Impacts of Surging Inflation Mount, Including Potential Delay for BBB Package
USDA announces faster line-speed trial program for nine pork plants; eyes remand of poultry line speed waivers
In Today’s Digital Newspaper
• Today’s dispatch includes focus on surging inflation
• Consumer Pain Index: Where Americans are seeing the most inflation
• Inflation: Biden comments
• Inflation outlook
• Inflation: Fed gets come advice
• Not whether Fed will raise interest rates next year but how much and how quickly
• Inflation: Political impact
• Inflation: It’s even worse in China
• Average hourly earnings after inflation fell 0.5% in October
• Businesses passing on higher costs to consumers
• IRS: Tax brackets will be higher in 2022 due to faster inflation
• Home prices climbed across U.S. in third quarter, but price growth slowed
• Elon Musk sold about $5 billion in shares of the carmaker
• Federal gov’t ran $165 billion deficit during October
• Gold prices hit five-month high, and silver scored three-month high on Wednesday
• U.S. coal appetite growing due to higher natural gas prices
• If EIA is correct, Biden is right to expect relief from high oil and gasoline prices
• Biden vows to address inflation caused by high energy prices
• Oil producer group opposes ‘manipulating’ of market with SPR
• Little change in FSA certified corn, soybean acres
• 81: Number of container ships anchored offshore at ports of LA and Long Beach
• Ag demand update
• Varied price tone in light overnight trade
• Brazil raises its 2021-22 soybean, corn crop forecasts
• USDA announces faster line-speed trial program for pork plants
• Packers chasing cash cattle
• Cash hog fundamentals weaken
• Signing ceremony for BIF next Monday at White House
• CBO releases scores for four sections of House BBB
• Fallout for BBB: Manchin and inflation
• Virtual confab between Biden and Xi tentatively set for Monday evening
• Xi's growing power
• Evergrande averts default, again
• Blinken: If China wants something from companies, ‘the state will get it’
• Three amigos to meet again
Energy & Climate Change:
• U.S. and China said they would work together to do more to cut emissions
• What Iran wants to ratify Paris climate agreement
• Will biofuel sector still get $700 million in Covid aid with ethanol prices nearing highs?
Livestock, Food & Beverage Industry Update:
• USDA announces faster line-speed trial program for pork plants
• USDA eyes remand of poultry line speed waivers
• More than 900,000 kids ages 5-11 vaccinated by late
• German Chancellor-in-waiting Olaf Scholz calls for renewed vaccination effort
Politics & Elections:
• Ron Johnson nearing decision on whether to seek third Senate term
• Must-see TV next Tuesday when Homeland Security Sec. Alejandro Mayorkas testifies
Other Items of Note:
• Biden gets a cannabis letter from three Dem senators
• Russian moves unsettle Ukraine and U.S.
Equities today: Global stock markets were flat to a bit higher in overnight trading. The U.S. stock indexes are pointed to firmer openings. Inflation, and the possible Fed reaction to it, is today’s theme in markets and therefore today’s dispatch focuses on inflation — which should not be surprising if you shop. Asian equity markets were mixed as Chinese property shares rebounded. Japan’s Nikkei was up 171.08 points, 0.59%, at 29,277.86. The Hang Seng Index gained 251.85 points, 1.01%, at 25,247.99. Markets in India, Australia and South Korea were lower. European equities are also mixed. The Stoxx 600 was up 0.1% while other markets posted gains of 0.4% to losses of 0.6%.
U.S. equities yesterday: The Dow lost 240.04 points, 0.7%, to 36,079.94. The Nasdaq declined 263.84 points, 1.7%, to 15,622.71. The S&P 500 dropped 38.54 points, 0.8%, to 4,646.71.
Tesla’s Elon Musk sold about $5 billion in shares of the carmaker (4.5 million shares), according to regulatory filings made public late Wednesday. Shares ticked up premarket. He still owns about 17% of Tesla, a stake worth about $180 billion. Musk's buying and selling is contributing to significant gyrations in the company's stock. Shares fell 16% on Monday and Tuesday before bouncing 4% on Wednesday. They're up another 2.7% in premarket trading today.
Yield on the benchmark 10-year Treasury note settled Wednesday at 1.558%. That’s still well below its 2021 high of 1.749% set at the end of March and even its recent peak of 1.674% reached on Oct. 21.
On tap today:
• Today is Veterans Day in the U.S., and we honor all who have served in the military. The U.S. gov’t and Treasury markets are closed. There is no U.S. economic data due for release, due to the holiday.
President Biden’s schedule:
— 9 a.m. ET: The president will host veterans and other military community members before the group goes to Arlington National Cemetery.
— 11 a.m. ET: The Bidens will take part in the Presidential Armed Forces Full Honor Wreath-Laying Ceremony on the 100th anniversary of the Tomb of the Unknown Soldier.
— 11:15 a.m. ET: Biden will speak at the National Veterans Day Observance at the Memorial Amphitheater.
Consumer Pain Index: Where Americans are seeing the most inflation (year over year):
- gasoline prices are up 49.6%
- fuel oil up 59.1%
- utility natural gas up 28.1%
- used cars and trucks up 26.4%
- beef prices are up 20.1%
- pork up 14.1%
- bacon up 15.4%
- chicken up 8.8%
- eggs up 11.6%
- milk up 4.3%
- apples up 6.7%
- coffee up 4.7%
- peanut butter up 6%
- baby food up 7.9%
- prices for furniture and bedding costs had their biggest jump since 1951
- prices for new cars and trucks had their biggest jump ever
Biden comments: “Everything from a gallon of gas to a loaf of bread costs more, and it’s worrisome,” President Biden said. He said his infrastructure bill would help ease supply-chain issues. The U.S. economy's challenge isn’t lack of jobs but shortages, inflation and daily disruptions wrought by Covid-19. President Biden’s agenda wasn’t designed to address that sort of problem, and in some ways may have made it worse, writes chief WSJ economics commentator Greg Ip.
Inflation outlook: “The bigger picture is we’re likely to see inflation climb higher. Things are going to get worse before they get better,” predicts Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.
Fed gets come advice. Glenn Hubbard, the former top economic adviser to President George W. Bush, thinks the Fed risks losing control of inflation if it doesn't pivot soon. "It doesn't add up," Hubbard told CNN Business. "You don't have to pour gasoline on a fire." Jason Furman, a Harvard economist who advised President Barack Obama, also believes the duty to act lies with the Fed. "The Fed is charged with a dual mandate of maximum employment and price stability. They should be processing the monthly data on jobs, prices, and figuring out whether or not to adjust accordingly," he tweeted. "Fiscal policy has bigger issues to worry about, like our long-term future."
Political impact: “High prices tend to usher out incumbent politicians faster than they usher in new technologies,” says Kevin Book, managing director of ClearView Energy Partners. Meanwhile, some reports are already calling this “Bidenflation.”
It’s even worse in China: China’s producer prices surged at a record 13.5% pace in October. One analyst said: “If they are admitting to 13.5% inflation, it’s probably more like 20%.”
Average hourly earnings after inflation fell 0.5% in October, the Labor Dept. reported. Real wages are down 2.2% since January. American purchasing power has declined, and the average standard of living has fallen, despite unheard of levels of government spending.
Businesses are passing on higher costs to consumers, with 60% of small business owners raising prices in the previous 90 days, according to a November survey of 560 firms by Vistage Worldwide. Companies are struggling to get materials and are delaying orders, adding to demand pressures, while a labor shortage is putting upward pressure on wages.
Inflation rise question: Not whether Federal Reserve will raise interest rates next year but rather how much and how quickly. The Labor Department's consumer price figures highlight why Fed officials have been backing away from characterizing recent price pressures as “transitory.” They have since used “sticky” but most think it is more like the best glue around. While senior central bank leaders still believe inflation could slow as supply-chain kinks abate, they now see that process taking longer than they expected earlier this year, extending into 2022. That is in part because the spread of the Delta variant of the coronavirus has extended a series of disruptions in the economy. Together with evidence that the labor market is rapidly recovering, this means they are more likely to raise interest rates next year, possibly as soon as next summer, the Wall Street Journal reports (link).
Says analyst Diane Swonk: “The Fed will be accelerating its tapering of asset purchases when it meets next in December. They will want some cushion to raise rates sooner & faster in 2022 to deal with the inflation we are seeing. Inflation is not expected to crest until spring 2022 and could get worse.”
— IRS: Tax brackets will be higher in 2022 due to faster inflation. The threshold for the top federal income-tax bracket in 2022 will climb by nearly $20,000 next year for married couples, and that 37% rate will apply to income above $647,850, the Internal Revenue Service said Wednesday as it implemented automatic tax-code updates to reflect faster inflation in 2021.
The new inflation adjustments are for tax year 2022, for which taxpayers will file tax returns in early 2023. Due to increases in consumer prices, all of the tax bracket thresholds and other key tax-code parameters are rising faster than usual. This would be the largest increase in four years. Congress reset the brackets and changed the tax code’s inflation formulas in 2017. The brackets apply to taxable income, or income after deductions. Democrats are still considering surtaxes that would apply only on adjusted gross income above $10 million.
The standard deduction for married couples will be $25,900, up from $25,100. The maximum amount that can be set aside in a healthcare flexible spending account will be $2,850, up from $2,750.
The exclusion from estate and gift taxes will be $12.06 million per person, up from $11.7 million. Democrats had discussed cutting that exclusion to about $6 million but have since dropped that provision from their legislation.
The annual exclusion for gifts will be $16,000, up from $15,000. That is the amount that each person can give another person without using up any of the lifetime exclusion from estate and gift taxes.
Some numbers in the tax code aren’t automatically tied to inflation and won’t adjust unless Congress changes them. Those include the $3,000 deduction for capital losses against ordinary income, the $2,000 base level for the child tax credit and the $10,000 cap on the state and local tax deduction.
— Federal gov’t ran a $165 billion deficit during October, a smaller gap when compared with a year earlier, as the government took in higher revenue from taxes and other receipts and pulled back on spending.
— Home prices climbed across the U.S. in the third quarter, but price growth slowed from earlier in the year as record prices and stiff competition pushed some buyers out of the market. The median sales price for single-family existing homes was higher in the quarter compared with a year before in 182 of the 183 metro areas tracked by the National Association of Realtors. Median prices rose by more than 10% from a year earlier in 78% of those areas.
• Outside markets: The U.S. dollar index is higher and hit a 15-month high overnight. U.S. bond markets are closed for Veterans Day with the yield on the 10-year U.S. Treasury note at 1.55%. There is a mixed-to-positive tone noted in other global government bond yields. Gold and silver futures are up, with gold trading around $1,867 per troy ounce and silver around $25.16 per troy ounce.
• Gold prices hit a five-month high, and silver scored a three-month high on Wednesday, as traders and investors seek out inflation hedges in hard assets.
• Crude oil prices are lower ahead of U.S. trading with U.S. crude trading around $80.50 per barrel and Brent around $82.00 per barrel. Futures posted losses in Asian action, with U.S. crude down $0.87 at $80.47 per barrel while Brent was off $0.65 at $81.99 per barrel.
• U.S. coal appetite growing due to higher natural gas prices. U.S. coal consumption in the power sector will rise 18% this year in response to higher natural gas prices, the Energy Information Administration (EIA) projects in its latest Short-Term Energy Outlook. Power generation from coal has not increased as much to offset rising gas prices as in similar circumstances in the past, EIA said. But it’s picked up enough that the share of U.S. electricity from coal rises from 20% in 2020 to about 23% in 2021 and 22% next year. That bump means coal-related carbon emissions will rise by 18% this year, after falling 19% during the pandemic year in 2020.
• If EIA is correct, President Biden is right to expect relief from high oil and gasoline prices beginning next year. EIA projections show oil production from OPEC+ and the U.S. will outpace slowing growth in global demand next year and contribute to Brent crude prices declining from current levels — averaging $84 per barrel last month — to an annual average of $72 per barrel in 2022.
• Biden vows to address inflation caused by high energy prices. President Biden Wednesday morning blamed high energy costs for driving inflation to its highest annual rate in 30 years. Consumer prices rose to 6.2% in the year ending October, the Department of Labor reported today, and will add to widespread fears about inflation as Biden and Democrats look to pass their $1.75 trillion climate and social spending plan. “The largest share of the increase in prices in this report is due to rising energy costs,” Biden said in a statement, while noting the price of natural gas has fallen in recent days. The EIA had previously projected Americans will see home-heating bills rise by 30% on average due to high natural gas prices. Biden did not specify specific actions he might take to try and reduce energy costs, but said he directed the National Economic Council to “pursue means” to try to address the issue. He also reiterated a previous request that the Federal Trade Commission look “to strike back at any market manipulation or price gouging” in the energy sector.
• Oil producer group opposes ‘manipulating’ of market with SPR. Independent oil producers are coming out strongly against the possibility of the Biden administration releasing supplies from the nation’s Strategic Petroleum Reserve (SPR) to push gasoline prices downward. The Independent Petroleum Association of American said it opposes any attempt to “manipulate” the market through an SPR release. “The SPR was created to deal with crude oil supply emergencies,” IPAA said. “There is at this time no crude oil supply emergency either domestically or worldwide.”
• Little change in FSA certified corn, soybean acres. After failing to publish the data last month, FSA updated certified acres for November today. Corn planted/failed/volunteer acres increased to 91.354 million, up just 135,000 acres from what was reported in September. Corn prevent-plant (PP) acres increased to 639,006 acres, up 1,201 acres from September. Soybean planted/failed/volunteer acres rose to 86.250 million, up just 65,000 acres from September. Soybean PP acres increased just 4,662 acres to 341,805 acres.
• 81: Number of container ships anchored offshore at the ports of Los Angeles and Long Beach on Tuesday, a record, according to the Marine Exchange of Southern California
• Ag demand: Japan purchased 157,987 MT of wheat from its weekly tender, including 62,364 MT U.S., 63,240 MT Canadian and 32,383 MT Australian. South Korea bought 65,000 MT of corn – likely South American or South African origin. Bangladesh tendered to buy 50,000 MT of optional origin milling wheat.
• NWS weather: There is a slight risk of excessive rainfall over parts of the Pacific Northwest through Friday morning... ...Snow for the Upper Midwest... ...Temperatures will be above average over parts of the Northeast/Mid-Atlantic.
Items in Pro Farmer's First Thing Today include:
• Varied price tone in light overnight trade
• Brazil raises its 2021-22 soybean, corn crop forecasts
• USDA announces faster line-speed trial program for nine pork plants
• Packers chasing cash cattle
• Cash hog fundamentals weaken
— Signing ceremony for the bipartisan infrastructure framework (BIF) bill will be next Monday at the White House. Members of Congress have started getting invitations. The White House said some governors, mayors, labor and business leaders will also be at the ceremony. "At the signing ceremony, the President will highlight how he is following through on his commitment to rebuild the middle class and the historic benefits the Bipartisan Infrastructure Deal will deliver for American families," according to a news release (link) from the White House.
— CBO has released scores for four sections of the House’s version of the Build Back Better Act:
- Link to the Small Business title
- Link to the Veterans Affairs title
- Link to Homeland Security title
- Link to Science and Technology title
More focus ahead. “Other estimates will take longer, particularly for provisions in some titles that interact with those in other titles,” CBO Director Phillip Swagel said Tuesday. Observers are anxious to get CBO’s score immigration score and a score of the Medicare prescription drug negotiation portion of the package. According to congressional rules, the House doesn’t need a CBO score to vote on the package. But the Senate does. And that figure, set to change as Senate Democrats make their own changes, will play a major part in how the upper chamber’s parliamentarian decides what stays and what goes in Biden’s bill.
— Fallout for BBB: Manchin and inflation. Sen. Joe Manchin (D-W.Va.), the key swing vote, has cited inflation as a reason Democrats should heed caution with its aggressive spending agenda. On Wednesday, Manchin commented on the inflation numbers released by the Labor Department. He tweeted: “By all accounts, the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse. From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day.”
Background: Manchin warned months ago about spending and inflation. He said last week he wouldn’t “support a package that risks hurting American families suffering from historic inflation.” He said he wants “greater clarity about why Congress chooses to ignore the serious effects inflation and debt have on our economy and existing government programs.”
— Virtual confab between Biden and Chinese President Xi Jinping is tentatively set for Monday evening. The two leaders telegraphed their intent Tuesday to establish a positive tone for the summit via letters of congratulations both leaders sent to the National Committee on United States/China Relations to mark its 55th anniversary. Biden’s letter emphasized the “global significance” of the U.S./China relationship in addressing challenges “from tackling the Covid-19 pandemic to addressing the existential threat of the climate crisis." "Right now, China/U.S. relations are at a critical historical juncture," Xi declared. "Following the principles of mutual respect, peaceful coexistence and win-win cooperation, China stands ready to work with the United States to enhance exchanges and cooperation across the board." The meeting is likely to produce initiatives on several issues, including easing of visa restrictions, the creation of a bilateral nuclear weapons dialogue and a possible framework to ease trade frictions to demonstrate bilateral resolve to move the relationship from confrontation to cooperation.
— Xi's growing power. China's Sixth Plenum is wrapping up in Beijing, where President Xi Jinping summoned top Chinese Communist Party leaders for an annual meeting. The party's central committee is expected to approve a resolution that would pave the way for a historic third term for Xi and potentially position him as ruler for life. That would also have ramifications for the Chinese economy, which is expected to become the world's largest within a decade.
— Evergrande averts default, again. The embattled Chinese property developer made $150 million in interest payments yesterday, just before crucial deadlines. Missing those would have prompted a default that could ripple through the Chinese economy, though other developers, like Kaisa, remain on the edge of insolvency. The WSJ today reported Beijing’s plan for China Evergrande is to dismantle it slowly and quietly, selling some of the deeply indebted real-estate giant’s assets to Chinese companies while limiting damage to home buyers and businesses involved in its projects. Chinese regulators are also considering easing lending rules imposed last year that helped trigger the stress at Evergrande. Developers’ stocks and bonds jumped today as the prospect improved sentiment.
— If China wants something from companies, “the state will get it …” Secretary of State Antony Blinken warned business leaders against sharing information and technology with their Chinese-owned partners. If Beijing wants intellectual property or information — anything, really, he said — “the state will get it.” Blinken made the comments at the NYT’s DealBook summit.
— Three amigos to meet again. Next Thursday, President Biden will host Canadian Prime Minister Justin Trudeau and Mexican President Andrés Manuel López Obrador at the White House to discuss “the coronavirus pandemic, climate change, immigration and economic growth” in the first joint meeting of the three countries’ leaders since 2016.
ENERGY & CLIMATE CHANGE
— At COP26, the U.S. and China issued a surprise joint statement agreeing to “accelerate the transition to a global net zero economy.” Although the statement did not offer much new, the joint nature of it signals a warming of relations ahead of a likely virtual meeting between Presidents Biden and Xi next week. China also committed to developing a “national plan” to cut methane emissions, although it did not sign up to an international pledge to cut emissions of the gas 30% by 2030. China's climate envoy said the country wants "differentiated" responsibilities, including its own plan for methane reduction. A draft of the Glasgow Agreement was also released. However, Saudi Arabia is proving to be a holdout on fossil fuels.
— What Iran wants to ratify Paris climate agreement. The head of Iran’s environment department told the BBC that his country will ratify the Paris climate agreement only if Western governments remove the economic sanctions, they have imposed to deter its nuclear program. Iran, the eighth-largest emitter of carbon dioxide, acknowledges the urgency of tackling climate change, but argues it cannot afford to join the global effort under the weight of its economic blockade.
— Will biofuel sector still get the much delayed $700 million in aid now that ethanol prices are close to an all-time high? Yes, say sources, with one contact signaling the announcement is ready to be made “at the right time.” Prices for ethanol have risen about 50% year to date, with the near-term contract trading at about $2.20 a gallon on the Chicago Board of Trade. The price pushed through $2 a gallon earlier this year, the first time since 2014 it has done so. Gasoline prices, meanwhile, are the highest they have been in seven years.
LIVESTOCK, FOOD & BEVERAGE INDUSTRY
— USDA announces faster line-speed trial program for nine pork plants. USDA said Wednesday nine U.S. pork plants can apply to operate faster processing-line speeds under a one-year trial, after a federal judge in March struck down a Trump-era rule that removed line speed limits. In the pilot program, plants will implement worker safety measures under agreements with labor unions or worker safety committees. Plants will collect data on how line speeds affect workers and share it with OSHA and the data could be used to make future rules for the industry, USDA said. Pork companies lost 2.5% of their slaughtering capacity following the March court decision, according to the National Pork Producers Council.
— USDA eyes remand of poultry line speed waivers. This delays consideration of the underlying litigation until that request is resolved. At issue is a complaint brought by the United Food and Commercial Workers Union that is pending in the U.S. District Court for the District of Columbia Circuit. The labor group alleges USDA violated the Administrative Procedure Act by failing to review the impact of faster line speeds on worker safety — the waivers allow poultry plants to increase line speeds from 140 birds per minute (bpm) to 175 bpm. In a status report last week, USDA said it was planning to file a remand motion and asked for further proceedings to be delayed — a move opposed by UFCW. USDA cited its ongoing work to address a federal court’s decision to block line speed increases at pork plants, telling the court that “because of the potential implications of that effort for the poultry line-speed waivers that are the subject of this litigation” it intends to move for voluntary remand “to allow it to reconsider those waivers on its own initiative.” U.S. District Judge Timothy Kelly — who rejected USDA’s motion to dismiss the case in August — agreed on Tuesday (Nov. 9) to put consideration of summary judgment on hold until the remand issue has been decided. USDA’s motion to remand is due with the court by Nov. 23.
— Summary: Global cases of Covid-19 are at 251,576,095 with 5,075,443 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 46,792,081 with 759,060 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 432,743,555 doses administered, 194,382,921 have been fully vaccinated, or 59.22% of the U.S. population.
— More than 900,000 kids ages 5-11 were vaccinated by late Wednesday with their first shot in less than a week since the shots have been available to the age group, the White House said Wednesday. Meanwhile, Education Secretary Miguel Cardona told CBS's Face the Nation that given the widespread availability of vaccines and improved treatment against Covid-19, there "should be no need for remote or hybrid learning."
— German Chancellor-in-waiting Olaf Scholz called for a renewed vaccination effort in the country as cases topped 50,000 in one day for the first time. Israel began a nationwide drill to test the country’s readiness in the event of an outbreak of a new, more deadly, Covid-19 variant. In the U.S. a federal judge blocked Texas Governor Greg Abbott’s edict banning school mask mandates.
POLITICS & ELECTIONS
— Ron Johnson nearing a decision on whether to seek a third Senate term. Sen. Ron Johnson (R-Wis.) told a home-state radio show he'd decide in the next couple weeks whether to break a term-limits pledge and seek reelection. "It's not going to be in the distant future. It'll be in the next few weeks ... My overall consideration is I think we need to retain this seat in Republican hands,” Johnson told the Dan O'Donnell Show.
— Must-see TV next week when Homeland Security Secretary Alejandro Mayorkas testifies before the Senate Judiciary Committee Tuesday morning. Recall that Mayorkas had to pull out of his appearance before the panel last month after testing positive for Covid.
OTHER ITEMS OF NOTE
— Biden gets a cannabis letter from three Dem senators. Sen. Elizabeth Warren (D-Mass.) called on President Joe Biden Wednesday to make good on his campaign platform that no one should be in jail for cannabis-related crimes by pardoning all non-violent federal cannabis offenders. Warren sent a letter to the president asking him to use his pardon power to honor the campaign promise. “Our country’s cannabis policies must be completely overhauled, but you have the power to act now,” she wrote in the letter, which was also signed by fellow Democratic Sens. Ed Markey (Mass.) and Jeff Merkley (Ore.).
— Russian moves unsettle Ukraine and U.S. Secretary of State Antony Blinken on Wednesday expressed his concern over “unusual Russian military activity” near the Russian border with Ukraine amid an unexplained military buildup. Last week the Ukrainian Defense Ministry confirmed that 90,000 Russian troops were stationed across its border, although it’s not clear how many were only recently positioned there. The U.S. concern comes amid reports garnered from commercial satellite imagery that Russian tank and artillery units had moved close to Ukraine’s northern border over the past month. Unlike in April, the military’s movements can’t be explained away by training exercises and have caused enough concern in the Biden administration that CIA chief William Burns was dispatched to Moscow last week to warn Russian officials against any further escalation. Blinken said in a meeting with Ukraine’s Minister of Foreign Affairs Dmytro Kuleba on Wednesday that “the U.S. commitment to Ukraine’s security and territorial integrity is ‘ironclad’ and will not change. He said any Russian escalation along the border would be viewed with ‘grave concern,’” reinforcing pressure on Russia.