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Goldman Sachs says Trump has a ‘narrow advantage’ in 2020 election

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Trump’s $1.5 trillion tax cut package and increased government spending have boosted wage gains and employment, sending the economic growth rate to nearly 3 percent in 2018. Economic factors including income, payrolls and GDP are widely used to predict election outcomes, and they have all seen improvement since Trump took office, Goldman said.

“A strong economy should help the president’s reelection chances. … Political scientists have developed a number of election models over the years that rely mainly on economic variables to predict the two-party popular vote,” Hatzius said.

Additionally, incumbents finishing the first term for their party have received a greater share of the two-party vote than candidates whose party has already controlled the White House for two or more terms, according to Goldman. This “prominent” historic pattern would give Trump a “narrow advantage,” Hatzius said.

While Trump’s approval rating is only hovering over 40%, according to an average calculated by the website FiveThirtyEight, the number isn’t that low when put in context, the Goldman economist pointed out. In fact, Hatzius said, Trump could still win the reelection fight even with a general unfavorable opinion.

“We note that if President Trump maintains his -9.6pp net approval rating, combining this approach with our economic forecast suggests that he would win the two-party popular vote by a slim margin,” Hatzius said.

Goldman’s view also seems to be in line with Wall Street’s consensus as more than 70% of market insiders expect Trump to win reelection in 2020, according to an RBC survey in April.

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Still scope for US interest rate cut, says IMF’s chief economist

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There is still room for the U.S. Federal Reserve to cut interest rates, the International Monetary Fund’s (IMF) chief economist suggested ahead of the latest decision on rates from the central bank on Wednesday.

The Fed is widely expected to clear the way for a July interest rate cut by downgrading their economic forecast, tweaking the language in their statement and reducing their interest rate forecasts. Many analysts are now pricing in two rate cuts by the end of 2019. The Fed’s decision on interest rates is due at 2 p.m ET on Wednesday.

Speaking to CNBC’s Annette Wiesbach in Sintra, Portugal, IMF Chief Economist Gita Gopinath suggested that “you could use more conventional policy in the U.S., because there is still some scope in terms of interest rate cuts.”

President Trump has long been vocal in exerting pressure on the U.S. central bank to cut rates but Gopinath emphasized the importance of independent central banks “particularly on the operational side when it comes to making big policy decisions.”

“That has to be preserved – there are a lot of benefits that come from this independence, and it is important to maintain that.”

The Fed’s forthcoming decision on rates comes after European Central Bank (ECB) President Mario Draghi signaled Tuesday that more stimulus, in the form of a possible rate cut, could be forthcoming for the euro area.

U.S. President Donald Trump railed against Draghi and accused him of currency manipulation, before hinting that he might look to demote Fed Chairman Jerome Powell depending on the outcome of Wednesday’s Fed monetary policy meeting.

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Three Russians, one Ukrainian accused of 2014 downing of flight MH17

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Three Russians and a Ukrainian will face murder charges for the July 2014 downing of Malaysia Airlines flight MH17 over eastern Ukraine in which 298 people were killed, in a trial to start in the Netherlands next March, an investigation team said on Wednesday.

The suspects are likely to be tried in absentia, however, as the Netherlands has said Russia has not cooperated with the investigation and is not expected to hand anyone over.

Ukrainian rescue servicemen look through the wreckage of Malaysia Airlines flight MH17 on July 20, 2014 in Grabovo, Ukraine.

Rob Stothard | Getty Images

The Dutch-led international team tasked with assigning criminal responsibility for the plane’s destruction named the four suspects as Russians Sergey Dubinsky, Oleg Pulatov and Igor Girkin, and Ukrainian Leonid Kharchenko.

It said international arrest warrants for the four have been issued. MH17 was shot out of the sky on July 17, 2014, over territory held by pro-Russian separatists in eastern Ukraine as it was flying from Amsterdam to the Malaysian capital Kuala Lumpur. Everyone on board was killed.

Most of those on board were Dutch. The joint investigation team formed by Australia, Belgium, Malaysia, the Netherlands and Ukraine found that the plane was shot down by a Russian missile.

Last year Russian President Vladimir Putin called MH17’s downing a “terrible tragedy” but said that Moscow was not to blame and that there are other explanations for what happened.

The governments of the Netherlands and Australia have said they hold Russia legally responsible.

Asked if she expected the suspects to attend the trial, Silene Fredriksz, whose son Bryce was on the plane with his girlfriend Daisy, said: “No. No, I don’t think so. But I don’t care. I just want the truth, and this is the truth.”

Moscow has said it does not trust the investigation.

“Russia was unable to take part in the investigation despite expressing an interest right from the start and trying to join it”, Kremlin spokesman Dmitry Peskov told reporters earlier on Wednesday.

The investigation team said Girkin was a former FSB colonel who served as minister of defence of the Donetsk People’s Republic (DNR) in the summer of 2014.

It said Dubinsky was head of the military intelligence agency of DNR, while Pulatov was head of a second department of the DNR military intelligence agency.

Ukrainian national Kharchenko was head of a reconnaissance battalion for the second department, it said.

The team said it would ask the Russian government to allow it to question the suspects who are currently in Russia. It said Kharchenko was thought to be in Ukraine at the moment.

Prosecutors have previously said the missile system that brought down the plane came from the Russian 53rd Anti-Aircraft Brigade, based in the western Russian city of Kursk.

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American Airlines to become first US airline to order new Airbus plane

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Airbus A321XLR

Soruce: Airbus

American Airlines will become first U.S. airline to order new Airbus A321XLR, according to a source familiar with details of the agreement.

CNBC has learned American will order 50 XLR jets, converting orders and options previously placed for A321neos into firm order for the A321XLR. The deal will be formally announced later Wednesday at the Paris Air Show.

Airbus has targeted first deliveries of the XLR to start in 2023.

— CNBC’s Meghan Reeder contributed to this report.

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