Bernanke Urges Fed to Adopt ‘Alternative’ Forecast Scenarios

U.S. President Donald Trump's sweeping tax bill failed in a procedural vote in a key congressional committee on Friday, as five Republicans rejected the package amid calls for deeper spending cuts, potentially delaying its passage in the House of Representatives.

The vote came despite Trump calling for Republicans to "UNITE behind" the legislation, saying on social media: "We don't need 'GRANDSTANDERS' in the Republican Party. STOP TALKING, AND GET IT DONE!"

Five of 21 Republicans on the House Budget Committee voted to block the measure, saying they would continue to withhold support unless Speaker Mike Johnson agreed to further cuts to the Medicaid healthcare program for lower-income Americans and the full repeal of green energy tax cuts implemented by Democrats.

The vote is likely a temporary setback for the measure in a Congress that is controlled by Trump's Republicans and so far has not rejected any of his legislative requests. But it could delay plans for a vote by the full House next week.

The measure would add trillions of dollars to the federal government's $36.2 trillion in debt.

House Budget Committee Chairman Jodey Arrington convened the panel by stressing the legislation's importance to voters who elected Trump to the White House and gave the party full control of Congress last November.

"They want common sense policies. And they want from all of us a commitment to putting America and Americans first. Let's give the people what they voted for," the Texas Republican said.

'WRITING CHECKS WE CANNOT CASH'

Republican Representatives Chip Roy, Ralph Norman, Andrew Clyde, Josh Brecheen and Lloyd Smucker joined all 16 Democrats on the committee in voting against the measure.

"We are writing checks we cannot cash and our children are going to pay the price. So, I am a 'no' on this bill unless serious reforms are made," Roy, of Texas, told the committee.

The lawmakers said they hoped to reach a deal with Johnson to amend the bill and enact Trump's tax cuts.

The legislation would extend tax cuts passed during Trump's first term. Congress' bipartisan Joint Tax Committee estimates the tax cuts would cost $3.72 trillion over a decade. Trump has highlighted measures including lifting taxes on tips and overtime that Republicans say would boost working-class Americans, while critics say the bill will offer more benefits to the wealthy.

Democrats condemned the legislation as a vehicle for giving billionaires tax cuts, while citing a projection from nonpartisan congressional researchers that proposed spending cuts to Medicaid and federally subsidized private health insurance available through the Affordable Care Act could lead to 8.6 million Americans losing health coverage.

"No other previous bill, no other previous law, no other previous event caused so many millions of Americans to lose their healthcare. Not even the Great Depression," said Representative Brendan Boyle, the committee's top Democrat.

The Republicans are split between three factions: moderates from Democratic-led states who want to raise a federal deduction for state and local taxes; hardliners demanding that a bigger SALT deduction be offset by deeper cuts to Medicaid and the full repeal of green energy tax credits; and other moderates determined to minimize Medicaid cuts.

The proposed legislation would impose work requirements on Medicaid beginning in 2029. Hardliners want those to begin immediately and have called for a sharp reduction in federal contributions to Medicaid benefits available to working-class people through the Affordable Care Act - an option vehemently opposed by Republican moderates.

Source: Reuters

Extravagant displays of opulence and adulation greeted U.S. President Donald Trump at every stage of his four-day swing through the Gulf, which wrapped up on Friday. His itineraries in Saudi Arabia, Qatar and the United Arab Emirates appeared tailor-made for a real-estate-developer-turned-president, who can be susceptible to flattery, transactional in his foreign policy dealings and is attracted to extreme wealth.

To the extent those displays were designed to curry favor with Trump, they very well might have worked. While the Gulf states announced trillions in potential investments in the U.S. during his visit, they also got plenty in return.

On Thursday, the U.S. agreed to partner with the UAE to build a massive artificial intelligence campus in that Gulf state. In a surprise move on Tuesday, Trump agreed to lift sanctions on Syria at the request of Saudi Crown Prince Mohammed bin Salman, even as some of Trump's own advisers recommended against rapprochement with Syria, whose new president was once an al-Qaeda commander.

"Oh, what I do for the crown prince!" the president gushed to the crowd at the investment conference in Riyadh where he announced the decision.

Trump's regional swing could serve as a template for other host nations looking for a way to the president's heart, analysts said. The treatment Trump received throughout the week seemed almost a global extension of what regularly plays out in Washington, where Cabinet members are quick to praise Trump's acumen and vision, and often outline the administration's accomplishments in superlative terms.

"They played their hand well," Laura Blumenfield, Middle East analyst at John Hopkins University's School of International Studies in Washington said of the Gulf state leaders. "The choreography of Trump's royal tour was impressive."

Trump left the Middle East without securing a ceasefire or renewal of humanitarian aid for Gaza, however. Democrats and good government watchdogs raised concerns about Trump's decision-making being swayed by the regal spectacle and whether his diplomatic efforts could be used to further his family's extensive business operations in the Arabian Peninsula.

"It feels like Trump is being played by some of these leaders with the ostentatious, ceremonial pomp," said Brett Bruen, a former foreign policy adviser to Democratic President Barack Obama and president of the Global Situation Room consultancy.

"A lot of this raises questions whether Trump is taking personal prizes or really advancing U.S interests in the region," he added.

The Trump administration has repeatedly said it is committed to transparency and that it complies with all ethics laws to avoid conflicts of interests.

"Countries in the Middle East are 'pulling out all the stops' because America is strong again," said Taylor Rogers, a White House spokesman. "Foreign leaders know President Trump is the dealmaker-in-chief whose peace through strength policies have restored America’s dominance."

ROYAL TREATMENT

The pomp and pageantry began before Trump even touched down in Saudi Arabia on Tuesday for the first stop of his trip. As Air Force One descended toward Riyadh, Saudi F-15 fighter jets appeared close alongside to escort the presidential plane. After the president walked down a lavender carpet, his motorcade was escorted to the Royal Court on a road lined by mounted Arabian horses.

Not to be outdone, Qatar gave Air Force One a fighter jet escort of its own as it descended into Doha on Wednesday. And instead of mere horses, the Qataris added camels into the mix, as well as Tesla Cybertrucks, which have become popular among some Trump supporters due to their affiliation with Tesla CEO Elon Musk, a close Trump adviser. A traditional dhow sailboat with an American flag sail bobbed in the nearby bay.

In Qatar's elaborate royal court, the Emiri Diwan, Trump gushed at the quality of the marble. Trump's own style tends heavily toward the white stone and gold leafing, elements that feature heavily at his Mar-a-Lago estate in Florida and which he has added to the White House since taking office.

The emir had previously offered Trump a luxury Boeing 747-8 plane to replace Air Force One, a gift that is raising constitutional questions and ethical concerns even from some fellow Republicans. And on Thursday, he offered Trump a series of personal compliments, albeit ones related to diplomacy rather than style.

"We are very excited," the emir said. "I know that you are a man of peace. I know that you want to bring peace to this region."

Trump, throughout the trip, was quick to offer compliments in return. "I like him a lot. I like him too much," Trump said of bin Salman, without mentioning the leader's alleged role in ordering the murder of U.S.-based Saudi journalist Jamal Khashoggi in 2018. Bin Salman has denied involvement in the killing and former President Joe Biden's administration determined that he had immunity from a lawsuit filed against him in the U.S.

UAE President Mohammed bin Zayed al Nahyan, Trump said later in the week, is a "magnificent man."

Upon landing in Abu Dhabi on Thursday for the last stop of his trip, Trump toured the massive, ornate Sheikh Zayed Grand Mosque with the emirate's crown prince. Trump marveled at its beauty and what he called "an incredible culture."

At the Qasr al Watan royal palace that evening, Sheikh Mohamed presented Trump with a final gift on his trip: the Order of Zayed.

The baroque pendant necklace, the country's highest civilian honor, is made of pure gold.

Source: Reuters

Nasdaq Builds on Weekly Surge as Inflation Eases and Tariff Truce Fuels Optimism

Daily E-mini Nasdaq 100 Index Futures

Which Nasdaq Stocks Are Leading the Charge Today?

Daily Adobe Inc

Daily CrowdStrike Holdings, Inc.

Are Semiconductors and Consumer Stocks Under Pressure?

Daily Applied Materials, Inc.

Daily Starbucks Corporation

Will Options Expiry Trigger a Late-Day Move?

What’s the Outlook for the Nasdaq Now?

Source: fxempire

source : Kitco

The London Metal Exchange is discussing imposing curbs on big positions that would outlaw the sort of outsized bets that have rocked the markets in recent months.

The LME, which hosts global benchmark prices for key industrial metals such as aluminum, copper and nickel, has been discussing the appropriate level for position limits in informal conversations with market participants, according to people familiar with the matter. It has suggested it could seek to prevent traders from taking positions in the nearby month’s contracts larger than the total inventory, the people said, asking not to be named as the talks are private.

The conversations come as responsibility for setting position limits in UK commodity markets is due to be transfered from the Financial Conduct Authority to individual exchanges from July 2026, according to a policy statement from the regulator earlier this year. The LME is likely to make a formal proposal on position limits to the market at some point before then, the people said.

At the same time, the LME has been rocked in recent months by the arrival of some of the world’s largest energy traders. They have made an aggressive push into metals markets after making tens of billions of dollars in profits in oil and gas trading in the wake of Russia’s full-scale invasion of Ukraine.

Vitol Group, Gunvor Group and Mercuria Energy Group Ltd. have all in recent months had positions on the LME that exceeded the total available inventory. Most recently, Mercuria built up a huge position in aluminum in a bet that any easing of sanctions against Moscow would tighten the market, Bloomberg reported this week.

While the LME has been in contact with each of the trading houses about their positions, there’s no rule to prevent traders amassing large bets in the market — indeed, it has been a feature of trading on the exchange for almost all of its 148-year history.

The FCA imposed position limits on UK commodity markets for the first time in 2018, but it set them at such high levels as to be largely irrelevant.

The position limit for aluminum in the nearby month’s contracts, for example, is equivalent to 1.19 million tons — more than four times currently available inventories. In nickel, the overall position limit of nearly 500,000 tons is far larger than the vast position built up by Chinese nickel company Tsingshan Holding Group Co. that triggered a short squeeze that almost destroyed the exchange in 2022.

The LME hasn’t yet decided where to set position limits, the people said, and any overly restrictive policy may have unintended consequences. A crucial question will be how to define the total inventory, the people said: the exchange currently publishes data on “on-warrant” stocks, “canceled” stocks that are in the LME system but have been requested for delivery, and “off-warrant” stocks that are outside the system but could be delivered.

An LME spokesperson said on Friday that the exchange is working on its implementation plan in response to the FCA’s final rules and guidance on reforming the commodity derivatives regulatory framework. “We will keep the market informed as we work towards the roll-out of the new framework on 6 July 2026.”

Source: Bloomberg Europe

Former Federal Reserve Chair Ben S. Bernanke urged the US central bank to provide the public a fuller explanation of its interest-rate decisions and a much richer examination of potential forecast scenarios.

“The publication of selected alternative scenarios and their implications could facilitate a subtle but important shift in the Fed’s communications strategy,” Bernanke said Friday in the text of a speech for a conference at the Fed’s headquarters in Washington.

That, he added, would allow policymakers “to provide policy guidance that is more explicitly contingent on how the economy evolves.”

Under Bernanke, the Fed tried and failed in 2012 to introduce a consensus forecast of economic conditions and interest rates. On Friday, Bernanke referred to that effort as “a terrific mess.”

But the central bank could release the Fed staff’s forecast, which is viewed as important by policymakers, and use that as a starting point for discussing alternative forecasts, he said.

“There really is a movement toward treating uncertainty in the forecast more seriously,” Bernanke said. “The only way to do that is to have a true forecast and the ability to construct alternative scenarios.”

The Fed, he said, might also release a summary of commentary from policymakers on what represents a “meaningful projection,” even if that falls short of a consensus.

“It doesn’t have to be 100% consensus,” he said, as it’s nearly impossible to have 19 people in perfect agreement. “But is it just a reasonable description of what the committee thinks? That’s a criteria that I think can be operationalized, and that’s important.”

More Explanation

The former chair criticized the Fed for providing relatively little context and explanation following its rate decisions.

Almost all other major central banks, he said in his prepared remarks, release “timely, detailed background information bearing on the policy decision.”

The former chair spoke at an event dedicated to the central bank’s ongoing review of its longer-run strategy — or framework — for implementing monetary policy. The framework serves as a guide for policymakers as they aim to meet the broad goals assigned by Congress to foster stable prices and maximize employment.

The Fed first published its Statement on Longer-Run Goals and Monetary Policy Strategy in 2012 when Bernanke was chair. It included the central bank’s first public declaration of an explicit inflation goal, which it set at 2%.

Source: Yahoo Finance