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MNI: Fed's Cook Sees Rate Cuts 'At Some Point'


Inflation and labor market indicators should continue to cool gradually, Federal Reserve Governor Lisa Cook says.


MNI Banxico Preview - June 2024: Expected Rate Hold Not Set in Stone

Most analysts expect Banxico to keep its overnight rate unchanged at 11.00%, with some seeing an outside chance of a 25bp cut.

MNI CNB WATCH: Close Call Between 50 or 25Bp Cut, Policymakers Admit

The Czech National Bank will decide whether or not slow the pace of rate cuts on Thursday.

MNI CBRT WATCH: Rates Seen On Hold, Stance Still Hawkish

Central Bank of Turkey will decide whether or not to hold rates at 50% on Thursday

Political Risk

US Announces Sanctions On Iranian "Shadow Banking" Network

The US Treasury Department has announced sanctions on nearly 50 entities and individuals connected to a “shadow banking” network used by Iran to gain illicit access to the international financial system and process billions of dollars of oil and petrochemical revenue.

  • According to Treasury, the revenue derived from this network is used by the Iranian Revolutionary Guards Corps (IRGC) and Ministry of Defense to support Iran's regional proxies, including military technology used by the Houthis to disrupt Red Sea shipping, and the production of military drones to Russia for use on the battlefield in Ukraine.
  • Deputy Treasury Secretary Wally Adeyemo said in a statement: “The United States is taking action against a vast shadow banking system used by Iran’s military to launder billions of dollars of oil proceeds and other illicit revenue.
  • "We have sanctioned hundreds of targets involved in Iran’s illicit oil and petrochemical-related activity since President Biden took office, and we will continue to pursue those who seek to finance Iran’s destabilizing terrorist activities. We continue to work with allies and partners, as well as the global financial industry, to increase vigilance against the movement of funds supporting terrorism.”
  • VOA notes: "Tuesday's action targeted dozens of companies in Hong Kong, the United Arab Emirates and Marshall Islands, as well as Iran and Turkey-based firms."

Latest Ifop Poll: RN: 36% (=), NFP: 28.5% (-1), Ensemble: 21% (+0.5%)

The latest rolling opinion poll from Ifop ahead of the presidential election shows little change from yesterday's publication. The right-wing nationalist Rassemblement National (RN) and its allies sit in first place on 36%, the same score as yesterday. The leftist New Popular Front (NFP) alliance sits in second on 28.5% (down 1%), and the centrist Ensemble bloc of President Emmanuel Macron is in third place on 21% (up 0.5%). The conservative Les Republicains and other parties of the centre-right sit on 6.5% (down 0.5%).

  • If these results were reflected in the 30 June and 7 July elections it would likely result in RN emerging as the largest party, but short of a majority. This would risk either a minority RN gov't or political paralysis presaging a technocratic gov'.t

Chart 1. Ifop Poll 25 June, %

Source: Ifop

Business And Economic Establishment Remains Sceptical Of Trump

Former President Donald Trump may have repaired some bridges with business leaders, but no Fortune 100 CEOs have financially backed his campaign, a major reversal from the three elections prior to 2016 when 30–40 CEOs backed the Republican candidate – a sign that corporate American remains sceptical of his agenda.

  • Axios reports: “It's easy to overstate how much America's business establishment supports Donald Trump. Just because corporate America has serious issues with President Biden doesn't mean they're in Trump's camp,” adding that, “Roughly two-thirds of CEOs are registered Republicans, but they're not MAGA.”
  • Jeffrey Sonnenfeld writes in a New York Times op-ed: “Trump continues to suffer from the lowest level of corporate support in the history of the Republican Party.”
  • Sixteen Nobel prize-winning economists, led by Joseph Stiglitz, have penned a letter warning that Trump’s agenda could exacerbate inflation: "While each of us has different views..., we all agree that Joe Biden's economic agenda is vastly superior to Donald Trump.”
  • "We believe that a second Trump term would have a negative impact on the U.S.'s economic standing in the world, and a destabilizing effect on the U.S.'s domestic economy... There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets."

GOP Could Further Embrace Crypto Sector Under Trump

Former President Donald Trump is reportedly in talks to speak at the Bitcoin 2024 convention in Nashville, Tennessee on July 25-27, another bullish pivot towards the sector after scepticism in his first term.

  • Trump's move is part of a broader shift within the GOP to align with the crypto industry and follows a strong month of May when the sector won a series of legislative victories including House votes to create a regulatory regime tailored for crypto and repeal SEC crypto guidance.
  • Analysts told Bloomberg the GOP, "sees crypto not just as a vote bank but also a meaningful source of funding. If the election sentiment shifts more Republican, crypto would end up as the primary ‘Trump trade’ and hopes of a favorable regulatory regime would change the ‘use-case’ narrative around blockchains.”
  • Trump said on social media on June 12: “VOTE FOR TRUMP! Bitcoin mining may be our last line of defense against a CBDC [central bank digital currency]. Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left...”
  • Axios reports: “[Trump's] embrace of crypto has contrasted with President Biden's coolness toward digital currency — and led some wealthy crypto investors to back the Republican's campaign. Trump wouldn't be the only presidential candidate at the convention. Independent contender Robert F. Kennedy Jr. is slated to speak there, as are former GOP candidate Vivek Ramaswamy and Tennessee GOP Sens. Bill Hagerty and Marsha Blackburn.”


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