Congress Returns from Latest Break with Focus on Inflation, Gun Legislation

Congress continues to work on Democrat-only social spending/green energy bill

Washington Focus

Congress returns from a weeklong break. With rising gas and food prices, several hearings will likely focus on this has the topic. Meanwhile, House Democrats are moving to pass gun legislation that will face hurdles in the Senate if it is too aggressive.

A Democrat-only reconciliation social spending and green energy measure in focus. Bipartisan energy talks in the Senate helmed by Sen. Joe Manchin (D-W.Va.) apparently are over, potentially setting the course for a Democrat-only deal via another budget reconciliation measure, as Republican senators are convinced that Manchin is nearing a deal with Majority Leader Chuck Schumer (D-N.Y.). Any deal will still need the support of every Senate Democrat, House Speaker Nancy Pelosi (D-Calif.) and President Joe Biden.

Treasury Secretary Janet Yellen will testify on the president's proposed fiscal year 2023 budget before the Senate Finance Committee on Tuesday and to the House Ways and Means Committee on Wednesday.

The House Agriculture Committee has additional farm bill prequel hearings this week that on Wednesday is on the Supplemental Nutrition Assistance Program (SNAP/food stamps) and on Thursday, commodity programs and crop insurance.

Drought in U.S. ag and forest sectors. The Senate Ag Subcommittee on Conservation, Climate, Forestry and Natural Resources will hold a hearing on Tuesday. It will focus on drought and forest and farmland restoration in the Western states, with much of the Western United States currently under severe drought conditions.

Forest Service chief to testify. A Senate Energy and Natural Resources Committee hearing on Thursday will hear from Forest Service Chief Randy Moore.

A Senate Ag subcommittee hearing on agricultural trade will take place Thursday. Also on Thursday, the Cato Institute has a webinar on “The (Updated) Case for Free Trade.” That will be interesting because mostly here is no such thing as “free” trade.

WOTUS hearings. EPA and the Army Corps of Engineers on Monday will hold another virtual roundtable Monday on the definition of waters of the U.S. (WOTUS), which determines the jurisdiction of the Clean Water Act. The latest meeting will key on the cattle industry and was proposed by the Kansas Livestock Association, an affiliate of the National Cattlemen’s Beef Association. 

Methane emissions. House Science, Space and Technology Committee will meet on Wednesday for a hearing on the oil and gas industry's methane emissions. Senior scientist David Lyon with the Environmental Defense Fund will be one of the witnesses at the hearing. Methane is the primary component of natural gas and a more potent greenhouse gas than carbon dioxide.

The House select committee investigating the January 6 riot at the U.S. Capitol will begin its first public hearing Thursday at 8 p.m. ET. The hearing will feature previously unseen material, witness testimony, and will "provide the American people a summary of its findings about the coordinated, multi-step effort to overturn the results of the 2020 presidential election and prevent the transfer of power," according to an advisory from the committee.

Fed, SEC nominations. Senate Banking, Housing and Urban Affairs Committee on Wednesday will hold a markup to vote on the nominations Michael Barr to be a member and vice chairman for supervision of the Federal Reserve System Board of Governors; Jaime Lizarraga to be a member of the Securities and Exchange Commission; and Mark Toshiro Uyeda to be a member of the Securities and Exchange Commission.

     NRC nominations. Also on Wednesday, the Senate Environment and Public Works Committee hearing on the nominations of Annie Caputo to be a member of the Nuclear Regulatory Commission; and Bradley Crowell to be a member of the Nuclear Regulatory Commission.

Primaries will be held Tuesday in California, Iowa, Mississippi, Montana, New Jersey, New Mexico and South Dakota. There's also a special general election for California’s 22nd Congressional District to fill the seat vacated by former Republican Rep. Devin Nunes in January.

     Voters in Alaska will head to the polls on Saturday for a special primary election to fill the state's lone US House seat after the death of longtime Rep. Don Young in March. Among those in a crowded field hoping to advance to the August 16 special general election is former Alaska Gov. Sarah Palin.

Secretary of Commerce Gina Raimondo, Deutsche Bank USA Corp. CEO Christiana Riley and International Monetary Fund First Deputy Managing Director Gita Gopinath are among the many executives, heads of state and agency directors speaking at the Financial Times' Global Boardroom conference, which runs Tuesday through Thursday. Raimondo's keynote on Wednesday will cover the global chip manufacturing crisis.

Technology summit. Binance U.S. CEO Brian Shroder, Mastercard Inc. CEO Michael Miebach and Edwin Aoki, chief technology officer of blockchain, crypto and digital currencies at PayPal Holdings Inc., are among the speakers slated to appear at the 2022 Bloomberg Technology summit on Wednesday.

Student debt forgiveness. Undersecretary of Education James Kvaal will take part in a Bipartisan Policy Center fireside chat on "The Path Forward on Student Debt." The event is scheduled for 2 p.m. ET Monday.

Digital assets oversight. Washington Post Live on Wednesday will host Commodity Futures Trading Commission Chair Rostin Behnam, Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) for a discussion of what oversight of digital assets should look like and their impact on the larger financial system and economy.

The Federal Communications Commission will hold its June Open meeting on Wednesday. Commissioners are expected to vote on several items, including on how to better meet the nation's spectrum needs offshore, and to prevent the misrouting of 911 calls.

Economic Reports and Events for the Week

Focus will be on inflation this week with the latest read on consumer prices arriving Friday, June 10. Economists anticipate that headline inflation will be 8.2% Y/Y for May vs. 8.3% in April and see core CPI after backing out food and energy costs trickling down to 5.9% from 6.2%. If so, there could be a “relief rally” in financial markets.

Tuesday, June 7

• Federal Reserve reports consumer credit data for April. Consensus estimate is for total consumer debt to increase by $35 billion to a record $4.57 trillion. In the first quarter, consumer credit rose at a seasonally adjusted annual rate of 9.7%. Revolving credit, which is mostly credit-card debt and makes up nearly a quarter of all consumer debt, jumped 21.4% in the first three months of the year. As inflation has spiked, consumers have kept retail spending at high levels by borrowing more.
• International Trade
   

Wednesday, June 8

• MBA Mortgage Applications
• Wholesale Inventories
• Global economic outlook. The Organization for Economic Co-Operation and Development (OECD) holds a presentation on the “Economic Outlook,” including “analysis and projections for the world economy, OECD member countries, G20 countries and key partners.”
   

Thursday, June 9

• Jobless Claims
• Fed Balance Sheet
• Money Supply
• European Central Bank announces its monetary-policy decision. The ECB is expected to keep its deposit rate unchanged at negative 0.5%, at which it has been since September 2019. With eurozone inflation recently hitting record levels, Christine Lagarde, the ECB’s president, has said that the deposit rate probably will be out of negative territory by the end of September. Traders are pricing in one quarter-point rate hike for the July meeting and another quarter-point increase at the September meeting.
   

Friday, June 10

• University of Michigan releases its Consumer Sentiment index for June. Economists forecast a 58.8 reading, slightly higher than May’s 58.4. The May figure was the lowest for the index since August 2011, as rising inflation, particularly record-high home prices, has soured consumers’ moods.
• Bureau of Labor Statistics releases the consumer price index for May. Expectations are for the CPI to increase 8.2% year over year, compared with a 8.3% jump in April. The core CPI, which excludes volatile food and energy prices, is seen rising 6% after a gain of 6.2% previously. Inflation most likely peaked at 8.5% in March, but how quickly it moves back toward the Federal Reserve’s stated goal of 2%, will determine when the Fed can pause its interest-rate hikes.
• May Treasury Budget
   

Key USDA & international Ag & Energy Reports and Events 

USDA’s World Agricultural Supply and Demand Estimates will be released Friday, June 10. According to Pro Farmer newsletter: “In May, USDA cut its corn yield projection by 4 bu. per acre from trendline due to planting delays. As of the end of May, the planting pace had nearly caught up to average. That could prompt USDA to raise its yield some, though it has no precedent of doing so in June. USDA’s decision on corn yields could heavily influence the post-report reaction. Other points of interest will be USDA’s second winter wheat production estimate and any adjustments to U.S. and global usage forecasts due to the war in Ukraine.”

Monday, June 6

     Ag reports and events:

• Export Inspections
• Crop Progress
• Amber Waves, June issue
• County Estimates: Poultry
• Malaysia’s June 1-5 palm oil export data
• Holiday: Germany, South Korea, Malaysia, New Zealand
   

Tuesday, June 7

     Ag reports and events:

• Purdue Agriculture Sentiment
• EU weekly grain, oilseed import and export data
• Russian Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 1
• International Grains Council conference, day 1
• Global Food Summit in Munich, day 1
• Abares agricultural commodities outlook
• France agriculture ministry releases crop estimates
   

     Energy reports and events:

• API weekly U.S. oil inventory report
• EIA releases Short-Term Energy Outlook
   

Wednesday, June 8

     Ag reports and events:

• Broiler Hatchery
• Livestock and Meat International Trade Data
• U.S. Agricultural Trade Data Update
• Brazil’s Conab releases data on area, yield and output of corn and soybeans
• Russian Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 2
• International Grains Council conference, day 2
• Global Food Summit in Munich, day 2
• France AgriMer monthly grain outlook
   

     Energy reports and events:

• EIA weekly U.S. oil inventory report
• U.S. weekly ethanol inventories
• Genscape weekly crude inventory report for Europe’s ARA region
   

Thursday, June 9

     Ag reports and events:

• Weekly Export Sales
• China’s first batch of May trade data, including soybeans, edible oils, rubber and meat imports
• Russian Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 3
   

     Energy reports and events:

• EIA natural gas storage change
• China’s first batch of May trade data, including oil, gas & coal imports
• Insights Global weekly oil product inventories in Europe’s ARA region
   

Friday, June 10

     Ag reports and events:

• CFTC Commitments of Traders report
• Peanut Prices
• Meat Price Spreads
• WASDE
• Crop Production
• Cotton: World Markets and Trade
• Grain: World Markets and Trade
• Oilseeds: World Markets and Trade
• World Agricultural Production
• China’s agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• Malaysian Palm Oil Board’s data for May output, exports and stockpiles
• FranceAgriMer weekly update on crop conditions
• Malaysia’s June 1-10 palm oil export data
• Brazil’s Unica may release cane crush and sugar output data
   

     Energy reports and events:

• Baker Hughes weekly U.S. oil/gas rig counts