FED: Too Early To Decide Whether To Cut In Sept, 50bp Cut Unwarranted - Musalem

Speaking at a presser following the conclusion of the Foreign Affairs Council meeting in Brussels, EU High Representative for Foreign Affairs and Security Policy Kaja Kallas says that she is "really sad" that the EU did not approve an 18th round of sanctions on Russia at today's meeting. She says that "the ball is in Slovakia's court" on the issue. Earlier, Slovakian PM Robert Fico confirmed on X that he had tasked the Slovak foreign minister with requesting a delay to the vote on sanctions.  

• Fico claims that "the best solution would be granting Slovakia an exemption allowing it to fulfill its contract with Russian Gazprom until it expires in 2034..." Fico says that parties across the political landscape claim that the Commission's proposals on the Russian fossil fuel phase out are "insufficient".
• Kallas says that she is "hopeful" an agreement on tariffs will be reached tomorrow.
• Kallas says that the EU welcomes US President Donald Trump's announcement on sending more weapons to Ukraine, "although we would like to see the US share the burden".
• Asked about the potential use of frozen Russian assets for Ukraine's defence and reconstruction amid rising international focus on the prospect amid Trump's commitment to weapons provision, Kallas says that the issue will be discussed at the informal 'Gymnich' meeting of foreign ministers on 29-30 August. 

Senate Majority Leader John Thune (R-SD) has downplayed the broader implications of President Donald Trump's USD$9.4 billion rescissions package ahead of the first Senate votes on a request that has threatened to derail government funding negotiations. The first procedural vote could take place as soon as this evening, if Thune can get a handful of wavering Republicans onside. 

• Thune said on the Senate floor that the House-passed recissions package has "a focus on woke and wasteful foreign aid dollars. We're going to consider that common-sense legislation this week." Thune added: "...incredibly, Democrats are melting down at the prospect of even the most minor cuts to federal spending. You'd think we are proposing to defund the entire government from the way they are talking."
• Senate Minority Leader Chuck Schumer (D-NY) said yesterday: "This rescissions package is certainly troubling, but the pattern behind it is even worse. It sets the stage for even more party-line devastating cuts for the future, to healthcare, education, anything Republicans decide they don’t like. All on a party line vote. All because of obeisance and fear of Donald Trump."
• Schumer last week explicitly tied the package to FY26 government funding, and with the appropriations process stalled, Thune will almost certainly require Democrat votes to pass a short-term measure to offset a government shutdown in October.
• Polymarket currently shows a conservative 40% chance of a government shutdown in 2025, reflecting conventional wisdom that Democrats will not allow a shutdown despite having few other options for leverage.

• total 22,500 USU5 108 puts, 28-29 vs. 112-09/0.16% at 1031:00ET