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☆ US economy on the brink as time runs low to avert debt default
▼ + stars: | 2023-05-22 | by ( Stephen Collinson | ) edition.cnn.com time to read: +10 min

After a weekend of acrimony between negotiators for House Republicans and the White House, Biden will meet House Speaker Kevin McCarthy Monday for critical talks on pulling the economy back from the precipice. Biden and McCarthy to meet MondayThe rhetoric eased a little, however, after Biden and McCarthy spoke as the president flew home on Air Force One. McCarthy already passed a bill raising the debt ceiling in exchange for a wish list of Republican demands. This is a balance of power that ought to drive both sides towards a compromise, but extremist elements in the House GOP could make that impossible. Like McCarthy, Biden also faces political pressure within his own party after some progressive Democrats expressed fears he would offer the speaker too much in any deal.

☆ Crypto’s biggest headwinds this year are hurting stablecoins. Here’s what investors need to know
▼ + stars: | 2023-05-19 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +3 min

Stablecoins are like cash in crypto markets: They are supposed to be pegged to the value of a stable asset, such as the U.S. dollar. Stablecoins play an important role bridging traditional and digital currencies and giving market participants access to crypto trading and protocols. For many, that makes them a proxy for the amount of fiat money entering and leaving crypto, Panigirtzoglou said. Republican negotiators walking out of the high-stakes debt ceiling talks Friday also has implications for stablecoins. Tether and Circle's USDC hold about 65% and 57%, respectively, of their stablecoin reserves in T-bills, according to the companies' attestation reports.

☆ Fed Chair Powell says rates may not have to rise as much as expected to curb inflation
▼ + stars: | 2023-05-19 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Federal Reserve Chair Jerome Powell said Friday that stresses in the banking sector could mean that interest rates won't have to be as high to control inflation. "So as a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals," he added. Powell spoke with markets mostly expecting the Fed at its June meeting to take a break from the series of rate hikes it began in March 2022. Powell characterized current Fed policy as "restrictive" and said future decisions would be data-dependent as opposed to being a pre-set course. "Importantly, there is no evidence that the era of very low natural rates of interest has ended," New York Fed President John Williams said in prepared remarks.

☆ Having Established Turkey on the World Stage, Erdogan Faces Risky Vote at Home
▼ + stars: | 2023-05-14 | by ( Jared Malsin | Elvan Kivilcim | ) www.wsj.com time to read: 1 min

People in Turkey are voting in the tightest election in years, as the country recovers from a devastating earthquake in the midst of an economic crisis. WSJ’s Jared Malsin explains why the results could reverberate beyond Turkey. Photo: Jeff J Mitchell/Getty ImagesISTANBUL—Turkish voters go to the polls on Sunday in one of the most crucial elections in the country’s history—a vote that could bring to an end the long rule of President Recep Tayyip Erdogan and have far-reaching geopolitical consequences for the Middle East, Ukraine and NATO. Mr. Erdogan has towered over Turkish politics for two decades, tightening his grip over the country and eroding democratic institutions at home, while also raising the country’s profile on the international stage.

☆ Turkey election rivals both claim early lead, but runoff is likely
▼ + stars: | 2023-05-14 | by ( ) www.cnbc.com time to read: +3 min

Supporters of Turkish President Tayyip Erdogan attend a rally ahead of the May 14 presidential and parliamentary elections, in Istanbul, Turkey May 12, 2023. Turkey appears headed for a presidential election runoff, with the parties of Tayyip Erdogan and opposition rival Kemal Kilicdaroglu claiming the lead. Early results put Erdogan comfortably ahead, but as the count continued his advantage eroded, with a runoff on May 28 beckoning. Ankara's opposition mayor Mansur Yavas said a count by his party suggested Kilicdaroglu was ahead with 47.42%, while Erdogan had 46.48%. His government's slow response to a devastating earthquake in southeast Turkey that killed 50,000 people added to voters' dismay.

☆ Jane Roberts' anti-abortion advocacy helped her husband, Chief Justice John Roberts, land his spot on the Supreme Court years before Roe v. Wade was overturned
▼ + stars: | 2023-05-13 | by ( Erin Snodgrass | ) www.businessinsider.com time to read: +11 min

Chief Justice John Roberts' wife's anti-abortion advocacy once helped bolster his judicial career. Details of Jane Roberts' work, though not new, are worth revisiting in the aftermath of Roe v. Wade's reversal. Supreme Court Chief Justice John Roberts and his wife Jane exit the funeral service for Antonin Scalia. Jane Roberts' advocacy and public political beliefs ultimately helped convince two conservative legal power players, Leonard Leo and Jay Sekulow, to publicly advocate for John Roberts' confirmation, according to the Times. Photo by Alex Wong/Getty ImagesAt the time of John Roberts' nomination, liberals feared he might pose a threat to Roe v. Wade.

☆ Fed Governor Waller casts doubt on need to conduct climate change tests for banks
▼ + stars: | 2023-05-11 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Christopher Waller, governor of the US Federal Reserve, during a Fed Listens event in Washington, D.C., US, on Friday, Sept. 23, 2022. Federal Reserve Governor Christopher Waller on Thursday cast doubt on the need for special focus on how banks are preparing for climate change risks. Thus, he said that conducting special tests for how banks are preparing for such events probably shouldn't fall under the Fed's purview. The stress tests focus on how banks would respond to financial and economic crises. A financial stability report in 2020 first addressed the topic.

Persons: Christopher Waller, Waller Organizations: US Federal Reserve, Washington , D.C, Federal Locations: Washington ,, U.S, Madrid, United States

☆ MSG: The world's most misunderstood ingredient
▼ + stars: | 2023-05-10 | by ( Maggie Hiufu Wong | ) edition.cnn.com time to read: +12 min

Case in point – he has the letters “MSG” tattooed on his arm, and his restaurant’s menu includes a signature drink called the MSG Martini. “Things just taste better with MSG, whether it’s Western food or Cantonese food,” the chef tells CNN. You’ve probably been playing with glutamate, inosinate and guanylate in your own cooking without even realizing it. We season our food with MSG a little bit – it’s different from heating water and adding MSG and serving it with noodles,” he says. “Our mission from the very beginning was to show people what Cantonese food is and what Cantonese food can be – it’s always going to be playful, fun and approachable,” says Eng.

She will warn about "the global impact of this standoff and highlight the need to avoid default," a senior Treasury official said. It will lead to a freeze in global financial markets," said Muehleisen, now a fellow with the Atlantic Council. G7 counterparts will question Yellen "about the financial stability risks in the U.S., the regional banks' exposure to commercial real estate. Real risks that are not manufactured for political posturing," said Stephanie Segal, a former U.S. Treasury official who is a senior fellow at the Center for Strategic and International Studies in Washington. The far more complicated "Pillar 1" plan to allow countries to tax global technology giants and other highly profitable corporations on their local sales is still under negotiation.

If a bank failure were to leave one of them without access to cash, widespread market instability would follow. “Why take that risk?” Summer Mersinger, a member of the Commodity Futures Trading Commission, told DealBook. Clearinghouses exist to mitigate risk, taking collateral and settling transactions between buyers and sellers in all kinds of financial markets. This means a bank’s failure could easily lead to losses for a clearinghouse that “could potentially reverberate across the financial system,” the Chicago Fed concluded in a 2020 report. Even without a complete failure at a commercial bank, delays in access to cash could trigger liquidity issues across markets.

☆ Opinion: How to fight back against the ‘anti-woke’ movement
▼ + stars: | 2023-05-09 | by ( Opinion Khalil Gibran Muhammad | ) edition.cnn.com time to read: +6 min

Several states across the country have imposed bans on books, K-12 educational curricula and diversity programs in recent months. And even where statewide bans are not in place, restrictive measures are being enacted by local school boards. The mere mention of structural racism or gender discrimination or sexuality can potentially cost educators and librarians their jobs. The beginnings of this national movement to defend the freedom to learn is rekindling relationships between college students and civil rights activists and inspiring new ones between college faculty and K-12 teachers and librarians. With such formidable alliances among students, teachers, organizers and academics being forged in communities across the country, we finally have an answer to reverse the swelling tide of injustice and authoritarianism.

☆ Senate Republicans oppose vote just to raise US debt ceiling, push for other priorities
▼ + stars: | 2023-05-06 | by ( ) www.reuters.com time to read: +2 min

Biden will meet with four top congressional leaders on Tuesday to discuss spending priorities, according to the White House. Schumer said this week that the Senate might consider a bill that only raises the debt ceiling without addressing other Republican priorities. With only a 51-49 majority in the Senate, Schumer would need the support of at least nine Republicans to clear a 60-vote threshold to advance such legislation. The latest Senate Republican letter shows the party could block a so-called "clean" debt ceiling bill. The House in late April passed a bill to raise the government's $31.4 trillion debt ceiling that includes sweeping spending cuts over the next decade.

☆ North Carolina Passes 12-Week Abortion Ban
▼ + stars: | 2023-05-05 | by ( Jennifer Calfas | Laura Kusisto | ) www.wsj.com time to read: 1 min

From a high-stakes legal battle over the abortion pill mifepristone, to states debating their own legislation, WSJ’s Laura Kusisto highlights where abortion access stands now and what could come next. Photo Illustration: Preston JesseeNorth Carolina’s Republican-led legislature passed a ban on most abortions after 12 weeks of pregnancy, setting the state on a path to restricting access that could ultimately reverberate across the region. North Carolina has become a crucial access point for patients in the Southeast seeking abortions after the Supreme Court last year overturned Roe v. Wade and many states in the region enacted near-total bans on the procedure.

☆ North Carolina Republicans reach agreement on 12-week abortion ban
▼ + stars: | 2023-05-03 | by ( Sharon Bernstein | ) www.reuters.com time to read: +2 min

The proposal is the latest effort by lawmakers in Republican-dominated state legislatures to limit abortions after the U.S. Supreme Court overturned the constitutional right to end a pregnancy last year. "The bill that has been developed is a commonsense, reasonable approach to restricting second and third trimester abortions," state senate leader Phil Berger said at a news conference. The legislation would limit elective abortions to 12 weeks' gestation, with exceptions for rape, incest, life-limiting fetal anomalies and the life of the mother. North Carolina Governor Roy Cooper, a Democrat, said on Tuesday he "strongly opposed" the measure. The move by North Carolina Republicans comes days after a far more restrictive anti-abortion bill was successfully blocked in neighboring South Carolina by a group of five women lawmakers, three of them Republicans.

☆ Morning Bid: RBA shock hike starts huge week for central banks
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Asia markets correspondent Kevin Buckland. The Reserve Bank of Australia kicked off a string of major central bank meetings this week by surprising markets with a quarter-point rate hike, when most had been positioned for a pause. The debate among policy makers is whether to opt for another half-point hike or slow to a quarter-point pace. The Fed, meanwhile, is widely expected to hike rates by a final quarter point and then signal a pause. Money markets are still betting on a Fed rate cut before the end of the year.

☆ Yen sinks to 15-year low vs euro, Aussie jumps as central banks diverge
▼ + stars: | 2023-05-02 | by ( Kevin Buckland | ) www.reuters.com time to read: +3 min

TOKYO (Reuters) - The yen continued its steep descent on Tuesday, reaching a 15-year low to the euro, as the implications of a steadfastly dovish Bank of Japan continued to reverberate days after the decision. FILE PHOTO: Japanese Yen and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/IllustrationMeanwhile, the Aussie dollar leapt to a one-week high after the Reserve Bank of Australia (RBA) surprised with a rate hike and signalled more tightening may come. The central bank lifted the cash rate to 3.85% and said “some further” tightening may be required to ensure that inflation returns to target in a reasonable timeframe. The European Central Bank (ECB), meanwhile, is widely expected to raise rates for a seventh straight meeting the following day, with a 50 basis-point increase on the table.

☆ Bond investors fearing recession, boost safety bets ahead of FOMC
▼ + stars: | 2023-05-01 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +5 min

Going long duration reflects expectations U.S. yields will fall because the Fed will be forced to cut rates. During the Fed's aggressive rate-hike phase last year, investors shortened their duration exposure. In terms of price action, U.S. 5-year yields dropped 67 bps since March, suggesting increased demand from investors. U.S. Treasuries rallied in March, pushing yields lower, as the market sought safety during the banking crisis. U.S. two-year yields, which reflect rate expectations, fell nearly 60 bps in March, the largest monthly fall since December 2007.

☆ The First Republic deal has come at a crucial point for the markets and economy
▼ + stars: | 2023-05-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Michael M. Santiago | Getty ImagesJPMorgan Chase's takeover of First Republic likely ends the panic phase of the banking crisis, with the fallout left to come in a pivotal week for markets and the economy. Following an unsuccessful effort to keep First Republic open, the largest U.S. bank by deposits reached a deal to take over the 14th-largest financial institution. With financial services covering such a wide swath of activities in the $26.5 trillion U.S. economy, the failures of Silicon Valley Bank, Signature Bank and now First Republic Bank will reverberate. Stocks nudged higher Monday morning on hopes that the worst of a banking crisis that began in early March has drifted into the rear view. "Resolving FRC should end the 7-week post SVB bank crisis phase."

Depositors had pulled $100 billion from accounts at the bank in the panic triggered by the SVB and Signature failures, imperiling its survival. Both SVB and Signature failed last month. Both SVB and Signature grew quickly in recent years, outpacing the ability of regulators to keep up, especially with shrinking resources. Regulators closed Signature two days after SVB was shuttered. Signature lost 20% of its total deposits in a matter of hours on the day that SVB failed, FDIC Chair Martin Gruenberg has said.

☆ Fed report on SVB collapse faults bank's managers — and central bank regulators
▼ + stars: | 2023-04-28 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Central bank officials likely will turn their attention to cultural changes, noting that risks at SVB were not thoroughly examined. Future changes could see standardized liquidity requirements to a broader range of banks, and tighter supervision of compensation for bank managers. "[T]he combination of social media, a highly networked and concentrated depositor base, and technology may have fundamentally changed the speed of bank runs,' he said in the report. "Social media enabled depositors to instantly spread concerns about a bank run, and technology enabled immediate withdrawals of funding." Fed Chairman Jerome Powell said he welcomed the Barr probe and its internal criticism of Fed actions during the crisis.

Things are calmer now, but seven traders who spoke to Reuters, some heading rates desks at big global banks, said March's mayhem continues to reverberate, with fears of further volatility in traditionally stable bond markets muting activity. Investors rely on government bond markets to translate central bank interest rates into a stable benchmark for borrowing costs, from corporate loans to household mortgages. Yield shifts in government bond markets have become bigger - occasionally hitting 20 bps a day - since central banks started ramping up rate hikes last year to tame surging inflation. For some, March's turmoil is the latest sign of how post-2008 regulations constraining dealer balance sheets are affecting bond market functioning. Others noted markets were leaving behind an era of low volatility for good as rates rise.

Washington CNN —Republican Sen. Lindsey Graham said Sunday that he will follow precedent for replacing Sen. Dianne Feinstein on the Judiciary Committee if she resigns, signaling a willingness to vote to replace the California Democrat if she left the chamber altogether. She has asked to be “temporarily” replaced on the Senate Judiciary Committee while she is recovering but remains committed to returning to Washington. “As to Sen. Feinstein, she is a wonderful person. I hope she comes back,” the top Republican on the Judiciary Committee added. I think the Republican Party will be in good standing to oppose late-term abortion.”Graham’s comments highlight the difficulty that Republicans have had navigating the abortion issue.

☆ Jobs are strong, inflation is cooling — yet recession worries remain
▼ + stars: | 2023-04-18 | by ( Christine Romans | ) edition.cnn.com time to read: +4 min

In the optimist camp is Treasury Secretary Janet Yellen, who told CNN’s Fareed Zakaria last week a damaging recession can be averted. “I do think there is a path to bring down inflation while maintaining what I think all of us would regard as a strong labor market.”After months of inflation at close to 40-year highs, prices are cooling. By most measures, the job market is stronger today than it was in February 2020, before the Covid pandemic crashed the global economy. “I think the strong labor market and bringing down inflation are compatible goals,” Yellen said. Another read is that a recession, if there is one, will be mild and brief, without a big spike in the jobless rate.

☆ Japanese PM unhurt after blast during campaign event
▼ + stars: | 2023-04-15 | by ( ) www.cnbc.com time to read: +4 min

Japanese Prime Minister Fumio Kishida was evacuated from the port in Wakayama after a blast was heard, but he was unharmed in the incident, local media reported on April 15. TOKYO (AP) — Japanese Prime Minister Fumio Kishida was evacuated unharmed Saturday after someone threw an explosive device at a campaign event in a western port city, officials said. Police wrestled a suspect to the ground as screaming bystanders scrambled to get away and smoke filled the air. In Abe's assassination, the former prime minister was shot with a homemade gun during a campaign speech. Abe's alleged assassin told investigators that he killed Abe, one of Japan's most influential and divisive politicians, because of the former prime minister's apparent links to a religious group that he hated.

☆ The Fed could easily drive Black unemployment much higher than the overall jobless rate
▼ + stars: | 2023-04-05 | by ( Krystal Hur | ) edition.cnn.com time to read: +7 min

However, the jobless rate isn’t expected to be that low for long. While that’s a small improvement from the central bank’s previous 4.6% jobless rate estimate, economists say it’s possible the unemployment rate could rise above the Fed’s expectations. It can be difficult to slow an unemployment spiralEconomists say it’s hard to guess the trajectory of the unemployment rate this year, noting it could very well exceed the Fed’s estimate. As such, the Fed’s tightening efforts could easily drive the Black unemployment rate much higher than the overall jobless rate, said William Spriggs, an economics professor at Howard University and chief economist to the AFL-CIO. The Black unemployment rate will easily get to 9% in that scenario.”One other likely consequence of growing unemployment is slowing wage growth, Bivens said.

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