Lawmakers Out for Fourth of July Recess, But Action Continues on Spending Packages

USMCA trade officials meet in Mexico City on Wednesday

Washington Focus

The Senate and House are both on break for the Independence Day holiday.

Work continues on getting enough votes for the nearly $1 trillion bipartisan infrastructure package, and even harder work for the $1.5 trillion to $2 trillion “human” infrastructure plan, despite far-left Democrats wanting a lot more. Senate committees with jurisdiction are working to translate the bipartisan framework into legislative language. That signals more leaks ahead regarding specifics.

But the bipartisan spending deal is getting some renewed resistance from key Democrats concerned about plans to pay for the $973 billion package. Two major financing mechanisms for the spending proposal — repurposing unspent funds for unemployment benefits and state assistance — are meeting hurdles from a group of Democratic senators who say higher corporate tax rates should be the primary revenue source.

Bottom line: Veteran congressional sources still say a way will be found to get the infrastructure votes and just as important, if not more so, the odds are slightly over 50% that the Senate will also pass the “human” infrastructure package that will not likely exceed $2 trillion. If so, House Speaker Nancy Pelosi (D-Calif.) will attempt to move both the bills (one via reconciliation), but she will only do so for the first, physical infrastructure measure if the Senate first clears both bills.

Hearings and Events This Week

Highlight this week is Wednesday’s meeting in Mexico City that will include trade official from the U.S., Mexico and Canada.

Tuesday, July 6

U.S./Canada trade. U.S. Trade Representative Katherine Tai meets with Mary Ng, Canadian minister of small business, export promotion and international trade, to discuss "ongoing work to keep supply chains open and resilient, and opportunities to ensure a strong, sustainable, inclusive economic recovery through trade." Washington, DC.
China actions against Uyghurs. Hudson Institute virtual discussion on "China's Pressure Campaign Against Western Politicians," focusing on "the Chinese Communist Party's genocide campaign against the Uyghur people."
Oil and gas and net-zero emissions. Atlantic Council virtual discussion on "Leading Oil and Gas Into a Net-zero World."
Biden strategy in Asia. Asia Society Policy Institute virtual discussion with White House Coordinator for the Indo/Pacific Kurt Campbell on "the Biden administration's goals and strategy in the vitally important Indo/Pacific region."
Future of the Republican party. New York University, Washington, D.C. virtual discussion on "GOP After Trump: The Future of the Republican Party."
Budget reconciliation. Brookings Institution virtual discussion on "Reconciliation 101: An Explainer of the Budget Process."

Wednesday, July 7

Federal Reserve. Atlanta Fed President Raphael Bostic to speak.
USMCA meeting. Mexican Secretary of Economy Tatiana Clouthier, U.S. Trade Representative Katherine Tai, and Minister of Small Business, Export Promotion and International Trade of Canada Mary Ng will meet in Mexico City to commemorate the one-year anniversary of the U.S.-Mexico-Canada Agreement (USMCA).
Inflation. Heritage Foundation virtual discussion on "Inflation and Congress' Role in Controlling It," as part of the Policy Pulse series.
Covid vaccines. Washington Post Live virtual discussion on "Coronavirus: Vaccines and Variants."
SEC meeting. Securities and Exchange Commission teleconference of the Asset Management Advisory Committee.
U.S./India trade relations. Atlantic Council virtual discussion on "Reimagining the U.S./India Trade Relationship."
Decarbonizing and natural gas. Atlantic Council virtual discussion on "Decarbonizing Natural Gas Through Turquoise Hydrogen Production," as part of the EnergySource Innovation Stream series.
U.S./Pakistan relations. United States Institute of Peace virtual discussion on "The Next Chapter in U.S./Pakistan Relations."
Trump administration response to Covid. Center for Strategic and International Studies virtual book discussion on "Nightmare Scenario: Inside the Trump Administration's Response to the Pandemic that Changed History."

Thursday, July 8

2020-2021 Supreme Court session review. Heritage Foundation discussion on "Scholars and Scribes Review the Rulings: The Supreme Court's 2020-2021 Term."
Infrastructure and net-zero emissions. Bipartisan Policy Center virtual discussion on "Critical Infrastructure for a Clean Future: Department of Transportation’s Role in a Transition to a Net-Zero Economy."
Farm Credit Board meeting. Farm Credit Administration teleconference of the board, including reports on Data Improvement and FCA Data Priorities, Cybersecurity Recent Issues, Risk to FCA and FCS, and Mitigations; Climate Risk Task Force Scope and Objective; and Risk Weighting of High Volatility Commercial Real Estate.
Remote work impacts. Urban Institute virtual discussion on "The Prescription: Fiscal Policy for Today's Economy," focusing on the tax implications of the rapid growth in remote work.
Covid, drought in Utah. Washington Post Live virtual "Leadership During Crisis" discussion on issues that include Utah's spike in new cases of Covid-19 and how the state is handling the drought.
Climate and health in urban areas. International Society for Urban Health virtual 17th International Conference on Urban Health, including a session on “Climate change and urban health.”

Friday, July 9

Rural-urban divide. Atlantic Council virtual discussion on "Rural/Urban Divide: A Call for Action."
Hong Kong as a financial center. Hudson virtual discussion on "Can Hong Kong Remain a Global Financial Center?"

Economic Reports for the Week

Wednesday brings the minutes of the mid-June FOMC meeting. Analysts will see if they contain any further hints of inflation and the timeline for boosting interest rates.

Tuesday, July 6

PMI Composite Final
Institute for Supply Management releases its Services Purchasing Managers’ Index for June. Consensus estimate is for a 63 reading, slightly lower than the May data, which was a record. The Services PMI has also had 12 consecutive monthly readings higher than the expansionary level of 50.
Reserve Bank of Australia announces its monetary-policy decision. The central bank is expected to keep its cash target rate unchanged at 0.1%, as parts of the country have entered lockdown again to fight the Delta variant of the virus that causes Covid-19.

Wednesday, July 7

BLS releases the Job Openings and Labor Turnover Survey for May. Economists forecast 9.3 million job openings, matching the April figure, the highest since the data were first collected in December 2000.
Federal Open Market Committee (FOMC) releases minutes from its mid-June monetary-policy meeting. Fed officials signaled that interest rates would rise sooner and faster than Wall Street had expected prior to the meeting, as inflation is rising at its fastest pace since 2008. Seven officials now expect rates to be lifted next year, compared with four in March.
Mortgage Bankers Association reports mortgage applications for the week ending on July 2. Mortgage applications declined 6.9% this past week and have fallen in four of the past six weekly surveys, as supply constraints have pushed home-price growth to record levels.

Thursday, July 8

Department of Labor reports initial jobless claims for the week ending on July 3. Claims averaged 392,750 a week in June, the lowest since February of last year.
Federal Reserve reports consumer credit data for May. Total outstanding consumer credit was a record $4.24 trillion in April, as the continued reopening of the economy and hot housing market spurred shoppers to take on more debt.
Fed Balance Sheet
Money Supply

Friday, July 9

Wholesale Trade
Italy hosts a G20 summit of finance ministers and central bank governors. The confab runs from July 9 to July 10 in Venice. U.S. Treasury Secretary Janet Yellen will attend, as the Biden administration pushes for a global minimum corporate tax rate of at least 15%. This past week, 130 countries, representing more than 90% of global GDP, backed the minimum tax rate after two days of negotiations in Paris.

Key USDA & international Ag & Energy Reports and Events

Wednesday brings Conab’s (equivalent of USDA) updated review of Brazil’s crop situation, with analysts expected a further cut in the forecast, especially since Conab has been one of the highest estimates. Commodity traders will start to talk more about the July 12 USDA supply/demand update (WASDE).

Tuesday, July 6

Ag reports and events:

Export Inspections
Crop Progress
Livestock and Meat International Trade Data
U.S. Agricultural Trade Data Update
CNGOIC monthly report on Chinese grains & oilseeds
EU weekly grain, oilseed import and export data
Purdue Agriculture Sentiment

Wednesday, July 7

Ag reports and events:

Broiler Hatchery

Energy reports and events:

API weekly U.S. oil inventory report

Thursday, July 8

Ag reports and events:

Weekly Export Sales
Brazil’s Conab releases data on yield, area and output of corn and soybeans
FAO World Food Price Index
Brazil Coffee Council Conference, Sao Paulo
Port of Rouen data on French grain exports

Lawmakers Out for Fourth of July Recess, But Action Continues on Spending Packages

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