The Incredible Shrinking Path.

The "do-nothing Democrats".

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1. The U.S. is "no longer an overheated economy" with a job market that has cooled from its pandemic-era extremes and in many ways is back where it was before the health crisis, Fed Chair Jerome Powell said in remarks to Congress that suggested the case for interest rate cuts is becoming stronger. "We are well aware that we now face two-sided risks," and can no longer focus solely on inflation, Powell told the Senate Banking Committee on Tuesday. "The labor market appears to be fully back in balance." Powell told lawmakers that he did not want "to be sending any signals about the timing of any future actions" on interest rates, a stance consistent with the chair's recent efforts to focus attention more on the evolution of economic data - and the possible choices the Fed might make in response - and less on firm guidance about what might happen on what timetable. (Source: reuters.com)

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2. For weeks the People’s Bank of China has voiced concern about a bubble forming in the country’s sovereign bond market. Now it has moved from talking about the problem to arming itself for its first direct market intervention in decades. On Friday the central bank said it had struck deals with several institutions to borrow several hundred billion renminbi of long-dated bonds that it can sell into the market to try to satisfy demand. The PBoC said it would continue to borrow and sell the bonds on an open-ended and unsecured basis. The moves are the strongest signal yet of the central bank’s determination to slow the rush of money into sovereign bonds, which has sent yields — which move inversely to prices — to record lows. The central bank fears that eager buyers such as regional banks may be storing up trouble if yields rebound abruptly and the value of their holdings drops, creating the potential for a crisis similar to the collapse of Silicon Valley Bank last year. On Monday the PBoC unveiled another tool of market intervention, saying it would start temporary bond repurchases or reverse repo operations to try to reduce the volatility of interbank interest rates. (Source: ft.com)

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3. Russia is unlikely to make significant territorial gains in Ukraine in the coming months as its poorly trained forces struggle to break through Ukrainian defenses that are now reinforced with Western munitions, U.S. officials say. Through the spring and early summer, Russian troops tried to take territory outside the city of Kharkiv and renew a push in eastern Ukraine, to capitalize on their seizure of Avdiivka. Russia has suffered thousands of casualties in the drive while gaining little new territory. Russia’s problems represent a significant change in the dynamic of the war, which had favored Moscow in recent months. Russian forces continue to inflict pain, but their incremental advances have been slowed by the Ukrainians’ hardened lines. The months ahead will not be easy for Ukraine. But allied leaders gathering in Washington this week for the 75th anniversary of the founding of North Atlantic Treaty Organization can legitimately argue that their efforts to strengthen Ukraine are working. “Ukrainian forces are stretched thin and face difficult months of fighting ahead, but a major Russian breakthrough is now unlikely,” said Michael Kofman, a senior fellow in the Russia and Eurasia program at the Carnegie Endowment for International Peace, who recently visited Ukraine. (Source: nytimes.com)

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4. NATO nations will provide Ukraine urgently needed air-defense systems, President Biden said Tuesday, vowing aid to shield against deadly Russian attacks even as the alliance stops short of offering Kyiv concrete advances toward membership. The U.S. leader, kicking off a summit marking the 75th anniversary of NATO, said the donation of five air-defense systems by Germany, Italy, Romania, the Netherlands and the United States represented just one element of NATO’s ongoing campaign to help Kyiv hold off a far larger, better-armed adversary. “Make no mistake; Russia is failing,” Biden said. “The war will end with Ukraine remaining a free and independent country.” (Source: washingtonpost.com)

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5. Senior U.S. and European leaders opened this week’s NATO summit with a pledge to increase the alliance’s investment in military industrial production, while acknowledging that more than two years after Russia invaded Ukraine, the allies are still struggling to produce enough weapons and equipment to help Kyiv win the war. Even as Russian President Vladimir Putin put his country on a war footing, cranking out tanks and ammunition rounds at an alarming rate, the North Atlantic Treaty Organization has had limited success in accelerating the output of its own defense industry. “The reality is that the war in Ukraine has demonstrated not only that the scopes have been too small, and that the production capacity has been delinquent, but it has also demonstrated serious gaps in our interoperability,” NATO Secretary-General Jens Stoltenberg said during a Tuesday event at the U.S. Chamber of Commerce. (Source: wsj.com)

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6. As President Biden prepared to address NATO allies gathered in Washington on Tuesday evening, his advocates on Capitol Hill seemed to be growing a bit louder. But so was the unease over Democratic prospects of beating Donald Trump and making gains in Congress come November. In a searing indictment of the stakes for Democrats, Sen. Michael Bennet (CO) went on CNN on Tuesday night and said that as things stand, Trump would win in a “landslide” in November. “Donald Trump is on track I think to win this election and maybe win it by a landslide and take with him the Senate and the House,” Bennet said, echoing concerns he raised in a Tuesday lunch with his colleagues. “For me, this isn’t a question about polling, it’s not a question about politics. It’s a moral question about the future of our country.” (Source: washingtonpost.com)

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7. Swing state data:

A new bipartisan poll in Wisconsin taken after the presidential debate on June 27 has former President Donald J. Trump up five percentage points against President Biden in the swing state, 50 percent to 45 percent. Mr. Biden was trailing by a similar margin — six percentage points — in a ballot that included third-party candidates, which had the independent candidate Robert F. Kennedy Jr. at 9 percent in the state. Mr. Biden is running far behind Senator Tammy Baldwin, the Democratic incumbent, who has the support of 50 percent of likely voters in her race against her Republican challenger, Eric Hovde. The poll, conducted by Fabrizio Ward and Impact Research on behalf of AARP, had Mr. Biden trailing Mr. Trump by an even wider margin — seven percentage points — among voters in the state who are 50 and older. Mr. Biden's weakness with younger voters was apparent in the poll. He is neck and neck with Mr. Trump among voters under 50, losing by just one percentage point, while Ms. Baldwin is winning the group by 14 percentage points. Views of Mr. Trump’s time in office are also helping to lift the former president’s candidacy. Just over half of Wisconsin voters strongly approve of Mr. Trump’s time in office, compared with 39 percent who strongly approve of Mr. Biden’s job performance (Sources: nytimes.com, aarp.org, italics mine)