In sixth call since January, Putin tells Trump: Russia ‘will not step back from goals' in Ukraine
On the war in Ukraine, Putin's top foreign policy adviser Yuri Ushakov said Trump 'again emphasised the importance of a quick cessation of hostilities.' Putin, meanwhile, reiterated Moscow's position that it is ready for talks with Kyiv, but under conditions that would secure what he called Russia's 'goals' in Ukraine. These include Ukraine's withdrawal from its NATO bid and recognition of territory Russia has seized since its 2022 invasion.
Putin repeated claims that Russia invaded to fend off NATO expansion and defend Russian-speaking populations — assertions flatly rejected by Kyiv and the West.
While Thursday's call made no mention of recent US policy changes, it came amid the Pentagon's confirmation that it is pausing some weapons shipments to Ukraine to reassess military stockpiles. The delayed supplies reportedly include air defense missiles and precision-guided artillery.
On Iran, Ushakov said the Russian president stressed the need to resolve tensions 'by political and diplomatic means.' The call came just days after US airstrikes on June 22 targeted three locations inside Iran.
Ukrainian President Volodymyr Zelenskyy, speaking in Denmark after a meeting with EU leaders, said he expects to speak with Trump 'in the coming days' about the implications of the pause.
'I'm not sure that they have a lot of common ideas, common topics to talk [about], because they are very different people,' Zelenskyy said when asked what he expected from the Trump-Putin exchange.
The latest call adds to a string of resumed high-level contacts between Trump and Putin, signaling their shared interest in thawing US-Russia relations, which have deteriorated dramatically since Russia's invasion of Ukraine. The conversation also came just two days after Putin spoke directly with French President Emmanuel Macron — their first call in nearly three years.
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Mint
31 minutes ago
- Mint
Wall Street worries as crisis-level deficits become the government's default mode
U.S. budget deficits were already approaching $2 trillion when Republican lawmakers set out to extend and expand tax cuts this year. Interest rates were high and the bond market was jumpy, producing worrying spikes in borrowing costs. Republicans forged ahead anyway, defying warnings from Wall Street to Washington that they were pushing the country further down a dangerous fiscal path. On Thursday, the House voted in favor of the sprawling tax-and-spending bill that was passed on Tuesday by the Senate. The resulting legislation headed for President Trump's desk adds $3.4 trillion to federal deficits through 2034 compared with a scenario in which Congress did nothing, according to the Congressional Budget Office. The extent of the projected shortfall increased as the measure worked its way across Capitol Hill, as the Senate made some business tax breaks permanent. Economists, investors and politicians have often warned that the U.S.'s growing debt burden would punish future generations. The market has been willing to tolerate spikes in borrowing during crises such as a war or Covid, seeing it as a logical, and temporary, response to a sharp growth slowdown. What stands out now to those sounding the alarm the loudest is that America is bingeing on debt when there's no such emergency requiring it. The deficit as a share of the economy is already around the levels reached in the era of the 2008 financial crisis and the pandemic. Many investors are concluding that financial profligacy isn't a bug, but rather a feature of U.S. policymaking. 'The government is like a teenager with a credit card that has no limits until it has to be paid," said Bill Gross, founder of Pimco. ''Payment due' comes not with default but with a weak dollar and higher interest rates." Trump and his GOP backers in Congress dismiss those bleak projections and, armed with their own budget math, paint a very different fiscal reality. They say tax cuts will accelerate growth and, along with new tariffs and heavy cuts to social programs such as Medicaid, will actually put the nation on sounder financial footing. The long-term verdict might be rendered in U.S. bond markets. The U.S. borrows money by issuing Treasurys, and an oversupply of those bonds would drive up yields, which rise when prices fall. Because interest rates on other debt are linked to Treasury yields, that would also lift costs on mortgages, car loans and corporate bonds. The market has been calm lately. But it has sent warning flares about the fiscal trajectory, most recently in May when yields on 30-year bonds climbed close to a two-decade high. Some investors, meanwhile, are concerned that massive debt projections are weighing on the dollar, which just posted its biggest first-half decline since 1973. The deficit, or annual gap between government revenue and spending, was $1.8 trillion, or around 6% of gross domestic product, last fiscal year. Moody's estimates it will reach nearly 9% of GDP by 2035, pushing publicly held federal debt—or the sum of all the annual shortfalls—from a little under 100% of GDP now to more than 130%. That compares to the previous record of 106% in 1946. Ken Rogoff, a Harvard University professor and former chief economist for the International Monetary Fund, said the U.S. is leaving itself little room to go on a borrowing binge when it really needs to. 'We typically look to borrow 20% or 30% of GDP in these big crises," he said. 'It's not clear markets will tolerate that." Even if Congress wasn't adding new tax cuts this year, federal debt would grow from around $29 trillion to $50 trillion in 2034, according to the CBO. The bill's advance, though hardly unexpected on Wall Street, has dimmed budget hawks' already modest hopes that lawmakers would make deficit reduction more of a priority. Ray Dalio, founder of Bridgewater, warns that staying on the current path will ultimately lead to some mix of a bond-market slide, a severe economic contraction or an inflation-fueling intervention by the Federal Reserve. The GOP bill 'reflects a political system that favors indulging voters over prudence," he said. Trump says skyrocketing growth will avert any downsides. 'For all cost cutting Republicans, of which I am one, REMEMBER, you still have to get reelected," he wrote in a social-media post shortly before senators began voting on the bill earlier this week. 'Don't go too crazy! We will make it all up, times 10, with GROWTH, more than ever before." Members of Congress during the House vote on Thursday. The U.S. government borrows money to pay for the shortfall between what it collects in taxes and what it spends on programs, such as defense and Social Security, by issuing Treasury securities that mature over varying periods of time. Buyers of this debt range from foreign banks to hedge funds to everyday investors. In principle, Treasurys are subject to the forces of supply and demand, like any other item. If the government issues more Treasurys than investors want or need, it will need to win them over with higher interest rates. If investors are worried about that happening in the future, they will likely sell bonds now, causing an immediate jump in yields. Treasurys, though, have long been viewed as the ultimate safe investment, especially in rocky economic times, because they are backed by the world's richest country and are effectively guaranteed to be repaid at maturity. That has historically kept America's borrowing rates in check, even as the volume of debt grew. Yet deficit worries still go back a long way, in government and on Wall Street. Peter Peterson, the late co-founder of the Blackstone Group who also served as President Richard Nixon's secretary of commerce, became concerned when planning for a talk on President Ronald Reagan's budget in 1981. Its big increase in defense spending and substantial tax cuts didn't make sense to him, and he was especially worried about the looming costs of Social Security and other entitlement programs. 'To put the matter bluntly, Social Security is heading for a crash," he wrote in a 1982 essay so long that the New York Review of Books split it into two parts. That same year, Salomon Brothers chief economist Henry Kaufman, known as Dr. Doom for his pessimistic forecasts, warned that proposed tax cuts and the resulting deficits would effectively block recovery from an ongoing recession. Worries about the deficit flared up regularly in the decades that followed—taking a break in the 1990s when the Clinton administration briefly engineered a surplus. But the concerns were little more than minor impediments to a long bull market in bonds that dragged Treasury yields steadily lower. Rogoff, the Harvard professor, who with Carmen Reinhart wrote the 2009 book 'This Time Is Different: Eight Centuries of Financial Folly," has long argued that high levels of debt can weigh on growth. A 2012 paper he wrote with Reinhart and her husband, Vincent Reinhart, found that for advanced economies since 1800, debt levels above 90% of GDP corresponded to significantly lower levels of growth. The U.S. shot past that 90% threshold when the government spent massively in its efforts to bolster the economy during the pandemic. The overall level of America's GDP is significantly higher than what forecasters on the eve of the pandemic expected it would be in 2025, but Rogoff still thinks that at some level deficits matter. 'The appetite for U.S. debt may be very large, but it's clearly not infinite," he said. The Department of Treasury building in Washington. Nearly a third of publicly held U.S. debt is owned by foreigners, including foreign central banks. If they start worrying more about America's large debt load, they could become less willing holders. A wholesale dumping of U.S. debt by foreigners—a doomsday scenario—is extremely unlikely, according to Jeremy Stein, a Harvard economist who was a Fed governor from 2012 to 2014. 'But I wouldn't be surprised if, over the next couple of years, as their portfolios roll off and they have to reinvest, they start shifting that reinvestment more towards, say, Europe or German bonds," he said. Stein also worries that as the supply of Treasurys increases, hedge funds will become even bigger players in the market for U.S. debt. That could raise the odds of market disruptions, because fast-money traders occasionally run into problems that force them to sell. A mix of factors has created the current fiscal imbalance, including recessions, an aging population and rising federal assistance to households. Those spending policies were largely championed by Democrats. Republicans, meanwhile, have led the charge in cutting taxes. This year's budget negotiations revealed fissures among Republicans, with some expressing more concern about deficits than others. With the 2017 tax cuts set to expire at the end of the year, many in the party argued that an extension shouldn't count as a deficit increase because it was merely a continuation of current policy. Others, though, opposed that approach, citing concerns about national debt. House conservatives, led by Reps. Jodey Arrington (R., Texas) and Lloyd Smucker (R., Pa.), along with others such as Rep. Chip Roy (R., Texas), forced the House's budget framework to link tax cuts and spending cuts, with no more than a $2.5 trillion gap between them. By that approach, if the House could find $2 trillion in spending cuts, it could have $4.5 trillion in tax cuts. If it could only find $1.5 trillion, the tax cuts would have to shrink, too. 'We can't continue to have quote, a free lunch, by just saying that every single tax cut pays for itself," Roy said in an April interview. The House, on May 22, passed a version of the tax bill that adhered to those demands. CBO estimated that it would cost $2.4 trillion over a decade. In June, 38 Republicans led by Smucker signed a letter saying they wouldn't support legislation coming back from the Senate that violated their framework. Doing so, they wrote, 'would invite higher borrowing costs and undermine the economic growth that Americans need." In the end, though, it is estimated the Senate's version of the legislation would add $1 trillion more to the deficit over the next 10 years than the House bill—well above what those House Republicans said they would accept. All of them voted for it anyway on Thursday. Johnson showed the tally of the vote in the House on Thursday. The question of how much deficits matter ultimately depends on the bond market—and the corresponding effect on borrowing costs for businesses and consumers. Worries about government borrowing have already caused a couple of selloffs in Treasurys over the past two years. One came two summers ago, when the Treasury Department announced that it would need to borrow more than investors had expected in the coming months. Another occurred in May, after Moody's became the last major ratings firm to downgrade the U.S. to below triple-A. In both cases, the selloffs were temporary. Bond prices rebounded and yields fell, suggesting to some analysts that investors are only sporadically worried about deficits. Others, though, note that yields on longer-term Treasurys, in particular, are higher than what would be expected based just on the projected path of short-term rates set by the Fed. That extra yield, known on Wall Street as a term premium, can only be estimated. But one popular estimate, published by the Federal Reserve Bank of New York, indicates the premium for the 10-year Treasury note has reached its highest level since 2014. Deficits are 'absolutely at the back of anybody's mind who's buying anything" other than the shortest-term Treasurys, said Priya Misra, a fixed income portfolio manager at J.P. Morgan Asset Management. 'You have to think about how much you want to get paid up for a fairly unsustainable debt trajectory." Deficits are still not the biggest influence on yields, which are largely determined by economic data and investors' expectations for Fed policy. A run of mild inflation data has helped bring yields lower recently. Investors also say that the Trump administration has ways it could mitigate the impact of deficits on the market. The most meaningful is its ability to lean more on ultrashort-term debt to meet coming borrowing needs, thereby minimizing pressure on longer-term bonds, which matter more for consumer and business borrowing costs. The administration has strongly suggested it intends to do that by leaving the sizes of longer-term debt auctions unchanged at least through the end of the year. When it does come time to increase auction sizes, many analysts expect the Treasury Department to mostly focus on debt that matures in just two to seven years. If demand is stronger for shorter-term bonds, it makes sense to 'just give the investors what they want," said Blake Gwinn, head of U.S. rates strategy at RBC Capital Markets. Write to Sam Goldfarb at and Justin Lahart at
Hans India
35 minutes ago
- Hans India
We'll cross the bridge when we get there
Washington: India is engaging with American lawmakers over concerns surrounding a new Russia sanctions bill introduced in the US Congress, Foreign Minister S Jaishankar said on Wednesday. The bill, backed by Republican Senator Lindsey Graham, seeks to impose 500 per cent tariffs on countries-- including India and China-- that continue to trade with Moscow even after Russia's full-scale invasion of Ukraine three years ago. When asked about potential implications of the bill, Jaishankar said, India will "cross that bridge when we come to it." "Regarding Senator Lindsey Graham's bill, any development which is happening in the US Congress is of interest to us if it impacts our interest or could impact our interest," the minister said in a press conference in Washington. "Our concerns and our interests on energy, security have been made conversant to him (Lindsey Graham). So, we'll then have to cross that bridge when we come to it. If we come to it," he added. Graham, who is sponsoring a tough new sanctions bill on Russia, said the legislation aims to pressure countries like India and China into buying Russian oil and other goods to weaken Moscow's war economy and push Russian President Vladimir Putin to the negotiating table on Ukraine and give Trump "a tool" to bring that about. Amid Western sanctions, countries like India and China have continued buying discounted Russian oil, making them targets of the proposed legislation. India, the world's third-largest oil-importing and consuming nation, traditionally sourced its oil from the Middle East. However, it began importing a large volume of oil from Russia soon after the invasion of Ukraine in February 2022. This was primarily because Russian oil was available at a significant discount to other international benchmarks due to Western sanctions and some European countries shunning purchases.
Indian Express
43 minutes ago
- Indian Express
It makes the world more dangerous
In the mid-1950s, Israel's first prime minister, David Ben-Gurion, initiated the country's nuclear journey. Amidst stiff opposition from its principal supporter, the United States, and with discreet help from France, Tel Aviv built its nuclear programme by the end of the 1960s. Today, Israel is widely known as a non-declared nuclear weapons state. This exclusive status is often compared to Iran's nuclear programme of today, which was targeted by US President Donald Trump on June 22 as B-2 stealth bombers of the US Air Force dropped 14,000 kg bunker-buster bombs on three of the country's nuclear sites — Fordow, Natanz, and Isfahan. Iran's nuclear programme has been the centre of delicate political brinkmanship for years. It began under the rule of the former pro-West Shah of Iran, Mohammed Reza Pahlavi, and was pitched as civilian in nature, developed around former US President Dwight D Eisenhower's 'Atoms for Peace' initiative. Tehran ratified the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) in 1970, committing to not attaining nuclear weapon capabilities. All its Arab neighbours are also signatories to the NPT. Internationally, only a handful of nations, including Israel, India, and Pakistan, remain outside the agreement's ambit. In 2003, Iran's Supreme Leader, Ayatollah Khamenei, issued a fatwa against nuclear weapons. This, within Iranian polity, is seen as strong an indictment against nuclear weapons as possible coming straight from the ideological leadership. But today, Iran may be on the cusp of exiting the NPT. A broader nuclearisation of West Asia has been a subject of discussion for many years, and in more contemporary times, Iran has been at the centre of this. Tehran's nuclear brinkmanship could arguably be more related to protecting and sustaining the political system set up post the 1979 Islamic Revolution than the bomb itself. It used this strategy to pull in Western powers, negotiate, and mainstream the state back into the international system via the Joint Comprehensive Plan of Action (JCPOA) in 2015. However, questions over its enrichment activities under the NPT have lingered for years, raising suspicion, fear, and anxiety about Iran's intent, especially in Israel. Over the years, Israel has publicly raised fears that Iran was rushing towards a nuclear weapon as it pushed back against the JCPOA. Under Trump, Israel eventually found success, as whispers about intelligence suggesting Iran had materials to build nine warheads reached Trump's ears. Trump ignored even his own intelligence apparatus, which had aired doubts. The Israel-Iran conflict is now central to the region's security debate. While speculation continues over the kind of damage the US air strikes have really caused, and how much of a setback has been dealt to potential weaponisation, the path forward could also accelerate nuclearisation instead of deterring it. The impact of nuclear weapons dictating the strategic calculus in West Asia will not be geographically limited — it will be global. Arguments around the validity of nuclear weapons and their relationship to the protection of sovereignty and power cannot be dismissed. Especially at a time when international norms put in place predominantly by the West after World War II face a potential collapse. The latter is giving rise to a strategic calculus of 'might is right' for the future. And there is no better deterrence than a nuclear weapon. Recently, North Korea has proved this. Whether Iran remains adamant on gaining nuclear deterrence is an open-ended question after the recent strikes. Israel will do its best to preserve its newfound status as the region's primary military power. Irrespective of who holds power in Tehran — moderates, conservatives or ultra-conservatives — the probability of a unanimous view that nuclear weaponisation is the only way to prevent a repeat of June 2025 may solidify. And if this happens, a domino effect could play out where nuclear shields — one Arab, one Iranian, and a publicly acknowledged Israeli one — cannot be discounted. Former prime minister of Pakistan Zulfikar Ali Bhutto perhaps best described a cornered state's vision of what nuclear capabilities can provide and how it can be marketed to a population. In 1977, according to various accounts, Bhutto said, 'A Jewish bomb, a Christian bomb, now a Hindu bomb. Why not an Islamic bomb?' Pakistan is the only nuclear Islamic country, and its know-how in this regard is widely accepted to be transferable to its Arab partners such as Saudi Arabia if need be. In the end, attaining nuclear weapons in today's day and age is not a technical challenge but a political decision that has long-lasting ramifications. West Asia should make such a decision cautiously and wisely. The writer is deputy director and fellow, Strategic Studies Programme, Observer Research Foundation
