Aurelia Butler

WASHINGTON (Reuters) – The U.S. House of Representatives on Wednesday was poised to avert a partial government shutdown next week, even as a large number of Republicans were prepared to revolt against their leadership for failing to achieve new federal spending cuts. The stopgap funding bill will maintain the government’s current level of roughly $1.2 trillion in annual discretionary funding through Dec. 20, avoiding the furloughing of thousands of federal workers and shutdown of a wide swath of government services just weeks before the Nov. 5 election.House Speaker Mike Johnson plans to use a parliamentary maneuver to pass legislation, bypassing the House Rules Committee to overcome opposition within his own Republican Party, which holds a 220-212 majority.If he succeeds, which is expected, the Democratic-majority Senate is also set to vote on the bill on Wednesday and send it on to be signed into law by President Joe Biden before current funding expires at midnight Monday.A significant number of House Republicans are expected to defy their leader and vote against the measure, after Republican presidential candidate Donald Trump earlier spoke in favor of a shutdown unless controversial legislation was attached to the spending bill that outlawed non-citizens voting in federal elections, something that already is illegal.”We’ll work in a bipartisan way to make sure that this gets done,” No. 3 House Democrat Pete Aguilar told reporters on Tuesday.Some Republicans expressed frustration in the run-up to Wednesday’s vote on the spending bill known as a “continuing resolution” or “CR.””He (Johnson) committed to the conference that we weren’t going to govern by CRs anymore … here we are. So, I’m sure there’s a bunch of members that are frustrated,” said Republican Representative Greg Steube.Hard-right House Republicans had been pushing for a six-month CR with the election piece attached, but last week failed to pass that bill, which would have been lost in the Senate anyway.Nonetheless, some of the most conservative Republicans thought Johnson and all rank-and-file Republicans should have fought harder against a Democratic victory, even if it meant a shutdown.Johnson has repeatedly had to bypass his own restive caucus to pass critical legislation. In March, the House passed the current funding bill despite 112 Republican “no” votes.April brought the passage of nearly $61 billion in new aid for Ukraine, which has battled a Russian invasion since February, 2022. Again, 112 Republicans voted against Johnson’s effort.The infighting comes after Johnson’s predecessor, then-Speaker Kevin McCarthy, was ousted by right-wing Republicans in an historic vote, as they punished him for reaching a bipartisan spending and debt limit deal with Biden.That latter fight will recur late this year. Democrats and Republicans will have to negotiate over full-year government funding. And it faces an even more critical self-imposed Jan. 1 deadline to either to raise the nation’s debt ceiling or risk defaulting on more than $35 trillion in federal government debt. More

In addition to approving the half-percentage-point cut, Fed policymakers projected the benchmark interest rate would fall by another half percentage point by the end of this year, a full percentage point next year, and half a percentage point in 2026, though they cautioned that the outlook that far into the future is inherently uncertain.Following are forecasts from some major banks on economic growth, inflation, and how they expect certain asset classes to perform:Forecasts for stocks, currencies and bonds:S&P 500 US 10-year EUR/USD USD/JPY USD/CNY target yield target Goldman Sachs 5,600 1.08 150 7.20 3.85% Morgan Stanley 5,400(for 1 140 7.5 June 2025) UBS Global 5,200 3.85% 1.09 148 7.25 Wealth Management* Wells Fargo 5,300-5,500 3.75%-4.25% 1.06-1.10 156-160 Investment Institute Barclays 5,600 4.25% 1.09 145 7.20 J.P. Morgan 4,200 1.13 146 7.25 3.55% BofA Global 5,400 3.75% 1.12 151 7.38 Research Deutsche Bank 5,750 4.60% 1.07 135 Citigroup 5,600 4.20% 1.02 135 7.25 HSBC 5,400 3.00% 1.05 145 7.10 Oppenheimer 5,900 UBS Global 5,600 4.0% 1.12 145 7.10 Research* Evercore ISI 6,000 RBC 5,700 * UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group—-U.S. INFLATIONU.S. consumer prices rose slightly in August, but underlying inflation showed some stickiness amid higher costs for housing and other services.U.S. inflation (annual Y/Y for 2024) Headline CPI Core PCE Goldman Sachs 2.6% 2.6% Morgan Stanley 2.10% 2.70% Wells Fargo 3.0% 2.60% Investment Institute Barclays 2.9% 2.6% J.P.Morgan 2.50% 2.50% BofA Global 3.5% 2.8% Research Deutsche Bank 3.10% Citigroup 2.0% 2.7% HSBC 3.4% —–Real GDP growth forecasts for 2024 GLOBAL U.S. CHINA EURO UK INDIA AREA Goldman 2.7% 2.8% 0.7% 1.1% 6.9% Sachs 4.7% Morgan 2.8% 1.9% 4.2% 0.5% -0.1% 6.4% Stanley UBS Global 3.1% 2.4% 4.9% 0.6% 0.2% 7.0% Wealth Management* Barclays 2.6% 1.2% 5.0% 0.3% 1.1% 6.2% J.P.Morgan 2.6% 4.6% 6.5% 0.7% 2.7% 1.1% BofA Global 3.2% 2.7% 0.7% 1.1% 7.6% Research 4.8% Deutsche 3.2% 2.7% 4.9% 0.9% 1.2% 7.0% Bank Citigroup 2.4% 2.0% 0.7% 1.0% 7.3% 4.7% HSBC 2.6% 2.3% 4.9% 0.5% 0.4% 6.3% UBS Global 3.1% 2.5% 4.6% 0.6% 1.1% 7.0% Research* More

“The U.S. move has no factual basis, violates the principles of market economy and fair competition, and is a typical protectionist approach,” said a spokesperson for the commerce ministry.The U.S. Commerce Department on Monday proposed the planned regulation, first reported by Reuters, which would also force American and other major automakers in the future to remove key Chinese software and hardware from vehicles in the U.S. connected to the internet and navigation systems.The action “seriously affects the normal cooperation between China and the United States in the field of connected vehicles, disrupts the global automotive industry supply chain, and harms the interests of United States consumers,” the spokesperson said, according to a statement.The move would effectively bar Chinese cars and trucks from the U.S. market, with major concerns centred around data collection by connected Chinese vehicles on U.S. drivers and infrastructure and potential foreign manipulation of vehicles. China and the U.S. have tussled over respective national security concerns. The U.S. has enforced major export bans on semiconductors, and the latest proposal is a significant escalation in U.S. restrictions on Chinese vehicles, software and components.”The U.S. should immediately revoke its restrictive moves,” the spokesperson said. More

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The average contract rate on a 30-year fixed-rate mortgage dropped 2 basis points in the week ended Sept. 20, the data showed, a far smaller move than the half-of-a-percentage point policy rate cut delivered by the Federal Reserve last week. Mortgage rates had been falling for weeks in anticipation of the Fed’s move, however, and are now down more than three-quarters of a percentage point compared with July, and more than 1.75 percentage points compared with the October 2023 peak. Applications to refinance existing home loans jumped as homeowners took advantage of the decline in home-loan rates in recent months to trim their regular house payments. Refinancing now accounts for more than 57% of all mortgage applications, the data show, above the historic median of 48%. More

BUDAPEST (Reuters) – Hungary is aiming to lift economic growth into the 3% to 6% range next year, Prime Minister Viktor Orban said on Wednesday, as his cabinet grapples with a weaker-than-expected recovery from last year’s inflation-led recession.In power since 2010, the veteran nationalist has struggled to revive Hungary’s economy from last year’s downturn following a surge in inflation to more than 25% in the first quarter of 2023, the highest levels in the European Union.The National Bank of Hungary, which cut its base rate by 25 basis points to 6.5% on Tuesday, reduced its economic growth forecasts – projecting it at 1% to 1.8% this year and 2.7% to 3.7% next year, both sharply below its previous estimates.”We need to lift economic growth into the 3% to 6% range,” Orban, who faces a parliamentary election in 2026, told a conference. “We can enter this range already next year, stay there in 2026 and target the high end of the band thereafter.”Orban said Hungary should pursue a disciplined fiscal policy but repeated an earlier pledge to double tax benefits for families and launch a substantial capital injection programme for small businesses in 2025.Hungary’s budget deficit has averaged nearly 7% of gross domestic product since the COVID-19 pandemic, and ratings agency Moody’s (NYSE:MCO) projects the shortfall at 5.5% of GDP this year even after recent government attempts to curb the gap.Orban said this month that a new ministry would take charge of the economy and state finances as he gears up for the nomination of a new central bank governor to succeed former ally Gyorgy Matolcsy.Finance Minister Mihaly Varga has been widely tipped to succeed Matolcsy early next year, while Economy Minister Marton Nagy, a former central banker, could take charge of public finances under a merged ministry.Zoltan Arokszallasi, an economist at Hungary’s MBH Bank, said the main risk for investors from the leadership changes would be a potential dovish policy shift, with Hungary still running the EU’s highest benchmark rate alongside Romania.”The question is whether the orientation of monetary policy could be substantially looser next year,” he said in a note.”A rate cut whose scale could potentially take markets off guard could significantly weaken the forint, which could have a boomerang effect on inflation.” More