Summary of РЕЦЕССИЯ В РОССИИ/ ТРАМП ПРОТИВ ФРС/ НАБИУЛЛИНА НАГОНЯЕТ ЖУТИ/ Милов

The video provides an in-depth analysis of recent economic and political developments affecting Russia, the United States, and the global economy, focusing on recession risks in Russia, tensions between Donald Trump and the U.S. Federal Reserve, and Russia’s worsening economic situation under current fiscal pressures.

Key Points:

1. U.S. Economic and Political Developments:

• Trump’s partial suspension of tariffs initially boosted markets, but optimism quickly faded as most tariffs remain in place.
• The World Trade Organization has sharply downgraded global trade forecasts amid ongoing tariff tensions.
• Data from U.S. Federal Reserve regional banks show significant drops in production orders and container bookings, signaling economic slowdown.
• Trump openly demands the resignation of Jerome Powell, Fed Chair, accusing him of being too cautious on rate cuts despite inflation concerns.
• Powell’s term expires in May 2026; while Trump cannot immediately fire him, he is pushing for a replacement who would favor aggressive rate cuts to stimulate the economy.
• This conflict threatens the Fed’s independence, risking destabilization of U.S. monetary policy and potential runaway inflation.
• The U.S. markets are unsettled by these developments, which could have long-term global economic consequences.

2. Oil Market and Russian Economy:

• Oil prices have dropped below $70/barrel, with OPEC trying to enforce production quotas to stabilize prices, but with limited effect.
• Russia’s budget requires around $70/barrel to balance, but current prices are well below this, deepening fiscal deficits.
• Russia’s National Welfare Fund has been depleted significantly, while military and war-related expenditures continue to rise sharply, exacerbating budget pressures.
• Domestic borrowing is ineffective due to high yields on government bonds (OFZs) over 16%, indicating a lack of investor confidence.
• The Central Bank has shifted to weekly repo auctions injecting nearly 2 trillion rubles weekly into the banking system, effectively amounting to money printing (monetary emission) to finance the budget deficit.
• This monetary expansion risks inflation and signals a lack of sustainable fiscal solutions.

3. Signs of Recession and Economic Cooling in Russia:

• Many Russian regions face severe economic decline beyond the relatively stable Moscow area.
• Key industries like coal mining are collapsing, with Russian Railways reporting a 30% underutilization of reserved transport capacity for coal exports.
• The Central Bank’s business climate index and investment activity are sharply declining, signaling deepening recession risks.
• Inflation remains high, particularly in food and services, with inflation expectations rising again, complicating any prospects for rate cuts.
• The ruble has strengthened recently due to a sharp drop in imports (reflecting economic slowdown), which hurts exporters by increasing their costs in foreign currency terms.
• Trade with China is also declining, with exports and imports falling by about 7%, further evidence of economic contraction.
• Western companies are unlikely to return to Russia soon due to restrictive conditions and ongoing geopolitical tensions; foreign investment has halved since the war began, with no significant influx from China or India.
• Legal actions against foreign firms like Germany’s Wintershall highlight worsening relations with international investors.

4. Housing Market and Construction Sector:

• Housing sales have fallen to historic lows with a large oversupply of unsold properties, risking a freeze in construction activity.
• Installment sales are growing rapidly as developers try to stimulate demand, but this increases financial risks and inflationary pressures.
• Putin has acknowledged problems in the construction sector and hinted at government support to prevent collapse, which may worsen budget deficits and inflation.
• Major developers report declining profits and anticipate worsening conditions.

5. Broader Implications and Outlook:

• The economic situation is deteriorating faster than official optimistic projections suggest.
• Monetary policy in Russia is moving toward sustained money printing to cover deficits.
• The conflict between Trump and the Fed in the U.S. and tariff uncertainties add global economic instability.
• Russia’s economic slowdown is deep and broad-based, affecting trade, investment, industry, and regional economies.
• The hoped-for return of Western companies and investors is unlikely under current political and economic conditions.
• The video concludes with a caution about the failure of Russia’s import substitution and domestic production plans, exemplified by the stalled MC-21 aircraft program and renewed interest in Boeing planes.

Presenters/Contributors:

• Vladimir Milov (main presenter and analyst)

Notable Quotes

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Category

News and Commentary

Video