Putin set to win another presidential term. Special election in Pennsylvania provides political bellwhether. Bank of Japan releases meeting minutes. All in the Week Ahead.
RUSSIA: Putin set to win another 6-year presidential term
- On 18 March, Russian voters will head to the polls to elect their president (parliamentary elections are next slated to be held in 2021). The outcome is not really in any particular doubt: incumbent President Vladimir Putin has consistently polled in the mid-60s, and is largely popular in Russia. Additionally, there are several candidates running against him, so even a strong anti-Putin shift in the electorate would likely split amongst several individuals.
- The only candidate who could have stood much of a chance, Alexei Navalny, was barred by the government from contesting the presidency. Additionally, another candidate, Ksenia Sobchak, is viewed as not particularly independent from Putin (her father was a mentor of Putin’s and she was known more as a socialite and TV host rather than a political figure prior to her run).
GRI Take: With his reelection secure, Putin should remain president at least until 2024. At that point, Putin is ostensibly term-limited and will leave office (though he previously served two terms with a term limit and switched offices to become Prime Minister). Putin’s relatively smooth reelection path will remove one of the chief opportunities for Russians opposed to his administration to make any tangible impact; as a result, Russia’s political future in the short term will likely be marked by stability.
United States: Pennsylvania special election could be canary in the coal mine for Republicans
- On Tuesday, voters in Pennsylvania’s 18th congressional district will vote for the replacement of longtime Congressman Tim Murphy, who resigned from office when his affair with a longtime staffer emerged. By many metrics, this election doesn’t matter: whether the Democrat Connor Lamb or Republican Rick Saccone wins, the House will still be Republican majority-controlled; the winner of the election will only secure his term until November at which time Pennsylvania’s electoral lines will all be redrawn and that district will cease to exist.
- These factors, however, are undermined by the fact that the Republican Party has spent over $7 million, and the fact that Republican candidate Saccone may lose in a congressional district that Trump won by 20 points. While this is in part due to the underwhelming candidacy of Saccone and the impeccable credentials of Democratic candidate Connor Lamb, at least a part of the swing is likely due to some of the sheen of Trump’s appeal wearing off in some of the areas he outperformed previous Republicans.
- Despite spending more than twice as much as the Democrats in this congressional district they should have won by at least 15 points, the Republicans are competing with a groundswell of grassroots activism from Democratic and liberal-leaning voters (as well as independents who have been turned off by the chaos of the administration). Current estimates project that Saccone is still likely to win (though a poll last week put Lamb up 4 points), but regardless of victory or defeat, the closeness of the race foreshadows Republican weakness in strongholds that flipped for Trump.
GRI Take: The congressional district, which includes both sections of working class Appalachia as well as highly educated Pittsburgh suburbs, is a microcosm of the spectrum of voters that may flip to the Democrats or simply stay home in November. If enough of these key demographics flip to Democrats, they will likely retake the House and have a shot and gaining the Senate.
JAPAN: Bank of Japan meeting minutes provide clarification on Governor’s comments
- On Tuesday, the BOJ will release its meeting minutes for the last central bank meeting, when the bank decided to maintain interest rates even as economies across the developed world are looking to either raise interest rates or move away from aggressive action in the market.
- The BOJ governor, Haruhiko Kuroda, who was recently confirmed to reappointment as governor, surprised market observers by suggesting that a roadmap could be in the works for the BOJ to unwind its stimulus program by 2019. While Japanese growth has picked up over the course of the past year, inflation has remained below 1%, even while inflation for the euro, US dollar, and British pound are all approaching their 2% targets.
GRI Take: While the release of the BOJ minutes will likely pull back from the off-ramping language on the stimulus, this may not have a meaningful impact on Japan’s sluggish inflation rates. Stronger growth may move the needle in that direction, but the BOJ policies don’t appear to be pushing inflation fast enough relative to its EU, UK, and US counterparts.
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