United States

With the Fed’s Lacker intimating there could be as many as four rate hikes this year, the already floundering small-business-economy could see an increase in SBA loan rates.

Why?

The U.S. Government sets a maximum interest rate for all of the loans it backs.  That maximum rate is composed of a base rate + a variable rate, which is negotiated between funding institutions and the businesses, and generally sits between 5.75% and 8.25%, depending on loan term and amount.

China has called on the United States to stop its close reconnaissance activities after the Pentagon reported that two Chinese fighter jets intercepted a US military spy aircraft over the South China Sea. “Two tactical [J-11s] aircraft from the People’s Republic of China” intercepted the Navy EP-3 Orion, a US maritime reconnaissance aircraft, which was on a “routine patrol” in international airspace, Defense Department spokesperson Lieutenant Colonel Michelle Baldanza told NBC News. Baldanza said: “The Chinese jets flew by the US aircraft at a distance of approximately 50 feet (15 meters).

• Fed Puts June Rate Increase on Table Provided Economy Says Go (BBG)
• European shares drop as mining stocks weaken, airlines fall (Reuters)
• Oil drops below $48 on Fed hike speculation, fading support from outages (Reuters)
• Violent Struggle Over Oil and Money Rattles Global Energy Market (BBG)
• Bayer Proposes to Acquire Monsanto (WSJ)
• How Wall Street Led LendingClub Into Crisis (BBG)
• Fewer Shareholders Pay U.S. Taxes on Dividends (WSJ)
• Turkey to miss end-June deadline for EU visa-free travel (Reuters)

After yesterday's algo-driven mad dash to close the S&P green both for the day and for the year following Fed minutes that came in shocking hawkish, the selling has continued overnight, led by the commodity complex as rate hike fears have pushed oil back down some 2% from yesterday's 7 month highs, which in turn has dragged global stocks lower to a six-week low, while pushing bond yields higher across developed nations as the market suddenly reprices the probability of a June/July rate hike.

Submitted by Eric Zuesse, investigative historian and author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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