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MNI BRIEF: NZ Q1 Inflation Rises 4%, Higher Than RBNZ Forecast

(MNI) Melbourne

New Zealand inflation rose 4% over Q1, flat against market expectations, but higher than the RBNZ's most recent projections.

LATEST INSIGHT

MNI BRIEF: ECB Rate Cuts Must Continue Into '25-ECB's Villeroy

Bank of France Governor sees ECB easing into 2025, but can react to events in mid-east if material impact on economy, price outlook.

Political Risk

Declining Homicide Rate Could Defang Key Trump Campaign Attack

President Biden has been given a potential campaign boost after data showed that the homicide rate in major US cities is falling at the quickest pace in decades, reversing a trend which accelerated during the COVID-19 pandemic,

  • Axios notes: “Polls show crime is a top concern ahead of the 2024 election — and it's an issue where Republicans regularly edge Democrats. But falling homicide rates could take steam out of the crucial GOP advantage.”
  • Former President Donald Trump's campaign said in a statement in March: "In Joe Biden’s first year in office, twelve major cities broke all-time high murder records. Biden’s policies and rhetoric have enabled criminals – with crime spiking as a result... Since Biden took office, numerous cities have seen homicides hit new record levels. Other cities, including Washington, D.C. , have seen spikes in violent crime not experienced in decades."
  • The Pew Research Center noted ahead of the 2022 midterm elections: “Around six-in-ten registered voters (61%) say violent crime is very important when making their decision about who to vote for in this year’s congressional elections.”

Figure 1: Changes in Year-to-Date Reported Homicides in Most Populous US Cities

Source: Axios

Speaker Johnson's Proposal "Will Help" Get Aid To Ukraine, Kirby

White House National Security Council Spokesperson John Kirby has tentatively endorsed House Speaker Mike Johnson's (R-LA) four-bill-bundle proposal to fund Israel, Ukraine, and Indo-Pacific allies: "We still have to see the Speaker's proposal in more detail. The important thing is the House moves this week to help us get security assistance for Israel, Ukraine, and also for the Indo-Pacific. They need to move this week," Kirby told reporters aboard Air Force 1.

  • Kirby: "It does appear at first blush that the Speaker's proposals will in fact help us get aid [to Ukraine and Israel]," and cover the "immediate needs" of the countries.
  • Kirby says he won't go into detail about what President Biden discussed with Johnson in a recent call except that, "the President stressed very strongly that we've got to move this national security supplemental funding as soon as possible - we need to see the House move this week."
  • Johnson is expected to release the final text of the four-bill package today. He is under pressure from conservatives to attach policy provision to the final bills which could undermine their prospects of passing the Senate. If the final bills are relatively 'clean' there is a strong chance that the entire package could pass the House by late Friday with Democrat support.
  • Democrats could also move to insulate Johnson from any move byhardline conservatives to oust him if Johnson tees up a package which tracks closely with the Senate-passed USD$95 billion package.

Hardline Republicans Escalate Threat To Oust Speaker Johnson

House Speaker Mike Johnson (R-LA) has told reporters that he does not intend to resign following a declaration from Rep Thomas Massie (R-KY) that he will co-sponsor Rep Marjorie Taylor Greene's (R-GA) motion to vacate - the procedural maneuver hardliners used to oust former speaker Kevin McCarthy in October last year. Massie and Greene have both cited Johnson's compromise with Democrats on FY24 funding and his new plan to fund Ukraine as justification for removing him from the position.

  • Johnson: "I am not resigning... I regard myself as a war-time speaker ... I didn't think this would be an easy path."
  • Massie said in a statement on X: "I just told Mike Johnson in conference that I’m cosponsoring the Motion to Vacate that was introduced by [Greene]. He should pre-announce his resignation (as Boehner did), so we can pick a new Speaker without ever being without a GOP Speaker."
  • If Massie or Greene decide to trigger a vote to oust him, Democrats could step in a dismiss the motion. Notably, they did not do this to insulate McCarthy, citing a lack of trust. If Democrats help Johnson maintain the gavel it could make him a lame duck speaker further alienated from the right flank of his party and in a degraded position to move legislation or fundraise ahead of the general election.
  • The prevailing view suggests than the chaos which would follow another ousted speaker would be politically damaging for Republicans. Johnson also has a renewed endorsement from former President Donald Trump which provides him some cover.

MNI Interview With IMF's Tobias Adrian

  • MNI interviews the head of the International Monetary Fund's monetary and capital markets department Tobias Adrian -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com

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