Aurelia Butler

ORLANDO, Florida (Reuters) -Fed policymakers on Wednesday kept their 2024 U.S. interest rate projection unchanged, but the floor for rates once cuts start is moving higher.In their quarterly Summary of Economic Projections, officials raised the median outlook for 2025 and 2026, and more importantly, increased their longer-run median interest rate outlook above 2.5% for the first time in five years. The median 2025 and 2026 rate views were raised by three tenths of one percent to 2.9% and 3.1%, respectively, and the longer-run rate was lifted by one tenth of a percentage point to 2.6%.As the Fed maintained its long-run inflation projection at its 2% target, this implies a slight increase in what policymakers deem to be the neutral real rate of interest, or ‘R-star’, to 0.6% from 0.5%. These were small changes, particularly to the longer run projection, but they could be significant. Collectively, they show the Fed recognizes that policy needs to be tighter for longer in the post-pandemic world to get inflation back down to target and keep it there. Seven Fed officials now see a neutral rate of 2.9% or higher, compared with four in December.Another way of looking at it, with growth consistently surprising on the upside, the post-pandemic U.S. economy is much less responsive to interest rate hikes than it was before March 2020. These are hardly new revelations – rates futures markets have for some time priced in a higher terminal rate than that implied in the SEP projections – but the highest neutral rate outlook since 2018 is a marker.The question now is whether that gap between the market-based and Fed view for the terminal rate, the policy rate once the easing cycle ends, begins to converge. “We’re on a higher glide path,” said Gregory Daco, chief economist at EY. “There’s a more consistent view between the market and the Fed on ending the easing cycle at a level that is higher than what had been consistent with previous cycles.”BABY STEPSFed Chair Jerome Powell downplayed the new neutral rate projection, calling the move “modest” and noting that the long-term horizon is shrouded in huge uncertainty. In addition structural factors like demographics, productivity trends and cross-border capital flows help determine ‘R-star’, and the pace of change in these can be glacial. But Powell did say his “instinct” is that interest rates will not return to pre-pandemic low levels. Again, this is not a particularly revelatory position but it does chime with what the bond and rates markets have been signaling recently.Breakeven inflation rates on 10- and 30-year inflation-linked Treasury bonds are hovering around 2.3% and drifting closer to 2.5%, a sign that bond traders are not fully convinced the Fed will get inflation back down to target.Interest rate futures currently imply a terminal rate of 3.7% by the end of 2026, a good bit higher than the Fed’s projected 3.1% over the same time horizon, never mind the long-run neutral view of 2.6%. With growth running hotter than nearly all forecasts and inflation proving stickier than Fed officials would like, it’s more likely that any convergence will see the Fed’s rate view drift towards the market’s rather than the other way around.”There is still a clear difference between the market and the Fed in terms of where the terminal rate will land,” says Charlie Ripley, senior investment strategist at Allianz (ETR:ALVG) Investment Management.”The main implication (of this) is that a policy rate set lower than the natural rate for a longer period of time could bring on unintended price instability or unwanted inflation.”The first step to closing that gap was taken on Wednesday. It may not be the last.(The opinions expressed here are those of the author, a columnist for Reuters.)(By Jamie McGeeverEditing by Shri Navaratnam) More

UBS expects a 25 basis point (bps) cut in June, followed by two additional 25 bps of cuts each in September and December, in line with brokerages including J.P. Morgan and Goldman Sachs, leaving its target range for the federal funds rate at 4.50%-4.75% by the year-end. Fed Chair Jerome Powell said on Wednesday recent high inflation readings in the U.S. had not changed the underlying “story” of slowly easing price pressures and affirmed that solid economic growth will continue.UBS also increased its 2024 core personal consumption expenditure (PCE) inflation forecast – the Fed’s preferred gauge for inflation – by about 0.4 percentage point to 2.3%. “We still expect inflation is on a bumpy path lower, but a touch slower than before,” UBS economists said in a note.The brokerage now forecasts the United States’ gross domestic product (GDP) to grow 1.2% this year while still expecting a slowdown. The Fed’s new quarterly economic projections showed officials expect the economy to grow 2.1% in 2024.For 2025, UBS forecasts the federal funds rate to move lower to 3.00%-3.25%. More

This article is an on-site version of Martin Sandbu’s Free Lunch newsletter. Sign up here to get the newsletter sent straight to your inbox every ThursdayGreetings. The big news in central banking this week was the Bank of Japan’s move to lift its short-term interest rate above zero and stop targeting long-term rates altogether. There has been a lot of reaction, mostly in the form of a sigh of relief at “the end of the global experiment with negative interest rates”, in the words of the Wall Street Journal. As I spell out below, this misses the point in many ways.But first, let’s check in on the latest news on a topic I am quite relentless about here at Free Lunch: how to make Russia pay for its destruction in Ukraine. (ICYMI, my most recent analysis was in last week’s column.) Josep Borrell, the EU’s foreign policy supremo, claims support from the bloc’s foreign ministers for using most of Euroclear’s profits from blocked Russian state assets on weapons for Ukraine. Predictably enough, Moscow makes noises — which some Europeans unfortunately believe, too — that a windfall tax on a Belgian company will damage the credibility of the euro.Let’s first get one thing out of the way: there isn’t much important to be said about the BoJ’s new monetary stance itself. It is a negligible shift for a central bank to raise the short-term target from minus 0.1 per cent to a zero to 0.1 per cent range, and abandon a cap on long-term rates only to promise to counteract any “rapid rise” in them and continue to buy long-term bonds in the same amount as before. For the details, read the FT’s reporting on the decision or the BoJ’s own six-page statement.For reasons I set out below, I also think it’s unfortunate to greet the shift from just below to just above zero as somehow symbolic or different from any other 0.1 to 0.2 percentage point tightening. Instead, I think the policy move is an opportunity to reflect on how quietly influential Japanese monetary policy has been on the rest of the world for the last quarter of a century. The BoJ was not the first to introduce negative interest rates (that was, briefly, Sweden, and later Denmark and the European Central Bank). But it pioneered ZIRP — zero interest rate policy — and was long seen as an aberration, a monetary cabinet of curiosities of sorts, for doing so.The exoticisation of Japan went beyond the central bank to the whole economy, which was long seen in the west as an idiosyncratic case whose bizarre economic phenomena — persistently weak inflation, a shrinking working-age population, slow growth and public debt accumulating beyond anything anyone thought sustainable — could happen in theory but not, anywhere else, in practice. Few expected that within a decade or so, every country would look Japanese. Nor did they expect that apart from foreshadowing the problems, Japanese policymakers would also prepare many of the solutions.In his fabulously titled 1998 article (“It’s Baaack!”), Paul Krugman analysed Japan as suffering from a 1930s-style “liquidity trap”. This is a situation where interest rates hit zero, and further monetary stimulus has no effect. Because — so it is assumed — interest rates cannot go below the “zero lower bound”, any additional money issued by the central bank is simply hoarded by savers, without creating additional incentives for investment or consumption. The implication is that monetary policy becomes impotent (like “pushing on a string”) and only fiscal stimulus can get the economy back to growth.The premise of the argument was, of course, wrong. Central bank interest rates can go negative, and all the arguments against them have proved unconvincing. Central banks including the BoJ have shown that one can remove the incentive to hoard cash to avoid negative rates by applying different rates to different “tiers” of commercial banks’ reserves. And as the ECB’s own assessment shows, taking interest rates below zero has pretty much the same effects as lowering rates while they are still positive. Rate cuts below zero are, in other words, just rate cuts. The specialness of zero was always a superstition.The BoJ’s role in demonstrating this is largely, but not entirely, positive. By going to zero first, Japanese central bankers made it easier for others to follow suit, putting other central banks on the threshold of breaking through the supposed zero “bound”. What is more, ZIRP was not the BoJ’s only contribution to the central banking arsenal. It pioneered large-scale government bond purchases, or “quantitative easing”, as well. After the 2008 global financial crisis, QE became so widely practised that we can hardly call it “unconventional” anymore. And while most major central banks, unlike the BoJ, are now working on how to reduce their bond holdings (in other words, quantitative tightening), the expectation is that they will permanently maintain larger balance sheets than before the GFC, and whip out QE again whenever they see fit. In this sense, the BoJ’s exotic experiments changed central banking forever.But the BoJ itself was late in daring to adopt negative rates proper, and it never went further than negligibly below zero. This, as well as the turn to QE as an alternative, buttressed the notion that there is, if not a zero lower bound on central bank rates, then a lower bound just below zero. The obvious, if patient, desire with which even the BoJ has wanted to “normalise” monetary policy, meanwhile, has reinforced the global tendency to “denormalise” what should be seen as standard.That’s not the end of the BoJ’s contributions, however. It has demonstrated how creative one can be with asset purchases (it talks of “qualitative” as well as quantitative easing), and has been buying not just government bonds but stock market funds and real estate-linked securities (it ended both programmes in this week’s decision). Most significantly, it implemented “yield curve control”, which in practice meant using conventional market intervention tools to fix the yield on 10-year government bonds (rather than the standard short-term rate on the shortest-term government securities).Unlike plain-vanilla QE, hardly any other central banks have copied these innovations. That was a wasted opportunity. The big-picture takeaway from the BoJ’s experience is surely that the policies worked as intended with few bad side effects. If anything, YCC worked better than plain QE in the sense that the BoJ ended up having to buy bonds at a significantly slower pace to achieve its desired monetary policy stance. As I have argued before, there was no need in particular to end YCC; the BoJ could instead have continued to adjust the target upwards if it wanted to tighten policy. In a world of several desirable policy objectives, giving up additional instruments is an unforced error. But on the bright side, the BoJ’s demonstration that these tools could be used will lower the threshold for others needing them in the future. That may include the BoJ itself, of course. As my colleague Robin Harding explains, all the structural causes of low inflation and naturally low interest rates in Japan remain. And much the same can be said for other advanced economies, if not to the same extent. It is far from clear that long-term equilibrium rates will be much higher than before the huge disruption of Covid-19 and Russian President Vladimir Putin’s assault on Ukraine and his energy war. To the extent the BoJ has demonstrated the many tools at central bankers’ disposal, it deserves huge thanks. To the extent it has supported the astonishingly widespread aversion to using these tools as something weird or unnatural or undesirable, it does not.So that’s my biggest takeaway: the very fact that observers without irony speak of “escaping” from negative interest rates is itself a manifestation of a big problem. Those who think they no longer live in a Japanese world are deluding themselves.Other readablesClaire Jones is on the ground in Georgia, assessing how the swing state’s “tale of two economies” is influencing voters. One insight: the boom has led to some of the strongest wage rises in the country — but has driven up prices by even more. Crypto is still a very bad idea.Universal basic income programmes are spreading throughout the US, and Republicans are trying to outlaw them. (Not sure what UBI is? Watch the video we made about it.)Great investigative journalism in a collaboration between the FT and a Danish outlet: Russia’s oil tanker fleet, built up to circumvent sanctions, travels through western waters without the required disaster insurance.European economists make bold proposals for a unified EU energy policy.The EU’s financial services commissioner wants progress on the bloc’s capital markets union. The FT’s Editorial Board has called on EU leaders to stop dithering.Numbers newsRecommended newsletters for youChris Giles on Central Banks — Your essential guide to money, interest rates, inflation and what central banks are thinking. Sign up hereTrade Secrets — A must-read on the changing face of international trade and globalisation. Sign up here More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The UK government borrowed more than expected in February as increased spending in part offset rising receipts, highlighting the fragility of public finances ahead of the general election this year. Public sector net borrowing was £8.4bn in February, £3.4bn less than in the same month last year, according to the Office for National Statistics on Thursday. However, this was higher than the £5.9bn forecast by economists polled by Reuters.In the first 11 months of the fiscal year to the end of February, borrowing was £106.8bn — £4.6bn less than in the same period a year ago and the lowest for four years in nominal terms.Economists said government borrowing was on course to overshoot official Budget forecasts. The Office for Budget Responsibility, the fiscal watchdog, forecast in March that borrowing would total £114.1bn in the fiscal year ending in March. Ruth Gregory, economist at Capital Economics, said: “February’s disappointing public finances figures suggest that the OBR’s new 2023-24 borrowing forecast already looks too optimistic.”“But this may not prevent the government from squeezing in another pre-election tax-cutting fiscal event later this year,” she added, based on the expectation that borrowing will fall faster beyond 2025-26 than current predictions. “Government borrowing is on track to overshoot the recent Budget forecasts by a few billion pounds,” echoed Rob Wood, economist at Pantheon Macroeconomics.Borrowing fell from last year on the back of more revenues from taxes, which were up 10 per cent. Gregory said the figures provided “evidence that tax receipts remained buoyant”.However, higher public sector receipts were partially offset by increased spending, as last month the government made its final cost-of-living payment of the current financial year totalling about £2bn. This payment, combined with higher spending on benefits linked to inflation, offset the reduced cost of the government’s energy support schemes, which have now largely ended.In February the interest payable on central government debt was £6.8bn, down £1.1bn from last year and the lowest figure for that month since 2022.Chief secretary to the Treasury Laura Trott said: “It was right that this government provided billions of pounds to support individuals and businesses during Covid, and pay half of people’s energy bills after [Russian President Vladimir] Putin’s invasion of Ukraine.“Because of the difficult decisions we have taken, the economy is turning a corner, inflation is falling and wages are up.”Earlier this week, shadow chancellor Rachel Reeves said a Labour government would ensure that “day-to-day costs are met by revenues” and would borrow only to invest. Labour has also vowed to match Prime Minister Rishi Sunak’s fiscal rule that overall public debt should fall year on year as a share of gross domestic product by the fifth year of official forecasts.Sunak has pledged to make progress towards his goal of scrapping employee national insurance contributions if he wins the election, which the chancellor has hinted could take place in October.The ONS figures were released ahead of the Bank of England’s monetary policy decision on Thursday. The BoE is widely expected to keep interest rates at a 16-year high of 5.25 per cent, after holding them at its last meeting in February.On Wednesday, official statistics showed that inflation fell more than expected to 3.4 per cent in February from 4 per cent in the previous month.The ONS data showed that public sector net debt — or borrowing accumulated over time — was 97.1 per cent of gross domestic product, the highest since the early 1960s, highlighting the next government’s challenge in public finances.Gora Suri, economist at the consultancy PwC, said: “This government and the next will face a Herculean task to both stimulate a flatlining economy and keep the public finances on a sustainable footing.” More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.This article is an on-site version of our Unhedged newsletter. Sign up here to get the newsletter sent straight to your inbox every weekdayGood morning. I’m old enough to remember when private equity liked to buy companies with steady, predictable cash flows that were ripe for cost cuts. Yesterday came the news that Apollo was interested in buying Paramount Global’s Hollywood studio. What is the movie business famous for? Lack of predictable profits and hatred for “suits” who come in to try to tell the insiders what to do. Perhaps a reader can explain how things have changed: [email protected] FedUS inflation has been going sideways for several months, at a level that is above the Federal Reserve’s target and the country’s comfort zone. In response, the central bank announced yesterday that it would do nothing.The Federal Open Market Committee’s plan of action — as expressed in the near-term rate projections of its members and in the tone of its chair’s press conference — is exactly as it was in December. Back then, the FOMC had enjoyed an almost uninterrupted six month run of good inflation news, and thought that its policy rate would be 4.6 per cent at the end of this year. It still thinks this, despite notably disappointing inflation reports in January and February. More importantly, Jay Powell’s language has retained its decidedly optimistic flavour:As labour market tightness has eased and progress on inflation has continued . . . we believe that our policy rate is likely at its peak for this tightening cycle, and that if the economy evolves broadly as expected, it will probably be appropriate to begin dialling back policy restraint at some point this year . . . Wait wait wait, one wants to interrupt, progress on inflation has not continued. Here is the chart Unhedged used to make this point a week ago, after the February CPI numbers landed:Here’s what Powell had to say about this:. . . the January CPI and PCE numbers were quite high. There is reason to think there may be seasonal effects there, but nonetheless we don’t want to be completely dismissive of it. The February number was high, higher than our expectations, but we currently [expect] well below 30 basis points (0.3 per cent month-over-month) core PCE, which is not terribly high. So it’s not like the January number. I take the two of them together, and I think they haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road towards 2 per cent.The FOMC thinks that two months of bad data, even accompanied by remarkably resilient economic growth and some extra accommodation provided by exuberant markets, is not enough for it to change its stance. It may be right. It could be that seasonal factors, and the fact that falling market rents refuse to appear in housing services prices, mitigate the badness of the numbers. And maybe two months just isn’t all that much time. But make no mistake: the Fed has decided that the disinflation story is fully intact and their policy posture, solidly tilted towards rate cuts in the near future, is unchanged.This plain fact might be obscured by changes in the committee’s longer-term economic projections. Since December, it has made non-trivial increases in its view of the appropriate policy rate for 2025 (3.6 per cent to 3.9 per cent) and 2026 (2.9 per cent to 3.1 per cent), and even nudged its view of the long-term neutral rate a tiny bit (2.5 per cent to 2.6 per cent). Estimates for economic growth in the out years were nudged up, too. The “dot plot” of individual members’ rate policy views showed a decided migration upwards.This is hawkishness, surely? No, it is not. Remember that the committee members’ ability to forecast the behaviour of the economy more than a quarter or two in the future is no better than yours or mine. We can’t do it, and neither can they. They have decisions to make about what to do this year, and they have been clear where they stand on those decisions. They plan to cut. Their longer-term projections, by contrast, are not plans — they are expressions of an attitude, a commitment to professional seriousness. Yes, the projections say, we see the bad data. But it does not change our mind.The low-end consumer revisited, redux Unhedged has been writing recently about various scraps of evidence suggesting that, even as the US economy as a whole hums along, there is significant stress among lower-income consumers. The hard data comes from car loan delinquency data. Card delinquency rates don’t look so great either, as my colleagues Stephen Gandel and Patrick Mathurin described in detail yesterday. The soft data comes from corporate executives discussing demand trends — a series of anecdotes that continues to accumulate, whether it be a Coca-Cola executive saying that while the American consumer overall is strong, “we all know that a lower-income consumer is under more pressure”, or the CEO of the high-gloss burger chain Shake Shack saying that “in times like this” lower-income consumers trade down to cheaper brands than his.A reader suggested another bit of hard data: hardship withdrawals from 401k retirement accounts. Because such withdrawals are taxed, and deferring withdrawal until retirement avoids this, the trend is informative. Vanguard, one of the largest 401k providers, tracks this:A 2019 law made it easier to take emergency withdrawals, which may account for some of this trend, but the 2023 jump is striking all the same.  In the hope of getting a more detailed view of what is going on, I spoke to Jennifer Thomas, a portfolio manager at Loomis Sayles who specialises in asset-backed securities. She tracks consumer loans at a granular level, and agrees that there is a subset of consumers who are getting into trouble. Typically, these borrowers have missed a single loan payment and are unable to make it up. “When we talk to the loan issuers, they all say the same thing — borrowers have jobs, they just can’t catch up.” Interestingly, Thomas notes that the problems are particularly acute for the 2021 and 2022 loan vintages, when many subprime lenders relaxed credit standards because consumer balance sheets were so strong. Standards have since tightened up again. There is very little “deep” subprime lending currently and interest rates are high, now that stimulus checks are largely spent and student loan payments have been reinstated.The big question is whether the stress at the low end is the leading edge of a weakening trend that will work its way further into the economy. Ian Shepherdson of Pantheon Macroeconomics thinks that it might be. His argument is that the excess savings built up during the pandemic acted as a wall separating the actions of the Fed from the private sector. Now that excess has been run down for all but the richest households, the wall is gone. Here is his chart of household liquidity, using inflation adjusted figures from the Fed’s distributional accounts:This change in household balance sheets is visible in weak real retail sales, and small business is pinched, too — both by customers holding back and by expensive credit. Shepherdson sites National Federation of Independent Business net intention to hire survey, which is not showing an encouraging trend among small businesses:Shepherdson is not confident that a recession is coming, but thinks we could see an abrupt slowdown in payroll numbers sometime soon — at which point the state of the economy will be a worry for everyone, not just those on low incomes.One good readBitcoin? Used in a fraud? No way.FT Unhedged podcastCan’t get enough of Unhedged? Listen to our new podcast, hosted by Ethan Wu and Katie Martin, for a 15-minute dive into the latest markets news and financial headlines, twice a week. Catch up on past editions of the newsletter here.Recommended newsletters for youSwamp Notes — Expert insight on the intersection of money and power in US politics. Sign up hereDue Diligence — Top stories from the world of corporate finance. Sign up here More

This article is an on-site version of our Europe Express newsletter. Sign up here to get the newsletter sent straight to your inbox every weekday and Saturday morningGood morning. France’s Emmanuel Macron will use an EU summit in Brussels today to push a plan for more joint EU borrowing to finance Europe’s biggest defence rearmament since the cold war, a move that will provoke a barnstorming argument with other leaders — led by Germany’s Olaf Scholz — who are vehemently opposed. Meanwhile, it will be Portuguese premier António Costa’s last summit. In Lisbon, centre-right leader Luís Montenegro was invited shortly after midnight to form a government following fractured election results. Sticking to the summit theme, here our trade correspondent previews (yet) another debate on Ukrainian food imports. While our energy correspondent explains why, at a separate gathering, others will discuss a Russia-free future for Europe’s nuclear industry.Going against the grainFarming issues are set to hijack a second consecutive European summit as some leaders push for more restrictions on Ukrainian food imports, writes Andy Bounds.Context: Yesterday morning, EU negotiators agreed a deal to cut imports of Ukrainian produce after huge protests by farmers in central Europe and France, who claim a glut has hit their income. But hours later, member state representatives refused to sign off on the measures as some said they did not go far enough.Polish Prime Minister Donald Tusk, who is struggling to contain farmer protests and blockades of the Ukrainian border, will demand changes at the summit, backed by France’s President Emmanuel Macron.The deal extended free access for Ukrainian goods for another year but created an “emergency brake”, automatically putting tariffs on poultry, eggs, sugar, oats, maize, honey and groats (grain kernels) if quantities exceeded a certain level.Poland wants to make it easier to pull. Rather than being triggered when Ukrainian imports reach the average imported in 2022 and 2023, it wants to include 2021, the much lower prewar level, too. That would cut exports of eggs and sugar in half, and poultry by almost a third. Warsaw also wants wheat included. The result, according to European Commission calculations, would be a €1.2bn loss of exports for Ukraine unless they find alternative buyers.Diplomats in favour of tighter curbs say Ukraine can now use the Black Sea again to ship to traditional markets in Asia and Africa.Last night, farming groups slammed the “weak compromise”. “The burden on the EU farming sector will persist and so will their discontent,” said a statement by Copa-Cogeca, the farmers’ umbrella group. German Socialist MEP Bernd Lange defended the deal he negotiated: “I think more tariffs would be the wrong message to give to Ukraine when it is fighting for freedom and democracy.”The issue has now been kicked up to today’s leaders’ summit. German Chancellor Olaf Scholz, along with his Dutch colleague Mark Rutte and others are determined to defend the deal.“There are many of us who are saying it was too rushed, and won’t work,” said a senior EU diplomat. “The danger is that leaders will now start to pull it apart even more.”If member states cannot agree, tariffs will be imposed on all Ukrainian imports on June 6.Chart du jour: Luxury fortunesLuxury groups rode a post-pandemic spending wave. But Gucci’s recent sales slump — blamed on the all-important Asia-Pacific consumer — means the luxury megatrend for investors is no longer, writes Lex.The nuclear optionsBrussels is aglow with nuclear chatter ahead of the first global summit on atomic energy today with more than 30 countries attending, including China and the US, writes Alice Hancock.But among the tougher questions is, how can the EU wean itself off Russian fuel?Context: The bloc has invested billions of euros in reducing its reliance on Russian gas since the full-scale invasion of Ukraine, but switching supplies of the enriched uranium needed for nuclear fuel is a far more complex matter.Figures from the environmental think-tank Bellona show that imports of Russian nuclear fuel have doubled since February 2022, with member states paying Moscow €686mn last year.This is largely due to stockpiling over fears that Moscow could — as it did for gas — cut off supplies. Though one senior EU official said member states were reluctant to switch suppliers because “it’s a headache”.Nuclear fuel is not a commodity but a manufactured product specific to different reactor designs, and must be licensed by nuclear regulators.Ukraine, unsurprisingly, has moved fastest to diversify away from Russian supplies in collaboration with the US company Westinghouse, which delivered the first batch of replacement fuel to Ukraine in September.Officials in Brussels say another producer should be operational “shortly”.Several leaders will speak at the summit including French President Emmanuel Macron, Belgian premier Alexander De Croo and European Commission president Ursula von der Leyen — an assembly of politicians you wouldn’t have expected in the aftermath of the 2011 Fukushima nuclear accident. EU officials will also get an update from the International Atomic Energy Agency on the situation at the Russian-occupied Ukrainian nuclear power plant in Zaporizhzhia. What to watch today Summit of EU leaders in Brussels.Nato secretary-general Jens Stoltenberg hosts a meeting with Slovenia’s Prime Minister Robert Golob.Now read theseRecommended newsletters for you Britain after Brexit — Keep up to date with the latest developments as the UK economy adjusts to life outside the EU. Sign up hereChris Giles on Central Banks — Your essential guide to money, interest rates, inflation and what central banks are thinking. Sign up hereAre you enjoying Europe Express? Sign up here to have it delivered straight to your inbox every workday at 7am CET and on Saturdays at noon CET. Do tell us what you think, we love to hear from you: [email protected]. Keep up with the latest European stories @FT Europe More