The Federal Reserve is divided over how to control high inflation as interest rate worries continue to plague the economy. Lorie Logan, president of the Federal Reserve Bank of Dallas, warned that inflation still posed a threat, suggesting that the chances of a rate increase when the next policymaker meeting is held was far from certain. Furthermore, measures of underlying inflation pressures are showing less improvement, with core inflation measuring 5.5% over April and March, while it has not fallen at all since January. However, not every Fed official agrees that rate hikes should continue, with some suggesting the need for an extended pause in the policy. They argue that giving the increases the chance to exert their full effect will boost growth without risking inflation. Chair Jerome Powell is to speak at a Federal Reserve economics conference on Friday, but it is not known whether he will address the Fed’s possible next moves.
Most Gulf stock markets fell on concerns surrounding the US debt-ceiling negotiations, with Dubai's main share index dropping by 0.3%. Meanwhile, Saudi Arabia's benchmark index rose by 0.6%, and Abu Dhabi's index fell 0.2%. The Qatari benchmark finished 0.4% lower, and Egypt's blue-chip index declined by 0.5%. The stock market in Dubai may now be affected as traders shift to caution while US issues continue to weigh on expectations.
Papua New Guinea will sign a defence cooperation agreement and maritime surveillance pact with the US, said Prime Minister James Marape. The deal follows agreements signed between China and Papua New Guinea in April, which included a memorandum of understanding on the Belt and Road Initiative. The US plan would see American troops gain access to PNG ports and airports in return for access to satellite surveillance. Joe Biden's administration has recently been placing more importance on relations with the Pacific, over concerns about China’s increasing aggression in the region.
Leaders of the G7 nations, including the US, the UK, Canada, France, Germany and Japan, have met to discuss tougher sanctions against Russia over the ongoing conflict in Ukraine. Economic coercion by China was also on the agenda, with the group looking at ways to reduce strategic dependence on imports and diversify supply chains and markets. Discussions also centred on tighter regulation and a range of new measures on Moscow's roughly $5bn annual trade in diamonds. The three-day summit continues today and includes representatives of the European Union.
The Biden administration is seeking to approve renewable-energy projects on America's public lands in a bid to decarbonise fast enough to avoid the worst effects of climate change. America's Bureau of Land Management (BLM), which has long issued permits for oil and gas drilling, manages 245 million acres of America's lands. The BLM's underfunding and staff shortages, as well as land-use conflicts arising from an increasingly difficult mission to balance extraction, recreation and conservation as well as deployments of renewables have made achieving its clean-energy transition goal challenging.
Republican congresswoman Marjorie Taylor Greene has filed articles of impeachment against President Joe Biden, but the move is unlikely to succeed given the thin majority and deep divisions in the House of Representatives. Greene, who has promoted a range of conspiracies, claimed that Biden compromising national security by refusing to enforce immigration laws and allowing illegal immigration into the country. The politician also filed impeachment articles against Attorney General Merrick Garland, FBI Director Christopher Wray, US Attorney Matthew Graves, and Homeland Security Secretary Alejandro Mayorkas.
US Vice President Kamala Harris and Lael Brainard, President Joe Biden’s top economic adviser, have warned that a US debt default would send the economy into a recession. In a conference call for Democratic activists, the pair urged the activists to contact lawmakers to express opposition to a debt default that could be less than two weeks away. Harris and Brainard said that the Biden negotiating team had been instructed not to agree to any proposals from Republicans on lifting the debt ceiling which would take healthcare away from Americans or push them into poverty.
The US has never defaulted on debts, causing "massive uncertainty" to surround the possibility, according to Shai Akabas, director of economic policy at the Bipartisan Policy Center. The government would be forced to prioritise who gets paid and when in the event of a default, which would be a "very different situation" from a government shutdown, he said. Meanwhile, President Joe Biden, Treasury Secretary Janet Yellen and economists have warned that a default would have "catastrophic" consequences, leading to job losses, unpaid federal government payments, "widespread suffering" and disruption to the air traffic control and law enforcement systems, among others.
Eleven US Senate Democrats, led by independent Bernie Sanders, are urging President Biden to be prepared to use the country's 14th Amendment to the Constitution to avoid a looming debt default should negotiations with Republicans fail. In a letter, they requested that Biden prepare to use the amendment, which states that "the validity of the public debt of the United States… shall not be questioned" as Republicans in Congress are "not acting in good faith". The periodic lifting of the federal government's borrowing limit is critical in enabling the government to make its necessary expenditures.
US President Joe Biden's latest judicial nominee, former New Hampshire Attorney General Michael Delaney, has appeared to be withdrawn after opposition from both Democratic and Republican senators. While Delaney's nomination had been on the Senate Judiciary Committee's agenda for a month, it never progressed to a vote due to a lack of support. Democratic concerns over a legal brief Delaney signed in defence of a repealed law requiring parents be notified before their minor child has an abortion have contributed to the opposition to his nomination.
Several US cities and California will benefit from federal help with the All Inside initiative in getting the homeless into permanent housing. The state of California, which has the highest number of homeless people in the country, will receive the tailored support for two years from US government departments, local agencies and private businesses. The program seeks to provide knowledge, resources and funding, in addition to help in identifying where regulations can be loosened to help those without a home find shelter more quickly.
US Democratic Party lawmakers are demanding accountability for the killing of Al Jazeera journalist Shireen Abu Akleh, who was fatally shot while covering a raid on the occupied West Bank city of Jenin in May last year. The lawmakers, joined by the journalist’s family, have renewed calls for an independent investigation into Abu Akleh’s death, with some proposing the reintroduction of bills specifying US involvement in Israeli rights violations in Palestine. The US provides $3.8bn in aid to Israel yearly and previously opposed efforts to seek accountability for Abu Akleh at the International Criminal Court.
Polling has closed for the Northern Ireland local elections, with counting to begin on May 7. The contest, the first since last year's Assembly elections, featured 462 positions across 11 councils. The election has taken place amid the backdrop of the Stormont stalemate, which has meant that powersharing institutions have not been operational due to the Democratic Unionist Party protesting against post-Brexit trade plans. Sinn Fein, which currently holds 105 councillors, is reportedly hoping to see gains in new areas. None of the parties will hold overall control of the election result.
As China, Russia, and Trump challenge the old rules of global politics, G7 aims to shore them up
CNN
23-05-18 20:47
This year’s G7 summit in Japan will focus on dealing with the war in Ukraine, the threat from China, climate change and international trade, all in an effort to solidify international rules and practices which are under serious threat. Similarly, although less prominently, the G7 will also deal with the struggle of many Western nations to resist populist, anti-democratic movements which may hinder their efforts to hold on to power that has become increasingly fragile. These problems are causing a new “Great Game” which could write new global rules over the course of decades.
The world's most advanced democracies have gathered for the Group of Seven (G7) summit in Hiroshima, Japan, to discuss heavy sanctions against Russia, to prevent conflict with China and to pay homage to the costs of war. The summit is set to feature heavily on strategies to end Russia's aggression in Ukraine and cut Ukraine's overreliance on Russian energy exports. The G7 countries will discuss how to better trace diamonds to cut trade in the precious gems from Russia, and how best to discourage global investment in China, without alienating the country completely.
Six months after announcing a $20bn energy transition deal to curb greenhouse gas emissions and reach net-zero targets a decade early, Indonesia remains in a stalemate with its partners, voiced its frustration with their perceived lack of commitment and received nothing more than a loan from the US for a refinery. The Export-Import Bank, a government agency that assists US goods and services exports, will lend $99.7m to help fund the expansion of Pertamina’s refinery in East Kalimantan province, a move that counteracts the US pledge to end funding fossil fuel projects abroad. The loan also risks increasing Indonesia’s reliance on fossil fuels at the expense of its environmental ambitions. Indonesia was the fifth biggest greenhouse gas emitter worldwide due to deforestation and coal plants, which generated 61% of the country’s power, and renewable energy accounts for only 12% of national power capacity. Ministers from Japan, Canada, France, Germany, Italy, Britain, Norway, Denmark, and the EU were among the partners in the Just Energy Transition Partnership.
US President Joe Biden's cancellation of his trip to Australia, and the Quad leaders meeting in Sydney, has drawn accusations that the US is unreliable and lacking commitment in the Indo-Pacific. Diplomatically, Beijing might try to make allegations against Biden’s decision to cancel the trip. However, if international relations and strategic policy was based primarily on whether heads of state attend foreign summits, then China would really be in trouble. The Quad will go from strength to strength because there is a strategic need and appetite for it, and Xi Jinping will not be breathing a sigh of relief. Beyond Beijing’s increasing belligerence, China’s aims present a comprehensive challenge to the US-led liberal order in everything from diplomacy, trade, technology, military power to the promotion of authoritarian values and ways of doing business.
Leaders of the world's seven most powerful democracies will attend the G7 summit in Hiroshima to discuss issues including economic policy, security, climate change, energy and gender. The G7 leaders will also host discussions with leaders outside the G7, such as Vietnamese Prime Minister Tan Dung, to address the rise of developing nations. Chinese military aggression from North Korea and Russia will be among the topics to be covered. Pledges of continuing support for Ukraine will see Ukrainian President Volodymyr Zelensky join the session via the internet, and there will also be a focus on Beijing's increasing threats against Taiwan.
Leaders of the Group of Seven advanced economies (G7) have discussed how to build support for a “strong response to economic coercion” by China. Ahead of a summit in Hiroshima, US officials predicted a joint response from all countries, which will involve protecting technologies in areas of national security. The EU has also been seeking to create support for a strategy against economic coercion, to “derisk” rather than disconnect from, China. However, all seven members of the G7 require a positive relationship with the world’s second-largest economy. The US imported goods amounting to $537bn from China last year, while its businesses invested nearly $120bn in China. EU investments in China over the course of two decades amounted to over $140bn. In the face of criticisms from the US, China’s Foreign Ministry spokesman Wang Wenbin argued that the US was the chief culprit in the coercion of China.
The US dollar is close to a six-month peak against the yen as a result of rising US Treasury yields and optimism surrounding debt ceiling talks between President Biden and US Congressional Majority Leader Kevin McCarthy. Previous fears over an unprecedented US debt default were calmed, leading markets to speculate about where US interest rates may head. US data showing potential for a tight US labour market contributed to expectations that the Federal Reserve would deliver another rate hike in a bid to lessen inflation. Two Fed policymakers have said US inflation is not dropping quickly enough for the central bank to halt its interest rate hike campaign.
