标签: Oceania

大洋洲

  • US Congress votes to end record government shutdown

    US Congress votes to end record government shutdown

    After 75 days of gridlock that made it the longest partial government shutdown in U.S. history, Congress passed a last-minute funding bill Thursday to reopen most of the Department of Homeland Security (DHS), bringing an end to weeks of disrupted critical public services and unpaid federal work. However, the core political clash over immigration enforcement that triggered the shutdown remains unresolved, setting the stage for a new round of partisan conflict later this year.

    The bipartisan funding package, which was first approved by the Senate and cleared the House via voice vote just hours before emergency funding set aside to cover employee salaries was set to expire, will keep key DHS agencies fully funded through the end of the 2025 fiscal year on September 30. Agencies restored to full operations include the Federal Emergency Management Agency (FEMA), the U.S. Coast Guard, the Transportation Security Administration (TSA) and the U.S. Secret Service.

    Notably, the bill excludes funding for two agencies at the heart of the partisan standoff: Immigration and Customs Enforcement (ICE) and U.S. Border Patrol. The shutdown first began on February 14, when Senate Democrats refused to back full immigration enforcement funding without new restrictions on controversial enforcement tactics, such as workplace raids in sensitive community locations and the routine use of unmarked uniforms and masks by officers. Congressional Republicans rejected these conditions, calling for full, unconditional funding for all border and immigration agencies.

    House Speaker Mike Johnson had blocked the Senate-approved compromise from a floor vote for more than five weeks, arguing the deal failed to address critical national security needs by leaving immigration enforcement agencies unfunded. But mounting pressure from the White House, centrist House Republicans, and senior DHS officials warning of imminent payroll shortfalls that would force widespread furloughs forced Republican leadership to schedule the vote. The 75-day shutdown already outstripped all previous partial funding lapses by a wide margin, and deep internal rifts within the House Republican conference were laid bare throughout the impasse: hardline conservatives rejected any partial funding deal that excluded ICE and Border Patrol, while moderates warned that prolonged disruption to critical security agencies would trigger severe political backlash ahead of the upcoming midterm elections.

    “After Republicans spent months blocking disaster relief and funding for the TSA, Coast Guard, and our cyber defense agency, it is a very good thing that this bill is finally on track to be signed into law to fund these agencies,” said Senate Democratic funding chair Patty Murray, who also criticized Johnson for dragging out the impasse for no substantive reason: “Speaker of the House Mike Johnson extended the DHS shutdown for over a month for no reason at all. This is the same bill the Senate unanimously passed five weeks ago.”

    Following the vote, Republican Congressman Nick Langworthy, who had publicly urged Johnson to move the bill forward, celebrated the progress: “Thank you to (President Donald Trump) for agreeing and demanding action. Not another day should go by with our safety and security at risk.”

    The prolonged shutdown already caused measurable harm to federal operations and the workforce. Thousands of DHS employees worked without pay for more than two months, and reports indicate that over 1,000 TSA frontline staff have quit their roles amid the financial uncertainty. Planning for major upcoming events, including 2026 FIFA World Cup matches hosted across U.S. cities this summer, was also thrown into jeopardy due to lost agency preparedness funding.

    With the bill now headed to Trump’s desk for his expected signature, the underlying partisan divide over immigration policy remains fully intact. House Republicans are now moving forward with a plan to approve up to $70 billion in separate funding for ICE and Border Patrol through the budget reconciliation process, a procedural move that would allow the measure to pass the Senate without Democratic support.

    Lawmakers have departed Washington for a scheduled recess, and all eyes now turn to the next phase of the funding fight. The standoff underscores just how deep partisan polarization over immigration remains just months before midterm elections that will decide which party controls Congress for the next two years, and it highlights the ongoing challenges House Republican leadership faces in balancing the demands of hardline faction members and moderates while advancing the White House’s policy agenda. The question of whether Congress can avoid a second shutdown when current partial funding expires later this year remains unanswered.

  • First direct US-Venezuela flight in years arrives in Caracas

    First direct US-Venezuela flight in years arrives in Caracas

    After nearly a decade of severed air connectivity and strained diplomatic ties, the first direct commercial flight between the United States and Venezuela touched down in Caracas on Thursday, marking the most visible milestone yet in the rapid normalization of relations between the two nations following Washington’s removal of former leftist leader Nicolás Maduro.

    The inaugural American Airlines service departed Miami International Airport at 10:26 a.m. local time (1426 GMT), touching down at Simón Bolívar International Airport less than three hours after takeoff. A second Envoy Air flight followed shortly after the American Airlines arrival, launching the resumption of regular direct air links that were completely halted in 2019 amid spiraling bilateral tensions.

    Notably, the flight manifest included senior U.S. officials traveling to Caracas for high-level government meetings — a development that would have been considered unimaginable just six months ago, according to diplomatic sources on the ground.

    For frequent transnational travelers with ties to both countries, the resumption of direct flights eliminates years of logistical hassle and extended travel times. Claudia Varesano, a 44-year-old traveler who maintains family and business operations in Venezuela, has long commuted between the two nations but was forced to rely on connecting routes through third countries that stretched short trips into all-day journeys. “A three-hour flight would become an eight-hour flight. I’m celebrating today because I’m a frequent traveler. I can go, have breakfast and come back,” Varesano told reporters ahead of arrival.

    Isabel Parra, a Venezuela-born travel agent who had not returned to her home country since 2018, echoed that excitement, saying she felt “super excited” to step back on Venezuelan soil after years of traveling via layovers in Curaçao, the Dominican Republic, or Bogotá. “For years we had to go through those intermediate stops, so having this direct flight is a real pleasure,” Parra said. She added that the inaugural flight carried a steep $3,000 price tag, but expects ticket costs to drop sharply once American Airlines launches a second daily round-trip route on May 21, increasing service capacity.

    To mark the historic occasion, American Airlines outfitted the flight with a specialty Venezuelan-themed menu, featuring local favorites including cachapas (traditional sweet corn pancakes) and Venezuelan-style chicken salad. Greeting passengers upon departure from Miami — a major hub for the Latin American diaspora and a long-recognized gateway to the region — were city representatives and Félix Plasencia, Venezuela’s ambassador to Washington.

    The resumption of direct flights comes as the two nations rapidly rebuild economic and diplomatic ties after years of estrangement. Roughly 1.2 million Venezuelans currently reside in the United States, many of whom split time between the two countries or send regular remittances back to family. Analysts widely expect the thaw in relations, paired with restored air links, to draw increased U.S. business investment into Venezuela, which holds the world’s largest proven crude oil reserves.

    Despite the progress on normalization, significant complexities remain in the bilateral relationship. U.S. President Donald Trump has simultaneously pushed aggressive deportation policies targeting Venezuelan migrants, terminating a humanitarian protection program that shielded thousands of migrants from deportation back to the country’s high-crime areas.

    The diplomatic shift traces back to a January 3 U.S. special forces raid in Caracas that resulted in the capture of Maduro, a longstanding U.S. antagonist, who was extradited to New York to face federal drug trafficking charges that he and his supporters deny. Maduro was succeeded by his former vice president Delcy Rodríguez, who has moved to cooperate extensively with Washington despite her historical ideological alignment with Maduro’s leftist government. Trump has publicly praised Rodríguez’s policy opening to U.S. companies, and has eased broad sanctions imposed on Venezuela in recent years, including lifting personal sanctions targeting Rodríguez. In line with this opening, Venezuela has moved to fully open its critical oil and mining sectors to private international investment.

    American Airlines, a Texas-based carrier with an extensive route network across Latin America, first launched service to Venezuela in 1987 and at its peak carried more passengers between the two countries than any other airline. The carrier suspended all service in 2019, when relations collapsed after the U.S. and a bloc of Western and Latin American nations refused to recognize Maduro’s 2018 re-election, citing widespread electoral irregularities.

    Even with the resumption of flights, U.S. travel guidance retains limited warnings: the State Department still urges U.S. citizens to reconsider travel to Venezuela due to persistent widespread violent crime, but lifted its full blanket ban on all travel to the country in March.

    The launch of direct flights also comes amid a period of upheaval for the global aviation industry, which has faced severe financial pressure from a sharp spike in global oil prices following recent military escalations between the U.S., Israel, and Iran.

  • Myanmar’s Suu Kyi back in the spotlight but still out of sight

    Myanmar’s Suu Kyi back in the spotlight but still out of sight

    Nearly three years after Myanmar’s military ousted her democratically elected government in a 2021 coup, ousted leader Aung San Suu Kyi’s upcoming transfer from prison detention to a designated residence has pushed the Nobel Peace Prize laureate back into global headlines — yet her isolation from the public and supporters remains unbroken. The announcement from junta chief Min Aung Hlaing, who seized power after the coup and was sworn in as civilian president last month, has offered little clarity about where Suu Kyi will be held or how much of her combined prison sentence she still has left to serve. A party source close to the National League for Democracy (NLD) indicates the 78-year-old will likely be held in Naypyidaw, Myanmar’s sparse, purpose-built capital.

  • Myanmar coup-leader turned president orders Suu Kyi to house arrest

    Myanmar coup-leader turned president orders Suu Kyi to house arrest

    Five years after ousting Myanmar’s democratically elected government in a military coup, the junta leader who has now rebranded himself as a civilian president has ordered that deposed national leader Aung San Suu Kyi be moved from prison to house arrest.

    In an official statement released Thursday, the office of Min Aung Hlaing confirmed that the 80-year-old former state counselor’s remaining prison sentence will now be served at a “designated residence” instead of a prison facility. At the time of publication, neither the exact location of the new place of detention nor the length of Suu Kyi’s remaining sentence has been disclosed to the public. A senior anonymous source from Suu Kyi’s banned National League for Democracy (NLD) party told Agence France-Presse that the ousted leader will likely be held in seclusion at a property in Myanmar’s capital Naypyidaw, but the source stressed that the precise address remains unknown.

    The order marks another step in Min Aung Hlaing’s ongoing push to legitimize his rule after he was sworn in as civilian president earlier this month. The election that paved the way for his new civilian role was tightly controlled by the military, completely excluded the NLD from participation, and barred any public criticism or opposition under penalty of up to 10 years imprisonment. The vote was not even held in large swathes of the country currently controlled by anti-junta rebel forces, a detail that has led independent democracy monitors to dismiss the entire electoral process as little more than a cosmetic rebranding of military rule, which has dominated Myanmar’s political landscape for most of the country’s post-independence history.

    Suu Kyi, who remains widely popular among Myanmar’s population, was first taken into custody by Min Aung Hlaing’s military forces when the 2021 coup toppled her democratically elected government. She was subsequently convicted on a series of charges that human rights organizations widely condemn as entirely fabricated, created solely to remove her permanently from Myanmar’s political scene. The coup sparked a widespread, ongoing civil conflict that has killed more than 10,000 people and displaced millions across the Southeast Asian nation, which is home to roughly 50 million people.

    Along with Suu Kyi’s transfer, the junta leadership has rolled back a small number of post-coup restrictions and issued a series of prisoner amnesties. Independent analysts have described these moves as empty public relations gestures designed to improve the administration’s image globally. This skepticism is shared by Suu Kyi’s family: in a phone interview with AFP, her son Kim Aris dismissed the decision to move her to house arrest as just another of the junta’s familiar political tactics.

    “[The military leadership is] trying to legitimise themselves in the eyes of the international media and governments around the world,” Aris said. He added that if the transfer is fully carried out, he hopes his mother will finally be granted permission to communicate with him, her legal team and other contacts, noting that no junta official has reached out to him with any updates about her status. Suu Kyi has been held almost completely incommunicado since the coup, and her family has repeatedly raised alarms over her declining and ailing health in recent years.

    In one of his first official actions after taking office as civilian president this month, Min Aung Hlaing also granted a pardon to Win Myint, Suu Kyi’s top aide and the ceremonial president of her ousted government.

  • Britain’s King Charles honors fallen US troops on last day of visit

    Britain’s King Charles honors fallen US troops on last day of visit

    On the final day of his landmark four-day state visit to the United States, King Charles III paid solemn tribute to America’s fallen service members at Arlington National Cemetery, capping a trip designed to mend bilateral strains sparked by the conflict in Iran. The visit, which wrapped Thursday, has been widely hailed as a diplomatic success, with former U.S. President Donald Trump extending a warm, ceremonial welcome as host, opening the royal stay with a spectacular formal greeting and an extravagant white-tie state banquet at the White House.

    As Charles and Queen Camilla arrived for a brief farewell gathering under clear, sunny skies Thursday morning, Trump told reporters, “He’s a great king — the greatest king, in my book.” After handshakes and informal conversation, as the royal motorcade departed, Trump added, “Great people. We need more people like that in our country.”

    Following the White House ceremony, the royal couple traveled to Arlington National Cemetery, just outside Washington D.C., to lay a ceremonial wreath and fresh flowers at the hilltop Tomb of the Unknown Soldier, a memorial honoring unidentified American service members killed in war. They stood in solemn silence as a bugler performed the traditional military tribute “Taps,” before touring a nearby exhibition hall featuring military artifacts and historical displays.

    The day’s remaining agenda included a community block party celebrating the 250th anniversary of American independence from British rule, and a meeting with Indigenous American leaders at a national park, before the pair departed for the British Atlantic territory of Bermuda.

    The undisputed centerpiece of the packed visit was Charles’ address to a joint session of the U.S. Congress on Tuesday, marking the first appearance by a British monarch before the legislative body since Queen Elizabeth II’s 1991 speech. The address earned a warm reception from lawmakers, even as Charles touched on a range of polarizing issues for Trump’s Republican Party: from urgent action on climate change and checks on executive branch power, to unwavering support for NATO and the defense of Ukraine. At 77 years old, the monarch carefully navigated existing tensions between Trump and British Prime Minister Keir Starmer sparked by the UK’s refusal to join military action against Iran, framing the bilateral relationship as one “born out of dispute, but no less strong for it.”

    On Wednesday, the royal tour brought Charles and Camilla to New York City, where they paid their respects at the 9/11 Memorial and met with city mayor Zohran Mamdani. Charles, a lifelong advocate for environmental stewardship and sustainable gardening, toured a community-led urban sustainable farming project in Harlem, while Camilla marked the 100th birthday of beloved children’s character Winnie the Pooh at the New York Public Library.

    Heavy security measures were in place for the entire visit, which came just one week after an alleged assassination attempt targeting Trump at a Washington D.C. media gala. Despite underlying diplomatic tensions, the trip included multiple warm, casual moments between Charles and Trump, including a lighthearted joke from the former president about his Scottish-born mother having had a childhood crush on a young Charles, when he was still heir to the British throne.

  • Banksy confirms behind new London statue of man blinded by flag

    Banksy confirms behind new London statue of man blinded by flag

    The notoriously anonymous British street artist Banksy has officially stepped forward to confirm he is the creator of a provocative new public sculpture that has sparked widespread public intrigue and media buzz in the heart of London this week.

    The life-sized bronze-style work first appeared unexpectedly under cover of darkness in the early hours of Wednesday morning on a vacant traffic island on Pall Mall, a historic central thoroughfare located in London’s prestigious Waterloo Place. The piece depicts a formally dressed man in a business suit mid-stride, stepping off the edge of a stone plinth into empty space. A flag wrapped completely around his head obscures his vision, leaving him unaware of the drop looming ahead. Banksy’s signature is hand-scrawled directly onto the base of the plinth, an early clue to the work’s origins that sent street art fans and passersby speculating within hours of its discovery.

    In a brief official comment to Agence France-Presse, a spokesperson for Banksy confirmed the uncommissioned monument was installed by the artist’s team, noting Banksy himself selected the specific site because “there was a bit of a gap” on the traffic island. To document the surprise installation, Banksy shared behind-the-scenes footage on his official Instagram account — the platform the artist regularly uses to authenticate his new works — showing the piece being lifted into place overnight by heavy construction machinery.

    The new sculpture comes just over a month after a Reuters investigation claimed to definitively unmask Banksy’s long-hidden identity, supporting a 20-year-old claim from Britain’s Mail on Sunday that the artist is 52-year-old British native Robin Gunningham, who has since changed his legal name to David Jones. The report drew on a 2000 New York arrest record and witness testimony from Banksy’s high-profile 2022 trip to war-torn Ukraine, where he painted a series of murals supporting the Ukrainian people. Banksy himself has never commented publicly on the identity claims, maintaining his long-standing commitment to anonymity as part of his artistic persona.

    As word of the new sculpture spread, dozens of art enthusiasts and curious Londoners flocked to Waterloo Place to see the work for themselves, joining long lines for photos and debating its possible meaning. The site is no accident: the traffic island sits steps from existing iconic memorials, including monuments to King Edward VII, pioneering nurse Florence Nightingale, and the British soldiers killed in the Crimean War, placing Banksy’s provocative contemporary work in direct conversation with London’s traditional public memorial culture.

    Visitors to the sculpture have offered a wide range of reactions. 23-year-old student Ollie Isaac, who traveled across London to see the piece, called it “brilliant” and offered his own interpretation of the work’s political subtext, suggesting it critiques the rising tide of nationalism across the globe and within the UK. “That suit screams politician,” Isaac noted, echoing the observations of many other onlookers. Other visitors, like 55-year-old teacher Lynette Cloraleigh, who made the trip after seeing the work shared on Instagram, praised the piece for its quiet audacity. “It’s intriguing how it got here,” she said. Not all feedback was positive, however: the behind-the-scenes video shared by Banksy included a clip of an elderly passerby rejecting the work outright, saying he preferred the traditional historic monuments standing nearby.

    This is not Banksy’s first unsanctioned public statue in London. Back in 2004, the artist installed *The Drinker*, a satirical reimagining of Auguste Rodin’s iconic *The Thinker* that showed the famous figure leaning on a public toilet instead of his knee, just a few blocks away on Shaftesbury Avenue. That work was stolen within days of its unveiling and became the subject of a years-long legal battle over ownership that continues to this day.

    Unlike many of Banksy’s temporary street works, the new sculpture looks set to remain in place for the foreseeable future. Officials from Westminster City Council, which manages public spaces in central London, released a statement welcoming the unexpected addition to the city’s public art scene. “We’re excited to see Banksy’s latest sculpture… making a striking addition to the city’s vibrant public art scene,” the council said, adding that officials have already taken preliminary steps to protect the work while keeping it open and accessible for the public to visit and enjoy. Many visitors noted that Banksy’s public works are almost always temporary, with many removed or destroyed within weeks of their unveiling, making the council’s decision to preserve the piece a rare and welcome outcome for fans.

  • Mexico demands evidence behind US drug charges against governor

    Mexico demands evidence behind US drug charges against governor

    In a major development that has escalated cross-border diplomatic friction, Mexico’s President Claudia Sheinbaum has publicly stated that Mexico will only act on a potential extradition request for a sitting state governor if Washington provides irrefutable evidence to back up unprecedented U.S. drug trafficking charges. The bombshell accusations were announced Wednesday by the U.S. Department of Justice, which named Sinaloa Governor Ruben Rocha Moya and nine other individuals as co-conspirators collaborating with the infamous Sinaloa Cartel to smuggle massive volumes of illicit narcotics into the United States. Rocha Moya, who has led the violence-plagued northern Mexican state since 2021, is a prominent member of Sheinbaum’s own left-leaning Morena party and a close political ally of former president Andres Manuel Lopez Obrador, the movement’s founder. With a 40-year career in Mexican public service, the 76-year-old governor has previously served as a state legislator, president of the University of Sinaloa, senior advisor to two prior Sinaloa governors, and the state party leader for Morena. Speaking at her regular morning press briefing on Thursday, Sheinbaum laid out a clear legal framework for moving forward: if Mexico’s Attorney General’s Office receives conclusive, lawfully compliant evidence from U.S. authorities, or uncovers evidence of criminal wrongdoing through its own independent investigation, it will fulfill its obligations under any extradition request. However, Sheinbaum added that if sufficient evidence never materializes, it will become clear that the Justice Department’s allegations are rooted in political motives rather than legal fact. Hours after the charges were made public, Rocha Moya took to social media to reject the accusations outright, framing them as a deliberate political attack on Morena, Mexico’s ruling populist movement. Notably, all other nine individuals facing U.S. charges are also affiliated with the Morena party. Sheinbaum emphasized that this marks the first occasion in history that the United States has publicly unsealed narcotrafficking charges against a sitting Mexican governor or any similarly high-ranking sitting Mexican official. Reaffirming her government’s commitment to accountability, the president stressed “We aren’t going to protect anyone.” This unprecedented legal action comes at a moment when bilateral relations between Mexico and the Trump administration are already stretched thin. Recent weeks have seen tensions rise following the death of two U.S. agents, widely reported to be CIA personnel, during an operation linked to a drug seizure. The pair died in a car crash in the northern border state of Chihuahua, and Mexican authorities confirmed the agents had never obtained formal permission from Sheinbaum’s government to conduct operations on Mexican soil. The Sinaloa Cartel, one of Mexico’s most powerful transnational criminal organizations, is among six Mexican drug trafficking groups that the Trump administration has formally designated as foreign terrorist organizations. For months, Washington has pressured Sheinbaum to approve expanded U.S. counter-cartel intervention inside Mexico, including proposals for unilateral drone strikes and the deployment of U.S. military personnel. While the Mexican president has expressed openness to deeper bilateral cooperation on intelligence sharing, she has repeatedly rejected any deployment of U.S. armed forces on Mexican territory, calling such a move a direct violation of Mexico’s national sovereignty and political independence.

  • Oil strikes 4-year peak, stocks rise

    Oil strikes 4-year peak, stocks rise

    Global financial markets swung through volatile trading on Thursday, driven by dual forces: escalating geopolitical tensions in the Middle East that pushed crude oil prices to a four-year high, and mixed signals from central bank policy and quarterly corporate earnings that left major stock indexes split across regions.

    Crude prices surged more than 7% early in the session, lifting the international benchmark Brent crude to $126 per barrel—its highest level since Russia’s 2022 invasion of Ukraine—before retreating. By 1330 GMT, Brent had fallen 3.7% to $113.72 a barrel, while U.S. West Texas Intermediate crude dropped 2.5% to $104.23 per barrel.

    The sharp run-up in energy prices stemmed from growing fears that Middle East hostilities will escalate and disrupt global oil supplies. Multiple sources confirmed to Axios that U.S. President Donald Trump is set to receive a briefing from U.S. Central Command head Admiral Brad Cooper on plans for potential new military strikes against Iran, while Trump has warned that an ongoing U.S. blockade of Iranian ports could extend for months. Negotiations over Iran’s nuclear program remain completely stalled, and Iran maintains full control over the Strait of Hormuz, the strategic waterway that carries roughly one-fifth of the world’s daily oil trade.

    “With no sign of any peace talks and fears mounting about an escalation, oil prices have continued their gains,” Jim Reid, Deutsche Bank managing director, noted ahead of the price peak. “Investors are pricing in a more protracted conflict,” he added.

    Beyond energy markets, investor attention remained fixed on major central bank decisions, one day after the U.S. Federal Reserve announced it would hold interest rates steady in the face of war-fueled elevated inflation. The European Central Bank and Bank of England followed the Fed’s lead on Thursday, also keeping rates unchanged. However, the ECB warned that risks to the eurozone’s growth and inflation outlooks have “intensified” due to Middle East tensions and energy supply disruptions, while the Bank of England downgraded its forecast for UK economic growth.

    Fresh economic data released Thursday reflected the growing ripple effects of the conflict. Eurozone first-quarter growth slowed to just 0.1%, while U.S. gross domestic product expanded at a 2% annual rate—slower than analysts had projected—as consumer spending cooled. The Federal Reserve’s preferred inflation gauge also rose 3.5% in March, driven largely by spiking energy costs. Even with the slowdown, Briefing.com analyst Patrick O’Hare said the U.S. data reinforced confidence in the economy’s resilience despite rising prices.

    On Wall Street, major U.S. stock indices opened higher and ended the day in positive territory, lifted by stronger-than-expected quarterly corporate earnings. The Dow Jones Industrial Average gained 0.5% to close at 49,108.93, the S&P 500 added 0.4% to 7,167.28, and the Nasdaq Composite rose 0.6% to 24,829.53. Big tech stocks delivered a mixed performance: Alphabet, Google’s parent company, saw shares jump more than 5% after investors praised the firm’s successful AI transition and strong revenue across core divisions, while Meta shares slumped more than 9% over concerns about its massive planned AI investment.

    Overall, quarterly results have beaten analyst expectations by a wide margin, pushing the estimated average earnings growth for large U.S. companies from 15% to 26%, O’Hare said. “That is just massive, and it is the trajectory that has had the stock market looking confident in the face of the Middle East tumult and rising oil prices,” he added.

    European markets were similarly split: London’s FTSE 100 rose 1.4% and Frankfurt’s DAX gained 0.8%, while Paris’s CAC 40 dipped less than 0.1%. Most Asian markets closed lower, with Tokyo’s Nikkei 225 falling 1.1% and Hong Kong’s Hang Seng Index dropping 1.3%; only Shanghai’s Composite index eked out a 0.1% gain.

    In currency markets, the Japanese yen surged more than 2% against the U.S. dollar after Japan’s finance minister strongly signaled that Tokyo was prepared to intervene in currency markets to prop up the yen, which had fallen to its lowest level against the dollar since mid-2024. By the end of the trading window, the dollar fell to 156.69 yen from 160.23 yen on Wednesday.

  • US first-quarter growth rebounds less than expected as inflation surges

    US first-quarter growth rebounds less than expected as inflation surges

    New government data released Thursday reveals that U.S. economic growth rebounded less than analysts projected in the first quarter of 2026, as soaring inflation driven by Middle East conflict-related energy price shocks cooled consumer spending and exposed deep divides in the country’s economic performance.

    The world’s largest economy saw gross domestic product expand at an annualized rate of 2.0% between January and March, according to the Commerce Department’s advance estimate. That marks a sharp improvement from the 0.5% growth recorded in the final quarter of 2025, but still underperforms the 2.2% expansion economists had predicted ahead of the report.

    The uptick in overall growth was primarily fueled by a jump in business investment and a rebound in federal government spending, which recovered after a disruptive government shutdown in the fourth quarter of 2025. White House spokesperson Kush Desai quickly framed the result as a win for the Trump administration’s policy agenda, crediting the president’s tax cuts and deregulation efforts for driving what he called an “astonishing surge in business investment.”

    Despite the headline growth number, economic observers warn that strengths in the economy are narrowly concentrated in the booming AI sector, while millions of ordinary households are already showing signs of financial fatigue from rising costs. The conflict-driven energy shock that began after U.S.-Israeli strikes on Iran on February 28, which prompted Tehran to block traffic through the strategic Strait of Hormuz – a critical global transit chokepoint for energy and fertilizer – has sent energy prices soaring worldwide. Data from the American Automobile Association shows the average price for a gallon of regular gasoline in the U.S. has already spiked to $4.30, eating into household budgets that were already stretched.

    Inflation data released alongside the GDP report confirms the sharp upward shift in prices: the personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation metric, jumped to 3.5% year-over-year in March, up from 2.8% in February. Even when stripping out volatile food and energy prices, core inflation still rose 3.2% annually, far above the Fed’s long-term 2% target.

    Heather Long, chief economist at Navy Federal Credit Union, described the current landscape as a “split-screen economy.” On one side, AI-focused companies and investors are thriving, driving the capital investment boom that lifted the headline GDP number. On the other, middle- and low-income households are grappling with persistent cost-of-living increases. Long noted that nearly half of larger annual tax refunds issued this year have already gone toward covering higher fuel costs for most families, and flagged the slowdown in consumer spending growth to just 1.6% in the first quarter as a “big warning sign” of deeper trouble ahead.

    Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, echoed this assessment, pointing out that underlying economic momentum is “anemic” outside of the AI investment surge. He added that multiple headwinds are already weighing on U.S. consumers: a cooling labor market, subdued consumer confidence, sluggish growth in real household income, and the depletion of excess savings accumulated during the COVID-19 pandemic have all combined to dampen spending.

    The combination of slowing consumption and rising inflation also carries significant political risks, as the Republican Party prepares to defend its majority in November’s midterm elections. Steeper everyday costs are likely to become a top campaign issue for voters, and could erode support for the incumbent administration.

    While some financial analysts, including Chris Zaccarelli, chief investment officer at Northlight Asset Management, believe the U.S. economy has enough resilience to absorb short-term global shocks, Zaccarelli cautioned that growing risks point to a much more challenging outlook for the global economy in the coming months, raising concerns about broader spillover effects from the Middle East energy crisis.

  • Australia’s budget ‘sugar hits’ are running out, economists warn

    Australia’s budget ‘sugar hits’ are running out, economists warn

    Australia’s national debt has posted an unexpected near-term decline, but leading economic analysts warn this seemingly positive trend rests on fragile, temporary factors rather than lasting fiscal progress – and the nation is running out of good luck to prop up its budget.

    The temporary drop in debt has been fueled by two external shocks: the ongoing conflict in the Middle East (Iran) and skyrocketing cost-of-living pressures that have lifted inflation across the country. According to the latest Deloitte Access Economics Budget Monitor report, these forces have delivered what senior partners describe as “sugar hits” to government revenue: higher prices across energy and commodities translate directly into higher tax collections, which have shrunk near-term deficits and allowed for a one-off $40 billion debt repayment in April 2026. Total gross national debt currently sits at $962.6 billion following this repayment.

    Deloitte Access Economics partner Stephen Smith argues that these one-off revenue gains have papered over deep, long-standing structural flaws that leave Australia in a precarious fiscal position. “Higher inflation and the Middle East conflict are all quite good for the budget in the short term because higher prices mean more tax revenue,” Smith explained in an interview with NewsWire. But this quick boost to revenue carries major long-term risks, he warned: a sustained oil supply shock from regional conflict could sharply slow domestic demand, while persistent inflation may force the Reserve Bank of Australia to raise interest rates even higher than markets currently expect. These risks will only grow if the government opts for heavy-handed short-term household relief in the upcoming budget, Smith added.

    The short-term fiscal picture has indeed improved more than many forecasters expected. Deloitte projects the underlying cash deficit will come in at $33.2 billion, a $3.6 billion improvement from the Mid-Year Economics and Fiscal Outlook (MYEFO) projections. Commonwealth Bank (CBA) is even more optimistic, forecasting the deficit will fall to $29 billion this fiscal year and $22 billion the next, marking a significant upgrade to the nation’s fiscal outlook.

    But despite these near-term gains, Deloitte warns upward cost pressures will erase much of the revenue windfall in coming years. Elevated inflation automatically lifts indexed federal payments, including welfare support for jobseekers and age pensions, while higher interest rates also increase the government’s debt servicing costs. Even with strict controls on new spending, growth in existing mandatory spending will offset most of the extra revenue, Smith noted. The fastest-growing spending areas – defense, the National Disability Insurance Scheme (NDIS), aged care, health, and debt interest – are all core government responsibilities, but their current growth rates are outpacing revenue at an unsustainable pace.

    To rein in runaway NDIS costs, the federal government has already proposed legislative changes to crack down on “scheme inflation,” tighten eligibility rules, and root out system rorting. Current projections show the scheme would cost more than $70 billion annually by 2030, but the reforms are expected to cut that figure by $15 billion over the forward estimates period.

    CBA chief economist Luke Yeaman identifies three core challenges the government must address in its upcoming budget to put public finances on a sustainable path: tax system reform to spread the burden more fairly across generations, avoiding new spending that would further stoke already high inflation, and managing growing uncertainty from the ongoing Iran conflict. “Achieving all of this in one budget – major reform, big spending cuts, national resilience and supporting households – is quite the ask,” Yeaman said. “We expect the government to try to thread the needle. To pull this off, they will need to meet several tests.”

    Treasurer Jim Chalmers has already acknowledged the difficult context, describing the government’s budget strategy as “hostage to economic turmoil.” He has pledged the upcoming budget will deliver substantial savings while remaining ambitious, with a core focus on addressing intergenerational inequity in the tax and housing sectors.

    A growing number of analysts expect the government will finally advance long-discussed reforms to the capital gains tax (CGT) discount and negative gearing, long considered untouchable “sacred cows” of Australian tax policy. Currently, investors receive a flat 50% discount on capital gains for assets held longer than one year, a policy that disproportionately benefits wealthy asset holders. Reports indicate the government will shift to an indexation model that only taxes real inflation-adjusted capital gains, a change framed as a measure to improve housing affordability and intergenerational equity rather than a broad tax increase. CBA projects the reform could save the budget around $2 billion over four years if implemented as rumored.

    While Deloitte calls CGT reform a solid first step, the firm argues the government needs to go further with broader structural tax reform: shifting the tax burden away from income taxes toward consumption and land taxes. Under Deloitte’s proposal, the tax-free threshold would be raised to $35,000, with a 33% marginal rate for incomes up to $300,000 and a 40% rate for incomes above that threshold. “From an economics point of view if you are taxing income you are discouraging people from working, so the less we can tax labour the more we encourage people to work and that can really boost the economy,” Smith said. He added that the current system is unfair to younger generations: as Australia’s population ages, wealthy retirees pay a disproportionately small share of total tax, while working-age Australians bear the bulk of income tax burdens. Taxes like the GST are far more efficient, he noted, because they are shared across all members of society regardless of age or employment status.