POLAND: Nawrocki's Campaign Suffers Further Setbacks, Tight Race Continues
May-27 07:08
- Presidential hopeful Karol Nawrocki's campaign hit another snag as Onet published an extensive source report accusing him of helping arrange escorts for hotel guests while working as a security guard at the Grand Hotel in Sopot during his university years. Onet reporters claimed that they interviewed 'dozens of people' familiar with the matter, and two of Nawrocki's former colleagues agreed to testify in court if needed, although they preferred to remain anonymous for now. Nawrocki denied all accusations and said he was planning to press charges against Onet, but suggested he would pursue civil law and criminal law avenues, instead of using an expedited procedure allowing courts to issue a ruling and consider an appeal in election-related matters within 48 hours.
- The expedited procedure has been designed to allow election candidates to tackle misinformation and libel during election campaigns. Pressure has been piling on Nawrocki to use this option to challenge Onet's findings.
- Nawrocki's decision has raised some eyebrows, provoking accusations that he opted for regular procedures, which may take years to find resolution, to avoid sensitive facts coming to the surface before the second round of the vote.
- TVN24 cited leaks from a Supreme Audit Chamber (NIK) report pointing to numerous transgressions during Nawrocki's tenure as head of the Institute of National Remembrance (IPN).
- There is growing consensus that turnout may play a decisive role as Rafał Trzaskowski and Karol Nawrocki are locked in a neck-and-neck race ahead of this Sunday's presidential run-off.
- Defence Minister Wladyslaw Kosiniak-Kamysz will hold talks with his US counterpart Pete Hegseth to discuss military contracts and aid for Ukraine. Meanwhile, Homeland Security Secretary Kristi Noem will attend the Polish edition of the Conservative Political Action Conference (CPAC).
- The Finance Ministry lowered the coupons on one-year and two-year bonds that will be offered at next month's auctions by 50bp, matching the latest NBP rate cut. The coupons on three- to twelve-year bonds were reduced by 10p.
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US TSYS: Extraordinary Measures And Cash Look Sufficient To Head Off X-Date
Apr-25 20:32
Treasury has about $164B in "extraordinary measures" available as of April 23 to avoid hitting the debt limit, per its regular report out Friday. That's out of a maximum total of $375B (they have used $211B).
- With Treasury cash looking healthy (around $600B), that's a fair amount of dry powder to get through the summer months to wait out the debt limit impasse. Tax receipts have looked strong with tariff revenues also starting to boost cash flows, further reducing the near-term urgency to adjust bond issuance.
- This has also helped push back analyst “x-date” expectations to later in the summer/September. We expect to hear from Treasury about its own x-date assumptions next week.
US TSYS: Treasury Market Trading Stayed Orderly In April: Fed Report
Apr-25 20:25
Liquidity across financial markets including the Treasury market deteriorated after President Trump's April 2 reciprocal tariffs announcement but market functioning was generally orderly, according to the Federal Reserve's semiannual report on financial stability, released Friday. (PDF link is here)
- Treasury market liquidity has been poor for years and yields were particularly volatile in early April, contributing to a deterioration in market liquidity, the Fed said.
- Nevertheless "trading remained orderly, and markets continued to function without serious disruption," according to the report, which looked at information available as of April 11.
FED: Ex-Gov Warsh: Fed Has Failed To Satisfy Price Stability Remit
Apr-25 20:22
From our Washington Policy Team - Some fairly sharp words today from ex-Fed Governor Warsh on the central bank (who for what it's worth is seen by betting markets as by far the frontrunner for the next Fed Chair):
- The best way for the Federal Reserve to safeguard its independence is for policymakers to avoid expanding the institution's role over time, including wading into policy areas that are outside its core mission, former Fed Governor Kevin Warsh, a leading contender to replace Jerome Powell as chair next year, said Friday.
- "I strongly believe in the operational independence of monetary policy as a wise political economy decision. And I believe that Fed independence is chiefly up to the Fed," Warsh said in a speech at a Group of Thirty event on the sidelines of the IMF meetings. "Institutional drift has coincided with the Fed’s failure to satisfy an essential part of its statutory remit, price stability. It has also contributed to an explosion of federal spending." His speech made no mention of Trump's tariffs or the appropriate monetary policy to deal with them.
- He said the ideas of data dependence and forward guidance widely adopted by Fed officials are not especially useful and might even be counterproductive.
"We should care little about two numbers to the right of the decimal point in the latest government release. Breathlessly awaiting trailing data from stale national accounts -- subject to significant, subsequent revision -- is evidence of false precision and analytic complacency," he said.
"Near-term forecasting is another distracting Fed preoccupation. Economists are not immune to the frailties of human nature. Once policymakers reveal their economic forecast, they can become prisoners of their own words. Fed leaders would be well-served to skip opportunities to share their latest musings."
