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Why Nikki Haley, crushed in her home state, vows to fight on

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WHEN DOES the act of hoping against hope go from admirable to absurd? Not yet apparently for Nikki Haley, the last woman left standing against Donald Trump and his seizure of the Republican Party’s presidential nomination. You can forgive Ms Haley for persisting through losses in the early primary states of Iowa and New Hampshire. But the indignity suffered on February 24th—a 20-point walloping in the primary election in South Carolina, the state she was governor of for six years—should have proven fatal.

And yet even out of those grim statistics, Ms Haley managed to extract something hopeful: “Today in South Carolina, we’re getting 40% of the vote. That’s about what we got in New Hampshire. I’m an accountant. I know 40% is not 50%. But I also know that 40% is not some tiny group.” She vowed to carry on her campaign until at least March 5th, also known as Super Tuesday, at which point another 21 states and territories will have conducted their elections. The embers of optimism present today will, in all likelihood, be extinguished by then.

Why continue? The first reason is that Ms Haley simply can. In America, moribund presidential campaigns are not usually dealt the coup de grâce by voters but by donors. The cash-burning machines simply run out of fuel. The central problem of Ms Haley’s campaign is that she is extraordinarily popular with the Trump-despising donors of her party—who showered her with $16.5m in contributions in January alone—but unacceptable to the Trump-adoring base of her party.

You could see this dilemma on vivid display at her election-night party held in a grand hotel in Charleston, South Carolina: fewer than 40 supporters had managed to tear themselves from the spectacular array of catered dips before them—crab, pimento cheese, spinach and artichoke—and enter the ballroom by the time the race was called, just seconds after the polls closed. (Later the room would fill up with supporters, who managed a surprisingly spirited cheer when the television screens showed that Ms Haley’s margin of loss had narrowed to only 16 points.) Like her catering budget, Ms Haley’s advertising budget was significantly higher than Mr Trump’s, too. Ms Haley and her allied political groups spent $8.4m on advertising in the state; Mr Trump spent almost none by comparison. The former governor embarked on a two-week bus tour; the former president flew in for a few rallies and quickly departed. All the extra expenditure of time and money simply did not matter.

Ms Haley and her advisers are fuzzy about how exactly this starting sequence of consecutive losses will ultimately spell victory. “We know that this is an uphill battle. We know that the road is difficult. We know that the math is challenging,” says Betsy Ankney, Ms Haley’s campaign manager. But Ms Ankney argues that because Mr Trump is unelectable in the general election, Ms Haley has an obligation to remain in the race for as long as she can. Indeed, in head-to-head polls against President Joe Biden, Ms Haley runs, on average, several points ahead of Mr Trump. Some polls even show her leading the hypothetical national popular vote by lopsided margins of 16 points or so.

Such margins are unheard of in modern-day, hyperpolarised politics; they probably do not reflect an actual possible result in November as much as they do the wide discontent felt with the two elderly candidates the major parties are preparing to nominate. In her stump speech, Ms Haley is fond of citing these polls as proof of her viability (though she scrupulously ignores any primary polling, which by our tally, has her down 57 points to Mr Trump). But winning the general election requires winning the primary election. That requires winning multiple state contests; but Ms Haley is struggling to win even one.

Her refusal to quit plainly enrages Mr Trump, who has declared that she and her enablers are personae non gratae in MAGA-land. “I feel no need to kiss the ring,” she said in a speech on February 20th teased to reporters as a major update on the state of the race (the kind of language used when a candidate is planning to drop out). Mr Trump’s needs may be more urgent than mere vanity. If he is declared the presumptive nominee his campaign lieutenants—including his daughter-in-law—could take over the leadership of the Republican Party. This could allow him to use the party to fund his considerable legal bills, now that Mr Trump is running low on the donor-provided funds that he has used for the last three years.

Bless her heart

The tortured, seemingly inevitable, demise of Ms Haley’s presidential campaign mirrors the fate of the increasingly endangered Reaganite wing of the party. Ms Haley is an internationalist who emphatically makes the case that America needs to continue providing military aid to Ukraine; followers of Mr Trump are withholding funds while their leader muses about encouraging Russian attacks on NATO allies. She frets about the national debt, while Mr Biden and Mr Trump studiously avoid the subject. She sees America as already great and good, while Mr Trump venomously attacks it, presenting himself as its only saviour. “Your victory will be our ultimate vindication, your liberty will be our ultimate reward and the unprecedented success of the United States of America will be my ultimate and absolute revenge,” he said at an apocalyptic speech delivered to CPAC, a conservative gathering, on the same day as the South Carolina primary. Trumpism is often an inversion of the spirit of John F. Kennedy’s famous inaugural address. “Ask not what your country can do for you,” Mr Trump asks of his fellow citizens: “Ask what your country can do for me.”

Understand these stakes and Ms Haley’s refusal to bend the knee makes more sense. In Congress, too, her faction is being broken. In the House of Representatives, sensible Republicans who might have helped reconstitute a post-Trump future like Mike Gallagher and Patrick McHenry are choosing to leave without seeking re-election. The House leadership, thoroughly aligned with Mr Trump, is utterly shambolic and unable to complete basic tasks of governance. In the Senate, this takeover has been slower due to lower attrition rates, but it is happening all the same. Mitch McConnell, the Republican Senate leader, thinks that Ukraine needs continued American aid and that Mr Trump disgraced himself on January 6th 2021. That places him in the minority of his own party. His command of his fellow senators, given his age and the increasing possibility of Mr Trump’s return, is slipping away.

Many ambitious Republicans have chosen to turn accommodationist with Mr Trump despite their consciences. Indeed, Ms Haley was guilty of this herself: going from opposing him in 2016, to joining his administration, to criticising him, before pledging not to challenge him in the presidential election—then challenging him while studiously avoiding any criticism of him, to finally emerging as a strong critic of Mr Trump’s character and record. Courage, even if it arrives late, is commendable. It is just that in this case, it may not make any difference.

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Economics

ECB members say inflation job nearly done but tariff risks loom

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Guests and attendeess mingle and walk through the atrium during the IMF/World Bank Group Spring Meetings at the IMF headquarters in Washington, DC, on April 24, 2025.

Jim Watson | Afp | Getty Images

After years dominated by the pandemic, supply chains, energy and inflation, there was a new topic topping the agenda at the World Bank and International Monetary Fund’s Spring Meetings this year: tariffs.

The IMF set the tone by kicking off the week with the release of its latest economic forecasts, which cut growth outlooks for the U.S., U.K. and many Asian countries. While economists, central bankers and politicians have been engaged in panels and behind-the-scenes talks, many are attempting to work out whether trade tensions between China and the U.S. are — or perhaps are not — cooling.

Policymakers from the European Central Bank that CNBC spoke to this week broadly stuck a dovish-leaning tone, indicating they saw interest rates continuing to fall and few upside risks to euro zone inflation. However, all stressed the current high levels of uncertainty, the need to keep monitoring data, and the high risks to the growth outlook — sentiments also echoed by Bank of England Governor Andrew Bailey in his interview with CNBC on Thursday.

These were some of the main messages from ECB members this week.

Christine Lagarde, European Central Bank president

On inflation and monetary policy:

“We’re heading towards our [inflation] target in the course of 2025, so that disinflationary process is so much on track that we are nearing completion. But we have the shocks, you know, and the shocks will be a dampen on GDP. It’s a negative shock to demand.”

“The net impact on inflation will depend on what countermeasures are eventually taken by Europe. Then we have to take into account the [German] fiscal push by the defense investments, by the infrastructure fund.”

“We have seen successive movements, you know, announcement [of U.S. tariffs], and then a pause, and then some exemptions. So we have to be very attentive… Either we cut, either we pause, but we will be data dependent to the extreme.”

Watch CNBC's full interview with ECB president Christine Lagarde

On market moves:

“When we had done our projections, we anticipated that… the dollar would appreciate, the euro would depreciate. It’s not what we saw. And there have been some counter-intuitive movements in various categories.”

“The German market has obviously been shocked in a positive way by the program soon to be put in place by the German government, with a commitment to defense, with a commitment to a big fund for infrastructure development.”

Klaas Knot, The Netherlands Bank president

On tariff uncertainty:

“If I look back over the last 14 years, in the initial days of the pandemic I think that was comparable uncertainty to what we have now.”

“In the short run, it’s crystal clear that the uncertainty that is created by the unpredictability of the tariff actions by the U.S. government works as a strong negative factor for growth. Basically, uncertainty is like a tax without revenue.”

On the inflation impact:

“In the short run, we will have lower growth. We will probably also have lower inflation. As we also see, the euro is appreciating as energy prices have also come down. So together with the sort of negative factor uncertainty in the short run, it’s crystal clear that it will accelerate the disinflation.”

It's 'crystal clear' that tariffs could hit growth in the short term, ECB's Knot says

“But in the medium term, the inflation outlook is not all that clear. I think there are still these negative factors. But in the medium term, you might get retaliation. You might get the disruption of global value chains, which might also be inflationary in other parts of the world than the U.S. only. And then, of course, we have the fiscal policy coming in in Europe. So this is actually a time in which you need projections.”

On a June rate cut and market pricing for two more ECB rate cuts in 2025:

“I’m fully open minded. I think it’s way too early to already take a position on June, whether it would be another cut. It will fully depend on these projections.”

“I would need to see a more structured analysis of the impact on the inflation profile ahead of us, and only then can I say whether the market is pricing fair or whether I don’t.”

Robert Holzmann, Austrian National Bank governor

On the need to wait for more data and news on tariffs:

“We have not seen this uncertainty now for years… unless the uncertainty subsides, by the right decisions, we will have to hold back a number of our decisions, and hence, we don’t know yet in what direction monetary policy should be best moved.”

“Before looking at data in detail, the question is, what kind of political decisions will be taken? Is it that we will have some tariff increases? Is it that we will have strong tariff increases? Is it that we will have retribution by high counter tariffs?”

We have not seen this much uncertainty for years, Austrian central bank governor says

On the ECB’s April rate cut:

“I think there’s a broad consensus [on rates]. But of course, at the margin, people differ.”

“My assessment is that at this time, it wasn’t clear yet to what extent [tariff] countermeasures were being taken. Because with countermeasures in Europe, prices may have increased. Without countermeasures, quite likely the price pressure is downward. And for the time being, we don’t know yet the direction.”

On the direction of interest rates:

“I think if the recent noises about an arrangement [on trade] were to be true, in this case, quite likely it is more towards the downside than the upside with regard to prices. But this can be changed with different decisions and the result of which, we may even imagine in [the] other direction. For the time being, no, it will be down.”

“There may be further cuts this year, but the number is still outstanding.”

Mārtiņš Kazāks, Bank of Latvia governor

On opportunity from tariffs:

“With all this uncertainty and vulnerability, this is also the time of opportunities for Europe.”

“It’s a time for Europe to grasp all the aspects of being an economic superpower and becoming a really fully-fledged political and geopolitical superpower, and this requires doing all the decisions that in the past, were not carried out fully.”

“This requires political will, political guts to make those decisions, and to strengthen the European economy and assert its place in a global world.”

Global vulnerability an opportunity for Europe, says ECB's Kazāks

On market reaction to tariffs:

“So far it seems to be relatively orderly … but if one looks at the spillovers to Europe, the financial markets are working more or less fine, we haven’t seen spreads exploding or anything like that.”

“But in terms, however, of the macro scenarios, this uncertainty is extremely elevated in the sense that, given the possible outcomes, the multiple scenarios and their probabilities are very similar with the baseline [tariff] scenario.”

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Economics

Trump insists bond market tumult didn’t influence tariff pause: ‘I wasn’t worried’

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US President Donald Trump speaks during a bilateral meeting with Prime Minister of Norway Jonas Gahr Store in the Oval Office of the White House in Washington, DC, on April 24, 2025.

Saul Loeb | Afp | Getty Images

President Donald Trump denied that an aggressive bond market sell-off influenced his decision earlier this month to hold off on aggressive “reciprocal” tariffs against U.S. trading partners.

“I wasn’t worried,” Trump said in a Time magazine interview during which he was asked about financial market tumult after his April 2 “liberation day” announcement.

In the decree, Trump slapped 10% across-the-board duties against all U.S. imports and released list of tariffs against dozens of other nations. The extra levies were based on trade deficits the U.S. had against the respective countries and raised fears about inflation, a potential recession and disruption of long-held trade agreements.

Markets recoiled following the release. Treasury yields initially headed lower but quickly snapped higher. The 10-year yield rose half a percentage point in just a few days, one of its quickest moves ever, as investors also ditched stocks and the U.S. dollar.

Ultimately, Trump issued a 90-day stay on the reciprocal tariffs to allow time for negotiation. But he said it wasn’t because of the market tumult.

Pres. Trump to TIME: Would consider it a total victory if U.S. still has 50% tariffs in a year

“No, it wasn’t for that reason,” Trump told Time in the interview from Tuesday that was published Friday. “I’m doing that until we come up with the numbers that I want to come up with. I’ve met with a lot of countries. I’ve talked on the telephone. I don’t even want them to come in.”

Yields have since moved lower, with the 10-year most recently around 4.28%, about a quarter percentage point higher than its recent low. Trump had said when he made the decision to hold off that the bond market had gotten the “yips.”

“The bond market was getting the yips, but I wasn’t. Because I know what we have,” he said. “I know what we have, but I also know we won’t have it for long if we allowed four more years of the gross incompetence. This thing was just running — it was running as a free spirit. This was — this was the most incompetent president in history.”

Though negotiations over tariffs are ongoing, Trump added that he would consider it a “total victory” even if the U.S. has levies as high as 50% still in place a year from now.

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Economics

Bank of England chief focused on tariff ‘growth shock’

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Bank of England governor: We're seeing the uncertainty effect of tariffs

The Bank of England is focused on the potential impact of U.S. tariffs on U.K. economic growth if there is a slowdown in global trade, the central bank’s governor Andrew Bailey said Thursday.

“We’re certainly quite focused on the growth shock,” Bailey told CNBC’s Sara Eisen in an interview at the IMF-World Bank Spring Meetings.

Going into its May 8 monetary policy meeting, the central bank will consider “arguments on both sides” around the impact of tariffs on growth and domestic supply constraints on inflation, Bailey said.

“There is clearly a growth issue we start with, with weak growth … but a big question mark is how much of that is caused by the weak demand, how much of it is caused by a weak supply side,” he continued.

“Because the weak supply side, of course, unfortunately, has the sort of the upside effect on inflation. So we’ve got to balance those two. But I think the trade issue is now the new part of that story.”

Inflation could be pulled in either direction by wider forces, with a redirection of trade exports into other markets being disinflationary, but a retaliation on U.S. tariffs by the U.K. government — which he stressed did not appear likely — pushing up inflation.

Bailey added that he did not see the U.K. as being close to a recession at present, but that it was clear economic uncertainty was weighing on business and consumer confidence.

IMF downgrade

The IMF earlier this week downgraded its 2025 growth forecast for the U.K. to 1.1% from 1.6%, citing the impact of U.S. President Donald Trump’s trade tariffs, higher borrowing costs and increased energy prices.

However, economic forecasting remains mired in uncertainty as countries engage in negotiations with U.S. officials over Trump’s swingeing universal tariff policy, currently on pause. The U.S. has imposed 25% tariffs on steel, aluminum and autos and a 10% levy on other British exports.

U.K. policymakers have expressed hopes of reaching a trade deal with the White House, with U.S. Vice President J. D. Vance saying there is a “good chance” of an agreement.

Bailey told CNBC on Thursday that he would be “very encouraged if the U.K. does make a deal,” but that its economy was very open and services-oriented, so it would still be impacted by a wider slowdown in growth or trade.

He also noted that inflation would increase from the current 2.6% in the coming readings due to effects from markets such as energy prices and water bills, but that the bump up would be “nothing like what we saw a few years ago.”

The Bank of England held interest rates at 4.5% at its March meeting, before Trump shocked the world with the scale of his tariff announcement.

Markets now see the BOE slashing rates to 4% by its August meeting.

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