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US yield curve inverts in possible recession signal

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US yield curve inverts in possible recession signal

A intently watched recession sign flashed crimson on Tuesday, as traders fretted that the Federal Reserve’s efforts to tame inflation will convey a few sharp slowdown in US financial exercise.

Two-year Treasury observe yields rose above these of the 10-year for the primary time since August 2019, inverting a portion of the yield curve monitored intently by Wall Avenue and policymakers. Inversions usually sign malaise in regards to the economic system’s long-term development prospects and have preceded each US recession previously 50 years.

Sometimes, a recession has adopted within the two years after an inversion of this measure of the yield curve.

Two-year yields, which transfer with rate of interest expectations, rose as excessive as 2.45 per cent, the very best degree since March 2019. The 2-year yield has risen by 1.64 share factors this 12 months because the US central financial institution has tightened financial coverage, together with its first charge rise since 2018 with a view to fight inflation that’s at a 40-year excessive.

The ten-year yield, which strikes with inflation and development expectations, fell as little as 2.38 per cent. The benchmark yield has additionally risen this 12 months, albeit at a slower tempo, as tighter Fed coverage has curtailed inflation and development forecasts.

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After inverting, the hole rapidly widened and the yield curve turned optimistic once more, the place it hovered at about 0.02 share factors. Firstly of the 12 months, it stood at 0.77 share factors.

The unfold between five- and 30-year yields, one other measure of the yield curve, on Monday inverted for the primary time since 2006.

Buyers argue, nonetheless, that the inversion will not be as dependable a recession indicator this time spherical as a result of the Fed’s huge bond purchases through the coronavirus disaster have skewed the yields.

“The yield curve inversion is an element that may fear markets,” stated Gennadiy Goldberg, a US charges analyst at TD Securities. However, he famous that these inversions “may additionally be distorted as a result of huge Covid quantitative easing programme undertaken by the Fed”.

The Fed, as a part of its intervention in monetary markets through the market collapse in March 2020, started shopping for enormous swaths of US authorities debt to shore up the economic system. The central financial institution this month ended that $120bn-a-month bond-buying programme and because it has pulled again, the flood of Treasuries to the market has pushed costs decrease and yields increased.

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Expectations have elevated that the Fed will ratchet increased the tempo at which it’s tightening financial coverage, with traders girding for the central financial institution to ship a half-point charge enhance as early as its assembly in Might. The central financial institution usually strikes in quarter-point increments, because it did earlier this month, however mounting inflationary pressures have raised the chance of extra aggressive motion.

Some officers have additionally advised charges this 12 months must rise above the so-called impartial degree that neither aids or hinders development and that’s forecast to be 2.4 per cent.

The results of the Fed’s intervention could imply that this yield curve inversion is one pushed by technical elements out there, fairly than financial fundamentals.

The normal indicators of a slowing economic system are additionally not but current. The US economic system final 12 months grew on the quickest annual tempo since 1984 because it rebounded from the pandemic-driven recession, which lasted for the primary two quarters of 2020. The labour market has additionally roared again, with robust jobs development reported in latest months.

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Donald Trump’s anti-war pledge tested as Israel’s attack on Iran splits Maga base

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Donald Trump’s anti-war pledge tested as Israel’s attack on Iran splits Maga base

Donald Trump won last year’s US election promising to be a president of peace. With America now at risk of being dragged into a new war between Israel and Iran, that pledge is looking increasingly hollow.

Trump said on the campaign trail that he could easily resolve the conflict in Gaza, use diplomacy to halt Iran’s nuclear programme and end the war between Russia and Ukraine within 24 hours of taking office.

In his victory speech in November, he said: “They said, ‘he will start a war’. I’m not going to start a war, I’m going to stop wars.”

It was a message that held huge appeal for American voters tired of decades of US military interventions in the Middle East and Afghanistan — the seemingly interminable engagements Trump frequently referred to as America’s “forever wars”.

Yet the fear is growing among Trump’s loyal Maga base that Israel’s strikes against Iran on Thursday night will embroil an anti-war president in another foreign military entanglement — this time between the two biggest military powers in the Middle East.

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Donald Trump at Fort Bragg on Tuesday. The president on Friday said the Iranians officials the US had been dealing with in the nuclear negotiations were ‘all dead’ following Israel’s strike on the Middle Eastern country © Stan Gilliland/EPA-EFE/Shutterstock

Steve Bannon, Trump’s chief strategist in his first term, said US and Israeli interests were not necessarily identical in the current crisis.

“They [the Israelis] are Israel First, we need to always be America First,” he said. “And in Jerusalem they should reflect on the message of Christ: live by the sword, die by the sword.”

Asked by the Financial Times whether he feared the US would be dragged into a war with Iran, he replied: “Very much.”

It is a fear that is widely shared among Trump’s supporters, as concerns grow that beyond the missile attacks on Israel on Friday afternoon, Tehran might also hit at US military assets in the region. “Israel is trying to get Iran to attack us just like your bitchy ex who tried goading some dude in a bar to fight you,” Tim Pool, the popular rightwing podcaster, wrote on X.

“Is the United States about to be sucked into yet another war in the Middle East?” said Jack Posobiec, an far-right media personality. “Because that’s exactly the opposite of what . . . President Trump campaigned for back in Pennsylvania and Michigan and Wisconsin.”

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Steve Bannon, Trump’s chief strategist in his first term
Steve Bannon said he feared the US would be dragged into a war with Iran © Al Drago/Bloomberg

Posobiec was speaking on Thoughtcrime, a video roundtable hosted by rightwing influencer Charlie Kirk, just as details of the Israeli strikes were coming in. Both indicated the Israeli action would set alarm bells ringing among Trump’s base.

“This is going to schism Maga terribly online,” Kirk said. “You’re going to see — I don’t want to say a Maga civil war, but it’s going to be a Maga online food fight [which] is going to be very hard to navigate.”

Kirk later posted hawks would be urging the US to “finish off the mullahs”. But he warned: “America’s interventions in Afghanistan, Iraq and Libya were all easy at the start. It was in the months and years afterwards that they became costly, wasteful quagmires. None of them were worth it.”

On the same podcast, Tyler Bowyer, an activist at conservative non-profit Turning Point USA said: “If you could probably sum up President Trump’s campaign from 2024, it was that electing me is going to prevent world war three.”

“One of Trump’s biggest promises was ‘with me you’ll get less war — I’m the anti-war president’,” Bowyer added.

rightwing influencer Charlie Kirk
Rightwing influencer Charlie Kirk said the hawks would be urging the US to ‘finish off the mullahs’ © Andrew Harnik/Getty Images

Matthew Boyle, Washington bureau chief of rightwing populist news website Breitbart, said Trump faces a precarious balancing act, keeping the US out of a wider war while continuing to back Israel, one of America’s closest allies, and ensuring Iran never gets a nuclear bomb.

“What he does from here could define his presidency,” he said. “But if there’s anyone who can handle such a perilous situation, it’s President Trump.”

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Complicating matters for the president’s Maga supporters was the fog of uncertainty over Trump’s real position on the Israeli attack. In late May, he said he had warned Israeli Prime Minister Benjamin Netanyahu not to attack Iran while Washington was negotiating with Tehran over a nuclear deal.

That initially led some observers to speculate that Netanyahu had gone against US wishes in launching its attack, an impression enhanced by secretary of state Marco Rubio who said the US had not been involved and described the strikes as a “unilateral action” by Israel.

 Israeli Prime Minister Benjamin Netanyahu and Donald Trump
Israeli Prime Minister Benjamin Netanyahu, left, and Donald Trump in April. The US president on Friday said Washington had known about Israel’s attack on Iran in advance © Kevin Dietsch/Getty Images

But on Friday Trump came out in support of the Israeli strikes, telling the Wall Street Journal that Washington had known about them in advance. He called them the “greatest thing ever for the market” because they would stop Iran developing “a nuclear weapon that was a great threat to humanity”.

“Trump has now praised Israel’s strike, affirmed US material support, and Israeli media is reporting his public opposition was a disinformation campaign to mislead Iran,” said Saagar Enjeti, rightwing co-host of the podcast Breaking Points. “So in other words Trump, not Israel, has made a mockery of all of us [who] wanted to avoid this war.”

But Breitbart’s Boyle said he firmly believed Trump’s goal of a historic deal to end Iran’s nuclear programme could still be in reach, despite the Israeli assault — and that the chances of it happening had now increased.

“If anything, what Israel did strengthens Trump’s hand in negotiations with the Iranians,” he said. “It might create leverage that didn’t exist before.”

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This echoed Trump’s comments. In an interview with CNN’s Dana Bash on Friday he said the Iranian “hardliners” the US had been dealing with in the nuclear negotiations were “all dead”.

Asked by Bash if Israel had killed them, he replied: “They didn’t die of the flu.”

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‘No Kings’ demonstrators to gather across Greater Cincinnati in opposition to Trump

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‘No Kings’ demonstrators to gather across Greater Cincinnati in opposition to Trump
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A string of protests is planned throughout Greater Cincinnati as part of a nationwide movement opposed to President Donald Trump and his administration.

The June 14 “No Kings” protests, organized by activist group Indivisible and its partners, are described as a “nationwide day of defiance.” Events are slated to take place in nearly 2,000 communities across the nation to oppose what organizers describe as “corrupt, authoritarian politics.”

Numerous protests are scheduled to take place in the afternoon locally throughout Greater Cincinnati, including:

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  • Cincinnati – University Pavilion (University of Cincinnati): 2618 University Circle, Cincinnati, Ohio 45219.
  • Union Township – Veterans Memorial Park: 906 Clough Pike, 45245.
  • Loveland – Loveland Elementary School: 600 Loveland-Madeira Road, Loveland, Ohio 45140.
  • Mason – Intersection of Mason Montgomery Road and Tylersville Road, 45040.
  • West Chester Township – Intersection of Tylersville Road and Cox Lane, 45069.
  • Hamilton – Intersection of South Martin Luther King Junior Boulevard and High Street, 45011.
  • Middletown – Towne Mall: 3461 Towne Blvd., 45005.
  • Oxford – Uptown Park: intersection of Main Street and High Street, 45056.

Falling on Flag Day and Trump’s birthday, the day of protest is intended to help counter Trump’s planned Washington, D.C. military parade. It also coincides with large-scale protests in Los Angeles, which erupted in response to Trump’s immigration policy.

The U.S. Immigration and Customs Enforcement agency is carrying out a directive from Trump to find immigrants living in the United States without legal status. The aggressive crackdown has fueled anger and protests in Los Angeles and across the country, which have led to hundreds of arrests amid occasional violent clashes, vandalism and looting.

Hundreds of demonstrators gathered on June 8 outside the Butler County Jail to protest the arrest of 19-year-old Honduran immigrant Emerson Colindres, who was detained by ICE agents on June 4 during a routine check-in with immigration officials at the agency’s office in Blue Ash.

The Enquirer will have reporters covering the protests and will update this story.

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USA TODAY contributed to this report.

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How Many Law Enforcement Agencies Are Involved in LA Immigration Protests?

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How Many Law Enforcement Agencies Are Involved in LA Immigration Protests?

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Bedel Saget/The New York Times

The protests in Los Angeles against immigration raids, now seven days on, have resulted in a considerable law enforcement presence — significant in both its sheer number and its broad representation across local and federal agencies, including military forces.

The New York Times identified more than a dozen groups that were on the ground in the past week. Times journalists reviewed over a thousand videos and images taken of the protests, including drone footage of the downtown area, to determine officers’ locations and movements and the weapons they were carrying.

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Where major agencies were seen operating

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Source: New York Times analysis of photos and videos from the protests; aerial image by Nearmap

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Note: Areas are approximate and based on photographic evidence.

The New York Times

It is extremely unusual for active-duty military personnel to be deployed to respond to a domestic protest, as the Trump administration ordered last week. President Trump commandeered 2,000 members of California’s National Guard and placed them under federal control, bypassing the opposition of state leaders, and then sent another 2,000 National Guard troops and 700 Marines to the greater Los Angeles area.

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The last time a president bypassed a governor to deploy the National Guard was in March of 1965, on the eve of the civil rights march from Selma to Montgomery, Ala. On Thursday, a federal judge blocked Mr. Trump’s deployment of the troops and ordered the administration to return control of the forces to Gov. Gavin Newsom. The administration has appealed the decision.

The array of local law enforcement officers on the ground, on the other hand, is not unusual. California has a so-called mutual aid system in place that allows police and sheriffs’ departments to request backup from nearby areas if necessary. The two Los Angeles agencies were joined by at least 240 officers from neighboring counties and cities, as well as 600 California Highway Patrol Officers sent by Mr. Newsom.

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Which agencies are represented, and what gear they have

The Los Angeles Police Department has traditionally been in charge of crowd control at protests. Some officers on the ground in recent days have worn basic uniforms, which include a handgun and a baton. Others have been equipped with full riot gear.

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Police officers on horseback have significant physical advantage against crowds.

This week, the L.A.P.D. called for mutual aid from other local municipalities, including:

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The L.A.P.D. also requested assistance from the Los Angeles County Sheriff’s Department.

Similarly, the sheriff’s department has called upon neighboring counties to support its efforts, including:

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The California Highway Patrol has been leading the efforts to contain crowds as they cross, block or take over major thoroughfares — for instance, when protesters briefly blocked Highway 101 on Sunday.

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The Department of Homeland Security, a federal agency, has been performing immigration raids, including those that set off the current wave of demonstrations. Agencies under the department — including Immigration and Customs Enforcement and Customs and Border Protection — carry out the raids, sometimes with the help of the Federal Bureau of Investigation.

Mr. Trump federalized the California National Guard and deployed around 4,000 troops to defend federal buildings and federal agents. On Monday, Trump also mobilized the U.S. Marine Corps, which has not operated on domestic soil since the 1992 Los Angeles riots. As of Thursday afternoon, Marines were training in the greater Los Angeles area but had not been seen on the ground at the protest site.

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On Thursday, U.S. Marshals were spotted in the vicinity of the federal building complex, assisting the L.A.P.D with arrests.

How agencies interact

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The National Guard has been positioned alongside Department of Homeland Security officers directly outside a federal building complex in downtown Los Angeles where much of the protest activity has occurred. The Guard members have not been authorized to carry out immigration raids or patrol the city’s streets.

They could be seen on occasion this week interacting with crowds when federal property was involved. On Sunday, the National Guard and D.H.S. officers pushed back demonstrators to clear a way for federal vehicles entering the complex, and the D.H.S. officers sprayed the crowd with pepper spray and pepper balls.

When conducting immigration raids, federal agents from the D.H.S., including Border Patrol, and from the F.B.I. often do interact with crowds of angry community members. Federal agents arrived in armored trucks, wearing tactical gear and carrying military-style rifles, for a raid on a clothing wholesaler on June 6 less than two miles from Los Angeles City Hall. Using flash-bang grenades, the agents dispersed a group of people that gathered to protest the raid.

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Given the relatively small protest area — which has been concentrated in just a few square blocks — officers from various agencies have frequently ended up in close proximity. In the below photo, taken Monday, officers from at least five agencies stand on a single corner.

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An image showing how multiple agencies were stationed outside a federal building during the protests in Los Angeles. Pictured are members of the California National Guard, and officers from the U.S. Customs and Border Protection, Department of Homeland Security, Los Angeles County Sheriff’s office, and the Los Angeles Police Department.

Los Angeles law enforcement agencies, including the Los Angeles County Sheriff’s Department and the city’s police department, have responded to demonstrations throughout the city, at times deploying flash-bang grenades, projectiles and other crowd-control measures. They have been authorized only for traffic and crowd control management, and not to perform immigration raids.

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As of Thursday, the L.A.P.D. had already arrested more than 160 people in connection with the demonstrations, most of whom face charges of failure to disperse.

Prominent California leaders, including Mr. Newsom, have accused Mr. Trump of inflaming recent tensions in the state. In a speech on Tuesday, Mr. Newsom sharply criticized Mr. Trump’s deportation agenda, which led to the federal raids last week that set off the protests. He also condemned the administration’s decision to commandeer National Guard troops and deploy Marines, calling it “a brazen abuse of power by a sitting president.”

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