As Russia continues to pummel Ukrainian cities, the war is coming dangerously close to spilling over into NATO countries. Yesterday, Russia launched a missile attack on a Ukrainian military base 15 miles from the Polish border that resulted in dozens of Ukrainian casualties.
- Plus, inflation heads toward double digits.
- And, Republicans make gains with Hispanic voters.
Guests: Axios' Margaret Talev, Neil Irwin and Russell Contreras.
Credits: Axios Today is produced in partnership with Pushkin Industries. The team includes Niala Boodhoo, Sara Kehaulani Goo, Julia Redpath, Alexandra Botti, Nuria Marquez Martinez, Sabeena Singhani, Lydia McMullen-Laird, Alex Sugiura, and Ben O'Brien. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.
Go deeper:
- Dashboard: Russian invasion of Ukraine
- Double-digit inflation is now quite plausible
- Democrats' Hispanic peril
Good morning! Welcome to Axios Today!
It’s Monday, March 14th.
I’m Niala Boodhoo.
Here’s what you need to know today: inflation heads toward double digits. Plus, Republicans make gains with Hispanic voters.
But first, today’s One Big Thing: Biden’s Red lines on Ukraine.
As Russia continues to pummel Ukrainian cities, the war is coming dangerously close to spilling over into NATO countries. Yesterday, Russia launched a missile attack on a Ukrainian military base about 15 miles from the Polish border that resulted in dozens of Ukrainian casualties. Axios managing editor for politics Margaret Talev is here to talk about president Biden and American options moving forward.
Margaret. If president Biden keeps saying that we're not going to involve our US military, that has been a very consistent message from the president, what options are left for the U.S.?
MARGARET TALEV: Niala we're seeing a lot of those options already in progress. The Biden administration signing off on another $200 million over the weekend in arms and equipment for Ukraine. We are seeing the sanctions go into effect. These are things that take a bit of time. What are we not seeing that no fly zone that Volodymyr Zelensky is asking for, the Ukrainian airmen up in the sky with any sort of equipment that can be used to combat what Russia is doing on the ground. Why? Because the intelligence, I think, and the Western allies have largely concluded that it won't work, that it would be to some extent a suicide mission. Americans are unified on the idea that they don't want to commit American troops to another war. But the scenes from across Ukraine are ghastly. And so what do you do?
NIALA: So yesterday we saw Russia launching an attack on a Ukrainian base, just about 15 miles from the Polish border. If Poland is drawn into this, isn't the U.S. also?
MARGARET: Poland is a NATO country. There are 30 NATO countries. Poland is the same as the United Kingdom, Denmark is the same as France. It is article five and an attack on one NATO country is an attack on all. Biden would have no choice.
NIALA: Margaret, can I just play what president Biden said on Friday that I think sums all of this up?
PRESIDENT JOE BIDEN: We'll defend every single inch of NATO territory of the full might of the United and galvanized NATO. We will not fight a war against Russia in Ukraine. Direct confrontation between NATO and Russia is World War III.
NIALA: For people hearing the term World War III. How should people be thinking about that? Because that is something that's terrifying to everyone?
MARGARET: President Biden is signaling to three audiences. He's signaling to the Ukrainians who already know at this point that the U.S. is not going to send military into Ukraine to defend Ukraine. He's signaling to Americans that he is not sending military intoUkraine. But he is also signaling to Russia. This is a red line. The truth is we knew what World War II looked like. Nobody knows what World War III looks like. There are nuclear powers, but the technology that has developed, over the course of the last more than half century, means that cyber war, financial war, potential use of chemical weapons, all sorts of things that would come into play and add dimensions that we can't even begin to imagine.
NIALA: Axios’ managing editor for politics, Margaret Talev. Margaret, thanks for helping us understand a little bit more of this.
In 15 seconds, understanding the economic backdrop ahead of this week’s Federal Reserve meeting.
NIALA: Welcome back to Axios Today. I'm Niala Boodhoo. Gas prices are high, unemployment is low, and it's possible inflation could soon hit double digits. It feels like our economy is changing at a rapid clip and we're seeing signs of that change everywhere. Our producer Sabeena was telling me that in her state of New Jersey, a decades-old law that prohibits drivers from pumping their own gas could change because of the tight labor market, which would be a big deal in New Jersey. How should we be thinking about the economy in this moment? Axios’ chief economic correspondent Neil Irwin is here with that. Hey Neil.
NEIL IRWIN: Hi Niala.
NIALA: Let's start with the idea of inflation hitting double digits. Could that happen soon? What's going on here?
NEIL: Yeah, I think it's a real possibility. Uh, you know, we just saw a number the other day of 7.9% over the 12 months ended in February. That's before most of the impact of the Ukraine war. That's before this spike in oil prices, gasoline prices, a lot of food commodities. And also some real disruptions to supply chains. You know, there's a lot of these things that are mined in Russia and Ukraine that go into cars, go into other industrial products. So we don't know exactly how big those effects are going to be. We don't exactly know when they're going to show up. but the possibility that we could get from roughly 8% inflation up to 10 within the next several months is really well within the range of possibility.
NIALA: So that's something that is widely seen as a negative for the economy. One of the good stories of the economy has been looking at the labor market and how low the unemployment rate has been. How do we think about that in context with this?
NEIL: Yeah, that's absolutely true. The high inflation we're experiencing has coincided with this extraordinary jobs boom. Lots of job creation, very low unemployment, labor shortages, companies struggling to find workers, giving raises, paying more. But those things aren't totally disconnected, right? That is feeding into inflation in some ways, and leading companies to raise their prices to make up for higher wage costs.
NIALA: And so how would you think The Federal Reserve is thinking about all of this? They're meeting this week – What actions might we see?
NEIL: Right. So they're going to raise interest rates, most likely a quarter percentage point. So this is just the first of many rate increases to come, most likely. I think the real question is, are they too far behind the curve? Is it going to be enough to raise interest rates a quarter point every couple of months, you know, gradually, try and have a soft landing in the economy. Or is the inflation problem getting so entrenched, so severe, that it will take something more severe and more extreme out of The Fed to change the trajectory of things.
NIALA: Especially when we think about what's happening in Europe, Neil?
NEIL: Yeah. So with the war in Europe, that again, has these massive effects on commodity markets. It's, uh, you know, restricting the supply, a lot of things in the economy. I would also add one more wildcard there, which is, you know, we have this resurgence of, of, uh, of COVID in China. They're doing new shutdowns. That could affect supply chains. So it's really a nasty combination of factors that affect policy and affect the inflationary outlook, where this is all on the supply side. We're having constraints on the global supply, potential of the economy. That is what's restraining the growth potential of the U.S. economy. And that's the underlying source of this high inflation.
NIALA: Axios’ chief economic correspondent, Neil Irwin. Thanks, Neil.
NEIL: Thanks so much, Niala.
NIALA: We reported from South Florida in January about GOP plans to win new Hispanic voters in the state. Republicans and Democrats across the country have started those efforts earlier than ever ahead of the midterms. Well, a new poll from the Wall Street Journal last week found that the needle may be moving in the GOP direction: By nine points, Hispanic voters said they'd back a Republican candidate for Congress over a Democrat. Back in November, the parties were tied. Axios’ race and justice reporter Russell Contreras has been following this. Russ, first, this is one poll, but do we know why the shift might be happening?
RUSSELL CONTRERAS: Oh, yes. Right now, Latinos, especially Mexican Americans, still lean Democratic, but over the last few election cycles we've been seeing the Democrats have been losing ground with these voters because the party just hasn't been paying attention to them. Democrats talk a lot about immigration, but poll after poll shows that Latinos see immigration as their fifth top concern or their sixth. They're still concerned about jobs, baby. It's the economy. It's COVID. It's crime. So Democrats are losing ground. They talk about climate change, but dismiss the fact that many Latinos work in lucrative oil field jobs in New Mexico and west Texas.
NIALA: So what is your big takeaway from all of this?
RUSSELL: Well, historically Latinos have been reliable Democratic voters for years going back decades. But recently Latinos, especially younger Latinos, are starting to go political shopping. They're seeing what else is out there, because if you talk about immigration and immigration is not my topic, what else? The other thing that's happening here, Niala is something that's very interesting - many people will point to Republicans who have used very vicious and harsh rhetoric that many people will deem racist. Democrats, on the other hand will use this very positive and welcoming language to target Latinos but yet their policies are almost the same. Latinos, will say, “Okay, both of you could be racist. What else do you have?” And Republicans come back and say, “Well, in fact, we have this job plan.”
NIALA: Russell Contreras is Axios’ race and justice reporter. Thanks Russ.
RUSSELL: Thanks for having me.
And before we go - it’s Pi Day, when we eat pizza and pie and celebrate the mathematical constant - which NASA says its engineers use to help calculate parachuting on Mars, talking to spacecraft and discovering potentially habitable new worlds. If you’re feeling ambitious - the Space Agency has a whole series of Pi challenges for students - I’ll tweet out a link.
I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.