US, Ukraine Talks Resume Early Next Week
"Balance of Power" focuses on the intersection of politics and global business. On today's show, Dr. Rebecca Grant, Vice President of Defense Programs at the Lexington Institute, discusses Boeing winning a multi-billion dollar contract to design and build the next-generation fighter jet and states this new fighter jet should be able to prevent a war with China. Jane Harman, Former Chair of the Commissioner on National Defense Strategy, discusses what she expects Ukraine and the United States to speak about as the two countries are set to talk with one another early next week. (Source: Bloomberg)
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Yahoo
38 minutes ago
- Yahoo
Senate rejects effort to block arms sales over Trump's dealings with Qatar and UAE
WASHINGTON (AP) — Senate Republicans have blocked an effort by Democrats to temporarily block arms sales to Qatar and the United Arab Emirates in response to President Donald Trump's dealings in the region. Democrats forced two procedural votes Wednesday to protest Qatar's donation of a $400 million plane to be used as Air Force One and a $2 billion investment by a UAE-backed company using a Trump family-linked stablecoin, a form of cryptocurrency. Sen. Chris Murphy, who led the Democratic effort, said the U.S. Senate should not 'grease the wheels" for Trump. 'We can do that by voting to block these two arms sales to Qatar and to the UAE — not permanently, but until both countries commit to deny Trump's requests for personal enrichment as part of the bilateral relationship,' Murphy said. Trump's administration is still sorting out the legal arrangement for accepting a luxury jet from the Qatari royal family and how the plane would be modified so it is safe for the president, who has called the arrangement a 'no brainer' as a new Air Force One has faced delays at U.S.-based Boeing. Trump said he wouldn't fly around in the gifted Boeing 747 when his term ends, but Democrats, and even some Republicans, have strongly questioned the ethics of the arrangement. At a hearing on Wednesday, Defense Secretary Pete Hegseth refused to provide details on plans for his department to accept the jet. He said budgeting and schedules for security upgrades to turn the plane into the president's aircraft are classified. 'A memorandum of understanding remains to be signed,' Hegseth said. Democrats have also raised ethical questions about the Trump family's stake in World Liberty Financial, a cryptocurrency project that has launched its own stablecoin, USD1. Earlier this year, World Liberty announced an investment fund in the United Arab Emirates would be using $2 billion worth of USD1 to purchase a stake in Binance, the world's largest cryptocurrency exchange. Murphy forced the votes under a mechanism known as a joint resolution of disapproval that allows the Senate to reject arms sales. The procedural vote Wednesday blocked a Democratic motion to discharge the resolution from the Senate Foreign Relations Committee and move to an up-or-down vote on the Senate floor. The effort was mostly symbolic, as the measures would have had to pass both chambers of Congress and withstand any presidential veto to become law. But Murphy said the Senate should exercise its powers to oversee arms sales around the world. "We place immense trust in the president not to abuse these incredible authorities that are given to him," he said.
Miami Herald
an hour ago
- Miami Herald
Stocks sputter after surprising inflation, China trade news
The stock market needs a new catalyst. Until now, the S&P 500's rally since early April was built on the potential for sellers to be caught off guard by surprising trade deals. Since the benchmark index has rallied 21% after Trump paused reciprocal tariffs on April 9, fewer investors will likely be surprised by developments, and many may be disappointed with outcomes. The possibility that tariff deals may be baked into stock prices appeared when a softer-than-expected May inflation report, alongside what should've been positive China trade news, fell flat. The S&P 500 posted early gains on the news, but reversed to close lower by the end of trading. Related: CPI inflation report resets interest rate cut bets The culprit? While CPI showed inflation was relatively tame last month, most still believe tariffs will cause inflation to reassert itself later this year. Advancing China and the U.S. negotiations are encouraging, but President Trump's comments regarding China tariffs are disheartening. The "meh" reaction to the inflation and China trade news caught the attention of veteran hedge fund manager Doug Kass. Kass has been tracking the markets professionally since the 1970s, and he's the former research director for Leon Cooperman's Omega Advisors, one of the most famous hedge funds in history. After witnessing today's reaction to the news, Kass offered up a frank opinion that may frustrate some investors. Image source: Goodney/Bloomberg via Getty Images The Federal Reserve's mission is to balance inflation and unemployment. It does this by adjusting the Fed Funds Rate. When it increases rates, economic activity slows, crimping inflation but increasing unemployment. When it lowers rates, GDP expands, lowering unemployment but increasing inflation. The dual mandate means that the Fed is in a pickle this year. After the most hawkish monetary policy since the 1980s caused inflation to drop below 3% from over 8% in 2022, the Fed switched gears, cutting rates in September, November, and December to lower unemployment, which has risen to 4.2% from 3.4% in 2023. Related: Billionaire fund manager sends strong message on Fed Chair Powell's future Hopes were for more cuts in 2025, but Fed Chair Powell was forced to pause additional reductions amid sticky inflation and the threat of tariffs driving prices higher. As a result, many Wall Street economists have gone from expecting many cuts this year to none. The CPI report showed that inflation in May only inched up 0.1% month over month, less than the 0.2% predicted. However, headline CPI showed inflation of 2.4% year over year last month, up from 2.3% in April. Meanwhile, core CPI, excluding volatile energy and food prices, was up 2.8% in May, matching April. That's undoubtedly not barn-burning progress. Nevertheless, some latched onto the lower-than-expected increase as evidence that the tariff impact on inflation is overblown, helping stocks in early action. Also contributing to optimism was news out of London that a meeting between Chinese and U.S. officials, including Treasury Secretary Scott Bessent, had led to progress in uncorking supplies of rare earth minerals necessary for EVs and other next-gen technology. President Trump heralded the deal, saying, "OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES." More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs However, details were scant, and Trump threw some cold water onto hopes that a trade deal would ease tariffs on Chinese goods, which already currently stand near 55% all-in. "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%," he said on Truth Social. Doug Kass has seen more than his share of good and bad tapes. He's survived the 1970s inflation, 1980s skyrocketing interest rates, the S&L crisis, Internet boom and bust, the Great Recession, Covid, and 2022's bear market. Related: Fed official revamps interest-rate cut forecast for rest of this year His experience led to him correctly predicting this year's steep sell-off and his accurate bet that stocks would bounce in early April after the drop. He isn't convinced that the latest inflation progress is bullish for the S&P 500. "The market has likely already discounted a better than expected Core CPI," wrote Kass on TheStreet Pro. "Market participants may interpret this number as being less exciting for equities because companies/manufacturers are likely eating the higher costs/tariffs, leading to concerns about lower margins and profits over the balance of the year." Kass says that "swings in the trade balance" show importers stockpiled inventory ahead of Trump's April 2 "Liberation Day" tariff announcements. As a result, May data still reflects inventory brought in before tariffs hit. "When that inventory runs out, they will likely have to put through price hikes and inflation will heat up," said Kass. Kass is similarly unimpressed by the outcome of the China meeting. "The China/U.S. tariff meeting ended up being a complete non-event (with no evidence of lowering tariffs)," wrote Kass. Absent tariff relief, companies absorbing at least some additional costs will see earnings come under pressure. And since earnings growth is a cornerstone of stock prices and tariffs don't seem destined to retreat further anytime soon, there may be little impetus to support a rip-roaring rally. Related: Veteran fund manager revamps stock market forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Bloomberg
an hour ago
- Bloomberg
Morgan Stanley's Hornbach on Markets, Strategy
Matthew Hornbach, Head of Global Macro Strategy at Moragn Stanley, discusses his outlook for macro markets and investment strategy. He speaks with Haidi Stroud-Watts from the sidelines of the "Morgan Stanley Australia Summit" on "Bloomberg: The Asia Trade". (Source: Bloomberg)
