Biden to Announce Emergency Summertime Sale of E15 During Speech Today in Melo, Iowa

White House blaming Putin for inflation it believes will be ‘extraordinarily elevated’

An abbreviated dispatch today because I am on my way to Nashville for a pork management seminar, and then will go to southern Virginia to meet with the Virginia Cattlemen’s Association.

As alerted early Monday, year-round E15 will be announced by President Joe Biden today during a trip to Iowa. The president will announce summertime sale of E15 at a Poet bioethanol facility in Menlo, Iowa. A senior official on Monday said the administration plans to use emergency authority to allow for the fuel to continue to be sold after the current June 1 cutoff. The Environmental Protection Agency will make the move official in a waiver closer to the beginning of June. Sen. Chuck Grassley (R-Iowa) said he was confident “Iowa biofuel producers can ramp up production and provide affordable, low-carbon biofuels to the country if the president allows summer sales of E15.” The shift could yield a modest effect on pump prices given that in areas where’s it already available, E15 sells at a 5- to 10-cent per gallon discount to regular gasoline, said Patrick DeHaan, head of petroleum analysis at retail tracker Gas Buddy. E15 is gasoline comprised of 15% ethanol. The change, which would apply on a temporary basis over the summer months, would waive anti-pollution restrictions that effectively block warm-weather sales of E15 gasoline in areas where smog is a problem. Ethanol proponents have been imploring the administration to make the change permanent, after a successful legal challenge by oil refiners led to a court last year overturning an initial attempt by the Trump administration. About 2,300 of the nation’s more than 150,000 stations now sell E15, and though it is available in roughly 30 states, the fuel is most widely offered in the Midwest. The president’s move is “good news for farmers and ethanol producers,” according to Monte Shaw, executive director of the Iowa Renewable Fuels Association. “Summer sales this year could account for about 250 million gallons of E15. But the impact goes far beyond summer sales in 2022. This means retailers aren’t forced to abandon E15.” Meanwhile, a fact sheet (link) listing the Biden administration’s fuel-related efforts also said that the EPA is proposing a change that would allow canola-based biofuels to qualify for credits under a federal program that compels refiners to blend plant-based alternatives into gasoline and diesel.

The U.S. offered a grim assessment that Russia’s invasion is likely to enter “a more protracted and a very bloody phase” as it focuses on Ukraine’s Donbas region, Pentagon spokesman John Kirby said. “By what we have seen in the past, we are probably turning another page in the same book of Russian brutality,” Kirby said at a Pentagon news conference Monday. Separately, Kirby said the first shipment of 100 Switchblade drones have arrived in the region. He said the total number of the dive-bombing armed drones that the U.S. will send to Ukraine will be in the hundreds.

The Labor Department is scheduled to release inflation data. The consumer price index (CPI) is expected to have risen 1.2% in March after advancing 0.8% in February. In the 12 months through March, the CPI is likely to have shot up to 8.4% compared with 7.9% in February. In the 12 months through March, core CPI is likely to have risen 6.6% following a 6.4% gain as of February.  

White House already blaming “Putin” for inflation it believes will be “extraordinarily elevated due to Putin’s price hike” — a reference to the increase in gas prices due to Russia’s war with Ukraine. “We expect a large difference between core and headline inflation, reflecting the global disruptions in energy and food markets,” White House Press Secretary Jen Psaki said. “Core inflation doesn’t include energy and food prices. Headline inflation does. And of course, we know that core inflation —energy, the impact of energy of course on oil prices, gas prices — we expect that to continue to reflect what we’ve seen the increases be over the course of this invasion.”

Deese: U.S. economy faces ‘rocky waters.’ President Biden’s top economic adviser warned that the U.S. may see some difficulties as it contends with elevated inflation and further supply-chain challenges stemming from Covid lockdowns in China and the Russian invasion of Ukraine. “We’re facing a lot of uncertainty, we’re facing rocky waters right now,” said Brian Deese, director of Biden’s National Economic Council, on Bloomberg TV on Monday. Still, the Biden White House has worked to improve the processing of containers at key ports — a major supply chain bottleneck through the pandemic — Deese said. He refrained from offering any estimate of the prospects of a recession in the U.S., while saying that risks of a downturn are more elevated in other economies. “The United States is probably better positioned than any other major economy to navigate effectively” through inflation and supply challenges, he said. Deese pointed to a strong U.S. labor market — unemployment last month dropped to 3.6%, practically its pre-pandemic level — along with strong household balance sheets and U.S. consumption.

Britain’s fish-and-chip shops are struggling as the war in Ukraine has made the meal’s main ingredients scarcer and more expensive. Of 10,000 shops, 3,000 may close.

China port congestion worsens as 477 bulk ships waiting to berth. Dotting the sea off Chinese ports are 477 bulk cargo ships waiting to deliver resources from metal ore to grain into the country. A shortage of port workers at Shanghai is slowing the delivery of documentation needed for ships to unload cargoes, according to ship owners and traders. Meanwhile, vessels carrying metals like copper and iron ore are left stranded offshore as trucks are unable to send goods from the port to processing mills.  Link to more via Bloomberg.

Slow tax processing cost IRS $3 billion in interest. The IRS paid nearly $14 billion in interest payments for late refunds due to slow processing of tax returns over the past seven years, a new Government Accountability Office report said. Interest payments during that period spiked in fiscal 2020 and 2021, with payments on individual refunds peaking at $1.9 billion in 2021, according to the report. Corporate refund interest payments reached nearly $1.5 billion in 2020 but decreased to approximately $1.2 billion in 2021. Interest payments for late refunds were already growing before the pandemic, since 2017.

Philadelphia is reinstating its indoor mask mandate. The Omicron BA.2 variant has increased newly reported Covid-19 cases across the Northeast, so starting next week, residents and visitors to the city will be required to wear masks in indoor public spaces. Philadelphia’s health department lifted its mandate for schools and eased other precautions just over a month ago.

Coronavirus cases in South Korea have dropped substantially over the past week, and health officials there are beginning to reopen the country. With 90,928 new cases reported yesterday, the fewest in nearly two months, South Korean testing centers will no longer offer free rapid tests to the general public and will administer PCR exams only to those in high-risk groups. The country’s health authorities are planning to soon lift most restrictions, while still making masks mandatory indoors.

Election Day 2022 is 210 days away. Election Day 2024 is 938 days away.

A Democrat fights open border? Sen. Maggie Hassan (D-N.H.), one of the endangered Democrats in the country for Nov. 8 elections, visited the southern border and criticized the Biden administration for not doing enough to stem the flow of migrants. She said ending the restriction known as Title 42 could lead to many more people trying to cross the border both legally and illegally. “Our frontline personnel need significant, additional numbers, people, on the ground at the border. They need more technology. They need access to roads and, in some places, they need physical barriers,” Hassan said. “The administration really needs to step up here, develop a plan and get more resources to the southern border.” Hassan said smugglers are also trying to take advantage of resources that are stretched thin.