Uncertainty persists over whether additional interest rate increases will be required in the US, according to the Federal Reserve’s chairman, Jerome Powell. The central bank needs to weigh the effect past rate hikes and recent bank credit tightening may have on the economy against the difficulties it faces in reigning in inflation. Powell said the Fed would have to go “meeting by meeting” in its approach but added that coming into this year it had “faced little restraint”. Policy makers will receive job and inflation data which could affect their decisions ahead of a meeting on 13 and 14 June.
The UK’s largest girls-only organisation, Girlguiding, dissolved its international operating arm, British Girlguides (BGO),of just under 2,600 members almost exclusively from English-speaking homes in 36 countries. Girlguiding has been hit by several noteworthy controversies in the past three years, including complaints from a guide leader over a policy allowing boys claiming to be girls to join the charity. Trans Girl Guide commissioner Monica Sulley was featured in photographs with a fake assault rifle and wearing inappropriate clothing and followers of the charity generally found it to be too focused on politics. In the UK, Girlguiding is now facing increasing competition from similar programmes that have taken on a “cachet of cool”. On the website, it states that Girlguiding offers adventures galore: “We do anything from abseiling to zooming around on a zipline. We explore new places and meet people from different cultures. We speak out on issues that matter to us and make a difference in our communities.”
The chances of the Federal Reserve raising interest rates next month have fallen from 36% to 18.6%, and some experts believe the central bank won't raise rates again in June. Wall Street had been betting on the latter scenario, after the Fed meeting earlier this month created hopes that it was done with rate hikes, but a slate of strong economic data last week led to some nerves. Key data points set for release before the June 14 rate decision include the April Personal Consumption Expenditures price index, the May jobs report, the May Consumer Price Index and the May Producer Price Index.
Governor Greg Gianforte of Montana has signed a bill banning TikTok within the state from January, targeting the app by restricting access in mobile app stores such as the Apple Store and Google Play. TikTok and the stores themselves face fines if they continue to offer access after 1 January. The Chinese-owned video-sharing app is already facing legal challenge with some of its users filing a lawsuit claiming that the ban violates their First Amendment rights. If successful, similar challenges could follow in other states that have already considered restrictions on TikTok.
Wall Street’s strong week ran out of steam on Friday as concerns over the US government’s ongoing efforts to avoid a default on its debt mounted. The S&P 500 lost 0.1%, the Dow Jones was down 0.3% while the Nasdaq fell 2%. Despite Friday’s blip, the S&P 500 gained 1.6%, breaking out of a pattern in which the index failed to rise or fall by 1% for six straight weeks. Optimism earlier in the week that Washington could avoid a crippling default helped the market. Concerns rose again on Friday after a leading negotiator for House Speaker Kevin McCarthy suggested the talks aimed at averting a default be paused, causing the S&P 500 to slide from modest midday gains to modest losses. Investors also took comments from Federal Reserve Chair Jerome Powell to suggest his committee may leave interest rates unchanged next month.
The Indian rupee is set to open lower against the US dollar after the Reserve Bank of India (RBI) announced it would withdraw the highest denomination 2,000-rupee note. The RBI's move is expected to impact the cost of carry, or forward premiums of the USD/INR, which are already low, with reports expecting further declines. The excess liquidity that the withdrawal of the 2,000-rupee note is expected to lead to, will likely result in a significant drop of the rupee money market rates and hence pressure on the Indian currency.
The US dollar fell against the yen and euro on Monday after US debt negotiations broke down and the Federal Reserve's Jerome Powell indicated a preference for slowing down rate hikes. The dollar slid 0.15% to 137.715 yen, and the euro rose 0.14% to $1.0822. Investors are waiting for US President Joe Biden and House Republican Speaker Kevin McCarthy to meet on 24 May to discuss the debt ceiling. Many analysts believe this type of brinksmanship is to be expected before the Treasury runs out of money around 1 June.
Recent research from the Federal Reserve indicates that the US economy has been left vulnerable by prolonged low interest rates. One analysis, from the New York Fed and published last week, focused on the natural rate of interest, or R-star, which is the interest rate that balances the economy meaning it neither stokes inflation nor limits growth. The theory is that monetary policy is only “tight” if the policy rate is well above the natural rate. The report said policy rates are some 380 basis points above the estimated natural rate. The second bit of research from the New York Fed concerns R-double-star, a newer concept called the financial stability interest rate. The report explains that it is "theoretical rate" that tips the financial system into crisis. If R-double-star drifts below R-star, it increases vulnerability to financial shocks from rate increases and risk-taking, which could trigger a banking crisis before getting near the point rates would really contain inflation.
Florida Governor Ron DeSantis experienced a glitch-mared 2024 debut on Twitter, which detracted from his chance to introduce himself as a serious contender to take down former President Donald J. Trump. Despite this, he appeared to have later found his footing on the familiar airwaves of Fox News, offering an effective method of communicating to primary voters. Mr DeSantis hinted he would be more heavy-handed than Mr. Trump with the federal bureaucracy and he called for a full border wall - a rebuke of Mr. Trump's lack of action. He also indicated that he would be more comprehensive than Mr. Trump in confronting China from the outset on all fronts. In polling so far during the Republican nomination race, DeSantis’s perilous path to the nomination rests almost entirely on whether Mr. Trump decides to run.
Florida Governor Ron DeSantis is planning to challenge Donald Trump for the Republican presidential nomination on policy rather than personal attacks. DeSantis believes that he can be trusted to adhere to conservative principles more than Trump, who he has criticised as undisciplined and incapable of delivering policy victories. One of the main policy areas of friction could be abortion, with DeSantis coming down hard on hardline abortion targets. However, Trump is seen as an anti-abortion president who delivered by ending Roe v. Wade.
Another area of dispute could be corporate America, with DeSantis in favour of using all levers of government power to fight back against progressives while Trump has been less consistent on this issue and has slashed taxes for corporations. On foreign policy, DeSantis is expected to be tougher on China and more supportive of Ukraine than Trump, who has been more willing to negotiate with Beijing and failed to draw a moral distinction between Ukrainians and Russians.
The article describes Trump’s focus as a protectionist agenda oriented around preserving government benefits for the elderly. DeSantis, who rose in politics as a Tea Party fiscal conservative, is expected to orient the party’s conversation around fiscal discipline, although he has not ruled out a trimming of entitlement spending in ways that would affect younger Americans.
Bo Levi Mitchell led his new team, the Hamilton Tiger-Cats, to a 27-22 pre-season victory against the Toronto Argonauts. The 33-year-old quarterback threw a touchdown on his second offensive possession for his first game with Hamilton. He joined the Ticats having been traded from the Calgary Stampeders. Mitchell went 3-for-6 for 63 yards before being replaced by backup Taylor Powell. The season kicks off on 9 June.
Masai Ujiri has made five successful and five unsuccessful moves during his decade-long time at the helm of the Raptors. Among the hits are the decision to trade DeMar DeRozan, Jakob Poeltl, and a draft pick to the San Antonio Spurs for NBA champion Kawhi Leonard and Danny Green, while trading Rudy Gay, Quincy Acy, and Aaron Gay to Sacramento for Chuck Hayes, Patrick Patterson, John Salmons, and Greivis Vásquez. Flynn was taken as the 29th choice in the 2020 draft but Desmond Bane has already become a key piece with the Memphis Grizzlies.
Wisconsin Governor Tony Evers is seeking to recoup $106,000 in attorney fees from conservative lawyer Sidney Powell and others for their failed lawsuit alleging fraud in the 2020 presidential election. Evers' lawyers told the 7th Circuit U.S. Court of Appeals in Chicago that Powell should have been sanctioned for bringing the lawsuit, which alleged massive election fraud in battleground states that Joe Biden won, including Wisconsin. The lawsuit, which alleged a vast, tangled fraud linking voting machines to Venezuelan dictator Hugo Chavez and hackers from China and Iran, was dismissed within days on procedural grounds. Powell has also been sanctioned $175,000 by a Michigan federal judge for filing a similar lawsuit alleging meritless election fraud claims. She has appealed the sanction to the 6th Circuit U.S. Court of Appeals.
Although the tightening of monetary policy has made an impact, there are still several reasons for further rate rises, rebuffing suggestions that the US Federal Reserve should pause its interest-rate increases, wrote Bill Dudley, a former president of the New York Fed. For example, poor weather conditions early this year led to a temporary slackening of growth, which could snap back and impact inflation, evidenced by wage inflation remaining at 4%-6%. In addition, despite concern over constrained bank credit, there are hopes that regional lenders struggling with higher funding costs and lower net interest margins will not cause wider issues.
Pricey services are weary ratesetters’ last battle
Reuters BreakingViews
23-06-01 09:52
Rising prices for services such as flights, restaurants and concerts are impeding efforts by central banks in the US, Europe and the UK to curb inflation to the 2% target. While the US post-pandemic spending boom is fading, higher wages have extended the battle across the Atlantic. Price increases for hotels, restaurants and haircuts are now the main obstacle to achieving the target rate for inflation, say economists. Although services make up about 58% of the US consumer price index, and 44% in Europe, higher labour costs mean services inflation in Europe is expected to remain above 4% until the end of the year.
The US labour market might not be as important to inflation as previously believed, and the tightness of the market might not have been a major contributor to recent inflation, according to a paper by Ben Bernanke and Olivier Blanchard. Their paper said that recent IMF research suggested that increased demand could have a greater effect on inflation as the economy evolves. The labour market receives much attention as the Federal Reserve once described it as “the key to understanding inflation”. Furthermore, if the jobs report shows a significant rise in new jobs, there could be a market freak out as investors become uncertain of further interest rate increases by the Fed, a reminder of which was provided by December's physical stimulus and the possibility of a wage-price spiral. However, some suggest that investors should not obsess over labour market tightness and focus on what is driving inflation instead.
The parents of a 10-month-old baby who died on holiday in Portugal have criticized the delays in transferring him to an intensive care unit at a bigger hospital. Deza Powell and Paul Larochelle claimed their son, Adonis, was treated poorly by hospital staff and was given medication and treatment that was not properly explained to them. Adonis died of sepsis 48 hours after he was first treated in hospital. The couple, from Enfield, north London, have criticised the delays in transferring him to an intensive care unit at a bigger hospital as his condition deteriorated. An inquiry in Portugal is underway. The family said they had struggled to access documents from local authorities and were fundraising for legal representation to find out what happened.
Inner-west Melbourne suburb Maidstone has been named by Domain as the cheapest suburb to buy a house within 10km of the city centre, followed by West Footscray, Footscray and Maribyrnong. While houses in other inner suburbs cost over the Melbourne median median of A$1.023m ($769,000), Carlton was the cheapest for units, with a median of A$320,000, followed by Travancore and West Footscray. The under $1m range in Footscray is an attractive option for investors, although interest rates have led to many turning to renting.
More than six house boats went up in flames at Wahweap Marina on the Utah-Arizona line. The fire lasted for roughly 90 minutes before it was extinguished and contained. The cause of the fire is currently under investigation by the National Park Service. No injuries have been reported, but one company claimed to have lost one of its boats containing engines and electrical systems.
The "cancel culture" phenomenon has been discussed by a number of readers writing to The Telegraph. Tim Leach, for example, recalls that when he was at Exeter in 1968, he was part of a student protest against an Enoch Powell speech he was invited to make by the university’s Conservative society. The noise of the students led Powell to abandon the speech, but he was not banned from speaking. However, John Pritchard, a former politician and Christian, said he had become “increasingly wary”: “As sensible people have become wary of being heard saying unfashionable things. I had never thought George Orwell’s prophecies would become a reality”. Cheryl Blair writes the cancel culture is “infantilising our young people” and the revocation of Jordan Peterson's visiting fellowship is “just the latest example of this worrying trend”. Another reader said it is an inhibition on free speech that is spreading in America. However, a correspondent insisted that the notion of “cancel culture” has been overblown and argued that Americans are still free to say ugly, racist or otherwise offensive things.
