A few simple items to report from DC. The Federal Reserve Board is hinting that they will raise interest rates by 50 basis points in May. They began the year stating that 25 basis points would be enough however inflation indicators have emboldened the Fed to move quicker. The treasury markets moved substantially on the heels of Fed Governor Lael Brainard stating in an interview that it was paramount to get the inflation rate down and that they needed to do this with a sense of urgency. Brainard is not simply one of the seven Federal Reserve Board governors, but she is also set to become to the Vice Chair directly under Powell. She carries weight.
Russia has been removed from the list of countries that receive favorable treatment as far as trading is concerned. Is this favorable or unfavorable treatment? In trading between countries, countries can impose tariffs on one another when we bring in goods from them. The countries that are listed with most favored status means that they receive the lowest tariffs on their goods when we import them. The low tariff would encourage more companies to import those goods as they are cheaper than importing them from a country with higher tariffs associated with doing business hence unfavored. Russia was granted favored status in 2012 when they joined the World Trade Organization (WTO). When Congress passed these the votes were 420-3 in the House and 100-0 in the Senate. That is OVERWHELMING!!! The no votes in the House were cast by Marjorie Taylor Green (R,GA), Thomas Massie (R,KY) and Matt Gaetz (R, FL). Who knows what these three were thinking.
Midterm election are around the corner. As of now it appears that the House will flip to Republicans taking control. Historically speaking this is par for the course. Since World War II, in 17 of the 19 midterms, the party who was in the White House LOST the House of Representatives. The trend is also in place for the Senate however it is not as lopsided where the Senate lost seats in 13 of those 19 occurrences.
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