Latest News
-
The top cases in the US Supreme Court docket
During its current term, the U.S. Supreme Court will decide a number of important cases involving voting rights, presidential power, tariffs and birthright citizenship. Other issues include race, transgender sportspeople, campaign finance laws, LGBT "conversion therapies" and federal agency authority. The term began in October, and will run through June. Separately, the court has also acted in emergency cases in several cases that challenge President Donald Trump's policy. VOTING RIGHTS ACT On April 29, the court gutted a crucial provision of the Voting Right Act, making it harder for minorities who want to challenge electoral maps under the landmark civil right law as racially biased. The court blocked a map that would have given Louisiana a U.S. Congress district with primarily Black constituents. The court's ruling undermined Section 2 the Voting Rights Act which Congress passed to prevent electoral maps from diluting minority votes. The ruling opened the door for Republican-led Southern States to demolish Democratic-held districts with majority-Black or majority-Latino voters ahead of November's midterm elections. After the Supreme Court gutted another part of the Voting rights Act in 2013, Section 2 became a more important bulwark to combat racial bias in voting. Black and Latinos tend to vote for Democratic candidates. Birthright Citizenship The court expressed skepticism about the legality of Trump’s directive on April 1, to restrict birthright citizenship within the United States. Justices asked questions to the administration's lawyer about Trump's executive orders and their practical implications. The lower court blocked Trump’s order which instructed U.S. agencies to not recognize citizenship for children born in the U.S. when neither parent was an American citizen, or a legal permanent resident (also called "green card") holder. The court found that Trump's policy was in violation of the 14th Amendment to the U.S. Constitution and federal law codifying "birthright citizenship" rights. The Supreme Court will likely rule by June's end. TRUMP'S TARIFS The Supreme Court ruled on February 20, 2018 that Trump's tariffs were illegal because they were imposed under a law intended to be used in emergencies. This ruling has major implications for global economics. The ruling, which was 6-3 in favor of the lower court decision, confirmed that Trump had exceeded his legal authority by using this 1977 law. The court ruled that Trump's claim to have the authority to impose tariffs was not supported by the law in question, the International Emergency Economic Powers Act (IEEPA). Congress has the power to impose taxes and tariffs, not the President, according to the U.S. Constitution. Tariffs are at the heart of a global trade conflict that Trump started after he entered his second term in office. This war has alienated trading partner, affected financial markets, and created global economic uncertainty. TRUMP'S FIRE OF FED OFFICIAL Justices expressed skepticism about Trump's attempt to fire Federal Reserve governor Lisa Cook, a move that could threaten the independence of the central bank. The justices said they would not grant Trump's request for a judge to overturn a decision that prevented him from firing Cook immediately while her legal case is being resolved. Congress created the Fed by passing a law, the Federal Reserve Act, that contained provisions designed to protect the central bank against political interference. The law stipulated that governors could only be removed "for cause" by the president, though it does not define this term or establish procedures for removal. Trump claimed that Cook's firing was due to unproven allegations of mortgage fraud, which she has denied. Cook, who is still in her position for now, said that the allegations were a pretext used to fire Cook over differences of monetary policy, as Trump pressures the Fed to reduce interest rates. The ruling is expected to be made by the end June. IMMIGRANTS WITH PROTECTED STATUS The Justices heard arguments April 29 on the Trump administration's move to strip humanitarian benefits from hundreds of thousands Haitian and Syrian migrants, as part of Trump's signature immigration crackdown. The Trump administration appealed two federal judge's rulings that halted its efforts to "terminate" Temporary Protected Status (TPS), which the U.S. Government had previously granted to over 350,000 Haitians and 6,100 Syrians. Some conservative justices seemed to agree with the administration that courts could not second-guess the decision of the government to end TPS. Some justices questioned also the challengers' claim that the administration didn't follow mandatory protocols when making decisions in accordance with the law governing TPS. The ruling is expected to be made by the end June. FEDERAL COMMISSION FIREING The conservative justices of the court have signaled that they will uphold Trump's legality in firing a Federal Trade Commission Member and also give a historical boost to president power, while also putting at risk a 90-year old legal precedent. The court heard arguments in December regarding the Justice Department’s appeal against a lower-court decision that said the Republican president had exceeded his authority by dismissing Democratic FTC member Rebecca Slaughter before the term of her appointment was due to end. The conservative justices seemed sympathetic to the Trump Administration's argument that tenure protections granted by Congress to heads of independent agencies illegally infringed on presidential powers under the U.S. Constitution. Trump was allowed to remove Slaughter until the case concluded. The court is expected to make a decision by the end June. TRANSGENDER SPORTS PARTIcipation The conservative justices seemed ready to uphold the state laws that ban transgender athletes to female sports teams, amid an escalating nationwide effort to restrict transgender rights. On January 13, the court heard arguments in appeals filed by Idaho and West Virginia regarding decisions of lower courts siding transgender students in their challenge to the bans imposed in both states for violating the U.S. Constitution as well as a federal antidiscrimination act. 25 other states also have laws similar to Idaho's. The conservative justices expressed concerns over imposing a uniform law on the whole country, amid a sharp disagreement and uncertainty about whether medications such as puberty-blocking hormones or gender affirming hormones remove male physiological advantages in sport. The ruling is expected to be made by the end June. LGBT 'CONVERSION THERAPEUTY' On March 31, the court rejected a Democratic-backed Colorado Law that prohibited psychotherapists from using “conversion” talk therapy to change a LGBT minor's gender identity or sexual orientation. The 8-1 decision sided with the Christian licensed counselor and deemed the ban as an intrusion into free speech rights. The court rejected Colorado’s argument that the law only protected speech, but regulated professional conduct. The court reversed a lower-court decision which had upheld a law brought by Kaley Chiles who argued it violated First Amendment protections from government abridgment. HAWAII GUNS LAW The conservatives expressed skepticism about a Hawaii gun law which restricts handguns from being carried on public property, such as businesses. They appeared ready to expand the right to own a firearm again. On January 20, the court heard arguments in an appeal filed by opponents of the law, backed by Trump's administration. The challengers were appealing a judicial decision that Hawaii's Democratic-backed measures likely comply with the U.S. Constitution’s Second Amendment right. Hawaii's law demands that a property owner "expressly authorize" the bringing of a handgun on to a private property. Four other states in the United States have laws similar to Hawaii's. The ruling is expected to be made by the end June. Drug Users and Guns On March 2, the justices heard arguments in a case in which a dual American/Pakistani national in Texas was defending a federal gun law that prohibits users of illegal drugs to own guns. Hunter Biden, son of former president Joe Biden, was charged under this law in 2023. The Justice Department appealed a ruling by a lower court that the gun restrictions were in violation of the Second Amendment rights to "keep and carry arms" guaranteed under the U.S. Constitution. Gun Control Act 1968 included a prohibition against gun ownership by illegal drug users. The decision is expected to be made by the end June. CAMPAIGN-FINANCE On December 9, the court heard arguments in a Republican led bid to overturn federal spending limits by political parties coordinated with candidates. The case involved Vice President JDVance. The conservative justices seemed to be sympathetic towards the challenge. However, the three liberal members of the court appeared inclined to maintain the spending limits. The debate centers around whether federal limits on campaign spending coordinated with candidates' input violate First Amendment protections against government abridgment. Vance and Republican challengers have appealed the ruling of a lower court that ruled on restrictions on how much money can be spent on campaigns by parties with input from candidates who support them, a type political expenditure called coordinated party expenses. The ruling is expected to be made by the end June. MAIL-IN BALLOTS Conservative justices expressed skepticism in a March 23 case against a Mississippi law that allowed a five-day period of grace for mail-in votes received after Election Day. This could lead to tighter voting laws across the country. The Trump administration supported the challenge against Mississippi's law that allows mail-in votes sent by certain voters be counted as long as they are postmarked before Election Day and received within five business days of a federal election. In Mississippi, absentee voting is only available to certain categories of voters. These include the elderly, disabled and those who live away from home. A lower court ruled that the law was unconstitutional. The court is expected to rule by the end of June. U.S. ASYLUM - PROCESSING: The court seemed likely to rule for the Trump administration's defense of its authority to reject asylum seekers when officials deem U.S. - Mexico border crossings to be too overburdened to process additional claims. On March 24, the court heard arguments in a dispute over a policy known as "metering," which Biden's administration dropped in 2021. The Republican president may want to reinstate it. It allowed U.S. immigration officers to stop asylum seekers and refuse to process their applications indefinitely. The decision is expected to be made by the end June. WEEDKILLER CAUSES CANCER The court seemed divided on Bayer AG’s attempt to close down thousands of lawsuits alleging the German company failed to warn users of the dangers of the active ingredient of its Roundup weedkiller. On April 27, the court heard arguments in Bayer’s appeal of a Missouri state court jury verdict awarding $1.25million to a man called John Durnell, who claimed he had been diagnosed with non-Hodgkin's lymphoma following years of exposure to Roundup glyphosate. The lower court rejected Bayer’s argument that U.S. pesticide law bars lawsuits based on claims made under state laws. The ruling is expected to be made by the end June. Human Rights Abuses Around the World The court heard arguments in April 28 on a case that has broad implications for American human rights litigation. Members of the Falun-Gong spiritual movement have accused Cisco Systems, of facilitating religious persecusion in China. Cisco appealed the 2023 ruling of a lower court that gave new life to the 2011 lawsuit brought under the Alien Tort Statute of 1789 that accused the company of developing technology that enabled China's government to monitor and persecute Falun-Gong members. Cisco asked the court to limit the scope the Alien Tort Statute which allows non-U.S. Citizens to sue in American courts over violations of international laws. The court is expected to make a ruling by the end June. SEC'S DISGORGEMENT POWER The Justices appeared to be inclined to support the U.S. Securities and Exchange Commission (SEC) in a case that tested the limits of one of its key powers. A financial remedy known as disgorgement, it seeks the recovery of profits from illegal activities. On April 20, the majority of justices seemed to be receptive of a defense put forth by the Trump Administration of the SEC’s broad disgorgement powers. The ruling is expected to be made by the end June. FCC fines wireless carriers Justices seemed to be inclined to maintain the Federal Communications Commission system for levying fines, despite a challenge from major wireless carriers against the agency's regulatory powers. During the April 21st arguments, the majority of justices appeared skeptical about the claims made by Verizon Communications and AT&T's lawyers that the Federal Communications Commission's internal proceedings deprived them of their constitutional right to a trial by jury. The ruling is expected to be made by the end June. 'GEOFENCE" WARRANTS On April 27, the court heard arguments in a Virginia case over whether law enforcement using a "geofence warrant" to identify?potential criminal suspects by using data from mobile phones near crime scenes is in violation of the Fourth Amendment's bar against unreasonable searches. Geofence warrants approved by the court compel companies, such as Alphabet’s Google in this instance, to search for mobile devices near crime scenes. In this case, a defendant pleaded conditionally guilty to robbing an institution of higher learning while reserving the right to argue against evidence obtained from what he believes was an illegal search. The ruling is expected to be made by the end June. CRISIS PREGNANCY COUNTER The court sided on April 29, with the operator in New Jersey of Christian faith-based "crisis pregnancies centers" that are anti-abortion and trying to obstruct a state investigation as to whether these facilities engage in misleading practices. First Choice Women's Resource Centers brought a lawsuit against a subpoena issued by the state attorney general in 2023, which sought information about the organization's doctors and donors. The lawsuit had been thrown out by a lower court. First Choice's facilities are designed to discourage women from getting abortions. RASTAFARIAN INMAT The conservative justices seemed inclined to reject the Rastafarian inmate's attempt to sue Louisiana state prison officials after they shaved his head in violation of religious beliefs. On November 10, the case was brought before a federal statute protecting prisoners from religious discrimination. Plaintiff Damon Landor's religion requires that he let his hair grow. He appealed the decision of a lower court to dismiss his lawsuit, because they found that he could not sue officials individually for monetary damages. The ruling is expected to be made by the end June. DEATH ROW INMATE The court heard arguments in December in an attempt by Alabama officials in order to pursue the execution for an inmate who was convicted of a murder in 1997 after a lower judge found him intellectually disabled, and therefore ineligible to receive the death penalty. The Republican-led state has appealed a lower court ruling that Joseph Clifton Smith was intellectually disabled based upon his intelligence quotient (IQ), test scores, and expert testimony. In a 2002 Supreme Court decision, the court ruled that executing a person intellectually challenged violates the Eighth Amendment of the U.S. Constitution prohibiting cruel and unusual punishment. The ruling is expected to be made by the end June. COX COPYRIGHT DISSENSION On March 25, the court ruled that Cox Communications could not be held responsible for piracy of songs by subscribers to its internet service. These include Sony Music, Warner Music Group, Universal Music Group, and other labels. This ended their multi-billion dollar music copyright suit. The ruling of 9-0 overturned the decision by a lower court to order a trial to determine the amount the internet service provider was liable for the record labels under a form liability known as contributory copyright violation. Cox said that a retrial would have resulted in a verdict of up to $1.5 billion against the Atlanta ISP.
-
EU signs MoUs with Ukraine to pave the way for payment in mid-June
The European Commission has signed a Memorandum of Understanding with Ukraine regarding a macro-financial?assistance?programme. This paves way for a disbursement of 3.2 billion euros in mid-June after it is ratified by the Ukrainian Parliament. The EU has a 90 billion euro scheme to finance Kyiv throughout 2026 and into 2027, as it fights Russia's invasion. "We have completed?our discussions with Ukraine regarding the memorandum?of understanding that underpins our macro financial?assistance?program, as part of the Ukraine Support Loan," European Economic Commissar Valdis Dombrovskis stated. He told reporters, "I signed the agreement this morning. Now it is up to the Ukrainian side to sign it, and it also needs to be approved by Rada in Ukraine. Dombrovskis stated that the agreement for the 90 billion euro loan could be signed within a few days. From the 90 billion euro total loan, 45 billion euros will be paid out this year and another 45 in 2027. The money that will be coming in this year is split between 28,3 billion for military spending and 16,7 billion for general budget support. The general budget cash is split in two between macro-financial support and the Ukraine facility, which is dedicated to Ukraine’s recovery, reconstruction, and modernization. Dombrovskis stated that the macro-financial aid money was?conditional upon Ukraine implementing reforms, with a strong focus on fiscal matters, in order to boost domestic revenue mobilization, public spending efficiency, and public financial management systems. Dombrovskis added: "We have also coordinated closely with the International Monetary Fund to ensure that conditions are consistent, and if necessary, additional or complementary to IMF's program." (Reporting Jan Strupczewski).
-
Japan's oil refiners are expecting to have enough Middle East crude to replace it for the summer.
The 'head of a 'industry association' said on Wednesday that Japanese oil re-finers would be able to obtain enough?substitute petroleum products and crude to replace Middle Eastern supply?throughout the summer. Shunichi Kito is the president of the Petroleum Association of Japan. He said that U.S. Crude has become the main replacement while efforts are made to obtain crude from Saudi Arabia, the UAE, via routes that bypass the Strait of Hormuz. Some Japanese companies source crude oil from Latin America including Mexico, Ecuador, Venezuela and Alaska, as well from Russia's Sakhalin-2 and Alaska. Kito explained that "we are responding by a combination drawing down of national reserves and sourcing alternate supplies." We expect no problems with procurement during the summer peak demand season. Kito noted that VLCCs cannot travel through the Panama Canal with U.S. crude. This forces some shipments to travel by the Cape of Good Hope. The journey takes about 55 days, which is more than twice the time of the Middle East route. He said that the longer route would "significantly increase costs" and leave refiners little choice but pass these on to their customers. Japan relied on the Middle East to import about 95% its crude oil before the U.S. and Israel fought the 'war' against Iran. Kito says that Japan will have to reduce its dependence on Middle East crude oil over the long-term. Refiners are currently analysing properties of alternative crude grade, adjusting blend ratios, and refining within the existing equipment constraints. He said that Japan will need to improve its crisis preparedness in the future. This can be done by diversifying fuel sources, improving refineries, and expanding the use of biofuels. (Reporting and editing by Yuka Suzuki, Hina Obayashi)
-
Poland arrests three Poles accused of spying for Russia
Authorities said that on Wednesday, Poland had detained three citizens who were suspected of spying, planning sabotage, and spreading disinformation for Russia. Poland claims that its role as a 'hub' for military and other supplies to Ukraine makes it a target of Russian spies who are trying to gather intelligence on Kyiv’s efforts to repel Russia’s invasion as well as commit acts of sabotage. Officers from the (Internal Security Agency ABW )?detained three persons suspected of espionage on behalf of Russian Federation. "The?detainees? are Polish men between the ages of 48 and 62," Polish Special Service Minister Tomasz Siemoniak posted on social media. They are accused of spying activities, including reconnaissance of NATO forces deployed on the territory of the Republic of Poland as well as the production and dissemination of 'propaganda materials and disinformation. He added that a court had ordered their temporary detention for three months. In a press release, the ABW stated that the arrest took place on 12 May. It said that the men were also accused of producing and sharing disinformation and propaganda materials, planning sabotage, subversion and promoting symbols in support of?Russian aggression against Ukraine' and publically praising war. "The detainees, commissioned by an identified Russian citizen associated with the ?Federal Security Service of the Russian Federation, also carried out intelligence-gathering activities, ?including identifying ?the location of NATO troops stationed in Poland," it said. The group was trained in firearms and battlefield tactics to carry out subversive acts. The?Russian embassy in Poland has yet to respond to a comment request. Poland is one of many 'European' countries that have arrested individuals suspected of spying, cyber-attacks or planning sabotage. They say this is part of a hybrid warfare waged by Moscow against them for supporting Ukraine's fight to stop Russia's invasion.
-
Lithuania closes airport and issues an 'air-danger' warning over drone fears
Lithuania issued an "air danger" alert on Wednesday, asking people to take cover and suspending traffic at the airport in the capital amid fears that drones could violate Lithuania's airspace. Lithuanian army sent a message to the people of the capital saying, "Immediately seek shelter in a secure place. Take care of those you love and wait for new recommendations." The extent of the distribution was not immediately apparent. The Vilnius Parliament building was also issued with a warning. An announcement was made on the intercom of the parliament. The Lithuanian national crisis management center earlier said it had issued an alarm in response to a?neighboring Belarus drone that was seen flying toward Lithuania. NATO jets shot down a suspected Ukrainian drone over Estonia on Tuesday, according to the Baltic nation. This is the latest of a series?of airspace violations in the region amid frequent Ukrainian attacks against neighbouring Russia. (Reporting and writing by Andrius Sytas; editing by Gwladys Fouche).
-
Andrew Abbott and the Reds' shoot to end Phillies' winning streak
Andrew Abbott, who is currently enjoying one of the most successful stretches in his career hopes to continue the momentum when he pitches for the Cincinnati Reds on Wednesday afternoon against the Philadelphia Phillies. Abbott (3-2, a 4.21 ERA), in three starts during this month, has only allowed?one?run?in 16 2/3 inning,?which is a 0.54 ERA. He gave up a 'run' in five or more frames against the Cleveland Guardians on Friday to remain unbeaten over his last six starts. Terry Francona, the manager of the team, said that Francona had been "pitching" much like himself. "I thought it was too many pitches early and that wore him out a bit. He made pitches when it was really needed. "He competed like hell." Abbott has not defeated the Phillies during his four previous starts. He is 0-1 against Philadelphia with a lifetime 4.35 ERA. If Kyle Schwarber is not able to play Wednesday for the third straight game (illness), then the left-hander might get a break. The Philadelphia slugger is the leader in home runs with 20. Philadelphia only managed eight hits in its first two games of the series without Schwarber. Bryson Stott's home run with two outs at the bottom of the eighth inning gave Philadelphia a 5-4 win on Monday. Trea Turner's home run in the first inning of Tuesday's game was not enough to prevent Philadelphia from losing 4-1. The Phillies had won eight of nine games before the game, and five in a row, prior to their three-hit performance against Chase Burns. Burns was a victim of a lack of attention from the Philadelphia interim manager Don Mattingly. Burns and a trio relievers combined to strike out 14 batters in one night. Burns has a 0.72 ERA and is 3-0 this month. But the 23-year-old right-hander is aware that baseball is a marathon not a sprint. Burns advised, "Ride the waves and stay as level as possible." We'll have good and bad times. "It's all about surviving the storm." Reds had lost five of their seven previous games prior to Tuesday. They also lost 11 of their 12 previous road matches. Aaron Nola, who has a record of 2-3 and a 5.91 ERA, will be the next man up for Philadelphia. He had a tough start in his last outing. The veteran right-hander gave up six runs in three and a half innings against the Pittsburgh Pirates on Friday. He allowed six hits -- including two home runs -- and three walks. "He couldn't control himself" ... Mattingly told Nola that he needed to pitch, but he was not able to get the breaking ball out, use his changeup, and then miss some places. It's the least command that he has had all year. Nola started 10 times against the Reds in his career, and he was 5-2 with a ERA of 3.57. Field Level Media
-
Russia demonstrates troops moving nuclear weapons in major exercise
As part of an important nuclear exercise, Russia showed footage on Wednesday of troops loading mobile launch systems 'Iskander M' with a nuclear warhead and then moving it undetected from the launch site. The Defence Ministry released a statement to the state media in which it said that its forces have "practiced" bringing their units to the highest level of combat readiness for the use of nuclear weaponry. The three-day military exercise that began on Tuesday is being held in Russia and Belarus. It comes as Russia is engaged in what it calls an "existential battle" with the West regarding Ukraine, and tensions are high with NATO and Europe. The Defence Ministry announced on Tuesday that part of the drills, which will involve 64,000 military personnel and 200 missile launchers as well as 140 aircraft, 73 surface vessels, and 13 submarines, would be a rehearsing of launch procedures for Russian tactical nuclear weapons located in Belarus. The video of the Russian nuclear element shows the forces in a convoy moving through a densely forested area. They are camouflaging vehicles and raising launch tubes into firing position. The Iskander M can be equipped with both conventional and nuclear warheads. Its range is up to 500 km (310 miles). Reporting by Andrew Osborn, Writing by Mark Trevelyan.
-
Mike Dolan: ROI-Bond yields could finally be baked in an AI world
The rise in borrowing costs and the artificial intelligence investment frenzy are closely related. A long-term productivity boom is boosting estimates of neutral rates, even though workers' share of GDP is declining. Some of the bond market volatility this month can be attributed to the Iran-related oil crisis and its immediate inflation impact. Stock markets are at record highs, but it's harder to explain them during an energy crisis. Goldman Sachs estimates that AI?capex will be $7.6 trillion in the next five-year period. This is the biggest driver for both bonds and stocks. Some circles remain opposed to the idea. The idea is controversial in some circles, but there's a growing consensus that the shift away from saving to investing, along with the potential boost to GDP growth due to AI productivity gains will increase R-star, the neutral real interest rate where the economy is at equilibrium. The Institute of International Finance stated last week that a successful AI cycle would raise R-star, because expected returns are higher and capital formation is stronger. The AI boom is not a reason to assume that the markets will return to the low-real-rate world from the 2010s. Barclays annual Equity-Gilt Study reached a similar conclusion on Tuesday. It said that "rising productivity combined with large capital spending needs points to a higher real neutral interest rate." The move was exacerbated by the oil-fueled inflation, and its impact on interest rates. However, the long-term bond market may be finally repricing in order to take into account the latest wave upgraded AI spending plans as well as the economic fallout. As inflation-adjusted policy rates of central banks turn negative, even as massive investment booms unfold and estimates for long-term neutral rates rise, policymakers risk falling behind in tightening their monetary policy. Bond markets could be leading the policy adjustment. It explains at least in part why AI-led stock indexes, such as the S&P 500 or Nasdaq, and long-term bonds yields have been rising simultaneously. Labor SHARE What could go wrong? What generative AI, and AI-infused robots could mean for wages and jobs across the rest the economy is the other side of AI "futurology". This may ultimately put further pressure on the labor share of GDP in comparison to capital, and, by extension, on inequality within countries. Dario Perkins, TS Lombard's economist, analyzed this issue on Monday. He concluded that he believes the AI boom will augment existing jobs and not replace them. He demonstrated how the wage-share of GDP, which has been in steep decline since 1990 after a brief recovery following the pandemic, is closely related to R-star estimates. He argues that the wage share will rise as workers demand more through populist politics and fiscal activism, while deglobalization is also a factor. He wrote: "Either wage share has to recover or this talk of a new regime with structurally higher yields on bonds is probably wrong." The labor share continues to fall despite the administration of Donald Trump, who promised the opposite. The Barclays Equity-Gilt study, which did a deep dive into AI's macro-effects, suggested that the labor share would remain under pressure because AI and AI-enhanced robots will affect a wider range of workers and sectors. Humanoid robots could boost the economy's productivity more than previous AI predictions suggest, but they will also impact more jobs. Christian Keller and AkashUtsav of Barclays wrote: "To the degree that AI + humanoid robots?accelerates automation compared to augmentation, this will likely skew distribution of national income even further away from labor toward capital." This has already happened over the past decades. The aggregate share of income that labor generates could continue to shrink, as it is more easily replaced. Perkins of TS Lombard suggests that if the labor share of the pie continues to decline and has an impact on demand, it may be able to limit bond yields. The Barclays economists believe that even if wage growth is unclear, there is one thing they are certain of: electricity and commodities required to build and maintain the AI and robots world may stoke inflation pressures over the long term through power, raw materials and energy. Bond markets are hoping for a downturn to cool the market. A downturn is a distant prospect for most investors, thanks to the AI boom. Only 4% of global asset managers surveyed by Bank of America in this month's survey see a "hard landing". More than 60% of investors expect the 30-year U.S. Treasury to top 6% in the next year, despite the uncertainty. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
Am I out? US farmers are suffering from drought and the rising cost of the war in Iran
Scott Irlbeck crouched in a field of stunted plants of wheat in a parched stretch in West Texas, and put his hand in a crack large enough to swallow it. Irlbeck had planted a crop last autumn that barely grew due to the lack of rain. Now he hopes that his insurance adjuster declares it a complete loss, so he won't have to spend money on expensive fuel next month in order to harvest the crop. The Iran war has led to a rise in fuel prices and the cost of commercial fertilizer. This is making it harder for farmers across the U.S. Plains States of Texas, Kansas and Oklahoma.
Farmers were already struggling before the war with a resurgent dry spell, high input costs and the fallout of President Donald Trump's policies on trade, which hampered export markets and lowered prices for their crops.
Kentucky Farm Bureau, in a prepared statement to a U.S. Senate Agriculture Committee hearing earlier this month, said that the price of farm diesel had risen 72% since the Strait of Hormuz was closed in late February. The price of urea, a major fertilizer produced in the Gulf, was up by 55%. Prices for another nitrogen-based fertiliser were also up 33%.
Farmers are facing the prospect of lower harvests due to the drought.
Irlbeck said that he did not purchase fertilizer supplies in advance to plant a sorghum harvest this month. He will not likely use any because of the soaring price and the pernicious dry spell that is reducing yields.
Irlbeck listed his challenges: "There is fuel, there is drought, and there is fertilizer." "I have three strikes." "Am I out?"
Drought ravages wheat
Texas is the second-largest state for wheat production in the United States, followed by sorghum. It ranks first for cotton.
Irlbeck's farm near Tulia was awash with wind that blew across brown, dry fields, dotted with dirty cotton clumps and brittle sorghum stems from previous harvests. According to the U.S. Department of Agriculture, U.S. Farmers are expected to produce the smallest harvest of hard red wheat used for bread since 1957.
Irlbeck stated, "I am just waiting for the thing to die."
According to the latest U.S. Drought Monitor government report, more than 60% of continental United States - an area of 153 million people - is experiencing drought. This is up from 43% in 2026, and 33% one year ago. Amanda De Oliveira?Silva of Oklahoma State University, an agronomist said that it might be too late to save wheat in Oklahoma's hardest-hit areas.
Rain can help to preserve what's left but it won't undo the damage that's already been done.
Clarence Winter, South Dakota State University Extension Agronomist, explained that farmers in South Dakota were reconsidering their plans to fertilize the wheat they had planted last autumn due to high prices.
The U.S. Department of Agriculture responded in a press release when asked to comment on the cost of fertilizer. It said that the Trump administration is focused on increasing domestic production of affordable fertiliser.
WAR RAISES COSTS For farmers such as Tommy Salisbury who cultivates wheat, sorghum, and soybeans in Tulsa County (Oklahoma), higher input prices have wiped out any benefits received by individual operators from the $12 billion aid package offered by the Trump administration to offset tariffs.
He said, "We pay input prices for 2026 and get grain and crop prices from the 1970s and 1980s."
USDA Secretary Brooke Rollins acknowledged that farmers are facing hardship.
She said at a press conference on Tuesday that "we are experiencing significant price increases?at a period when our farm economy struggles." She said in a blog post last month that 80% of U.S. Farmers had secured supplies well before the beginning of the war.
A survey conducted by the American Farm Bureau Federation (the leading U.S. farming lobby) found that many farmers couldn't afford to buy all the fertilizer needed for the current growing season.
The Farm Bureau reported that the rates of pre-purchases varied greatly by region. The Midwest had the most pre-ordered fertilizer, but the Northeast and the South did not.
Farm Bureau says that advance buying is more common among farmers in the Midwest, where they rotate between planting corn and soybeans and make their purchases well before planting. The group stated that many farmers in the South do not have fertilizer storage facilities.
When asked for comment, USDA stated that it continues to evaluate data on fertilizer use.
Kody Carson, a farmer in the West Texas city Olton, has said that he didn't buy fertilizer ahead of time and may not purchase any for his 2,400 acre cotton farm.
He said that the drought had decimated his winter wheat yields to 18-20 bushels on an acre as opposed to his expectations of 80 bushels.
How can I be prudent financially and buy this expensive fertilizer when I have no idea if I will make a harvest? Carson said.
Leaning on Religion
Tom Gregory in Petersburg, Texas also didn't buy fertilizer ahead of time. By April, he reported that he faced costs of $558 per tonne, up from $402 per tonne in February.
Gregory said he was going to continue spring plantings because farming is a tradition and his livelihood. He said that he would apply fertilizer sparingly.
Gregory stated that he tried to offset rising input costs in recent years by increasing crop yields. He said that his hopes for this strategy eventually faded, first due to the drought, and now due to higher fertilizer costs.
Gregory said that he relied on his family, faith and physical exercise to get through.
He said, "I hope that the good Lord will take care of us." Reporting by Tom Polansek from Tulia in Texas and Julie Ingwersen from Chicago. (Editing by Emily Schmall, Suzanne Goldenberg and Suzanne Goldenberg).
(source: Reuters)