****The new numbers mean the Federal Reserve is likely to continue

aggressively raising interest rates, making it more expensive to borrow money

in the hope that Americans will spend less. The jump in inflation is bad news
for President Joe Biden, whose approval ratings are stubbornly low. And
although gas prices have started to drop in recent weeks, economists and
forecasters warn that the situation might not significantly improve for some
time, making it harder for people to afford essentials like housing and
groceries.

the price gains were mainly fueled by an increase in energy, food, and shelter
costs, which have been climbing for months amid supply chain
disruptions and Russia’s invasion of Ukraine. Energy prices drove most of
the gains, with gas prices up 11.2 percent in June from the month before.
Food prices increased 1 percent as consumers paid more for cereal, dairy
products, fruits and vegetables, and other items at the grocery store.

Economists and forecasters were already widely expecting the Fed to lift
interest rates another 0.75 percentage points at its next policy meeting this
month. That would make it more expensive to borrow money and do things
like buy a home or take out a car loan. The goal is to weaken consumer
demand, leading to Americans spending less, and, eventually, prices
dropping.

“It’s going to be an uncomfortable period for consumers,” Bostjancic said.

“They’re going to be facing higher borrowing rates and still sticky inflation.”

Sarah House, a senior economist at Wells Fargo, said a combination of

events will have to happen before inflation significantly comes down, including
the easing of supply chain constraints, tighter monetary policy, and reduced
consumer spending.

President Biden devoted the

last hours of his Israel visit to restoring the

ties with Palestinians severed by his pred-

ecessor, visiting a Palestinian hospital Friday

in East Jerusalem and crossing an Israeli

military checkpoint to meet with Palestinian

Authority President Mahmoud Abbas in

Bethlehem

without any Israeli officials to

accompany him, leading some
right-wing politicians to com-
plain that the president was un-
dermining Israel’s sovereignty
over the entire city, including its
Palestinian neighborhoods.

He reiterated the
official view that Jerusalem is
Israel’s capital during his meeting
with Abbas, according to the
White House. But he said the
city’s ultimate boundaries must
be determined through future ne-
gotiations.
An Israeli advocacy group,
B’Tselem, mounted billboards
near the 26-foot-high separation
wall in Bethlehem reading “Mr.
President, This is Apartheid,” a
characterization Biden has re-
jected.

The administration also views

the Saudis as integral to counter-
ing the economic and political
influence of Russia and China in
the Middle East. At a news confer-
ence Tuesday, Biden defended his
decision to meet with the crown
prince and the Saudis, saying they
are central to any effort to stabi-
lize a volatile region

the Pentagon.
“I saw the same videos that you
all saw,” the official told reporters.
“I didn’t see anything there that
looked anything close to military.
That looked like an apartment
building.”
The spike in civilian deaths has
occurred as Russian and Ukraini-
an forces remain locked in pitched
combat in eastern Ukraine, with
territory typically changing hands
only a bit at a time and at high cost
to both sides.
Asked whether the war, which
is closing in on its five-month
mark, had entered a stalemate, the
senior U.S. defense official said it
was too soon to say.
The official noted that Ukraini-
an troops continue to hold off
Russia’s attempts to gain ground
around the northeastern city of
Kharkiv, and that while Russian
commanders want to move on the
eastern city of Slovyansk, they
have “not been able to do so.”
Ukraine is using sophisticated
multiple-launch rocket systems,
including the M142 High Mobility
Artillery Rocket System provided
by the United States, to attack
Russian equipment behind the
front lines.
“They’re ... striking targets like
ammunition supplies, other logis-
tical supplies, command-and-con-
trol,” the senior U.S. defense official
said. “All those things have a direct
impact on the ability to affect oper-
BY DAN LAMOTHE
An estimated 100 to 150 civil-
ians have been killed in Russian
military strikes inside Ukraine
during the last two weeks, the
Pentagon said Friday, a day after
missiles launched from a subma-
rine in the Black Sea killed at least
20 in the city of Vinnytsia.
Russian officials claimed that
the attack, about 150 miles south-
west of Kyiv, struck military tar-
gets. The Ukrainian government
said Thursday’s barrage hit a busi-
ness complex and other civilian
infrastructure far from the front
lines of the war.

The most interest-

ing thing about the European
Union’s latest sanctions proposal
is what it does not do. The propos-
al does not ban imports of natural
gas from Russia. Nor does it in-
clude additional measures on oil.
Instead of targeting these key
sources of Russian revenue, the
European Commission on Friday
proposed a ban on gold imports
and some tweaks to improve the
implementation and enforce-
ment of existing sanctions.
While the proposal, which is
expected to be approved next
week, will surely have some im-
pact, its narrow scope reflects
growing division over how to hit
Russian President Vladimir Putin
without putting greater strain on
the E.U. itself

At the same time, the war has

cast a long shadow over European
economies. Leaders of E.U. coun-
tries face low growth and record
inflation. The euro is at parity
with the dollar. Appetite for addi-
tional disruption is low.
Though E.U. officials insist that
the bloc remains united on
Ukraine, leaders in the bloc ap-
pear less inclined to act in concert
and increasingly focused on do-
mestic woes, raising questions
about what comes next on
Ukraine.

But Europe, which in 2021 im-

ported about 40 percent of its
natural gas and more than a
quarter of its oil from Russia, has
lagged behind the more diversi-
fied United States in cutting Rus-
sian energy imports.
It took weeks of fractious de-
bate for the E.U. to agree to phase
out imports of Russian oil. To
reach a deal, the bloc was forced
to grant extensions to several
countries, moderating the short-
term impact.
On natural gas, the E.U. hasn’t
collectively agreed to go further
than it did in March, when the
bloc said it would cut Russian
imports by two-thirds this year.
Moscow has since threatened to
turn off the gas to Europe entirely,
which has left countries scram-
bling for alternate supplies and
preparing for a difficult winter

To limit Russia’s revenue from

energy sales, the United States is
pushing for a global price cap on
Russian oil. Though there are
some signs of momentum, E.U.
diplomats said the issue is unlike-
ly to get a serious hearing before
Brussels breaks for the summer, if
at all.
One E.U. diplomat, who spoke
on the condition of anonymity to
discuss ongoing negotiations,
said the bloc’s bruising battle over
the oil phaseout made countries
nervous about reopening the oil
talks under any circumstances.
Paolo Gentiloni, the European
commissioner for economy, told
reporters Thursday that the com-
mission is reviewing the proposal
on price caps but that such mea-
sures would be considered only in
“extraordinary future scenarios.”