Blinken Meets Chinese Leader Xi Jinping

Fed Chair Powell to testify before House and Senate panels | Farm Country Update on farm bill this Wednesday

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June 19, 2023 07:25 AM

Fed Chair Powell to testify before House and Senate panels | Farm Country Update on farm bill this Wednesday

Washington Focus

A holiday-shortened week with a handful of major earnings reports, economic data releases, and two days of Congressional testimony from Federal Reserve chairman Jerome Powell. The ag sector will hear from the Senate Appropriations panel regarding fiscal year (FY) 2024 appropriations, and by June 21, EPA should make final decisions (perhaps not an announcement) regarding RFS mandates for 2023, 2024 and 2025.

Congress is in for one more week before members head off for the July 4th recess.

Fed Chair Jerome Powell delivers his semi-annual monetary policy testimony to the House Financial Services Committee on Wednesday and the Senate Banking panel on Thursday.

The Senate Appropriations Committee will meet Thursday to debate its version of the FY24 Agriculture bill as well as the Military Construction-Veterans Affairs measure. The committee will meet to officially set the toplines for each of the 12 appropriations bills.

During the past three years, Senate Appropriations has marked up only three bills, all in one early August 2021 session for the fiscal 2022 cycle. No Senate appropriations bills have reached the floor during that time.

The debt limit deal set spending caps that Senate appropriators are planning to write to. But House appropriators are writing their bills below the caps. The Senate holds discretionary nonmilitary spending at roughly this year’s level and boosts military spending by about 3%. That puts the Senate total at about $120 billion more than the House is proposing.

In recent years, to avoid a shutdown, leaders have put out a last-minute spending deal that combines all 12 bills. House Speaker Kevin McCarthy (R-Calif.) has promised he won’t put an omnibus spending bill on the floor, saying it is all part of his plan to change Congress into a more functional place that gives power to the rank and file — but which could make resolving any impasse harder.

While the funding deadline is the end of September, most lawmakers expect Congress to extend the deadline through a continuing resolution (CR) to the end of December to avert a government shutdown. If all 12 appropriations bills aren’t passed by year-end, automatic across-the-board cuts known as a sequester would kick in, owing to a provision in the debt-ceiling pact designed to prod talks along.

EPA will finally decide by June 21 on its RFS RVOs (mandates) for 2023, 2024 and 2025. The deadline is for EPA to decide, not necessarily to announce ––---on that date.

Key issue is the final mandate for biodiesel and renewable diesel. Proponents have been lobbying EPA for higher levels than initially proposed.

Meatpacker hearing. The Senate Finance Committee will hold a hearing on Thursday to address allegations that meatpacking giant JBS has been using deforested ranch land in the Amazon region of Brazil to meet its demand for beef cattle. Among the witnesses is Jason Weller, a former chief of USDA’s Natural Resources Conservation Service during the Obama administration, who is currently serving as global chief sustainability officer for JBS.

House Budget Committee on Thursday holds a hearing, “Reigniting American Growth and Prosperity Series: Incentivizing Economic Excellence Through Tax and Trade.”

Rep. Anna Paulina Luna (R-Fla.) plans to reintroduce a resolution to censure Rep. Adam Schiff (D-Calif.) this week, without the previously proposed $16 million fine. Some House Republicans who initially voted against the motion last week, such as Rep. Marc Molinaro (R-N.Y.) and Rep. Warren Davidson (R-Ohio), now support it due to the fine’s removal. Last week, twenty House Republicans sided with Democrats to block the resolution, but the upcoming vote is expected to be less predictable.

Bottom line: Even if this is approved by the House, it will go nowhere in the Senate.

President Joe Biden kicked off his re-election campaign by calling for new taxes on the wealthy and corporations and warning that Republicans would roll back his policies, which he claims saved the U.S. economy. Speaking at a rally in Philadelphia, Biden focused on populist economic issues at the center of his pitch for a second term, emphasizing achievements like climate, health, and tax packages, as well as funding for infrastructure and semiconductor manufacturing.

Biden’s economic focus aims to frame the election as a choice between himself and the GOP while avoiding discussions of legal controversies, including classified document cases against both him and former President Donald Trump. As he ramps up his campaign, the president will be opening a headquarters in Wilmington, Delaware, and hosting events to highlight his economic message. The recent endorsement from the AFL-CIO and other union groups also underscores Biden’s commitment to energizing working-class voters.

Despite weak polling numbers, Biden is banking on his political achievements and improving economic indicators to build support. He has been engaging with core constituents to remind them of his accomplishments and rally their support for his reelection bid.

President Biden said that President Xi Jinping never meant to fly a spy balloon over sensitive American military sites earlier this year. “I don’t think the leadership knew where it was, and knew what was in it, and knew what was going on,” Biden told reporters Saturday as he headed to Philadelphia for his first campaign rally of the 2024 election. “I think it was more embarrassing than it was intentional.”

“I’m hoping that over the next several months I’ll be meeting with Xi again, and talking about legitimate differences we have but also how … to get along,” Biden added.

House Republicans have passed two bills aiming to prevent future gas stove regulations, one targeting the Energy Department’s efficiency requirements proposal and another addressing the Consumer Product Safety Commission’s authority over appliance bans. However, the Democratic-led Senate is unlikely to support these measures. This development follows the House Freedom Caucus expressing their debt-ceiling frustrations earlier this month. The White House has not issued a veto threat, but the Biden administration’s Unified Agenda includes plans to finalize gas stove regulations by January 2025. The debate over gas stoves will likely continue for some time.

President Joe Biden is set to announce new federal funding for climate resilience projects, following a joint endorsement by four major environmental groups for his re-election campaign. Biden has consistently focused on addressing climate change, considering it an existential threat. His administration has enacted various environmental justice initiatives and implemented rules to regulate emissions from natural gas power plants, reflecting his campaign promise to prioritize climate and environmental justice.

Coming Wednesday: Farm Country Update: 2023 Farm Bill: Influence, Impacts and Odds of Success.

Link to register for the event.

Indian Prime Minister Narendra Modi will be the guest of honor at a White House state dinner on Thursday.

Calendar of Hearings and Events

Tuesday, June 20

• Federal Reserve. Fed Reserve Vice Chair for Supervision Michael Barr participates in a discussion on “Bank Culture in Financial Services” at the Federal Reserve Bank of New York’s 2023 Governance and Culture Reform Conference.

• Food as medicine summit. Food Tank, Tufts University, and the White House, hold a summit on “Advancing Food is Medicine Approaches.”

• Global food insecurity. Washington Post Live holds a virtual discussion on “Combating Global Food Insecurity Amidst Ukraine War and Rising Inflation.”

• Clean energy and developing economies. The International Energy Agency (IEA) and the International Finance Corporation (IFC) hold an embargoed virtual briefing on a new report, “Scaling Up Private Finance for Clean Energy in Emerging and Developing Economies.”

• Trade issues. The American Association of Exporters and Importers holds a conference on “Trade Matters: Reshaping the Status Quo.” Runs through Wednesday.

• U.S. exports of environmental goods. International Trade Administration holds a meeting of the Environmental Technologies Trade Advisory Committee on programs to expand US exports of environmental technologies, goods, services, and products.

• China and clean energy. The Wilson Center’s China Environment Forum holds a discussion on “Cooperating for the Climate: Learning from International Partnerships in China’s Clean Energy Sector.”

• Competition in banking. The Brookings Institution holds a discussion on “Promoting Competition in Banking.”

• Pandemic preparedness. The Center for Global Development (CGD) holds a virtual discussion on “Strategic Investments in Surveillance for Pandemic Preparedness.”

• War in Ukraine. The Brookings Institution holds its 2023 Raymond Aron Lecture on “The Two World Wars, Genocide, and the Ukraine War.”

• Climate and acquisition workforce. General Services Administration holds a meeting by teleconference of the Acquisition Workforce Subcommittee on ways to advance a culture of sustainability and climate action within the acquisition workforce.

• Energy transition. Resources for the Future (RFF) holds a discussion on “Financing the Energy Transition.”

Wednesday, June 21

• Federal Reserve. Fed Chairman Jerome Powell delivers testimony on Monetary Report to Congress before the House Financial Services Committee. Nomination hearings for Fed Governor Lisa Cook. Fed Governor Philip Jefferson to be Vice Chair and Adriana Kugler to be a Fed Governor before the Senate Banking, Housing and Urban Affairs Committee. Chicago Fed President Austan Goolsbee, Cleveland Fed President Loretta Mester scheduled to speak.

• Digital divide in rural America. House Agriculture Committee hearing on “Closing the Digital Divide in Rural America.”

• Farm bill forestry programs. The Environmental and Energy Study Institute (EESI) holds a briefing on “Conservation Practices from Farms to Forests and Wetlands,” as part of the Farm Bill in Focus series.

• Antimicrobial resistance. The Center for Strategic and International Studies (CSIS) holds a virtual discussion on “Accelerating Innovation on Antimicrobial Resistance.”

• Trade issues. Final day of the American Association of Exporters and Importers conference on “Trade Matters: Reshaping the Status Quo,” with remarks from Commerce Undersecretary for Industry and Security Alan Estevez.

• Global subsidies. The Peterson Institute for International Economics (PIIE) holds a virtual discussion on “Can we Stop a Global Subsidy Race?”

• U.S./Mexico border issues. The Wilson Center’s Mexico Institute holds its ninth annual conference on “Building a Competitive US-Mexico Border.” Several US lawmakers deliver remarks, and Deputy Assistant Secretary of State for North America Rachel Poynter; and Georgina Barquet, head of borders and special affairs at the Embassy of Mexico, participate in a discussion.

• 2016 election campaign. House Judiciary Committee hearing on the “Report of Special Counsel John Durham” on matters related to intelligence activities and investigations arising out of the 2016 presidential campaigns.

• China actions. The Atlantic Council holds a virtual discussion on “China’s blueprint for the new world order.”

• OAS general assembly. The Permanent Council of the Organization of American States (OAS) holds its 53rd regular session of the General Assembly, runs through Friday.

• EPA emissions standards. House Oversight and Accountability Economic Growth, Energy Policy, and Regulatory Affairs Subcommittee hearing on “Clearing the Air: Examining the Environmental Protection Agency’s Proposed Emissions Standards.” Joseph Goffman, principal deputy assistant EPA administrator for the Office of Air and Radiation, testifies.

• Fossil fuel money. Senate Budget Committee hearing on “Dollars and Degrees: Investigating Fossil Fuel Dark Money’s Systemic Threats to Climate and the Federal Budget.”

• Taiwan Straits. Foreign Policy holds a virtual discussion on “Tensions Beyond the Strait: How Taiwan’s Security is Impacting the Transatlantic Alliance.”

• FCC oversight. House Energy and Commerce Communications and Technology Subcommittee hearing on “Oversight of the Federal Communications Commission.”

• U.S./China relations. The Quincy Institute for Responsible Statecraft holds a virtual discussion on “A Restraint Approach to U.S./China Relations: Reversing the Slide Toward Crisis and Conflict.”

• Recent bank failures. The Cato Institute holds a policy forum on “Financial Stability and Systemic Risk: What Recent Bank Failures Say about the U.S. Regulatory Framework.”

• War in Ukraine, tensions with China. The American Legion Post 20 holds a meeting on common U.S./U.K. national security issues ranging from the war in Ukraine to tensions with China.

• UFLPA at one year. Kharon holds a virtual discussion on “UFLPA (Uyghur Forced Labor Prevention Act) Enforcement, Year One and Beyond.”

• Post-pandemic backlogs at government agencies. House Oversight and Accountability Government Operations and the Federal Workforce Subcommittee hearing on “Please Leave Your Message at the Tone: Addressing Post-Pandemic Backlogs and Delays at Federal Agencies.”

• Biden energy spending. House Energy and Commerce Oversight and Investigations Subcommittee hearing on “Microvast and More: Oversight of President Biden’s Energy Spending Spree.”

Thursday, June 22

• Federal Reserve. Fed Chairman Jerome Powell delivers testimony on the Monetary Report to Congress before the Senate Banking, Housing and Urban Affairs Committee. Fed Governor Christopher Waller delivers opening remarks at conference in Dublin, Ireland; Fed Governor Michelle Bowman takes part in a Fed listens session. Cleveland Fed President Loretta Mester scheduled to speak.

• Cattle supply chains and Amazon deforestation. Senate Finance Committee hearing on “Cattle Supply Chains and Deforestation of the Amazon.”

• India Prime Minister remarks. Indian Prime Minister Narendra Modi addresses a joint meeting of Congress.

• China panel report to Congress. U.S./China Economic and Security Review Commission holds a meeting to review and edit drafts of the 2023 Annual Report to Congress.

• SEC oversight. House Financial Services Oversight and Investigations hearing on “Oversight of the SEC.”

• FY 2024 Appropriations: Council on Environmental Quality. House Natural Resources Committee hearing on “Examining the Council on Environmental Quality FY 2024 Budget Request and Related Policy Matters.” Brenda Mallory, chair of the White House Council on Environmental Quality, testifies.

• FY 2024 Appropriations: Defense, Energy and water. House Appropriations Committee markup of the FY 2024 Defense Department Appropriations bill; and the FY 2024 Energy and Water Development and Related Agencies Appropriations bill.

• FY 2024 Appropriations: Water and environment. House Transportation and Infrastructure Water Resources and Environment Subcommittee hearing on “Review of FY 2024 Budget Request: Agency Perspectives (Part I).”

• OAS general assembly. Second day of the Permanent Council of the Organization of American States (OAS) 53rd regular session of the General Assembly; runs through Friday.

• U.S./Korea relations. The Wilson Center’s Asia Program holds a discussion on “The U.S./Republic of Korea (ROK) Alliance at 70: The Outlook After the Washington Declaration.”

• China-Taiwan situation. The Atlantic Council and the Rhodium Group hold a virtual discussion on a new report, “Sanctioning China in a Taiwan Crisis: Scenarios and Risks.”

• Trade and sanctions. Sayari holds a Supply Chain and Illicit Trade Symposium.

• FCC nominations. Senate Commerce, Science and Transportation Committee hearing on the nominations for several Federal Communications Commission commissioners.

• Affordable vehicles and fuel. House Energy and Commerce Environment, Manufacturing, and Critical Materials Subcommittee hearing on “Driving Affordability: Preserving People’s Freedom to Buy Affordable Vehicles and Fuel.”

• SEC panel oversight. House Financial Services Capital Markets Subcommittee hearing on “Oversight of the SEC’s Division of Trading and Markets.”

• War in Ukraine. The Institute for the Study of War (ISW) holds a virtual briefing on “Ukraine: Critical Next Phase of the War.”

• Taxes and trade. House Budget Committee hearing on “Reigniting American Growth and Prosperity: Incentivizing Economic Excellence Through Tax and Trade.”

• U.S. policy toward NATO. House Foreign Affairs Europe Subcommittee hearing on “The Vilnius Summit and War in Ukraine: Assessing U.S. Policy towards Europe and NATO.”

• Mexican energy, climate policies. Washington Post Live holds a virtual discussion on “The Future of Mexico’s Climate Commitments and Energy Policies.”

• Climate and sustainability. General Services Administration holds a meeting by teleconference of the Policy and Practice Subcommittee on procurement policy that supports robust climate and sustainability action.

Friday, June 23

• Federal Reserve. Cleveland Fed President Loretta Mester scheduled to speak.

• Ukraine recovery. The German Marshall Fund of the United States (GMFUS) holds a conference on “Building A Transparent and Accountable Ukraine: Key Steps to Recovery.”

• OAS general assembly. Final day of the Permanent Council of the Organization of American States (OAS) 53rd regular session of the General Assembly.

• 2024 elections. Several Republican presidential candidates deliver remarks to the Faith and Freedom Coalition 2023 Road to Majority Policy Conference; runs through Saturday.

• U.S./China policy. The American Enterprise Institute for Public Policy Research (AEI) holds a virtual discussion on “The Future of U.S./China Policy.”

Economic Reports for the Week

Key focus: Fed chairman Powell will deliver semiannual testimony before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

Monday, June 19

Markets and gov’t holiday.
National Association of Home Builders releases its Housing Market Index for June. Consensus estimate is for a neutral 50 reading, matching the May data. The index has increased for five consecutive months and reached the midpoint mark of 50 for the first time since July of 2022, as limited existing inventory has lifted home builders’ confidence.
Raytheon Technologies hosts an investor meeting in Paris coinciding with the Paris Air Show.

Tuesday, June 20

Census Bureau releases residential construction data for May. Economists forecast a seasonally adjusted annual rate of 1.4 million housing starts, roughly even with April.
FedEx reports fourth-quarter fiscal-2023 results.

Wednesday, June 21

MBA Mortgage Applications
Fed Chairman Jerome Powell appears before the House Financial Services Committee for the Fed’s semiannual monetary-policy report. Powell will then testify before the Senate Banking Committee on Thursday.
Other Fed speakers include Lisa Cook, Philip Jefferson, Austan Goolsbee, Loretta Mester.
Dollar Tree hosts its 2023 investor conference in Norfolk, Va.
Equinix holds its 2023 analyst day.

Thursday, June 22

Jobless claims for the June 17 week, at a consensus 261,000, are not expected to come down from 262,000 in the two prior weeks, a level that marked a significant shift higher.
Conference Board releases its Leading Economic Index for May. The index is expected to decline 0.4% month over month and has fallen for 13 straight months. The Conference Board continues to predict a mild recession beginning in mid-2023, despite stronger-than-expected economic data in recent weeks that have pushed the S&P 500 index to its highest level since April of 2022.
National Association of Realtors reports existing home sales for May. The consensus call is for a seasonally adjusted annual rate of 4.25 million homes sold, slightly fewer than in April. After declining for 12 straight months through this January, existing-home sales have rebounded, although they remain well below historical levels.
Chicago Fed National Activity Index: The national activity index is expected to hold steady in May at 0.08 versus 0.07 in an April report that showed noticeable improvement across components.
The first-quarter current account deficit is expected to widen to $218.2 billion versus $206.8 billion in the fourth quarter.
K.C. Fed Manufacturing
Fed Balance Sheet
Money Supply
Federal Reserve speakers: Jerome Powell, Loretta Mester.
Bank of England announces its monetary-policy decision. The central bank is all but assured of raising its base rate for a 13th consecutive meeting, most likely by a quarter of a percentage point to 4.75%. The United Kingdom has one of the highest rates of inflation among developed countries, and traders are expecting at least four more interest-rate hikes by the end of the year after the coming meeting.
Accenture Darden Restaurants Inc. and FactSet hold conference calls to discuss earnings.
NRG Energy hosts its 2023 investor day.

Friday, June 23

PMI Composite Flash: No significant change is seen in June compared to May; manufacturing underperforming at 48.5 and services leading the way at 53.5.
Federal Reserve: Loretta Mester speaks.
CarMax releases first-quarter fiscal-2024 results.
DexCom holds its 2023 investor day.

Key USDA & international Ag & Energy Reports and Events

U.S. weather is now the focus as commodity prices have surged recently due to weather/crop concerns. Meanwhile, USDA on Friday releases its update on food prices and it is expected to show continued price downturns for several commodities.

Monday, June 19

Ag reports and events:

MARS monthly report on EU crop conditions
Holiday: U.S., Argentina