Rate cuts? Forget it

Anyone out there betting the US Federal Reserve will actually cut rates this year has got it very wrong, says BlackRock. The world’s biggest money manager has taken a dim view of Wall Street wishful thinkers who expect rate cuts, given the continuing risk of recession. But BlackRock’s position runs counter to that of TD Securities and DoubleLine Capital, both of which contend the Fed is mistaken about the need to keep raising rates. The collapse of three mid-size US banks and the forced marriage of Credit Suisse to UBS may have prompted a rethink by some on monetary policy, but Fed Chair Jerome Powell made clear with a fresh rate hike that the inflation fight will go on. Here’s your markets wrap. —Margaret Sutherlin

Former US Vice President Mike Pence was ordered by a judge to testify before a federal grand jury hearing evidence from the Special Counsel investigating Donald Trump and his allies for their alleged roles in what the Jan. 6 committee labeled an attempted coup. The probe of Trump’s efforts to block the transfer of power is just one of four criminal investigations faced by the Republican.

The US government is coming for crypto. The CFTC lawsuit against Binance, the world’s biggest digital-asset exchange, was just the latest. In recent weeks entrepreneur Justin Sun and the crypto app Sushi were sued by regulators and Coinbase also fell under scrutiny. Securities and Exchange Commission Chair Gary Gensler has asserted that cryptocurrencies are subject to the same regulations as securities, and just this year banking regulators issued the sternest warning yet against crypto. Since then, many banks have reduced their exposure to digital assets, and crypto-friendly banks Silvergate and Signature blew up. Meanwhile, US prosecutors added a new charge against FTX founder Sam Bankman-Fried for allegedly bribing Chinese government officials in order to get them to unfreeze accounts at Alameda Research, a Hong Kong-based trading firm affiliated with FTX.

US Senators grilled top US financial regulators in the wake of the collapse of Silicon Valley Bank and Signature Bank Tuesday. The banking crisis has called into question how the sweeping regulatory reforms that followed the Great Recession might have left dangerous gaps in the financial system, as well as how a rollback of certain provisions under the Trump administration played a role. Officials outlined stronger liquidity and capital standards, among other regulations, that would address underlying issues that contributed to the collapse of regional lenders. But the proposals are unlikely to become law in a divided Congress.

After months of protests, Israel’s opposition prepared for talks over paused government plans to restrict the independence of the judiciary. Prime Minister Benjamin Netanyahu—who has pushed for the change while facing corruption charges—has earned a reputation for pulling off political escape acts before. The delay gives negotiators on both sides to the end of July to come up with a compromise—and will give Netanyahu and his far-right government time to recalculate after a spectacular underestimation of public fury at what opponents consider an anti-democratic power grab.

Alibaba Group’s US shares surged after China’s online commerce leader announced plans to split its $220 billion empire into six business units. It frees up the company’s divisions—from e-commerce and media to the cloud—to pursue initial public offerings. Beijing criticized the influence of online platforms like Alibaba at the height of its tech crackdown, and the restructuring addresses, at-least in part, some of the concerns.

A fire at a detention facility in Ciudad Juarez, Mexico—near the US-Mexico border—killed 40 people Monday night. Authorities contend migrants set the fires to protest deportation and underscored increasing tension over Mexico’s crackdown on migrants aiming to reach the US.

In the face of the bloodiest and longest protests in Peru in decades, some of the country’s poorest, faced with deadly attacks from government security forces, are also sacrificing their livelihoods to force a new election.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

The mystery surrounding who owns an abandoned 267-foot superyacht docked in Antigua and Barbuda deepened after lawyers for Russian billionaire Andrey Guryev said their client doesn’t own the vessel, and the government pushed ahead with plans to auction it off.

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