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MNI INTERVIEW: Limits To Comms Benefits From Fed Scenarios

(MNI) WASHINGTON

Former Fed Board research director David Wilcox outlines challenges around implementing scenario-based forecasting and communications at the Fed.

LATEST INSIGHT

MNI BRIEF: Labour Hoarding Two-Sided Policy Risk - BOE Greene

BOE MPC member Megan Greene sees evidence of labour hoarding, and says it poses an upside and downside inflation risk.

MNI US Inflation Insight, May'24: CPI In Line After Three Beats But Trend Rates Still Hot

Core CPI moderated as expected in April after three hot monthly prints, but FOMC members will need to see further disinflationary progress to have greater confidence to cut rates

MNI: EU Tariffs On China EVs Seen Higher After U.S. Move

Tariffs on Chinese electric vehicles will come as the EU likely moves towards an industrial strategy, diplomats say.

MNI INTERVIEW: PBOC Can Use QE Strategically If Necessary - Yu

The People's Bank of China could enhance supports for fiscal expansion when economic headwinds strengthen, according to a former member of the monetary policy committee.

Political Risk

MNI POLITICAL RISK - Biden And Trump Agree To Debate

Daily roundup of news from the US.

Executive Summary:

  • President Biden and former President Donald Trump yesterday agreed to hold two presidential debates, bucking a prevailing view that the White House would be unlikely to agree to any public debates. By agreeing to debate, the White House may have signalled concerns over Biden’s lukewarm polling numbers and a resurgent Trump campaign.
  • House Speaker Mike Johnson (R-LA) is expected to hold a vote today on a Republican bill which criticises the Biden administration’s decision to withhold some heavy ordinance transfers to Israel. The vote will put at least two-dozen Democrats facing competitive races in a challenging position.
  • President Biden said on yesterday’s CPI report that "prices are still too high," and renewed a pledge to build two million new homes to lower housing costs.
  • A bipartisan group of lawmakers is preparing to introduce a Congressional Review Act to overturn the Biden administration’s clean vehicle tax credit - pitting Biden's agenda against the domestic political concerns of vulnerable Democrat lawmakers.
  • Poll of the Day: Voters trust Trump more than Biden on the economy and immigration - the two central issues of the campaign.

Please find the full article attached below:

MNIPOLRISKUSDaily160524.pdf

Minister-PM Shooter Disagreed w/ Policy On Ukraine, Media, Judiciary

Wires carrying comments from Deputy PM Robert Kalinak regarding the situation of PM Robert Fico, reporting Kalinak saying 'We cannot now say that we are winning or that [the] outlook is positive'. Slovakia's Dennik N reportsKalinak saying that doctors have stabilised the PM but that he is not out of danger. The Deputy PM says that the assassination attempt on Fico was premeditated and politically motivated.

  • Interior Minister Matus Estok says that the suspect has been charged with attempted murder, and that the individual listed reasons including the 'cessation of military aid to Ukraine, the abolition of the special prosecutor's office, with interventions in [state media companies] or with the dismissal of the chairman of the Judicial Council' for the attack.
  • Says that the suspect 'acted alone, had taken part in anti-gov't protests', but was not - as some had speculated - been part of a radical group. Slovakia's seniormost police officer will deliver a presser at 1500CET (0900ET, 1400BST).
  • Given the shocking nature of events, the actions and motivations of the shooter will dominate the Slovak news agenda in the hours, days, and weeks ahead. While a joint appearance from President Zuzana Caputova and President-Elect Peter Pellegrini (on opposite sides of the political spectrum) has been seen as an effort to calm the discourse, statements from some gov't and opposition lawmakers have only served to inflame an already tense political atmosphere.

New PM Announcement Awaited, Mediator Plasterk Frontrunner

Following the announcement on 15 May that an agreement had been reached on a four-party coalition gov't, attention is turning the potential identity of the next head of gov't and cabinet of ministers. The coalition agreement confirms that none of the party leaders, including right-wing populist Party for Freedom (PVV) head Geert Wilders, will serve as PM and that one-half of cabinet ministers will be non-party aligned. The House of Representatives will debate the coalition agreement on Wednesday 22 May.

  • The frontrunner to take over from incumbent PM Mark Rutte is the individual who has mediated in the coalition talks, former Labour Party (PvdA) minister Ronald Plasterk.
  • Plasterk had retired from politics prior to his return as informateur, and in spite of his PvdA membership is seen as a potentially reliable neutral figure that could gain approval from all four parties in the new gov't. If Plasterk is designated as formateur (the individual who formally appoint ministers) in the coming days it could be a signal that he is set to become PM.
  • Following the appointment of a formateur and ministers, they each face a confirmation hearing in parliament. Only after this can the PM and cabinet take an oath to the King and formally take office. Given that a sizeable number of ministers will need to face hearings this process could take up to a month, potentially delaying the new gov't taking office until mid-to-late June.

Joint Statement Threatens Retaliation To Asset Seizure

Russian state-run Interfax reporting comments from the joint statement from the Chinese and Russian gov'ts following meetings between Russian President Vladimir Putin and China's President Xi Jinping and Premier Li Qiang. Regarding economic relations and Western sanctions on Russia, the two sides said that they, "...will resist attempts to impede the development of relations between them...The parties are determined to defend their legitimate rights and interests, to counteract any attempts to interfere with the normal development of bilateral relations".

  • The joint statement says the two countries, “consistently regard each other as priority partners...”.
  • Statement: "Russia and China condemn initiatives to seize assets and property of foreign states and note the right to take retaliatory measures."
  • The US and EU have both recently made moves towards using windfall profits made from frozen Russian assets to pay for Ukraine's defence. EU permanent representativesapproved planslast week to use EUR2.5-3bn/annum in windfall profits to pay for arms for Kyiv, while in his 15 May visit to the Ukrainian capital US Secretary of State Antony Blinken said that the US will "make Russia pay for Ukraine's recovery and reconstruction",

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