US: House Of Representatives On Brink Of Passing Big Beautiful Bill
At around 03:30 ET 08:30 BST this morning, House Speaker Mike Johnson (R-LA) broke the deadlock on a procedural vote to adopt the rule and advance the GOP's One Big Beautiful Bill towards a final vote on the House floor.
- Consistent with previous votes, Johnson kept the rule vote open while he worked in concert with President Donald Trump to flip holdouts with political threats and promises to work on conservative priorities in future legislation.
- With the rule adopted, the House is now on a glide path to holding a final vote on the massive reconciliation bill that could come as soon 06:30 ET 11:30 BST. Debate on the bill is underway in the House and can be followed on C-Span.
- The process played out largely as expected, with conservative hardliners in House registering their displeasure with the Senate-passed package, but ultimately unwilling to torpedo a bill that covers the bulk of Trump’s domestic agenda.
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RBA: VIEW: J.P.Morgan Look For Next Cut In July, Terminal Call Still Lows 3s
J.P.Morgan have tweaked their RBA call, “respecting the message” from the latest meeting minutes.
- They bring forward “the next anticipated 25bp cut from August to July. This is in the spirit of the board’s evolving view”.
- They note that “locally, the soft landing has been largely achieved. The data taken at face value would warrant gradualism. However, the board had held in obviously restrictive territory a bit longer than usual, in order to vanquish lingering risks on inflation. With those upside risks now in the rearview mirror, policy may not be sufficiently neutral to balance the global backdrop”.
- J.P.Morgan do not add additional cuts to their forecast profile at this stage. They are of the view that “a move to clear accommodative territory (into the 2s on the cash rate) requires a break towards global recessionary dynamics, which is not in our baseline. If the domestic data continue to hold up, the board is likely to view itself as being in the ballpark of neutral once the cash rate is in the low 3s”.
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BOE: Mann: Consumer behaviour changes as inflation approaches 4%
"One point where I would differ a little bit with what the Governor has painted is on the sort of the inflation dynamics and how uncertainty about inflation dynamics... We know from from the research by bank staff... that in an environment of higher volatility in inflation, something we may well observe...[e.g] supply chain costs change, or global export prices change, or whatever very variability. So under that environment where you have inflation volatility, combined with the nature of labour and product markets in the UK, which is that there is downward bias to price settings and to wage settings. In that environment, you end up with upward bias on inflation, prospects for inflation, inflation going forward, and the proper response under that kind of scenario is for a more aggressive activist, bold move to ensure that the anchor that 2% objective doesn't drift."
"I wrote a number of speeches about this topic during the high inflation period of a couple of years ago, I think that is still something we have to be concerned about, because inflation, of course, has come in as expected, but nevertheless high and it approaches a threshold which, in the research, a 4% inflation is a threshold that may change consumer behaviour and attitudes towards an inflation process, which then could feed back to wages. So it's important to kind of think about these asymmetries in both the inflation dynamics and in wage and price settings as we consider appropriate monetary policy decisions."
