FirstFT: Governors meet Biden to discuss candidacy

Good morning.

State governors have arranged to meet Joe Biden today, where they are expected to discuss his candidacy as he faces increasing pressure to drop out of the presidential race.

The meeting comes at a time when angst is rising in the party about the president’s ability to defeat Donald Trump in November. Yesterday, Lloyd Doggett of Texas became the first congressional Democrat to publicly call for Biden to step aside, echoing a sentiment many Democrats have been expressing in private.

Meanwhile, Biden has tried to allay concerns about his disastrous debate performance last week, telling an audience at a fundraiser that he was “not very smart” for “travelling around the world a couple times” before the event with Trump.

But not everyone is convinced. “It’s probably going to be a goddamn disaster for the Democrats and the country and eastern Europe and the world if Biden doesn’t get out of the race,” one Democrat megadonor told the FT. “I think he’s going to get out . . . if Biden stays in the race, he’s selfish and there’s no other way to look at it.”

• Fundraising: The Trump campaign claims a big cash advantage over Biden in the second quarter.

• Liberal denialism: The fumbling of the Biden succession is part of a pattern of behaviour on the left, writes Janan Ganesh.

Here’s what else I’m keeping tabs on today:

• Diplomacy: UN Security Council to meet to discuss Haiti.

• Central banks: Minutes from the Federal Open Market Committee’s June meeting will be released.

• US private payrolls: ADP will release its US employment report for June, which will give insight into the labour market before the official government figures on Friday.

Five more top stories

1. Hurricane Beryl is forecast to bring “life-threatening” winds to Jamaica today, having become the earliest hurricane on record to develop into a category five storm. Beryl has already left several people dead, after making landfall on smaller islands in the south-east Caribbean on Monday.

2. Fed chair Jay Powell has urged the Biden administration to address the deficit, warning that the US economy is too strong to justify running such high levels of debt.

3. Blackstone has become one of the biggest buyers of a fast-growing type of risk transfer product which has become a lifeline for private equity, meaning the company is exposed to risks generated by its own business.

4. Chinese expats in the US have been asked to spread propaganda, according to interviews and documents obtained by the Financial Times, as the world’s second-largest economy demands increasing loyalty from its diaspora amid rising tensions between the two superpowers.

5. Apple is set to join OpenAI’s board in an observer role, agreed as part of a deal announced last month to integrate ChatGPT into Apple devices, which will give it a similar level of insight into the company as Microsoft, its biggest backer.

The Big Read

From oranges in Brazil to coffee in Vietnam, permanently shifting weather patterns as a result of climate change are reducing crop yields, squeezing supplies and driving up prices. Food price rises once considered temporary are becoming a source of persistent inflationary pressure, worrying central banks.

We’re also reading . . . 

• Misallocation of capital: Central banks still don’t seem to understand that financial bubbles are sources of future real asset inflation, writes Richard Bernstein.

• The biggest externality: Market forces are not enough to halt climate change, writes Martin Wolf, as people just do not want to pay the price of decarbonising the economy.

• Downgrading expertise: The US Supreme Court’s overturning of the Chevron doctrine means the opinions of experts will count for less, writes Anjana Ahuja.

Chart of the day

Google’s emissions have surged over the past five years, in large part due to the data centres it uses for its artificial intelligence systems, creating doubts about an earlier commitment to achieve net zero by 2030.

Take a break from the news

Lhakpa Sherpa might look like an average Connecticut mother-of-two, but she has also climbed Mount Everest 10 times, which is a record for a woman. Sherpa, who was born to a family of shepherds in a small Himalayan village, has faced many setbacks in order to scale the mountain and, as Simon Usborne catalogues in this piece, reclaim her identity.

Additional contributions from Benjamin Wilhelm and Irwin Cruz