the announcement just hours before the deadline. Russia is now hurtling toward a benchmark it has been intent on avoiding: a default on its foreign debt for the first time in more than a century. Treasury Secretary Janet L. Yellen said Tuesday that the exemption was always intended to be temporary. Still, the decision represents an escalation in U.S. sanctions on Russia as Western countries try to increase pressure on its economy.

Dealing With Gun Makers

The mass shooting at a school in Uvalde, Texas, last week that killed 19 children and two teachers has put a spotlight on how companies deal with gun manufacturers. But while many members of the public would like to see corporations distance themselves from gun makers — and while many corporations might wish to do so —  a law in Texas that went into effect last year has made that stance more complicated. The law bars government entities in the state from working with firms that “discriminate” against companies or individuals in the gun industry. That means a corporation like JPMorgan Chase can be shut out of the state’s lucrative municipal bond market if it refuses to work with gun or ammunition manufacturers. Just this month, before the massacre in Uvalde, lawyers for Chase suggested in a letter to the Texas attorney general that the bank was willing to do more business with gun companies, saying that the bank did not “discriminate against a firearm entity.”

A Multibillion-Dollar Acquisition

Broadcom, the semiconductor manufacturer, said Thursday that it would buy the software company VMware for $61 billion. Broadcom offered VMware the equivalent of $138.23 per share, more than 40 percent higher than the company’s stock price before word of a possible acquisition began to spread. The deal would be just the latest in Broadcom’s efforts to expand, as its chief executive has over the years bought up many of the companies responsible for corporate computer infrastructure. VMware, a major player in cloud computing, has more than 500,000 customers around the world and partners with all other big cloud providers, Amazon and Google among them. In acquiring the company, Broadcom would be the owner of an array of popular computing tools, making it more competitive in data-center technology and cloud computing.

What’s Next? (May 29-June 4)

How Much Was That Tankful of Gas?

Gas prices have jumped about 50 cents a gallon in the last month, which means that Memorial Day weekend drivers will be hard pressed to find gas for under $4 a gallon. Russia’s war in Ukraine is the most immediate reason for the spike, as sanctions on Russian energy reduce the world’s supplies. But drivers’ habits may be adding to the squeeze. Analysts say that a boom in travel, partly the result of Americans eager to get away after deferring plans because of Covid, is helping to keep prices high. Travelers also appear to be undeterred by high airfares: To make up for rising fuel costs, many airlines have drastically raised ticket prices and are finding that customers are still willing to pay. Southwest Airlines and JetBlue Airways said last week that their revenues in the second quarter were on track to be higher than initially projected.

An Inquiry Into the Baby Formula Shortage

The Biden administration has already taken steps to immediately respond to the severe baby formula shortage, working with Abbott Laboratories to restart production at its shuttered formula plant and flying in emergency supplies from Europe. But now the Federal Trade Commission wants to examine the conditions that led to the shortage in the first place: The agency last week announced that it was beginning an inquiry into consolidation in the industry, which is dominated by just four companies, and into whether federal regulations and trade agreements are blocking foreign companies from entering the market. The F.T.C. will also scrutinize online formula resellers and is seeking information from families who either believe they may have been scammed when trying to buy formula or paid exorbitant prices.

A Test of the Job Market

For months, economists have been expecting to reach the point where the number of jobs in the United States, which has been steadily gaining this year, hits its peak. This week’s job report could be that point — or not. While Americans continue to bemoan inflation, many are still paying the much higher prices for the goods and services they want and need. Consumer habits may shift, but spending remains high, and that usually means plenty of job openings. So it’s possible that job growth will keep chugging forward, even as the Federal Reserve raises interest rates.

What Else?

Twitter was fined $150 million by the F.T.C. for misleading users about how it treated their personal data. Fresh data showed that inflation slowed in April but remained close to a four-decade high. And strong financial reports from retailers last week pulled the markets higher.