Economy

Financial markets are falling into line with the Federal Reserve’s outlook for US interest rates, as stubborn inflation data forces investors to relinquish their bets on extensive cuts this year.This month traders have slashed their bets on the number of times the Fed will cut rates in 2024, from six in January to a current level of four. They have also pushed back their expectations of when those cuts will begin, from March to June.The retreat marks a shift in the relationship between the Fed and the market, which have been pushing competing outlooks for interest rates back and forth for several months.“The Fed and markets are in a slapping competition,” said Edward Al-Hussainy, senior analyst at Columbia Threadneedle, comparing it with Power Slap, a contest in which rivals take turns to hit each other across the face until one side submits.“The Fed is winning the fight for now — they’re in control at the moment. They only lose if things become disorderly,” he said.The debate over US rates, which stand at 5.25 per cent to 5.5 per cent, a more than two-decade high, was given fresh impetus in December when Fed officials on average projected three rate cuts for 2024 as slowing price growth raised hopes that inflation had been tamed.Minutes from the Fed’s January policy meeting, published on Wednesday, reaffirmed that officials were cautious about cutting rates too quickly, describing them as “highly attentive” to inflation risks.Investors, with memories of being wrongfooted by Fed projections in the past, had bet that a sharp deceleration in inflation would allow the central bank to move faster. However, a series of strong reports, from consumer inflation data to jobs figures, has strengthened the Fed’s hand and traders are coming around to its view.“After the December FOMC meeting, the market and the Fed’s expectations for interest rate cuts were historically out of whack,” said Meghan Swiber, a US interest rate strategist at Bank of America.“A big driver of that gap between the market and the Fed was the market’s expectation for a very quick pace of disinflation. The recent data flow has pushed back on that,” she added.Some have profited from the discrepancy. Rokos Capital Management, run by billionaire star trader Chris Rokos, has turned a profit of more than $1bn this year as the market came to accept the central bank’s forecasts.Consumer price inflation has proved to be more stubborn than traders were expecting. Price growth slowed in January — to 3.1 per cent — but not as quickly as economists had forecast. The closely watched core inflation measure, which strips out volatile food and energy components, was stagnant at 3.9 per cent.The middling inflation data comes alongside evidence that the US economy continues to boom, with employers adding nearly twice as many jobs as expected in January.Part of the opposition to the Fed’s forecasts reflects a widely-held view among investors that the central bank is slow to act on changing economic conditions. In December 2021, Fed officials projected on average three quarter-point rate rises in 2022, implying that rates would remain under 1 per cent. Surging inflation ripped through those forecasts, forcing the Fed to raise rates to a range of 4.25 per cent to 4.5 per cent by the end of the year.But what was true on the way up may not hold for the ride down. “My thought is [the Fed will] probably cut interest rates at consecutive meetings, assuming the economy is doing well,” said David Rogal, a portfolio manager on the Total Return Fund at BlackRock. “The thing the Fed doesn’t want to get into is a stop-start policy. They don’t want to risk restarting inflation, which they could do if they cut now.”A signal from the Fed that it was ready to ease could send consumer inflation expectations higher — which might encourage companies to raise prices — and could set off a rally in stocks and bonds, making it even easier for companies to borrow money. Moreover, the US unemployment rate remains stable, near historic lows at 3.7 per cent, and has taken pressure off the Fed to cut rates. “Rates at this level are not restraining anything, so why are cuts necessary? You would have to convince me that 5.5 per cent is causing problems — and I don’t see that,” said Jim Bianco, head of Bianco Research. “Unemployment is low, jobless claims are low, the US is adding jobs. Everything about this economy screams that the funds rate is not a problem where it is,” he said.Bianco is among a few who are betting that the Fed may not even cut three times this year, forecasting between two cuts and none at all. Larry Summers, the former Treasury secretary and noted inflation hawk, told Bloomberg he saw a 15 per cent chance that the Fed might be forced to raise rates.Despite the shifting expectations markets remain unruffled, with the S&P 500 hitting a fresh high earlier this month. January was a record month for US investment-grade bond sales while the “spread”, or premium paid by high-quality borrowers to issue debt over the US Treasury, stands at just 0.96 percentage points — the tightest level since January 2022, two months before the Fed launched its aggressive campaign of rate rises.Even so, retreating expectations on rates could still sting for some. Commodity Futures Trading Commission data shows that asset managers had the largest-ever long position in two-year Treasury futures — a bet that prices would rise and yields would fall — in November.Bank of America’s global fund manager survey for February still showed that investors were betting on a steeper yield curve — expecting yields on two-year yields to fall, or rise less than longer-term yields. Higher rate expectations could make this a “pain trade”, said Swiber.  More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is former chief economist at the Institute of International Finance In failing to take a tougher stance on sanctions against Russia over its invasion of Ukraine, the EU might have stored up a series of problems that investors need to pay more attention to.Two years after Russia’s full-scale invasion, it is now painfully clear that EU sanctions have failed to meaningfully curtail Moscow’s ability to wage war on its neighbour. What went wrong?The first and most obvious issue is excessive reliance on financial sanctions — that is, blocking some Russian banks from intermediating payments with the west. Central bank official foreign exchange reserves were also frozen, but that measure targets a stock of assets, not ongoing flows, which are what matter for economic activity.Financial sanctions can be highly effective when imposed on countries that run a current account deficit, because such countries must continually borrow from global markets to pay for imports. No more foreign credit causes the economy to collapse. However, before, during and after the invasion, the value of Russia’s exports has far exceeded what it pays for imports. As a current account surplus country, Russia effectively lends to the rest of the world: it accumulates foreign assets. (Russia’s current account surplus is forecast to be 4 per cent of GDP this year by the IMF.)By sanctioning some Russian financial institutions, the west merely caused the accumulation of foreign assets to shift from sanctioned to non-sanctioned banks. Effectively, Gazprombank replaced Russia’s sanctioned central bank as the main financial intermediary with the outside world. This shift did not in any way curtail payments to Russia for its exports, so there was no impact on its ability to pay for imports. (Russia’s imports in 2023 were 20 per cent above pre-Covid pandemic levels.)Why didn’t the G7 and EU sanction all Russian banks? That would be equivalent to a trade embargo (prohibition of exports), since countries would no longer be able to pay Russia for its fossil fuel exports (oil, gas and coal), bringing those exports to a halt. Russia exports about 8mn barrels of oil, on average, per day. How to squeeze Putin’s revenue without driving up the price of oil sharply?In December 2022, the G7 and EU found an ingenious way forward, imposing a cap on the price that Russia can receive for its crude oil exports when these are transported in western-owned ships or use western services. In early 2023, a roughly equivalent cap was extended to cover refined products. Unfortunately, implementation of this oil price cap was at every turn undercut by a small number of western operators, especially Greek shipping magnates, that sold their oil tankers to “undisclosed” buyers — allowing Russia to export oil outside the cap.To be fair, the Greeks are not alone. The massive rise in western exports to central Asia and the Caucasus is another example of western business at work. For example, German exports of cars and parts to Kyrgyzstan have risen 5,000 per cent since Russia’s invasion of Ukraine. There is no way these exports are staying in Kyrgyzstan. They are going to Russia, where they help keep the war economy going, and the same thing is happening via Belarus, Kazakhstan and other places.In the December package of EU sanctions, there were other examples. There was a ban on imports of Russian diamonds but that did not cover industrial diamonds. Croatia also secured an exemption on importing Russian vacuum gas oil. So did other central Europeans on crude oil and steel products. And Hungary gained an exemption on nuclear energy services for its Paks II power plant project. At a time of heightened geopolitical tensions, the vital security objectives of western countries are being undermined by short-term interests and the profit motive of a few western businesses. This weak sanctions enforcement has come at the expense of more aggressive action against Russia and thus — perhaps — a faster end to the war. That now risks coming back to bite it. If Donald Trump is elected in November, US support for Ukraine might end. Subsequently there would be a lot of squabbling in Europe over who pays for the defence of Ukraine.Given that most countries are grappling with high debt, this would raise scrutiny of the financial state of EU nations, potentially adding pressure on the euro and widening the spreads on sovereign bonds between core bloc countries and other member states. Through its terrible trade-off, the EU has stored up all kinds of economic and markets pain for later — and that later is fast approaching.Simon Johnson contributed to this article More

British government plans to require all meat and dairy products sold in the UK to be labelled “Not for EU” consumption will raise food costs, hit exports and deter investment in domestic food manufacturing, a leading industry group has warned.In a letter to ministers, the Food and Drink Federation said the post-Brexit labelling regime will cost “hundreds of millions of pounds” and had already caused international investors to “pause” plans to put capital into the UK.“It [the labelling plan] will lead to higher prices amid a cost of living crisis and to lower investment at a time when investment in our sector is already down,” FDF chief executive Karen Betts told Cabinet Office minister Steve Baker in a letter sent on Monday and seen by the Financial Times.The government’s introduction of “Not for EU” labels from October is a consequence of the Windsor framework deal, which sets out post-Brexit trade arrangements for Northern Ireland.The labels are intended to guarantee that products sold in Northern Ireland that have not undergone full EU border checks do not cross into the Republic of Ireland, which is part of the EU’s single market.As part of supplementary assurances signed last January, the UK government said it would pass legislation expanding the scheme UK-wide to “ensure no incentive arises” for businesses to avoid sending goods to Northern Ireland.The government has consistently argued that the measures are essential to protect Northern Ireland’s place in the UK internal market as part of their overall efforts to reassure the region’s Unionist community, even if that means putting some extra cost on to business.“These measures will help ensure that consumers in Northern Ireland have access to the same goods as those in the rest of the United Kingdom, safeguarding the UK internal market and the operation of the Windsor framework,” it said in a statement.But the FDF argues that the labels should only be used for products in Northern Ireland, warning that a UK-wide approach would hurt small and medium-sized businesses that cannot afford to run separate production lines for EU and UK markets.The government launched a consultation on the implementation of the scheme last month alongside a £50mn “transition fund” to assist businesses. It is considering an exemption for small businesses that have less capacity to adapt to the changes.The FDF also warned that exports to the Republic of Ireland, a key destination for British-made food, would be “particularly badly impacted”. It added that some larger companies were “considering abandoning their exports to Ireland altogether”.The industry also raised concerns that the labels, which are stamped on packaging beneath the barcode, will put off customers. A Survation poll for Best for Britain, the pro-EU pressure group, found that almost one in five consumers said they were less likely to buy products labelled “Not for EU”.Betts said the labelling regime was already deterring international producers from investing in the UK’s food and drink industry because of the additional bureaucracy needed to serve a smaller market than the EU.“We hear of investors already putting plans on pause, and considering investing in companies in the EU instead, from where they can decide about whether it’s worth supplying the UK market at all,” she wrote.The FDF said that investment in UK food manufacturing fell by a third last year compared with 2019, the year before the post-Brexit EU-UK trade deal came into force, citing data from the Office for National Statistics.  More

Steering the UK economy out of the inflationary storm would always require unusual finesse, but the task would be easier if the Bank of England governor had an unemployment number he could trust. The problem, highlighted by Andrew Bailey in a recent hearing, stems from deeply flawed labour market data from the Office for National Statistics, led by national statistician Sir Ian Diamond.The situation has cast a shadow over the ONS, an independent government agency tasked with producing reliable economic figures that are critical to BoE decisions about when and how far to cut rates this year.Lord George Bridges, the chair of the House of Lords economic affairs committee, this month warned that the BoE and Treasury were like pilots trying to plot a course while their instruments were “flashing and whirring around”. “How are the Treasury and the bank to make critical decisions based on dodgy statistics?” he said in a House of Lords debate. His view is widely shared among UK economists, business leaders and policymakers as they face as much as a year of uncertainty about the labour force, including questions like how many people are unemployed.The ONS said this month its new labour force survey would not be ready until September, six months later than it previously said and almost a full year after it first suspended publishing jobs data.Last week it resumed releasing jobs data, but it warned the figures were still not fully reliable because of the low response rate to its old survey.The body has not fully explained key decisions taken last year that proved deeply damaging to the reliability of UK labour market data. Diamond himself was not available for an interview, his spokesperson said.“The response rate to the labour force survey is shocking right now — it is a really poor situation,” said Erik Britton, a former BoE economist now at Fathom Consulting. “It is a problem,” BoE governor Andrew Bailey told the Lords economics committee last week.Though Bailey said the central bank could track employment through other sources, there was no real alternative to the labour force survey (LFS) to find out how many people were out of work or why.“Our staff have advised us that whether unemployment is 3.8 per cent or 4.2 per cent is really pretty hard to judge,” he said.The crisis besetting the ONS survey has been years in the making. Valued for its detail, the LFS is time-consuming for respondents. It has morphed so many times in its 50 year history as extra questions have been added that one researcher likened it to the children’s game of drawing monsters by blindly sticking together body parts. Because of its length, the LFS has been hard hit by a decline seen in many countries in the response rate to household surveys, as people become harder to contact and less willing to give personal details to cold callers. The LFS was designed to operate with a response rate of 55 per cent. A decade ago it was just below 50 per cent. It has now slid below 15 per cent.Alarmed by the long-term trend, the ONS had in 2017 already begun developing a simpler “transformed” labour force survey (TLFS) that would run primarily online and produce reliable results with a lower response rate.When Covid hit, forcing a switch from in-person to telephone interviews, responses to the old survey plummeted, forcing the ONS to plough resources into salvaging it by doubling the number of people contacted.The ONS also worried the disruption of the pandemic had changed the mix of people answering the survey, skewing the results. Users of the data increasingly noticed its results were at odds with other official figures.But by mid 2021, the ONS began drawing down the sample size. The agency maintained it was still confident about the headline jobless rate even if there was uncertainty around some of the more detailed breakdowns of the data. Meanwhile, it was taking longer than expected to get the TLFS right. Darren Morgan, who retired at the end of 2023 as director of economic statistics production, told the Financial Times in November he had to juggle resources between propping up the old survey and ramping up the new one.“Running two large surveys for longer than we thought — that takes capacity,” he said. The ONS had to redeploy staff while still protecting other surveys “as best we can”, Morgan said.He insisted the underlying problem was not one of money, but of trying to get people to respond to surveys.But in July 2023 the ONS made a decision that proved to be a tipping point. It pulled more resources from the old survey, returning it to its pre-Covid size. In July to September the response rate fell to an all-time low of 12.7 per cent, from 14.6 per cent in the previous three months.When officials crunched the numbers, the results looked implausible — with unusual swings in youth unemployment in particular — forcing the ONS to pull publication with just days’ notice in October.The ONS declined to answer questions about why it cut back on the old survey, who was responsible for the move, or the exact date of the decision.But it was clear that scaling back the LFS, while still relying on it because of delays to the new survey, was risky.On July 10, the Office for the Statistical Regulator warned the ONS about the “sustainability of the current LFS” and noted concerns about the agency’s use of statistical fixes to make up for the small sample size.The OSR told the FT it was not aware the ONS was reducing the sample size that month when it flagged up this concern in a progress report on the TLFS.Morgan’s successor, Liz McKeown, now faces an uphill battle to repair the damage. Even with more researchers in the field, a modest boost to the sample size from October and a bigger 50 per cent boost from January, it will take time and money for the LFS-based data to improve. The agency now uses branded notebooks and £10 vouchers to induce people to respond.Despite the failures at the ONS, the agency’s regulator has said the main problem has chiefly been communication. “The ONS is trying to do some difficult things,” Ed Humpherson, head of the OSR, told a parliamentary committee this month.He added: “The underlying common thread I would encourage the ONS to really think about is how it responds to users, to challenge, and how it communicates uncertainty.”Both the ONS and OSR are part of the UK Statistics Authority, which operates at arm’s length from government to ensure its independence from ministers. It is accountable directly to parliament, though the Cabinet Office is involved in appointing non-executive board members.With tight funding settlements across the government, the UKSA has committed to find efficiency savings of 10 per cent in its baseline budget, which will fall from £225mn to £220.8mn in 2024-25. However, it has additional funding of £17.6mn allocated in that year for improvements to key economic statistics, including on the labour market.The ONS has been through rocky patches in the past. It lost close to 90 per cent of its London-based staff after its headquarters shifted to Newport, Wales, in the late 2000s, costing it significant expertise at the time. Diamond wrote to MPs on the public administration and constitutional affairs committee in November setting out the ONS’s plans to rebuild the jobs data, but has otherwise said nothing publicly on the issue.The ONS said its work on the area was getting results. “Response rates have been improving since the autumn, with the survey sample boosted by 50 per cent to 24,000 homes. This will continue until we switch to the new survey. “Its later introduction in September will help it to yield better data for policymakers and address marked changes since the pandemic in public attitudes and behaviours in relation to official surveys.”But senior lawmakers such as Lord Bridges said progress dealing with the UK’s “shoddy data” is urgently needed.“This is mission critical.” he said. “This is not a peripheral matter that we can leave just to statisticians.” More

SEOUL (Reuters) -South Korea’s central bank left interest rates at a 15-year high on Thursday amid signs that the weaker economy is slowing inflation, with investors zeroing in on Governor Rhee Chang-yong’s comments on the timing of a policy pivot later this year.The Bank of Korea (BOK) held its benchmark interest rate at 3.50% at a policy review in Seoul, keeping it unchanged for a ninth straight meeting as expected by all 38 analysts polled by Reuters.The BOK kept its economic growth forecast for this year unchanged at 2.1% and inflation at 2.6%, it said along with the rate announcement.South Korea’s 300 basis points of interest rate hikes have stalled economic growth in Asia’s fourth-largest economy as construction investment took a hit from higher borrowing costs even as exports continued to improve.In a post-policy news conference, Governor Rhee is expected to join global peers such as the Federal Reserve and the Reserve Bank of Australia in pushing back against any bets on a near-term easing as inflation, while cooling, is still above the central bank’s target of 2%.In January, Rhee warned markets against rallying on premature expectations for a rate cut and said he sees very little chance of rate cuts for the next six months with inflation still high.Data released since then showed consumer inflation hit a six-month low of 2.8% in January, still far from the central bank’s target of 2% but easing for a third straight month mostly due to a fall in oil prices.”With inflation cooling and growth set to struggle, we don’t think cuts are far away,” Gareth Leather, an economist at Capital Economics said in a report after the rate decision. “With inflation concerns easing, we are expecting the central bank to start sounding more dovish.”BOK board members have warned acting too soon could trigger a resurgence in price pressures especially due to upside risks from supply-side constraints.The consensus forecast from analysts is that the BOK will start cutting rates in the third quarter of this year, but that would largely depend on when the Federal Reserve starts lowering it rates, analysts say.Thursday’s rate decision was the first for board member Hwang Kun-il, who began his three-year term on Feb. 13.Rhee holds a news conference at around 0210 GMT, which will be livestreamed via YouTube. More

The BOJ kept its benchmark base rate at 3.5% for a ninth straight meeting, largely in line with analyst expectations. The move comes even as South Korean inflation eased substantially in recent months.But with consumer price index inflation remaining above the BOK’s 2% annual target, the bank is widely expected to keep policy restrictive in the coming months. A Reuters poll showed that analysts expect a rate cut only by the third quarter of 2024. A recent rebound in South Korean exports- which are a key growth driver- also pointed to resilience in the economy, which gives the BOK more headroom to keep policy restrictive. But the economy is still grappling with pronounced decline in manufacturing, while a housing market downturn and relatively high inflation also quashed private spending.  More

Below are the questions and answers in the poll, conducted from Feb. 6 – Feb. 16, for Reuters by Nikkei Research. Answers are denoted in percentages.Percentage totals for a given question may not come to exactly 100%, due to rounding. The “polled” and “replied” figures are in absolute terms.1. How are current business conditions at your company? (Pick one)Good Not so Bad Polled Replied good All 26% 60% 14% 400 250 Manufacturers 20% 60% 21% 211 126 Non-manufactur 32% 61% 6% 189 124 ers 2. How do you see business conditions at your company in three months time? (Pick one)Good Not so Bad Polled Replied good All 24% 66% 10% 400 250 Manufacturers 17% 71% 11% 211 126 Non-manufactur 31% 61% 8% 189 124 ers 3. How do you see the Chinese market over the next five years? (Pick one)Very Somewhat Neutral Somewhat Very Polled Replied optimistic optimistic pessimistic pessimistic All 0% 4% 34% 50% 12% 400 239 Manufacturers 0% 2% 32% 52% 14% 211 126 Non-manufactur 1% 6% 36% 48% 9% 189 113 ers 4. What worries you most about China? (Pick one)Economic Weak Deterioration in Real Anti-Jap Other Polled Replied slowdown consumer China-US relations estate anese sentiment over trade and market feeling politics crisis All 49% 2% 19% 24% 5% 2% 400 239 Manufacturers 50% 2% 22% 21% 3% 2% 211 125 Non-manufactur 47% 1% 16% 27% 7% 2% 189 114 ers 5. How are you responding to the economic slowdown in China? (Pick as many as apply)Reining in Shifting Considering Returning Other Polled Replied capital production and pulling out or capital to investment sales to other shrinking Japan markets operations All 16% 35% 17% 8% 38% 400 208 Manufacturers 18% 49% 21% 7% 26% 211 112 Non-manufactur 14% 18% 13% 8% 51% 189 96 ers 6. How have your China revenues fared since the same period the previous year? (Pick one)Increased No Fell Fell Fell Fell Polled Replied change between between between more 1-10% 11-20% 21-30% than 31% All 11% 47% 21% 10% 5% 6% 400 216 Manufacturers 11% 35% 22% 15% 7% 9% 211 116 Non-manufactur 11% 61% 19% 5% 2% 2% 189 100 ers 7. There is the possibility of a Trump administration after the U.S. election. Do you see this as a risk? (Pick one)See it as Don’t see it See it as an Polled Replied a risk is a risk opportunity All 49% 47% 3% 400 235 Manufacturers 56% 41% 3% 211 122 Non-manufactur 42% 54% 4% 189 113 ers 8. If Donald Trump were to become president again, what would be your biggest concerns? (Pick as many as apply)U.S.-China The impact of Impact Increasing Other Polled Replied trade stronger on U.S. protectionism friction anti-China domestic worldwide trade sanctions strategy All 37% 34% 15% 54% 7% 400 235 Manufacturers 32% 45% 19% 53% 5% 211 121 Non-manufactur 42% 23% 11% 54% 10% 189 114 ers 9. Are you considering making business plans on the assumption of a Trump presidency? (Pick one)Considering Plan to No plans to Undecided Polled Replied consider in consider the future All 0% 8% 60% 32% 400 238 Manufacturers 1% 12% 50% 37% 211 125 Non-manufactur 0% 4% 70% 27% 189 113 ers 10. As Japanese Prime Minister Fumio Kishida’s approval rating remains low, there is talk of succession. Who do you think would be an appropriate next prime minister? (Pick one)Shigeru Yuko Katsunobu Yoko Fumio Shinjiro Taro Yoshihide Sanae Yoshimasa Toshimitsu Kenta Katsuya Nobuyuki None of Polled Replied Ishiba Obuchi Kato Kawakami Kishida Koizumi Kono Suga Takaichi Hayashi Motegi Izumi Okada Baba these All 18% 0% 1% 12% 4% 6% 9% 12% 7% 3% 4% 0% 0% 0% 23% 400 218 Manufacturers 18% 1% 1% 14% 4% 4% 13% 13% 7% 3% 4% 0% 1% 0% 17% 211 114 Non-manufacture 19% 0% 1% 10% 3% 8% 5% 12% 8% 3% 3% 0% 0% 0% 30% 189 104 rs More

The ultraconservative House Freedom Caucus, which represents about three dozen of Johnson’s 219-212 Republican majority in the House of Representatives, promoted the idea in a letter as congressional leaders rushed to complete legislation to avert a possible partial government shutdown beginning early next month.The hardliners also asked Johnson to update House Republicans on spending talks, claiming that party members were being left in the dark about spending levels and potential policy changes.”Since January, Speaker Johnson has held regular meetings with members, including appropriators and HFC members, on the status of the FY24 appropriations process,” a Johnson spokesperson responded in a statement to Reuters. Hardliners, whose demands for deep spending cuts and conservative policy changes stymied progress on House Republican spending bills last year, are concerned that Johnson and Democratic Senate Majority Leader Chuck Schumer will soon unveil legislation with spending and policy compromises that they reject.”We could instead pass a year-long funding resolution that would save Americans $100 billion in year one,” 28 members of the hardline bloc told Johnson in the letter.The letter was referring to a section of the 2023 Fiscal Responsibility Act that requires a 1% across-the-board spending cut, if the federal government is funded by a stopgap measure come April 30. The current fiscal year began on Oct. 1, and the government has since been funded by a series of short-term stopgap bills.It was not clear whether the suggestion would make a difference to Johnson and other House Republican leaders.A dozen hardliners shut down the House floor in January to protest Johnson’s framework spending agreement with Schumer. The speaker responded by defying the group in a public statement. Funding is due to run out on March 1 for some federal agencies, including the Department of Transportation, while others like the Defense Department face a March 8 deadline. More