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A major recession is coming, Deutsche Bank warns | CNN Business

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A major recession is coming, Deutsche Bank warns | CNN Business


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CNN Enterprise
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Deutsche Financial institution raised eyebrows earlier this month by turning into the primary main financial institution to forecast a US recession, albeit a “gentle” one.

Now, it’s warning of a deeper downturn attributable to the Federal Reserve’s quest to knock down stubbornly excessive inflation.

“We are going to get a serious recession,” Deutsche Financial institution economists wrote in a report back to shoppers on Tuesday.

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The issue, based on the financial institution, is that whereas inflation could also be peaking, it should take a “very long time” earlier than it will get again right down to the Fed’s objective of two%. That implies the central financial institution will increase rates of interest so aggressively that it hurts the economic system.

“We regard it…as extremely possible that the Fed should step on the brakes much more firmly, and a deep recession will probably be wanted to deliver inflation to heel,” Deutsche Financial institution economists wrote in its report with the ominous title, “Why the approaching recession will probably be worse than anticipated.”

Shopper costs spiked by 8.5% in March, the quickest tempo in 40 years. The roles market stays on fireplace, with Moody’s Analytics projecting that the unemployment price will quickly fall to the bottom stage for the reason that early Fifties.

To make its case, Deutsche Financial institution created an index that tracks the space between inflation and unemployment over the previous 60 years and the Fed’s said objectives for these metrics. That analysis, based on the financial institution, finds that the Fed at present is “a lot additional behind the curve” than it has been for the reason that early Eighties, a interval when extraordinarily excessive inflation compelled the central financial institution to lift rates of interest to file highs, crushing the economic system.

Historical past exhibits the Fed has “by no means been in a position to appropriate” even smaller overshoots of inflation and employment “with out pushing the economic system into a major recession,” Deutsche Financial institution mentioned.

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On condition that the job market has “over-tightened” by as a lot as two share factors of unemployment, the financial institution mentioned, “One thing stronger than a light recession will probably be wanted to do the job.”

The excellent news is that Deutsche Financial institution sees the economic system rebounding by mid-2024 because the Fed reverses course in its inflation battle.

After all, nobody is aware of exactly how it will play out. Though Deutsche Financial institution is pessimistic – it’s probably the most bearish amongst main banks on Wall Avenue – others contend this gloom-and-doom is overdone.

Goldman Sachs concedes it is going to be “very difficult” to deliver down excessive inflation and wage progress, however stresses {that a} recession is “not inevitable.”

“We don’t want a recession however most likely do want progress to gradual to a considerably below-potential tempo, a path that raises recession danger,” Goldman Sachs economists wrote in a report Friday night.

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UBS is equally hopeful that the financial enlargement will proceed regardless of the Fed’s shift to inflation-fighting mode.

“Inflation ought to ease from present ranges, and we don’t anticipate a recession from rising rates of interest,” Mark Haefele, chief funding officer at UBS World Wealth Administration, wrote in a report on Monday.

Deutsche Financial institution mentioned an important issue behind its extra damaging view is the chance that inflation will stay “persistently elevated for longer than typically anticipated.”

The financial institution mentioned a number of developments will contribute to higher-than-feared inflation, together with: the reversal of globalization, local weather change, additional supply-chain disruptions attributable to the conflict in Ukraine and Covid lockdowns in China and coming will increase to inflation expectations that can assist precise inflation.

“The scourge of inflation has returned and is right here to remain,” Deutsche Financial institution mentioned.

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If inflation does keep elevated, the Fed will probably be compelled to contemplate extra dramatic rate of interest hikes. The Fed raised rates of interest by a quarter-percentage level in March and Chairman Jerome Powell conceded final week {that a} half-point hike is “on the desk” at subsequent week’s assembly.

“It’s sorely tempting to take a go-slow method hoping that the US economic system might be landed softly on a sustainable path. This won’t occur,” Deutsche Financial institution mentioned. “Our view is that the one strategy to reduce the financial, monetary and societal harm of extended inflation is to err on the facet of doing an excessive amount of.”

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Olympic Sprinter Charged in Confrontation With Miami Beach Police

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Olympic Sprinter Charged in Confrontation With Miami Beach Police

Fred Kerley, a two-time Olympic medalist sprinter for the United States and one of the fastest runners in the world, was arrested late Thursday night in Miami Beach, Fla., after an altercation with the police in South Beach, a gathering place for tourists that is known for its nightlife.

Mr. Kerley, who won a silver medal at the 2020 Tokyo Games in the men’s 100-meter dash and a bronze in the same event at the 2024 Paris Games, was charged with battery of a police officer, resisting arrest and disorderly conduct after arguing and then scuffling with officers just off the area’s main thoroughfare, Ocean Drive. The battery charge, a felony, carries a maximum sentence of five years in prison.

Mr. Kerley, who is 29 and from Taylor, Texas, also faces two other felony charges, for robbery and domestic violence in an unrelated case from last May. The police said they had been looking for him in connection with that matter. Those charges include allegations that he choked his wife and stole her phone.

Yale M. Sanford, a lawyer representing Mr. Kerley in this week’s arrest, said the police were in the wrong because a simple conversation with Mr. Kerley could have de-escalated the situation.

“It’s an overstep and, you can even say, an unreasonable use of force that could have been avoided,” Mr. Sanford said.

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Richard L. Cooper, a lawyer representing Mr. Kerley in the domestic violence case, said those charges were “completely unsubstantiated,” and that it was his understanding that the case was not being pursued. The charges had been presented unexpectedly by the authorities after the altercation with the police in South Beach, he said. Mr. Kerley and his wife are separated and are seeking a divorce, the lawyer said.

The police defended their actions, saying that Mr. Kerley had interfered with an active crime scene at a tense time in the country, when police in Miami Beach were on high alert in the days after a van rammed a crowd in New Orleans, killing 14 people, and a Cybertruck exploded outside a Trump Hotel in Las Vegas, killing one.

On Thursday night, officers were investigating a man who had parked a car in a spot reserved for emergency vehicles near Ocean Drive, said Officer Christopher Bess, a spokesman for the Miami Beach Police Department. Mr. Kerley diverted their attention, Officer Bess said.

“We just saw an aggressive male impeding the crime scene,” Officer Bess said of Mr. Kerley.

While the police were dealing with the man who parked in the emergency area, Mr. Kerley approached the police, saying he was concerned about his own car, which was parked nearby, according to Officer Bess and an arrest affidavit. The police described Mr. Kerley as having “an aggressive demeanor,” the affidavit said.

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One officer’s body camera video shows shaky glimpses of a chaotic altercation, which appeared to escalate when an officer used his arm to block Mr. Kerley from approaching, and Mr. Kerley batted it away. Several officers then wrestled Mr. Kerley to the ground and tried to handcuff him while he repeatedly attempted to climb to his feet, according to the video and police documents.

One officer “delivered multiple hammer fists toward the defendant’s upper head area and several elbows toward his upper back area,” according to the arrest affidavit, and the police body camera shows officers striking Mr. Kerley as they try to subdue him.

A girlfriend of Mr. Kerley appears in the background of the police video, holding up her phone to videotape while repeatedly calling out, “Stop! Stop!” At one point, she says, “He’s an athlete, please do not mess with him.” Later, she refers to him as a “U.S.A. athlete” and says, “Stop, he didn’t doing anything.”

Just over a minute into the struggle, several police officers step away from Mr. Kerley, letting him rise to his feet before using a stun gun on him, the video shows. He then collapses onto the street.

On the body camera video, Mr. Kerley can be heard saying, “I’m not resisting, get off me,” and “Get off my legs. I need my legs.”

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Several times he called the officers weak and cursed at them. He also said they were going to jail for putting their hands on him.

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Oil tanker boss says UN maritime body ‘sleeping’ over dark fleet threat

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Oil tanker boss says UN maritime body ‘sleeping’ over dark fleet threat

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The boss of the world’s largest publicly listed oil tanker operator has accused the UN maritime rule-setting body of “sleeping behind the wheel” over the growing dark fleet of unregulated vessels, saying it is “only a question of time” before a significant disaster takes place.

Lars Barstad, chief executive of Frontline, also criticised European governments for failing to enforce rules meant to curtail trading in Russian oil, saying they were worried about forcing up energy prices.

The number of dark fleet vessels has grown to about a fifth of the world fleet after Russian-linked owners bought up hundreds of ageing ships to circumvent western countries’ curbs on the country’s oil trade.

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The potential for disaster was illustrated in July when the Hafnia Nile, a tanker operated by Singapore-based Hafnia, collided with the Ceres I, a dark fleet vessel carrying Iranian oil, in waters off Malaysia.

According to a subsequent US Treasury sanctions notice against the Ceres I’s owners, at the time of the collision the vessel’s radar system was broadcasting an inaccurate location — a common tactic for dark fleet ships trying to conceal their activities.

Dark fleet vessels, which carry oil from Iran and Venezuela as well as Russia, are generally the property of offshore companies whose ownership is unclear and often lack adequate insurance. They are frequently registered under the flags of countries that do little to enforce rules about regular safety inspections.

Lars Barstad said he was ‘very, very concerned’ about the growth of the dark fleet © Mats Finnerud

Barstad said he was “very, very concerned” about the growth of the dark fleet, which he said had incentivised a number of “lawbreaking operators” to make an “insane amount of money”.

He added that the International Maritime Organization (IMO), the UN body, was doing too little to ensure enforcement of its safety and environmental rules.

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“All these vessels . . . are trading outside the IMO framework,” Barstad said. “They have been sleeping behind the wheel now for quite some time in respect of tankers.”

There had been reports of other, unconfirmed incidents besides the Ceres I collision, Barstad added. “I’m very surprised we’ve not had more incidents like this,” he said. “I think it’s only a question of time until we get a big one.”

A vessel such as the Ceres I — which was carrying 2mn barrels of crude oil — could be split in two in a future incident, he said.

“That would be in the environment a bigger problem,” Barstad said. “It can happen any day — and then the biggest problem is that, if that happens, nobody will know who actually owns the ship or the cargo.”

Shipowners that complied with the regulations, such as Frontline, were facing disadvantages because so many others were operating with lower costs in unregulated dark fleets, Barstad added. He said that reflected politicians’ lack of willingness to enforce the sanctions.

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“Politicians have decided not to take the political risks,” Barstad said, adding that he thought many feared higher energy prices if oil from Russia, Iran and Venezuela were truly excluded from international markets.

There have been persistent suggestions that countries such as Denmark — which controls the entrance to the Baltic — and countries by the English Channel should inspect and take into custody tankers sailing past their coasts without proper insurance.

Barstad declined to single out particular states but said: “It seems extremely halfhearted the way enforcement has been done. A tough position should be taken if one is serious about this.”

The IMO said in response to Barstad’s criticism that its general assembly passed a resolution in late 2023 calling on member states to take tougher action over fraudulent registration of ships and to step up inspections of vessels in port.

It also said member states had the responsibility to ensure that vessels flying their flag followed the required rules and to ensure ships visiting their ports did so.

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A storm will bring heavy snow and dangerous ice from the Plains to the East Coast

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A storm will bring heavy snow and dangerous ice from the Plains to the East Coast

The National Weather Service’s Winter Storm Severity Index shows areas predicted to be impacted by the storm.

NWS Weather Prediction Center/Screenshot by NPR


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NWS Weather Prediction Center/Screenshot by NPR

The first weekend of 2025 is having the coldest air of the season, according to the National Weather Service. The first significant winter storm of the year will impact 62 million people through the weekend and into Monday.

Heavy snow, ice, rain and severe thunderstorms will be unleashed from the Plains to the East Coast. While snow and ice has been limited to the northern states this winter, the upcoming storm will impact areas less prone to winter weather.

“The major winter storm will bring significant disruptions to the Central Plains by late Saturday, spreading to the Ohio Valley on Sunday,” the NWS said.

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Travel delays are likely as the storm is forecast to reach the mid-Atlantic by Sunday night. Severe thunderstorms are expected in areas with warmer temperatures. The storm could also impact Texas and Mississippi, which are still recovering from last month’s deadly storms.

States are gearing up for heavy snowfall and hazardous conditions 

A nasty mix of sleet, snow and freezing rain is expected to disrupt travel and daily life in the central United States, according to the NWS Winter Storm Severity Index.

The storm will begin with a deep surge of moist air moving north out of the Gulf of Mexico, which will spread rain and snow over the Plains. As it strengthens and expands, it will track east and spread into the Mississippi Valley and parts of the Midwest on Sunday morning, and reach the East Coast by Sunday night and Monday morning.

Officials have already begun preparing for the worst. On Friday, Missouri Gov. Mike Parson put the National Guard on standby, and Gov. Glenn Youngkin of Virginia declared a state of emergency. Youngkin has urged people to avoid traveling on Sunday.

“I’m encouraging all Virginians, visitors, and travelers to stay alert, monitor the weather forecast, and prepare now for any potential impacts,” Youngkin said in a statement.

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States of emergency have also been declared in Kentucky and Arkansas. In Kentucky, Gov. Andy Beshear said in a press conference that emergency warming centers will open on Sunday and people should stay off the roads.

Major cities such as Chicago, St. Louis and Washington, D.C., have also begun pretreating their roads and preparing warming centers.

For those needing to rebook flights due to the storms, American Airlines, Delta, Southwest and United all said they were waiving certain change fees at some locations.

Near-blizzard conditions are expected in the Central Plains 

Heavy snowfall and wind gusts of over 40 mph could create blizzard conditions in the Central Plains by Sunday morning. The region from central Kansas to Indiana may get at least 8 inches of snow, with potential lingering snow showers on Monday.

The NWS Weather Prediction Center said that the most extreme conditions will likely be in places running along the Interstate 70 Corridor, which passes through St. Louis and Indianapolis.

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There is also “significant icing potential” mainly in parts of Kansas, Missouri and Kentucky this weekend, according to forecasters. Icing is when rain freezes on contact with the ground. It can also affect cars and car windows — essentially any surface outside.

A thin layer of ice can cause dangerous road conditions for vehicles and pedestrians. Thicker layers of ice can cause power outages and make roads impassable. In 2023, a January ice storm stretching from Texas to Tennessee left hundreds of thousands without power.

Thunderstorms expected in warmer climates

States too warm for snow will also experience extreme weather. Severe thunderstorms are likely on Sunday in parts of Louisiana, Arkansas and Mississippi, according to the NWS Storm Prediction Center.

The Southeast is expected to see the heaviest rainfall, and the storm could cause flooding. There is also an enhanced risk of thunderstorms in parts of the lower Mississippi Valley on Sunday.

This storm is expected to pass by late Monday. It will exit the East Coast on Monday night and fully diminish its impact overnight. But temperatures are expected to plunge on Tuesday. The eastern two-thirds of the U.S. will see temperatures 30 degrees below normal, and the frigid air could last until mid-January.

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