CLINTON’S COURTSHIP: The rivalry between Hillary Clinton and Bernie Sanders moves into a new phase where Clinton hopes to soothe tensions and move the party towards unification and eventually instill enthusiasm among Sanders’ loyalists. It won’t be completely one-sided and no candidate will get their own way – and she’ll likely have to concede more ground on trade, financial services, as well as labor issues. If Clinton wants to get a head start on beating Donald Trump in the fall, she and Democratic party chieftains need appeal to him and his most fervent followers who toil outside the traditional boundaries of the Democratic party. As we’ve noted before, look for Senator Elizabeth Warren to play a central role in brokering a deal in the coming days.
SELF-INFLICTED WOUNDS: Bad week for Trump and the timing couldn’t be worse. Party leaders are admonishing him to avoid controversy and focus on policy issues - and fast. With the Democrats uniting - and with five months to go to election day - they fear that they’ll be dragged down with him if he doesn’t pivot away from his sideshows and focus on what Americans care about.
EXTINGUISHING THE FLAME: Sanders hasn’t sacked his campaign, but he is sure to shortly. With DC being the only remaining primary and Clinton’s grip on the nomination all but assured, his campaign has begun laying off staff as a large majority of superdelegates are expected to go public with a Clinton endorsement. Sanders will meet with President Obama this morning and Minority Leader Harry Reid later in the day -who along with Warren will work to convince Sanders to exit gracefully. Sanders says he’ll remain in the race until next week’s DC primary – but the reality of flipping over 400 superdelegates is starting to sink in...
LOOKING AT THE LIBERTARIANS: Libertarian presidential nominee Gary Johnson is making a pitch to Sander’s supporters by asking them to take a look at the Libertarian agenda. Johnson is positioning himself as the “real alternative” to voters choosing between two wildly unpopular candidates. Objectively, a connection to Sanders’ supporters is there – Johnson believes he and Sanders share a connection on many things like social issues and foreign policy – but diverge on matters like the economy. Johnson will be vying for disenfranchised Republicans and Democrats – but as importantly - he’ll be looking to take advantage of any and every opportunity to bring Independents in his fold.
KEEPING THE PROMESA: H.R. 5278, The Promesa Act – the Puerto Rico debt stability bill – worked its way through House Rules Committee and is now off to a floor vote. PR’s next major payment due to bondholders is fast approaching - Congress must act before July 1st to provide a life vest for the island. The House will take it up today - giving the Senate little time for consideration, let alone changes, to the legislation.
FIDUCIARY RULE UPDATE: President Obama vetoed a resolution that would block the DOL’s fiduciary rule. The veto will make it even more unlikely that the resolution will see the light of day as neither the House nor the Senate have enough votes to override.
PREVIEW OF THE JUNE FOMC MEETING: Join us today for a preview of the June 14-15 FOMC meeting with former Fed Vice Chairman Don Kohn. Don will offer his outlook on the jobs report, consumer spending, personal consumption, GDP growth, and other factors expected to influence the Fed's rate hike calculus. Email us for dial-in information.