<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-820x462.jpeg" alt="" class="wp-image-424713" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Twitter CEO Elon Musk announced changes to the platform’s direct messages feature including the introduction of encryption. STR | Nurphoto | Getty Images</figcaption></figure>



Twitter could launch encrypted direct messages on Wednesday, Elon Musk said, as the CEO outlined plans to boost communication features on the social media service.



Musk said in a tweet late Tuesday that the latest version of the Twitter app contains changes to direct messages or DMs — non-public messages users send to one another.



The CEO said that users can now reply to any message in a DM thread, not just the most recent, as well as use any emoji to react to a message. Previously, users would only be able to reply to the latest message in a DM thread and only react with specific emojis.



Musk also announced that encrypted DMs “should” be released on Wednesday.



Encryption in messages means that only the sender and receiver are able to see a message. In theory, Twitter and Musk would not be able to see or intercept direct messages between people.



“The acid test is that I could not see your DMs even if there was a gun to my head,” Musk tweeted.



Facebook parent Meta said in January that it was expanding testing for default end-to-end encryption for its Messenger service. WhatsApp, the other messaging app owned by Meta, has had end-to-end encryption for several years.



Encrypted messaging services have grown in popularity in the past few years as users focus more on privacy.



Musk also said that voice and video calls will be added soon to Twitter so users can “talk to people anywhere in the world” without giving them a phone number.



Since Twitter’s inception, the development of the direct messages feature hasn’t got much attention from previous CEOs. But Musk has signaled numerous times his intention to make Twitter into an “everything app” from messaging to financial services.



New Twitter features Musk promises are not always introduced on time. In February, he said Twitter would introduce a feature to share advertising revenue with creators on the platform. That hasn’t happened yet.

107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7

Twitter to launch encrypted direct messages with voice and video chat to follow, Elon Musk says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106228510-1573065003737rtx77mmt-820x462.jpg" alt="" class="wp-image-424708" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106228510-1573065003737rtx77mmt-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106228510-1573065003737rtx77mmt-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106228510-1573065003737rtx77mmt-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106228510-1573065003737rtx77mmt-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106228510-1573065003737rtx77mmt.jpg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



NEW YORK — New York Federal Reserve President John Williams on Tuesday cautioned that interest rate increases will take a while to work their way through the economy before inflation returns to an acceptable level.



The central bank official gave no forecast for where he sees policy headed but said he doesn’t expect inflation to return to the Fed’s 2% goal until the next two years. Should inflation not come down, he said the Fed always has the option to raise rates.



He added that unemployment is likely to rise to a 4%-4.5% range, from its current 54-year low of 3.4%.



“Because of the lag between policy actions and their effects, it will take time for the [Federal Open Market Committee’s] actions to restore balance to the economy and return inflation to our 2% target,” Williams said in prepared remarks at the Economic Club of New York.



Williams spoke six days after the FOMC voted to raise its benchmark rate another quarter percentage point to a target range of 5%-5.25%. In its post-meeting statement, the committee hinted it could pause rate hikes, though it said officials will be taking a variety of factors into account when determining how to proceed.



The committee removed a key phrase from the statement that had indicated additional rate hikes would be appropriate. Williams, an FOMC voter, said that decision is now a matter of what the incoming data says.



“First of all, we haven’t said we’re done raising rates,” Williams told CNBC’s Sara Eisen during a Q&amp;A session after his speech. “We’re going to make sure we’re going to achieve our goals and we’re going to assess what’s happening in our economy and make the decision based on that data.”



“I do not see in my baseline forecast, any reason to cut interest rates this year,” he said, adding that additional rate hikes would be possible if the data doesn’t cooperate.



The current problems in the banking industry and their impact will factor into Williams’ policy outlook, he said.



“I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment and inflation,” Williams said.



Some positive signs Williams cited include moderation in longer-term inflation expectations and a cooling in demand for labor that has heated the jobs market and put upward pressure on wages, which nonetheless have failed to keep up with cost-of-living increases.



He also said clogged labor chains, which have been a major inflation contributor, have “improved considerably” over time.

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Fed’s John Williams says rates could be increased if inflation doesn’t come down

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="429" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/KLKFIIU4R5L7BLIL3XRC7LP2MM-820x429.jpg" alt="" class="wp-image-416302" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/KLKFIIU4R5L7BLIL3XRC7LP2MM-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/KLKFIIU4R5L7BLIL3XRC7LP2MM-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/KLKFIIU4R5L7BLIL3XRC7LP2MM-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/KLKFIIU4R5L7BLIL3XRC7LP2MM-768x402.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/KLKFIIU4R5L7BLIL3XRC7LP2MM.jpg 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Equinor&#8217;s Johan Sverdrup oilfield platforms and accommodation jack-up rig Haven are pictured in the North Sea, Norway December 3, 2019. REUTERS/Ints Kalnins</figcaption></figure>



The recent slide in oil prices is starting to bottom out, according to analysts who predict that a more significant pickup in the coming quarters is in the cards.



Oil prices saw their third consecutive weekly decline last week, marking the longest losing run this year. However, that may soon come to pass, according to some market watchers.



“Now it definitely feels like they’re at the bottom — there are multiple signs of that,” said Citi’s Global Head of Commodities Research Ed Morse.



“Inventories built a lot during the first and second months of the year, and then they’ve come off. So that’s part of figuring that it’s at the bottom.”



He added that markets are currently facing the impact of OPEC+’s recent production cuts, and the world is moving into a higher demand season. Last month, the oil cartel announced it was slashing output by 1.16 million barrels per day. The cuts came into effect in May and will run until the end of 2023. The production declines prompted some analysts to warn prices could surge to triple digits, which failed to materialize.



“We’re looking more positively at the second and third quarter than what’s happened in the first quarter,” Morse said.



Financial services company ANZ also believes that the oil slump could bottom out soon, with global oil demand set to grow by 2 million barrels per day, keeping the market under-supplied throughout 2023.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
A tightening oil market in H2 2023 will now rely more heavily on OPEC+, particularly Russia.
<cite>Vivek Dhar COMMONWEALTH BANK OF AUSTRALIA</cite></blockquote>



 “OPEC+ output cuts and a rebound in China’s demand will likely offset slower demand elsewhere … Therefore, we expect prices to bottom out soon,” the bank wrote in a research report dated May 8.



Similarly, Goldman Sachs has maintained its forecasts for a higher crude oil price tag.



“Our forecast remains that Brent rises to $95 per barrel by December and $100 per barrel by April 2024 as we expect large deficits in H2,” the investment bank stated in a report released over the weekend.



Global benchmark Brent traded 1.74% higher at $76.61 a barrel Monday, while the U.S. West Texas Intermediate futures stood 1.92% at $72.71 per barrel.



Oil’s sharp slide



 Brent had slipped 8% year-to-date by last Friday. On Wednesday, the benchmark posted a close of $72.33, marking the lowest since December 2021, according to data from Refinitiv. On a similar vein, West Texas Intermediate has seen a 11% year-to-date fall.



The slip in prices is attributed to a confluence of economic concerns.



Last Wednesday, the U.S. Federal Reserve hiked interest rates by a quarter of a percentage point, raising investors’ concerns that slower economic growth could dent energy demand.



“Pressure from anti-inflationary action undertaken by both the U.S. Fed and the ECB [European Central Bank], have resulted in lackluster demand growth for most of the OECD, with recession risks lying ahead,” Morse wrote in an e-mail.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-820x461.jpg" alt="" class="wp-image-400703" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3.jpg 2000w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An OPEC branded flag sits on a table ahead of the 169th Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Thursday, June 2, 2016. Saudi Arabia is ready to consider a surprise deal with fellow OPEC members, attempting to mend divisions that had grown so wide many dubbed the group as good as dead. Photographer: Akos Stiller/Bloomberg via Getty Images</figcaption></figure>



Additionally, a surprise contraction in China’s April manufacturing activity also threw a shade of doubt over the recovery of the country’s commodity demand.



“The narrative that oil markets will tighten later this year because of rising Chinese demand is being challenged,” Commonwealth Bank of Australia wrote in a daily note dated May 8.



“A tightening oil market in H2 2023 will now rely more heavily on OPEC+, particularly Russia,” CBA’s Vivek Dhar wrote.



And Moscow’s oil production has proved more resilient than expected.



“Russia’s oil production and exports have been resilient despite their announcement production cut of 500,000 barrels per day,” said Kang Wu, S&amp;P’s head of global demand and Asia analytics.



The recent slide is reminiscent of the downside volatility in March and “forces’ an evaluation of whether or not the OPEC will deliver another Saudi-led cut,” Mizuho’s Vishnu Varathan wrote in a note dated May 8.



But S&amp;P’s Wu reckons there is still a “big uncertainty” as to what the cartel’s next move will be.



“Unless they see real demand destruction either due to a weakening economy or surging prices, they probably will hold on a bit longer to decide what to do.”

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Oil’s sharp slide has surprised markets. But some traders now see a bottom for prices

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233476-16829606582023-05-01t165718z_528330424_rc2sp0apd7t1_rtrmadp_0_sudan-politics-drone-820x462.jpeg" alt="" class="wp-image-424655" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233476-16829606582023-05-01t165718z_528330424_rc2sp0apd7t1_rtrmadp_0_sudan-politics-drone-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233476-16829606582023-05-01t165718z_528330424_rc2sp0apd7t1_rtrmadp_0_sudan-politics-drone-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233476-16829606582023-05-01t165718z_528330424_rc2sp0apd7t1_rtrmadp_0_sudan-politics-drone-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233476-16829606582023-05-01t165718z_528330424_rc2sp0apd7t1_rtrmadp_0_sudan-politics-drone-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233476-16829606582023-05-01t165718z_528330424_rc2sp0apd7t1_rtrmadp_0_sudan-politics-drone.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Drone footage shows clouds of black smoke over Bahri, also known as Khartoum North, Sudan, in this May 1, 2023 video obtained by REUTERS Social Media | Reuters</figcaption></figure>



The International Rescue Committee anticipates “a secondary humanitarian crisis” as refugees pour into neighboring countries escaping the escalating conflict in Sudan.



The conflict between the Sudanese Armed Forces and the Rapid Support Forces (RSF) entered its 24th day on Monday as yet another cease-fire fell by the wayside earlier in the week.



U.S. Director of National Intelligence Avril Haines told a Senate hearing on Thursday that fighting is “likely to be protracted as both sides believe that they can win militarily and have few incentives to come to the negotiating table.”



Around 45 million people remain in Sudan, facing acute shortages of fuel, food, water and medical access. Multiple ceasefires have quickly dissolved into further violence, making it difficult for international bodies and NGOs to get humanitarian aid into the vast, sprawling country.



The IRC estimated that as of Wednesday, the conflict had displaced around 334,000 people within Sudan itself, while almost 65,000 were estimated to have moved over borders as refugees to neighboring countries.



“These countries are already of course struggling following ongoing conflict, and the failure of six rainy seasons in the Horn of Africa, which has already left many people food insecure or malnourished,” Madiha Raza, IRC senior global communications officer for Africa, told CNBC.



According to the IRC, 30,000 refugees have crossed the border from the Darfur region in western Sudan into Chad since April 15.



A further 15,000 have fled to South Sudan, many of whom are returnees that had previously fled their own country’s conflict south of the border, while several thousand have also crossed into Ethiopia.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="405" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107236306-1683291060248-GettyImages-1252565485.jpg" alt="" class="wp-image-424656" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107236306-1683291060248-GettyImages-1252565485.jpg 720w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107236306-1683291060248-GettyImages-1252565485-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107236306-1683291060248-GettyImages-1252565485-160x90.jpg 160w" sizes="auto, (max-width: 720px) 100vw, 720px" /><figcaption class="wp-element-caption">DARFUR, Sudan &#8211; May 2, 2023: People inspect a destroyed medical storage in Nyala, the capital of South Darfur province, as deadly clashes between rival generals’ forces have entered their third week. -/AFP via Getty Images</figcaption></figure>



“These countries are refugee hosting communities and countries that need more support from the international community to be able to take and support the refugees that are coming over in the thousands,” Raza added.



The U.N. Refugee Agency has planned for a figure of 800,00 refugees if the conflict continues as expecting. These numbers include those traveling in dire conditions to neighboring Chad, South Sudan and Ethiopia.



“People are coming over traumatized, hungry. It’s extremely hot, and there’s an acute lack of water in those areas. It’s about 50 degrees centigrade (122 Fahrenheit). People are arriving extremely dehydrated and thirsty,” Raza said via videolink from Nairobi, Kenya.



She said a lack of fuel, food and pharmacy equipment has further driven up prices in a country that was already struggling before the escalation of violence.



“People within the country that are trapped inside don’t have the means or the access to get very basic provisions, so absolutely, we were anticipating a secondary humanitarian crisis,” Raza said.



“The longer this goes on, the longer it’s going to take to recover from economic shocks in countries which are susceptible to extreme instability.”



<h3 class="wp-block-heading" id="h-darfur-in-the-crossfire-again">Darfur in the crossfire again</h3>



According to the IRC, most of the refugees crossing into Chad are women and children and are from Darfur. The organization is providing mobile health clinics, nutrition, protection and water, with many hospitals in the western region having been attacked or looted.



“People from farther afield are not actually able to cross because they’re getting attacked, killed or injured,” she added.



Darfur has been in the crossfire of conflict since 2003, after non-Arab groups rose-up against the Arab-led government of now-deposed dictator Omar al-Bashir. In response, Bashir sent in brutal Arab militias, known as the “Janjaweed.”



The Rapid Support Forces, led by Mohamed Hamdan Dagalo, known as “Hemedti,” emerged from the Janjaweed militia, and various Arab groups have seized on the instability created by the conflict in the country’s capital Khartoum to launch violent attacks.



The RSF has been in conflict with the Sudanese Armed Forces, led by General Abdel Fattah al-Burhan, since April 15, after a fragile power-sharing agreement between the two military factions broke down.



The two generals had been overseeing a planned transition back to civilian rule following a military coup in October 2021 that ousted civilian Prime Minister Abdalla Hamdok and dissolved the country’s government.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM-820x547.jpeg" alt="" class="wp-image-424657" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Sudanese refugees from the Tandelti area who crossed into Chad, in Koufroun, near Echbara, sit near temporary shelters on April 30, 2023 for an aid distribution. Gueipeur Denis Sassou | Afp | Getty Images</figcaption></figure>



Sudanese trying to escape the country cannot cross into Chad through Darfur because the area is currently held by different armed groups, explained Raza, meaning the movement of people into Chad from Sudan has “slowed down just because people from further afield are not able to make that journey.”



Fighting in Khartoum has also spread to other regions around the city such as Bahri and Omdurman.



Decades of conflict in Sudan has stifled the country’s growth, and pushed over half the population into poverty.



Several bloody civil wars hit Africa’s third-largest country, then overseen by Bashir, who ruled the country for over 30 years.



Both leaders now vying for control of the state’s military capabilities were generals under the Bashir regime, and rose from the ashes of his leadership after a coup unseated Bashir in 2019 following months of protests.

107233218-1682935652205-gettyimages-1252457207-AFP_33E82DM

‘Secondary humanitarian crisis’ expected in Sudan as refugees pour into neighboring countries

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN-820x547.jpeg" alt="" class="wp-image-424649" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. Treasury Secretary Janet Yellen holds a press conference at the US Treasury Department in Washington, DC, on April 11, 2023. Stefani Reynolds | AFP | Getty Images</figcaption></figure>



Treasury Secretary Janet Yellen on Sunday said that failure to raise the debt ceiling will cause a “steep economic downturn” in the U.S., and she reiterated her warning that the Treasury Department may run out of measures to pay its debt obligations by June.



“Our current projection is that in early June, a day will come when we’re unable to pay our bills unless Congress raises the debt ceiling, and it’s something I strongly urge Congress to do,” Yellen told ABC’s “This Week.”



Yellen said the U.S. has already been using “extraordinary measures” to avoid default, and it’s not something the Treasury Department can continue to do. She said Congress needs to take action to avoid “economic calamity.”



“It’s widely agreed that financial and economic chaos will ensue,” Yellen said.



Lawmakers have been trying to find a path forward to raise or suspend the debt ceiling, which would enable the U.S. to pay its bills on time. But they’re currently at an impasse, raising the prospect of default.



Yellen has called for decisive action, and quickly. In a letter to House Speaker Kevin McCarthy, R-Calif., Monday, Yellen said new data on tax receipts forced the department to move up its estimate of when the Treasury Department “will be unable to continue to satisfy all of the government’s obligations” to potentially as early as June 1. This date is earlier than Wall Street economists were expecting.



On Monday, President Joe Biden called the “big four” congressional leaders — Senate Majority Leader Chuck Schumer, D-N.Y., Senate Minority Leader Mitch McConnell, R-Ky., McCarthy and House Democratic Leader Hakeem Jeffries, N.Y. — to invite them to a May 9 meeting at the White&nbsp;House&nbsp;to discuss the debt limit, a White House official told NBC.



Jeffries said Sunday that the meeting Biden has organized is “very important” and will help the U.S. find a way forward.



“We have to avoid default, period,” he told NBC’s “Meet the Press.”



But for Sen. James Lankford, R-Okla., the meeting about the debt ceiling should have happened much sooner. He said the issue was raised the week after the election in November, and that President Biden’s refusal to negotiate has been “stunning.”



“Everyone knew this was coming and the president’s refused to be able to negotiate about it,” he told ABC’s “This Week” on Sunday.

107223339-1681231339469-gettyimages-1251595250-AFP_33CZ7EN

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107209924-1678975936427-gettyimages-1248375159-GERMANY_ECB-820x547.jpeg" alt="" class="wp-image-424610" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107209924-1678975936427-gettyimages-1248375159-GERMANY_ECB-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107209924-1678975936427-gettyimages-1248375159-GERMANY_ECB-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107209924-1678975936427-gettyimages-1248375159-GERMANY_ECB-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107209924-1678975936427-gettyimages-1248375159-GERMANY_ECB-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107209924-1678975936427-gettyimages-1248375159-GERMANY_ECB-1536x1025.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107209924-1678975936427-gettyimages-1248375159-GERMANY_ECB-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Christine Lagarde, president of the European Central Bank (ECB), pauses during a rates decision news conference in Frankfurt, Germany, on Thursday, March 16, 2022. Alex Kraus | Bloomberg | Getty Images</figcaption></figure>



FRANKFURT — The European Central Bank is expected to lift its benchmark rate by a smaller step of 25 basis points Thursday, as core inflation declines and its own survey data points to much tighter financial conditions in the region.



The new economic figures both strengthen the case for the ECB to only hike rates by a smaller amount at is policy meeting, and to possibly announce an increase in the pace of its balance sheet reduction.



Quantitative tightening, or QT, has already taken place with the ECB shrinking its gigantic bond portfolio sitting on its balance sheet after years of government debt purchases and monetary stimulus. The ECB has kept interest at zero, and below, for years, and has launched bond-buying program like the APP (Asset Purchase Program) and PEPP (Pandemic Emergency Purchase Program) in an effort to simulate lending.



APP started in mid-2014 to deal with persistently low inflation levels. It was frozen between January and October 2019 and then lasted until July 2022 — but continued to reinvest payments from the assets that had matured. On the other hand, PEPP was a more flexible bond purchase program introduced during the coronavirus pandemic.



“To stop financial conditions from overreacting to a downshift to a +25bp pace, we expect the ECB to announce faster QT: an increase in the roll-off of APP reinvestments from EUR15bn per month to EUR20bn per month from Q3,” said Deutsche Bank chief economist and ECB watcher, Mark Wall, in a note to clients.



Inflation in the euro area rose slightly to 7% in April, according to new data released this week, but core inflation — which excludes food, fuel, tobacco and alcohol — slowed to 5.6% from 5.7%, its first decline since last June and lower than what the market was expecting.



“The inflation trend goes down, as the big push from higher food prices is fading out,” said Joerg Kraemer, chief economist at Commerzbank in a research note.



“It’s a positive sign that&nbsp;core inflation has fallen for the first time in a long time. But because of wage settlements above 5 percent the inflation pressure should remain stubbornly high.”



In addition, the ECB’s bank lending survey pointed to an exceptionally large drop in credit demand amid tighter lending criteria, adding to the case for a smaller rate hike.



A net 38% of banks in the 20 nations that share the euro saw a decline in demand for credit from companies in the first three months of this year. That was the biggest net decline since the global financial crisis of 2008-09.



While the euro area avoided a recession in the first quarter with anemic growth of 0.1%, the effects of the monetary tightening cycle do show the first signs that it’s dampening demand. Traditionally, monetary policy has a time lag of roughly a year and the ECB only started its hiking cycle in June 2022.



“After May, we expect one more rate hike of 25 basis points in June,” said Kraemer.



“Afterwards the ECB should be done with hiking rates and will watch the effects of its tighter monetary policy on the real economy.”



—CNBC’s Silvia Amaro contributed to this article.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106800835-1606137435956-laxx-820x547.jpg" alt="" class="wp-image-424537" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106800835-1606137435956-laxx-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106800835-1606137435956-laxx-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106800835-1606137435956-laxx-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106800835-1606137435956-laxx-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106800835-1606137435956-laxx-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/106800835-1606137435956-laxx-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Travelers wearing protective masks receive nasal swabs from nurses at a COVID-19 test site inside Terminal B at Los Angeles International Airport (LAX), on Sunday, Nov. 22, 2020. Bing Guan | Bloomberg | Getty Images</figcaption></figure>



The Biden administration will end its Covid-19 vaccine mandates for federal employees, contractors and international air travelers next week.



The White House said in a statement Monday that those vaccine requirements will end on May 11, the same day the Covid public health emergency expires.



“While vaccination remains one of the most important tools in advancing the health and safety of employees and promoting the efficiency of workplaces, we are now in a different phase of our response when these measures are no longer necessary,” the White House said.



Although Covid cases, hospitalizations and deaths have declined dramatically this year, the virus is still killing more than 1,000 people per week.



The Health and Human Services Department also will start phasing out its vaccine mandate for health-care facilities that participate in Medicare and Medicaid, the White House said. In addition, it will end vaccination requirements for Head Start programs.



And the Department of Homeland Security will lift vaccination requirements for people entering the U.S via its land borders with Canada and Mexico, according to the Biden administration. U.S. citizens, nationals and permanent residents were never subject to those requirements.



HHS and DHS will provide more details on the end of these vaccine requirements in the coming days, the White House said.



The Biden administration implemented the vaccine requirements for health workers, federal employees, contractors, and international air travelers as part of its drive to boost lackluster vaccination rates and slow the spread of the virus as the delta variant surged in late 2021 followed by omicron in the winter of 2022.



The mandates faced fierce opposition and lawsuits from critics who decried the requirements as government overreach, while the White House stressed they were essential to protect public health.

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