A key coalition partner of Netanyahu is quitting, leaving him with minority in Israeli parliament
The political turmoil comes as Israel and Hamas are negotiating on a US-backed ceasefire proposal for Gaza.
While the shakeup in Netanyahu's government won't necessarily derail the talks, the Israeli leader will be more susceptible to the demands of his far-right coalition partners, who oppose ending the 21-month war while Hamas remains intact.
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Yahoo
3 minutes ago
- Yahoo
For Bond Dealers, It's Now All About Bills at Bessent's Treasury
(Bloomberg) -- Since Scott Bessent took the Treasury's helm in January, bond dealers have done a 180 on the key question about his issuance strategy in the $29 trillion market for US Treasuries. The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Budapest's Most Historic Site Gets a Controversial Rebuild Trump Administration Sues NYC Over Sanctuary City Policy At the start, the focus was how quickly he might ramp up sales of longer-term securities. That's after Bessent and other Republicans accused former Treasury Secretary Janet Yellen for artificially holding down sales of that kind of debt, and said it was an attempt to keep borrowing costs low before the election. Bessent quickly adopted the Yellen debt-management plan, however, and has repeatedly made clear he isn't about to boost issuance of notes and bonds because their yields are too high. Now the debate is about the limits of Treasury's bias to sell bills, which mature in up to a year. Dealers will be looking for clues in the Treasury Department's next formal update of debt-sales plans, due Wednesday. 'The commentary we've heard recently suggested that there isn't necessarily an urgency right now to start increasing long-end issuance, and that they can meet near-term needs with increased bill issuance,' Phoebe White, head of US inflation strategy at JPMorgan Chase & Co., said in a phone interview. For now, there's 'a backdrop where we have seen a lot of demand for bills,' including from the growth of money market funds, she said. But there are downsides to the Treasury relying more on bills, including higher volatility in interest payments as it rolls over maturing ones. President Donald Trump and his team say borrowing needs will shrink as growth picks up thanks to tax cuts enacted this month, as well as moves to scrap regulations and revive manufacturing. Plus there's rising revenue from tariffs. All of that in theory argues against boosting sales of long-term securities and locking in relatively high interest costs. The Treasury's latest gauge of how much it expects to borrow is due Monday afternoon. It's expected to almost double its previous estimate — mainly to account for a surge of bill sales needed to replenish the department's cash stockpile after Congress raised the debt limit earlier this month. Debt managers had to run down their cash balance while operating under the ceiling. Dealers expect a figure of $1 trillion or more for the July-September quarter. For next week's so-called quarterly refunding auctions, which include 3-, 10- and 30-year maturities, Wall Street expects no change from the past several quarters. That would leave the sales totaling $125 billion, made up of the following: $58 billion of 3-year notes on Aug. 5 $42 billion of 10-year notes on Aug. 6 $25 billion of 30-year bonds on Aug. 7 Forecasters predict outsize fiscal deficits for years to come, which would steadily increase the Treasury's need to issue debt. To prevent an over-reliance on bills, that means increasing sales of notes and bonds at some point. Dealers will be closely watching in Wednesday's statement for any tweak to the guidance that officials have had since January last year, that they plan to keep the size of those sales unchanged 'for at least the next several quarters.' If officials see the potential need to boost note and bond auctions starting in February 2026, they might remove the 'at least' wording from their guidance, White and her JPMorgan colleagues wrote in a recent note. But some dealers are betting on a later date. Bank of America Corp. this month scrapped its prediction that February 2026 would see the start of bigger note and bond auctions, now expecting the Treasury to hold off until 2027. Citigroup Inc.'s forecast is May 2026, with risk of a delay until later next year. The refunding announcement also may feature guidance on how much Bessent is prepared to allow bills outstanding to grow as a share of total US debt. If the Treasury continued to refrain from increasing note and bond issuance, the bill share would climb to 27% by 2028 — exceeding its peak in 2020, when sales were ramped up to pay for Covid relief — and to 41% by 2033, according to Citigroup Inc. strategists Alejandra Vazquez Plata and Jason Williams. They don't expect things to go that far, predicting the Treasury will likely have a 'soft cap' of around 25%. The Treasury Borrowing Advisory Committee, a panel of dealers, investors and other market participants, recommends the ratio should average around 20% over time, with 15% as a 'lower bound.' One thing to keep an eye on Wednesday is any 'charge' from the Treasury to the TBAC asking the panel to offer thoughts on broader trends in demand for Treasuries. JPMorgan's White said she's on the lookout for 'anything that would indicate that they're willing to let the weighted average maturity of the debt move shorter.' Buyback Program Bessent has repeatedly pointed to stablecoins as a new source of demand for bills, as new legislation mandates them to hold T-bills or other safe assets in reserve. The Federal Reserve, which has debated whether to skew its purchases toward bills, may be another one. Dealers will also be on watch for any news on the Treasury's program of buying back outstanding securities. The department in April said it was looking at 'enhancements' to that initiative, launched last year. Bessent drew attention to the program after a surge in Treasury market volatility triggered by concerns over Trump's tariff hikes. Barclays Plc strategists predict the Treasury will announce an increase in buybacks on Wednesday. Currently, buybacks are conducted to improve liquidity and aid the Treasury in its cash management. But Bloomberg Intelligence strategists Ira Jersey and Will Hoffman see the potential for a broader objective. The duo point out that Bessent has targeted 10-year yields — a benchmark for borrowing rates such as mortgages — and could deploy buybacks as a way to pressure them lower by cutting the average maturity of US debt. 'If the Trump administration believes long-term rates will fall with reduced supply of longer-term debt, this would be one way of testing that hypothesis,' they wrote. --With assistance from Alex Newman and Alexandra Harris. 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Chicago Tribune
4 minutes ago
- Chicago Tribune
Editorial: So is City Hall hiking property taxes or ruling them out?
There's going to be a Chicago property tax increase. Fooled ya'. Might the corporate head tax be revived instead? Yes. No. Wait! Chicago will impose a 'progressive revenue' solution to be named later. Say what? Mayor Brandon Johnson and the city's chief financial officer, Jill Jaworski, really didn't seem to have their stories straight last week as they sought to prepare Chicagoans for the difficult budget debate to come in the fall. First, Jaworski, speaking July 22 at a Bloomberg News event, said 'it was likely' the mayor's budget would include a proposed property tax increase alongside budget cuts in order to close an estimated $1.1 billion deficit for 2026. Asked about Jaworski's comments, Johnson at first didn't rule out a such an increase and, as per usual, blamed his predecessors for Chicago's budgetary woes. But on Thursday, two days after Jaworski's remarks, the mayor was singing a different tune. 'I will not be proposing a property tax increase in my budget,' he said, seemingly categorically. Seemingly. He said, as he has done many times in the past, that he would 'work hard to find progressive revenue' to help balance the city's books. Johnson didn't specify what progressive tax policies he would propose other than to say, 'the ultimate goal is to challenge those with means in this city, and quite frankly in this state, to pay their fair share.' Stop us if you've heard this one before. As Johnson prepared to take office following his surprise election win in 2023, progressive groups supporting his candidacy floated hundreds of millions in new taxes, with ideas ranging from a tax on financial trades to the reinstitution of the per-employee head tax on businesses and many others. Most of those new taxes would have needed, and would still need, state approval, and Gov. JB Pritzker along with numerous lawmakers quickly shot down the Johnson tax-bonanza agenda. For good reason, too. A state with such lagging economic performance as Illinois can't afford to be driving away more wealthy and middle-class people and businesses. Then Chicago voters themselves in 2024 rejected a Johnson-backed referendum to dramatically hike the tax on sales of property above $1 million, which likely would have raised apartment rents and further constricted our wheezing commercial real estate industry. So here we are. We're well past the halfway point of Johnson's term, and he's still knocking at the 'progressive taxation' door. We'll reserve judgment until we see precisely what the mayor has in mind. Maybe he and his team have devised some new plan not yet proposed (and rejected) that's worthy of consideration. We won't hold our breath. But it doesn't instill confidence that the mayor himself had to walk back his top financial aide's comments on property taxes a few days after she made them. Perhaps Jaworski was just floating a trial balloon, and Johnson got an earful in the two days between her remarks and when he effectively told reporters she'd spoken out of turn. Property tax hikes right now are a political third rail. Johnson found that out in the most humiliating way possible last year when the City Council unanimously rejected his budget, including a proposed $300 million property tax increase that broke one of Johnson's most noteworthy campaign promises. Attempts to win council support for a smaller hike went nowhere as well, and Johnson and aldermen patched together a budget at the eleventh hour with a hodgepodge of fee increases, business taxes and fines. So is a property tax hike in what is shaping up to be a more brutal budget year than last year's high-wire act really off the table? We don't know. But forgive us if we're skeptical that Johnson's cleanup of Jaworski's property-tax bombshell will be the last word on the subject.
New York Post
4 minutes ago
- New York Post
Mark Levine will reinvest in Israel Bonds as next NYC comptroller — reversing Brad Lander divestment
The leading candidate for Big Apple comptroller says he will reinvest millions of dollars of city pension funds into Israeli bonds — after current Comptroller Brad Lander divested from them. When Lander took office in 2022, the pension funds of city government workers and retirees that he oversees had $39.9 million of assets in Israeli bonds. When the bonds matured, Lander did not reinvest in them, in effect divesting the pension funds from bonds that New York City had invested in since the 1970s. Advertisement Brad Lander did not reinvest in Israeli bonds, despite it being a standard practice by the city since the 1970s Adam Gray for New York Post A campaign rep for Levine — Manhattan's borough president and the Democratic nominee for comptroller and thus likely next comptroller — said his boss will invest in Israel government bonds again if elected. 'We have a globally diversified portfolio, and that should include investments in Israel and Israel Bonds, which have paid solid dividends for 75 years,' Levine had said during the June comptroller primary-race debate with rival and Brooklyn Councilman, Justin Brannan. Advertisement 'We are now the only pension fund in America without that investment,' Levine said at the time. 'I think prudent management for global diversity should include investment in those assets.' Lander was criticized during his mayoral campaign for divesting from Israeli bonds. Foes have noted that he and Israel-bashing socialist buddy Zohran Mamdani cross-endorsed each other in the city's Democratic primary in June — a move that is credited with helping propel the far-left Mamdani well in front of the pack to clinch the party's nomination. Lander recently spelled out his divestment decision in a response letter to First Deputy Mayor Randy Mastro, who had ripped the divesting. Advertisement Lander had accused prior comptrollers of investing pension funds from unionized workers in Israeli bonds for political reasons, not for prudent returns. The Big Apple first invested $30 million in State of Israel Bonds in 1974 under former city Comptroller Harrison Goldin through its pension funds for educators. 'We are now the only pension fund in America without that investment,' Mark Levine (pictured) said during June's debate. 'I think prudent management for global diversity should include investment in those assets.' Pacific Press/LightRocket via Getty Images 'The decision to invest only in Israel bonds, when the funds held no other country's bonds, and to invest assets intended for short-term cash management in longer-term bond instruments, was a political decision, not a fiduciary one,' Lander said in his July 13 letter. Advertisement 'The City's pension fund holdings of Israel bonds amounted to $39,947,160 at the time I took office in January 2022. In January 2023, those bonds matured, and our office was faced with the choice of whether or not to purchase new ones. We consulted our guidelines and made the prudent decision to follow them, and therefore not to continue investing in the sovereign debt of just one country.' Lander, who is Jewish and a self-described Zionist, added, 'To summarize: We treat investments in Israel as we treat investments in any other country. No better, and no worse. 'The [Boycott, Divestment, Sanctions] Movement asks investors to treat Israel worse than other countries; I oppose this effort. You appear to be asking that the City's pension funds treat Israel better than all other countries. That would also be politically motivated, and inconsistent with fiduciary duty.' He then accused Mayor Eric Adams of using the city's divestment of Israeli bonds as a 'cynical ploy' in his desperate re-election campaign. But Lander's predecessor as comptroller, Scott Stringer, said Lander was out of line for claiming that Israeli bonds are not a worthy investment. 'Brad got busted for BDS'ing the pension system. He got caught, and now he has to own up to it,' Stringer told The Post. Stringer said he was infuriated with Lander for claiming Stringer and other prior comptrollers invested in Israeli bonds for political, not sound financial, reasons. Advertisement He said Israeli bonds had always been a sound investment and told Lander to 'f–k off. 'If you get busted, you can't be trusted,' Stringer said. Israeli bonds are considered a solid investment, accumulating about 5% returns on average a year, records show. The New York state pension system, run by state Comptroller Tom DiNapoli, has more than $360 million invested in the Jewish state.
