EM LATAM CREDIT: Republic of El Salvador (ELSALV; B3/B-/B-): White House Meeting
“The meeting between Bukele and Trump would seek to strengthen an alliance "against terrorism and transnational crime." “– La Prensa Grafica
Neutral for prices
• U.S. President Donald Trump is scheduled to meet at the White House with the president of El Salvador Nayib Bukele today to discuss the fight against transnational organized crime.
• El Salvador has imprisoned individuals deported from the U.S. who were accused of being members of the Tren de Aragua gang and held at the Terrorism Confinement Center (CECOT).
• There is a contract with a USD6mn payment from Washington to use the maximum-security prison to house alleged gang members expelled from the U.S., according to La Prensa Grafica.
• This is the first time since President Trump’s inauguration that he has received a Latin American leader at the White House.
• El Salvador has a USD1.4bn loan program with the IMF so the strong relationship between Bukele and the president is important, especially if the country’s continued accumulation of Bitcoin should become a sticking point with the IMF in the future as the agreement stipulates an eventual liquidation of the country’s Bitcoin position.
• ELSALV 2035 bond prices fell from USD97.29 at year end to USD93 March month end to last quoted at USD90.5 up almost a point today.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
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
