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What are the odds of an upset in Texas or Florida?

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“I’VE BEEN saying this for months now and a lot of people haven’t listened, but now they are: the stars are aligning in both Texas and Florida,” says Jaime Harrison, the chair of the Democratic National Committee. Aboard a swanky campaign bus in Jacksonville, Florida’s largest city, Mr Harrison’s tone shifts to distress as he explains that his party needs “multiple pathways to get the Senate majority”. In the final weeks of the campaign the map has become more daunting for Democrats. To their dismay, holding the upper chamber may now depend on flipping seats in America’s two biggest Republican-controlled states, where Donald Trump is expected to win comfortably.

New polls have Democrats like Mr Harrison feeling optimistic. Last week one in Texas showed Colin Allred, a linebacker-turned-congressman, in a dead heat with Ted Cruz, the Republican incumbent. In Florida Debbie Mucarsel-Powell, an Ecuadorean immigrant and one-term congresswoman, is trailing behind Rick Scott by as few as two or three points in her best polls. But The Economist’s forecast model, which accounts for other factors like candidate experience and the state’s voting history, shows a less rosy picture. By our reckoning, in each race Democrats have only a one-in-five chance of victory.

The Democratic Party is nonetheless hanging its hopes on these two races in part because the Republican incumbents are both deeply disliked. Mr Cruz, who has represented Texas since 2013, is a hardliner known for picking fights and not being a team player. “If you killed Ted Cruz on the floor of the Senate, and the trial was in the Senate, nobody would convict you,” Lindsey Graham, his colleague from South Carolina, teased in 2016. In 2021 Mr Cruz’s approval rating in Texas dropped when he jetted off to Cancún as his constituents suffered through a winter storm that left millions without power. On policy, his indelible support for Texas’s near-total abortion ban, one of America’s harshest, has done nothing to endear him to the plurality of Texans who support fewer restrictions.

Unpopularity contests

Mr Scott, in Florida, may be the rare politician with even fewer friends than Mr Cruz. He entered politics after the hospital chain he founded and ran had to pay out in America’s biggest Medicare fraud. After serving two terms as governor he won a Senate race in 2018 and was put in charge of the party’s campaign arm for the 2022 midterms. He presented a hard-right plan to remake the Republican Party, which included a proposal to sunset entitlement programmes that went over as poorly nationally as it did in Florida, a state where one in five residents is a pensioner. When Republicans did badly, they blamed him.

Mr Scott responded by challenging Mitch McConnell for the job of Senate majority leader. “Now I’m seeking to become the least popular man in Washington and I’m happy to report I’m making great progress,” he quipped in a speech at the Conservative Political Action Conference last year. At home his inability to curb Florida’s property-insurance crisis throughout his political career has left many locals reeling as hurricanes batter the coast and bankrupt families.

Democrats wanted both Republicans to have to confront these liabilities. Yet it was not until late September that the Democratic Senatorial Campaign Committee, responsible for getting Democrats elected, went on the offensive in Texas and Florida with a pair of multimillion-dollar ad-buys. Ms Mucarsel-Powell, Mr Scott’s opponent who says her initials stand for “Don’t Mess with my People”, reckons the money was too little, too late. In other battleground states, “you’re seeing investment and of course then you see shifts,” she says, but without that kind of cashflow to help the campaign talk to voters “nothing is going to happen.” Mr Scott, who in the past has written himself big cheques when he senses his rival in striking distance, has not spent even half of what he did in 2018, when he won by less than one point. Democrats hope that Florida’s ballot initiatives to legalise marijuana and codify abortion rights will give Ms Mucarsel-Powell a last-minute boost.

Plateauing poll numbers in Florida have national Democrats turning to Texas, where there seems to be better mojo after Mr Allred faced off with Mr Cruz in a debate two weeks ago. On October 25th Kamala Harris appeared at a rally with Mr Allred in Houston. It was the first time in decades that a Democratic presidential candidate has visited the state so close to election day. But on such conservative terrain any down-ballot Democrat is bound to struggle in a presidential cycle. This year “a vote against Ted Cruz is a vote against Donald Trump,” says Jason Sabo, a Democratic lobbyist in Austin.

Those paying attention to the campaigns could be forgiven for feeling a sense of déjà vu. Democrats have perennially promised that an increasingly diverse electorate would flip both states in their favour, only to suffer repeated losses. This time around some admit that they are playing the long game. In Texas a band of Democratic leaders launched the Agave PAC to build party infrastructure and “move past the boom-and-bust cycle of excitement”. And in Florida Nikki Fried, the state’s new Democratic Party chair, talks soberly about this year’s prospects. For the first time since the state flipped Republican the party is running state legislative candidates in every district, knowing they will lose in races big and small. “We’ve got to start somewhere,” she says.

Economics

Euro zone inflation, May 2025

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Shoppers buy fresh vegetables, fruit, and herbs at an outdoor produce market under green-striped canopies in Regensburg, Upper Palatinate, Bavaria, Germany, on April 19, 2025.

Michael Nguyen/NurPhoto via Getty Images

Euro zone inflation fell below the European Central Bank’s 2% target in May, hitting a cooler-than-expected 1.9% as the services print eased sharply, flash data from statistics agency Eurostat showed Tuesday.

Economists polled by Reuters had expected the May reading to come in at 2%, compared to the previous month’s 2.2% figure.

The closely watched services inflation print cooled sharply, amounting to 3.2% last month, compared to the previous 4% reading. So-called core inflation, which excludes energy, food, tobacco and alcohol prices, also eased, falling from 2.7% in April to 2.3% in May.

“May’s steep decline in services inflation, to its lowest level in more than three years, confirms that the previous month’s jump was just an Easter-related blip and that the downward trend in services inflation remains on track,” Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics said in a note.

Inflation has been moving back towards the 2% mark throughout 2025 amid uncertainty for the euro zone economy.

The latest figures will be considered by the European Central Bank as it prepares to make its next interest rate decision later this week. Markets were last pricing in an around 95% chance of interest rates being cut by a further 25-basis-points on Thursday.

Back in April, the central bank took its key rate, the deposit facility rate, to 2.25% — nearly half of the high of 4% notched in the middle of 2023.

But the global economic outlook remains muddied. U.S. President Donald Trump’s protectionist tariff plans have been casting shadows over the global economic outlook, with his so-called “reciprocal” duties — which are also set to affect the European Union — widely seen as harmful to economic growth. Their immediate potential impact on inflation is less clear, with central bank policymakers and analysts noting that it could depend on any potential countermeasures.

Despite the transatlantic tumult, the Organisation for Economic Co-operation and Development in its latest Economic Outlook report out on Tuesday said it was expecting the euro area to expand by 1% in 2025, unchanged from its previous forecast. Euro area inflation is meanwhile projected to come in at 2.2% this year, also in line with the March report.

Euro country bond yields were last lower after the fresh inflation data, with the German 10-year bond yield falling by over two basis points to 2.499%, while the yield on the French 10-year bond was last down by more than one basis point to 3.169%.

The euro was meanwhile last around 0.3% lower against the dollar.

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U.S. growth forecast cut further by OECD as Trump tariffs sour outlook

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Old Navy and Gap retail stores are seen as people walk through Times Square in New York City on April 9, 2025.

Angela Weiss | Afp | Getty Images

Economic growth forecasts for the U.S. and globally were cut further by the Organisation for Economic Co-operation and Development as President Donald Trump’s tariff turmoil weighs on expectations.

The U.S. growth outlook was downwardly revised to just 1.6% this year and 1.5% in 2026. In March, the OECD was still expecting a 2.2% expansion in 2025.

The fallout from Trump’s tariff policy, elevated economic policy uncertainty, a slowdown of net immigration and a smaller federal workforce were cited as reasons for the latest downgrade.

Global growth, meanwhile, is also expected to be lower than previously forecast, with the OECD saying that “the slowdown is concentrated in the United States, Canada and Mexico,” while other economies are projected to see smaller downward revisions.

“Global GDP growth is projected to slow from 3.3% in 2024 to 2.9% this year and in 2026 … on the technical assumption that tariff rates as of mid-May are sustained despite ongoing legal challenges,” the OECD said.

It had previously forecast global growth of 3.1% this year and 3% in 2026.

“The global outlook is becoming increasingly challenging,” the report said. “Substantial increases in barriers to trade, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty will all have marked adverse effects on growth prospects if they persist.”

Frequent changes regarding tariffs have continued in recent weeks, leading to uncertainty in global markets and economies. Some of the most recent developments include Trump’s reciprocal, country-specific levies being struck down by the U.S. Court of International Trade, before then being reinstated by an appeals court, as well as Trump saying he would double steel duties to 50%.

The OECD adjusted its inflation forecast, saying “higher trade costs, especially in countries raising tariffs, will also push up inflation, although their impact will be offset partially by weaker commodity prices.”

The impact of tariffs on inflation has been hotly debated, with many central bank policymakers and global analysts suggesting it remains unclear how the levies will impact prices, and that much depends on factors like potential countermeasures.

The OECD’s inflation outlook shows a notable difference between the U.S. and some of the world’s other major economies. For instance, while G20 countries are now expected to record 3.6% inflation in 2025 — down from 3.8% in March’s estimate — the projection for the U.S. has risen to 3.2%, up from a previous 2.8%.

U.S. inflation could even be closing in on 4% toward the end of 2025, the OECD said.

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Economics

Elon Musk’s failure in government

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WHEN DONALD TRUMP announced last November that Elon Musk would be heading a government-efficiency initiative, many of his fellow magnates were delighted. The idea, wrote Shaun Maguire, a partner at Sequoia Capital, a venture-capital firm, was “one of the greatest things I’ve ever read.” Bill Ackman, a billionaire hedge-fund manager, wrote his own three-step guide to how DOGE, as it became known, could influence government policy. Even Bernie Sanders, a left-wing senator, tweeted hedged support, saying that Mr Musk was “right”, pointing to waste and fraud in the defence budget.

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