GERMANY: Bild-Merz Ally Linnemann Passes On Econ Min To Stay CDU Sec-Gen
Bild reports that Carsten Linnemann, Secretary General of the centre-right Christian Democratic Union (CDU) and close ally of chancellor-in-waiting Friedrich Merz, has passed on the opportunity to take on the Economy Ministry portfolio in the incoming 'grand coalition' gov't. Instead, Linnemann will retain his position as organisational leader of the CDU. Linnemann: "We have worked over the past three years to rebuild our CDU. This process is not yet complete. I want to continue it."
- It is not yet clear who could take on the economy ministry position instead of Linneman. Some pundits have speculated Linnemann may prefer to remain with the party out of gov't to avoid potential blowback on his own political career should the 'grand coalition' experience significant political turbulence.
- Several CDU politicians have raised hackles on the left recently with comments that opponents have criticised as being soft on the right-wing nationalist Alternative for Germany (AfD). Deputy Chair of CDU/CSU Group Jens Spahn said in an interview with Bild that "Politicians must "simply acknowledge how many millions of Germans voted for the AfD. That's why it has such a strong hold there. [...] We should take them seriously, these [AfD] voters."
- FAZ reports Johann Wadephul, a front-runner for the Foreign Ministry, has said AfD lawmakers must be allowed to become committee chairs in the Bundestag, as denying them the opportunity would allow them to claim "martyr status." Says only those lawmakers who have "not attracted negative attention in the past" should be considered.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
