FirstFT: ‘Now what?’

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Kevin McCarthy has become the first Speaker of the US House of Representatives in history to be removed from the position.

In a dramatic 216-210 roll call vote yesterday afternoon, the House endorsed a “motion to vacate”, or fire McCarthy from the speakership. Eight Republicans voted against their party leader and sided with 208 Democrats, sealing his removal.

The vote sets the stage for the election of a new Speaker — though as of last night, there was no consensus candidate among House Republicans.

McCarthy told Republicans in a closed-door meeting after his ouster and later confirmed on X, formerly Twitter, that he would not run again for Speaker.

“Now what?” one unidentified lawmaker was heard saying after Steve Womack, the Republican congressman from Arkansas, read the results of the historic vote and declared the position of Speaker “vacant”.

“This is uncharted waters,” said Jim Clyburn, the veteran Democratic congressman from South Carolina. “Nobody knows [what will happen].”

Patrick McHenry, a Republican congressman from North Carolina and close McCarthy ally, has been designated “Speaker pro tempore” to lead the chamber in the absence of an elected Speaker.

McHenry said last night that it would be “prudent” for the House to go into recess so that its Democratic and Republican members could meet separately and “discuss the path forward”. Here’s more on what happened yesterday.

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

Economic data: The Institute for Supply Management will release its purchasing managers’ index for US services for September. We also get the private sector ADP payroll report for September ahead of government employment data on Friday and factory orders for August.

Monetary policy: US Federal Reserve governor Michelle Bowman will give a speech on banking reforms at a conference hosted by the Fed’s St Louis branch. Separately, Chicago Fed president Austan Goolsbee will be in conversation with former Indian central bank governor Raghuram Rajan at a conference in Chicago.

Results: Oil supermajor ExxonMobil will release its third-quarter earnings considerations in a regulatory filing, offering a preview of its results.

Catholic Church: In Rome, Pope Francis opens a three-week meeting attended by Catholics from all over the world to discuss the future of the church.

Five more top stories

1. Global bond markets continued to sell off today, with the yield on a 10-year US government bond rising to 4.88 per cent, its highest since mid-2007. The bond sell-off has followed a run of stronger than expected US economic data and warnings from the Federal Reserve that it will keep rates “higher for longer” to contain inflation. S&P 500 futures were down 0.1 per cent during morning trading in Europe.

2. Ukraine’s accession to the EU would entitle Kyiv to about €186bn over seven years, according to internal estimates of the union’s common budget. The calculations were made by the General Secretariat of the Council, the body that represents the bloc’s 27 member state governments, and come as the EU weighs up whether to agree to open formal accession negotiations with Ukraine by the end of this year, as Kyiv has requested. Here’s more on the leaked estimates.

3. Airbnb is plotting a push into longer-term housing rentals and a renewed drive on experiences as part of a shake-up of the travel accommodation app, chief executive Brian Chesky told the Financial Times. Offering rentals of up to a year represented a “huge opportunity”, Chesky said. Read more on his plans for the app.

4. The search for 12 jurors who will decide the fate of FTX founder Sam Bankman-Fried began in New York yesterday. The process marked the start of what is expected to be a six-week trial, in which the 31-year-old faces charges of fraud and money laundering related to the multibillion-dollar collapse of his cryptocurrency exchange last year. If convicted, Bankman-Fried could spend the rest of his life in prison. Read more on the more than five hours of questioning of potential jurors.

5. The US Treasury has placed 25 Chinese individuals and entities under sanctions for their alleged involvement in drug manufacturing and smuggling, as Washington steps up efforts to crack down on the proliferation of fentanyl. It also put sanctions on one person and two groups in Canada that had allegedly imported drugmaking chemicals from China.

Today’s big read

Despite booming trade between Germany and Poland, political relations between the two countries are tense. With an upcoming election, Germany has become a target for Poland’s governing Law and Justice party and its links to the former Polish prime minister and ex-president of the European Council Donald Tusk. Read more on how Germany has become a scapegoat in a bitter election campaign.

We’re also reading . . . 

Chart of the day

Can China overcome its demographic deficit? In the latest in his series of articles on the Chinese economy, Martin Wolf looks at what a declining population means for the world’s second-largest economy.

Take a break from the news

The rich, we are told, don’t try to look rich. Real money has nothing to prove and no one left to impress. It is comfortable. It wears what it likes. “Quiet luxury” is a kabuki performance of moneyed ease and indifference, according to Robert Armstrong and Lauren Indvik. Here they offer tips on how to look rich.

Additional contributions from Tee Zhuo and Benjamin Wilhelm