STIR: FED Reverse Repo Operation
Sep-18 17:46
RRP usage climbs back over $300B to $305.831B this afternoon from $256.337B yesterday. This after usage fell to $239.386B Monday -- the lowest level since early May 2021. Number of counterparties rebounds to 55 from 44 on Monday.
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US: Republicans Favoured To Win Senate, Split Ticket Forecast
Aug-19 17:39
Split Ticket has concluded, in newly published Senate ratings, that Republicans are favoured to win 51 Senate seats in November.
- Split Ticket: “Our forecast finds Republicans favored in 51 seats, with Democrats favored in 48. In our simulations, Republicans hold the Senate 84 percent of the time.”
- The forecast supports a widely-held view that control of the Senate may ultimately come down to the Montana race, where Senator Jon Tester (R-MT) is polling behind Republican challenger Tim Sheehy. To win the race, Tester would likely have to outperform Harris by upwards of 15 points, a heavy lift considering the rarity of split-ticket voting in the highly polarised modern political environment.
- Split Ticket concludes: “…it’s a minor miracle that virtually no battleground state’s senate seat is even that competitive at the moment — the only places Democrats are truly at risk of losing seats are in deep-red states. But that is all the GOP needs, and given the decline in ticket-splitting that has hurt red-state Democrats in the past decade, it makes sense to not bet against polarization.”
Figure 1: 2024 Senate Election Ratings
Source: Split Ticket
SECURITY: Blinken Says Netanyahu Accepted "Bridging" Proposal For Gaza Ceasefire
Aug-19 17:37
US Secretary of State Antony Blinken, speaking to reporters in Tel Aviv, says that a two-hour meeting today with Israel Prime Minister Benjamin Netanyahu was "constructive," adding that Netanyahu said he supports the US-backed Gaza bridging proposal and is committed to sending an expert team to Doha or Egypt to complete the Gaza ceasefire process.
- Reuters notes that Blinken said he will be travelling to Egypt and Qatar, with the next round of talks set to get underway on Wednesday.
- Amichai Stein at Kann notes, "Blinken says Israel has accepted U.S.-backed bridging proposal for a cease-fire, calls on Hamas to do the same."
- AP notes that Blinken, "did not say whether the so-called bridging proposal addressed Israel’s demands for control over two strategic corridors inside Gaza, which Hamas has said is a nonstarter, or other issues that have long bedeviled the negotiations."
- Netanyahu said, per Stein: "I greatly appreciate the understanding that the United States has shown to our vital security interests, while in our joint efforts to bring about the release of our hostages. And I would like to emphasize: Efforts are being made to release the maximum number of hostages alive - already at the first stage."
US OUTLOOK/OPINION: Newly Immigrated vs Native-Born Participation Rates
Aug-19 17:34
- Atlanta Fed economists write on the labor supply characteristics of newly immigrated workers (blog post here).
- It’s an area of focus for markets considering net immigration has “led to significant increases in the breakeven employment growth—the monthly payroll growth needed to maintain an unemployment rate consistent with "full employment"—thus implying that the labor market was less tight than suggested by the monthly payroll employment growth.”
- Using data from the US Census Bureau's ACS, they find “that immigrants work less intensively than native workers immediately following their arrival. They exhibit lower labor force participation rates, employment rates, number of weeks worked per year, average weekly hours, and total hours worked per year.”
- “However, as they continue to reside in the United States, their work intensity approaches that of native workers. By their fifth year of immigration, these labor market indicators are similar to those of native-born workers.”
- However, when it comes explicitly to participation rates, third year immigrants tend to have higher participation than native-born workers and this gap grows more positive over duration in the US.
