Clinton Campaign Lawyer Acquitted of Lying to the FBI

Lawyer for the 2016 Hillary Clinton campaign Michael Sussmann was acquitted by a jury in federal court Tuesday, ending a two-week trial in which he was accused of lying to the FBI.

The indictment of Sussmann was part of John Durham’s investigation into the origin of the narrative of the Trump-Russia collusion narrative. The indictment accused Sussmann of lying to the FBI in 2016 when he told FBI General Counsel James Baker that he was not representing a client when discussing his allegation that the Trump campaign was working with Russia. Sussmann was working for the Clinton campaign at the time.

 

Markets Close Out Month of Losses with Modest Gains in Final Week

 Today marked the end of a wild month for stocks, and while major indices closed roughly flat from May 1 to My 31, this month saw wild fluctuations in stock prices and investors attempted to price in growing uncertainty as interest rates rise and threats of a recession loom.

The S&P 500 had sustained 7 consecutive weeks of losses prior to last week, the largest such streak since 2001. The Dow Jones Industrial Average (DJIA) suffered an eight-week losing streak, the longest since 1923. These losses came as the Federal Reserve has tightened monetary policy in an attempt to rein in inflation. Central banks, like the Fed, pursue tighter monetary policy by raising interest rates, which reduce available credit, reducing money supply and reducing the size of the overall economy. In theory, this reduces the rate of price increases and should bring inflation to a stable, low level.

However, with the markets used to the easy money policies since the 2008 financial crash, a tight monetary policy brings uncertainty. Strained supply chains, sticky labor costs, and concerns of the availability of fuel and food have investors concerned about a possible recession and economic turmoil.

While the Russian invasion of Ukraine aggravated much of this turmoil, especially related to food supply given both country’s critical role in supplying food to the world, supply chains have come under enormous strain following the lifting of the coronavirus restrictions, which had reduced supply but also reduced demand. The removal of restrictions helped boost demand, especially given the amount of stimulus provided by governments throughout the pandemic, but supply has not caught up with the demand, creating an inability to fulfill consumer desires.

 

Emmanuel Macron Wins Reelection as French President

 

Credit: Nathanael Mergui 

French President Emmanuel Macron won reelection as president of France this past week, defeating his right-wing Eurosceptic rival Marine Le Pen in a rematch of the 2017 election. Macron led Le Pen 59% to 41%.

Macron and Le Pen had finished first and second respectively in the first round of the presidential election earlier this month, defeating a wide array of other rivals. The third-place finisher, Jean-Luc Melanchon, did not endorse either candidate, but encouraged his voters not to vote for Le Pen.

While Macron’s victory will prevent any marked change in France’s involvement in the European Union, Le Pen’s performance marked a highest level of support for her right-wing to far-right party in French presidential elections.

 

 

White House Reportedly Weighing Student Loan Debt Relief

President Joe Biden is reportedly weighing forgiving up to $10,000 of federal student loans. This comes as he struggles to regain footing among younger voters. Biden has previously resisted pressure to eliminate debt even while he extended repayment relief multiple times during his term.

Activists and politicians who have been advocating loan forgiveness, such as Sen. Elizabeth Warren (D-MA), have pushed for Biden to forgive up to $50,000 in debt. The White House has so far ruled out that amount.

The administration is also considering limiting relief to borrowers below a certain income threshold.

 

Economy Contracts in Q1 as Fed Attempts to Rein in Inflation

The US economy contracted in the first quarter for the first time since the coronavirus pandemic began.

Gross Domestic Product (GDP) fell by 1.4% annualized in Q1, which fell far below the consensus view that the economy would actually grow around 1% at an annual rate for the quarter. The major driver of the decline was an increase in the trade deficit, with imports surging from Q4 2021, while exports dropped from the same period. Imports are subtracted in GDP calculations, while exports are added. Inventories also decreased in Q1 after a buildup of inventories in the previous quarter.

While an economic contraction is not an ideal scenario, a deeper look reveals some more encouraging metrics. Consumer spending rose in Q1, with private demand rising 3.7%. This occurred even in the midst of accelerating inflation brought on existing economic conditions as well as the economic turmoil caused by the Russian invasion of Ukraine and the resulting financial sanctions.

While the Federal Reserve is often reluctant to raise interest rates amid a slowing economy, the latest numbers are unlikely to halt the Fed from raising interest rates this year in an attempt to tamp down on rising prices. Financial markets have experienced volatility the past few weeks as they price in the expected increases, which, by raising the cost of borrowing money, will slow down the economy, in turn reducing price increases. Besides reducing inflation, the Fed will also attempt to avoid a recession, which is defined as two consecutive quarters of economic contraction, though given the rates of inflation seen over the past year, this will remain a difficult balancing act.