THERE’S NO SHORTAGE of dramatic stories that will dominate the news this weekend — still another setback for the Russian military; confusion as interest rates fall; and a potential rebuke to Donald Trump in Tuesday’s fascinating GOP Pennsylvania Senate primary, which which we describe below.
THE BIG NEWS COMES FROM UKRAINE, as usual, with reports that Russian troops have withdrawn from territory near Kharkiv, Ukraine’s second largest city. Just as Kyiv will never fall, it appears that Kharkiv also is impenetrable.
RUSSIAN TROOPS MAY HOLD TERRITORY in the Donbas region, but their withdrawal from Kharkiv will be a huge morale-booster for Ukraine, still another sign that the Russians cannot win this war as their morale — and supplies — dwindle. Many respected analysts are writing about the post-war climate, probably prematurely, but this reflects a growing consensus that Russia cannot win.
ANOTHER BIG STORY, at least in the financial world, is why interest rates have plunged in recent days. Anxiety over inflation and shortages such as infant formulas has plunged U.S. consumers into a funk; they anticipate a recession, and that may be putting a lid on market rates.
THERE’S LITTLE DOUBT that Jerome Powell will hike rates by 50 basis points at the next two FOMC meetings, but the key issue is whether market rates will follow. Treasury paper is the ultimate safe haven (not crypto currencies), and the sudden reversal of 10-year bond yields is one of the big surprises in this volatile spring.
THE BIG POLITICAL STORY THIS WEEKEND will be Tuesday’s wild GOP primary in Pennsylvania; the commonwealth has always has been a fascinating political laboratory — once famously described by James Carville as “Pittsburgh on one side, Philadelphia on the other, and Alabama in the middle.” True to form, an enormous upset may be brewing in next Tuesday’s vote to replace GOP Sen. Pat Toomey, who is retiring.
JUST A COUPLE OF WEEKS AGO, the race was considered a cliff-hanger between celebrity Dr. Mehmet Oz, who has been endorsed by Trump, against hedge fund manager David McCormick. Suddenly both of these candidates are running scared as an ultra-conservative African-American woman sprints to the finish line.
THE SUDDEN EMERGENCE OF KATHY BARNETTE has shaken the party and prompted Trump yesterday to reinforce his endorsement of Oz. Barnette is even too right wing for Trump; she has a well-documented history of homophobic and Islamophobic statements; she has called for banning Islam in the U.S. Raised in abject poverty, Barnett is fiercely anti-abortion; she said this week that she’s the product of a rape that occurred when her mother was 11 years old.
AN UPSET BY BARNETTE would be a huge embarrassment for Trump, who said “Kathy Barnette will never be able to win the General Election against the Radical Left Democrats.” But voters in Pennsylvania may be sick of non-stop TV ads for Oz and McCormick, who have spent spent about $25 million combined. Barnette has spent less than $200,000 yet polls show all three are essentially tied.
A WIN BY BARNETTE, who still claims the 2020 election was stolen, would help the Democrats. But their most electable candidate, centrist Connor Lamb, trails radical Lt. Gov. John Fetterman, who campaigns in beat-up shorts and embraces the Bernie Sanders agenda. The 2022 political season is about to heat up dramatically next week.
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