Connect with us

Government

Rabobank: Did Biden Privately Tell Powell To Pivot In September, Ensuring All Blame Falls On The Fed

Rabobank: Did Biden Privately Tell Powell To Pivot In September, Ensuring All Blame Falls On The Fed

By Michael Every of Rabobank

Yesterday…

Published

on

Rabobank: Did Biden Privately Tell Powell To Pivot In September, Ensuring All Blame Falls On The Fed

By Michael Every of Rabobank

Yesterday I argued US President Biden’s inflation-fighting plan boils down to “rates or nothing.” It seems both he and Treasury Secretary Yellen agree, as following a White House meeting with Fed Chair Powell, the president made clear he fully backs the Fed’s independence and wants to give it “space” to act on high inflation. And little else on the topic.

You can tell just how seriously the White House is taking its role in the inflation crisis because the Powell meeting started at 13:15EST, and by 15:00EST the president was meeting South Korean boyband BTS. I presume they all know their inflation rate is 4.8% y-o-y, and the price of ‘Butter’?

Is that White House hospital pass intended to allow the Fed to pause in September, and then start to cut again? Yellen, talking to CNN, offered a mea culpa in saying, “I was mistaken about inflation’s trajectory,” but again stressed, “The Fed is taking necessary actions,” adding, “I think it’s impossible to rule out more inflationary surprises,” to give them a push towards the incoming bone-crunching tackle. (That is as Bloomberg says ‘China Plans for Years of Covid Zero With Tests on Every Corner’. Sorry, global supply chains.)

The Fed’s Bostic also clarified his comments last week about a “September pause” should not be construed as a “Fed put”. He predicts a significant drop in inflation as we will see a fall in the “willingness to spend freely among certain segments of the population”, with the key PCE deflator measure of price pressures expected to drop back from 6.3% y-o-y to 4.0% by year end – but still twice the level it should be.

Then again, there is a more cynical interpretation of yesterday’s meeting (with Powell, not BTS). Could the White House --which those in the know say was leaning on the Fed last year, as is the US tradition-- have publicly stressed the Fed is independent *and* told them to pivot in September, to ensure all the blame falls on Powell?

From here Powell either Volckers or Burns. Either way we see hospitalization-inducing volatility.

After yesterday’s shock Eurozone 8.1% y-o-y CPI print --and with lots more food inflation in the pipeline yet to come-- we got more ECB chatter of whether a 50bps step might be needed, and whether the neutral rate is 1.00%, which once looked impossible, or 2.00%, which to many still does. Again it looks to be rates or nothing – although with acronymtastic action to try to keep the Eurozone periphery out of danger.

Ironically, yesterday also saw drops in key commodities. In grains and oilseeds, this was due to thoughts of Russian exports from the Black Sea. Nothing can be ruled in or ruled out, but the removal of Western sanctions on Russia, Moscow’s core demand for letting food flow again, is something that is almost certainly not going to happen. In which case, that agri sell-off is not going to last.

On oil, the impact of the EU’s oil embargo was minor, as was French insistence the next step should be on gas (given it is nuclear-powered, naturellement). What moved markets was the Wall Street Journal reporting some OPEC+ members “are considering the idea of suspending Russia in an oil production deal as Western sanctions hurt the nation's ability to produce more.” That would open the doors for Saudi Arabia to pump – and so oil prices fell. Yet the Saudis insist that there is already enough oil around and the problem is a lack of refineries.

At time of writing, the market did not appear to have fully digested the other big energy news: Europe, the US, and UK are to stop insuring any vessels carrying Russian oil. That could have a serious impact given the lack of alternatives, and a likely Western backlash if other insurance actors step in to provide insurance. That’s also a hospital pass for central banks.

As an aside, there is lots happening regarding Saudi. They have, pointlessly, flirted with selling some oil in CNY, and Russia’s Lavrov arrives in Riyadh soon. However, they are also reportedly close to a gradual move towards joining the US-initiated Abraham Accords with Israel: the US looking serious about backing off from the Iran nuclear deal was key. They are also talking about soon having the world’s largest horizontal buildings – because with oil where it is, it seems we are back to ‘gold toilets’ cliches.

Meanwhile, New Zealand is clearly moving towards the US. PM Ardern and President Biden just released a joint statement on a ‘21st-Century Partnership’ that makes it 100% clear the Kiwis stand with the West, not as a tongue-in-cheek ‘New Xi-Land’. The key highlights are that:

“Our countries will expand our work in the Pacific on infrastructure, including transportation and information-communications technology; cyber security; maritime security, including combatting illegal, unreported, and unregulated fishing; education and skills training; COVID-19 pandemic assistance and global health security; and economic recovery. At the same time, we will promote democratic governance, free and fair elections, media freedom, and transparency; we will increase respect for human rights and the rule of law.”

All of this with deep US coordination.

“We oppose unlawful maritime claims and activities in the South China Sea that run counter to the rules-based international order, particularly UNCLOS. We reiterate our grave concerns regarding the human-rights violations in Xinjiang, and the erosion of rights and freedoms in Hong Kong... We underscore the importance of peace and stability across the Taiwan Strait and encourage the peaceful resolution of cross-Strait issues.”

All the hot-button US issues are now hot for NZ too.

We acknowledge that security and defence will become an ever-more-important focus of our strategic partnership. We look to increase the interoperability of our forces, including through personnel exchanges, co-deployments, and defence trade. Achieving this vision will require robust and sustained commitment to defence in the Pacific. As New Zealand takes delivery of new capabilities, we will look for opportunities for combined operations and to expand our cooperation in other ways. As the security environment in the Indo-Pacific evolves, so must our defence cooperation.”

It’s not joining The Quad – but given the US is aiming for military interoperability with Japan, India, and the UK, it’s not far off. It also means more Kiwi defence spending.

We intend…to explore how we can expand bilateral trade and investment in order to strengthen the security of our supply chains and economic resilience. To that end, the US and New Zealand will resume annual Trade and Investment Framework Agreement (TIFA) discussions.”

Wellington of course fully backs the new US-initiated IPEF trade structure.

Will the above move Kiwi markets today? No. Will it if we see a bifurcated Indo-Pacific region, and/or China importing much less from New Zealand to push-back against its shift towards the US? Yes - and the risks of that just increased markedly. As such, some might see this statement as a hospital pass: yet not acting geopolitically in the present environment would have been one too.

Likewise, the South China Morning Post says, ‘Europe beefs up trade armory for long-term fight with China. Europe doesn’t fight physically, but boy can it do so in committees, and paper cuts can hurt. The EU is going to address everything ‘China’, from state subsidies to market access, economic coercion to carbon emissions, and forced labor to tech transfer. Europe reportedly sees itself as able to leave the US for dust in these technical areas, doing its bit for the ‘liberal world order’. (As the US oddly once again flirts with the inflation-irrelevant issue of removing China tariffs: but this internal debate may yet end the same way as the Iran deal did.)

That is as Jörg Wuttke, the president of the EU Chamber of Commerce in China, says the “allure of China” is waning, as foreign businesses consider their options for new investments. Moreover, the EU just upgraded Thursday’s bilateral trade summit with Taiwan to ministerial level.

Will the above move Eurozone markets today? No. Will it if the end-point is a bifurcated world, and/or China importing much less from Europe to push-back? Or if China exports less to it, when supply-side inflation is already an issue? Yes - and the risks of that just increased markedly. As such, some might see this EU statement as a hospital pass: yet not acting geopolitically in the present environment would have been one too.

Today saw the new Aussie government faced with its first immediate crisis: CoreLogic house prices dropped 0.3% m-o-m. I would have expected a housing stimulus package by lunchtime if it was the last lot, but the new ones need to get their email up and running first. Q1 GDP, for which they are not responsible, meanwhile came in at 0.8% q-o-q vs. 0.7% expected and 3.3% y-o-y vs. 3.0%, with upward revisions to back data. So, Aussie rates are going to rise (after everyone else led them there). And Aussie house prices are going to…. [fill in the blank, RBA]. What a hospital pass for PM Albanese(?)

China’s Caixin manufacturing PMI was out today too and was 48.1 vs. 49.0 expected and 46.0 last month. It’s ‘interesting’ to see that it only half echoed the more upbeat official measures, which picked up more in May despite lockdowns.

Not directly linked to any of the above, but also a hospital pass of sorts, an Israeli tech firm has estimated that up to 12% of Twitter users are ‘bots’. Moreover, Pew research says the top 10% of tweeters account for 92% of all tweets, of which 69% are Democrats and only 26% Republicans. Expect to see more from Elon Musk ‘on Twitter’.

Tyler Durden Wed, 06/01/2022 - 12:05

Read More

Continue Reading

Government

Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

Published

on

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

Read More

Continue Reading

Government

Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

Published

on

Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

Read More

Continue Reading

Government

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…

Published

on

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

Read More

Continue Reading

Trending