US: Trump Expected To Send $9.3B Rescission Package To Congress
President Donald Trump is preparing a rescission package that will direct Congress to undo USD$9.3 billion in funding for the State Department aid budget and public broadcasting. The package is expected to be delivered to Congress when lawmakers return from recess. Passage through Congress will require a simple majority from both chambers.
- The New York Post, which first reported on the planned request, noted the request covered roughly $1 billion for the Corporation for Public Broadcasting and more than $8 billion for USAID and other State Department efforts.
- Politico notes: "Congressional Republicans have been asking [the White House] for more a month now to send over a formal rescissions package, which would allow lawmakers to approve or reject specific funding cuts... Some GOP senators have even directly appealed to Elon Musk for the chance to codify the spending cuts he’s made through his Department of Government Efficiency initiative."
- Politico adds: "Trump sent a request in 2018 to claw back $15 billion, the Senate rejected the plan. And not all Republicans support cutting funding for all the programs Trump would target in the new request."
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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
