Congress Continues on Summer Recess but Work Continues on Farm Bill Draft

Situation in Black Sea escalates due to Russia actions

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August 14, 2023 06:09 AM

Situation in Black Sea escalates due to Russia actions

Washington Focus

Congress remains on its summer recess into September, but staff and some lawmaker work on a new farm bill continues. House Ag Chairman G.T. Thompson (R-Pa.) has indicated a farm bill draft could come in early September followed by a panel markup later in the month and floor consideration depending on a busy congressional calendar. That timeline appears optimistic to many observers.

On Monday, James Bullard steps down as head of the Federal Reserve Bank of St Louis. Bullard was a hawkish member of the Fed’s rate-setting committee (FOMC) and has frequently advocated for rate raises. Bullard was not a voting member of the Fed’s FOMC in 2023. The St. Louis Fed is slated to have a voting seat on the FOMC again in 2025. Bullard will take a position as the inaugural dean of the Mitch Daniels School of Business at Purdue University the next day. Bullard has served as president of the St. Louis Fed since April 2008.

Kathleen O’Neill Paese, vice president and chief operating officer of the St. Louis Fed, has taken over Bullard’s post on an interim basis while the bank’s board searches for a permanent successor.

On Friday, President Joe’ Biden hosts a trilateral leaders’ summit with Japanese prime minister and South Korean president at Camp David. Top of the agenda will be the threat posed by North Korea in the region. The three leaders will announce that their countries will hold joint military exercises every year across a range of forces, and they also plan to make their summit an annual event, officials said.

National-security advisers from the three nations are set to meet twice a year, and a hotline for the three leaders is in the works. They are also planning tighter economic cooperation as they try to shield supply chains from China-related risks. “When the U.S., Japan and Korea are in lockstep, it changes the strategic landscape in a fundamental way,” said Rahm Emanuel, the U.S. ambassador to Japan.

China reaction. The Global Times newspaper, an outlet of China’s Communist Party, criticized the scheduled Camp David summit, saying the U.S. wanted to create a North Atlantic Treaty Organization-style alliance in the region that would be dangerous for Japan and South Korea. Wang Yi, a top Chinese official, warned Japan and South Korea in July against drawing too close to the West. “No matter how blond you dye your hair, or how sharp you make your nose, you’ll never turn into a European or American,” Wang said.

“New signs of life for the legal challenge to Florida’s congressional map, under state law,” says David Wasserman. “This is a big deal: if plaintiffs are successful, the restoration of a Black-plurality #FL05 would flip another House seat to Dems for 2024,” he adds.

Monday, Aug. 14

• IRA anniversary. Treasury Secretary Janet Yellen delivers remarks on “how the Inflation Reduction Act has begun to transform the American economy,” ahead of the first anniversary of the law’s passage.

• Clean energy and the IRA. American Council on Renewable Energy (ACORE) virtual discussion on “The Inflation Reduction Act (IRA) Turns One: Clean Energy Leaders Reflect on Bill’s Impact and Remaining Challenges.”

• Climate/IRA investments. Elected Officials to Protect America (EOPA) news conference on the anniversary of “climate crisis investments in the Inflation Reduction Act,” which includes provisions to cut carbon emission, boost domestic production and manufacturing.

• U.S./Iraq businesses. Washington Institute for Near East Policy virtual forum on “Bridging the US-Iraq Business Gap.”

• Large regional banks. Brookings Institution discussion on “The resolution of large regional banks and lessons learned.”

• Camp David Trilateral summit preview. Center for Strategic and International Studies virtual press briefing on “Previewing the Camp David Trilateral Summit.”

• Energy reports. Holiday: Pakistan.

Tuesday, Aug. 15

• Transport of the 2023 grain harvest. Surface Transportation Board meeting of the National Grain Car Council to discuss rail carrier preparedness to transport the 2023 grain harvest.

• Lab-grown meat. Washington Post Live virtual discussion on “The Future of Lab-Grown Meat.”

• China naval bases. Heritage Foundation discussion on “China’s Future Naval Bases: New Empirical Data Points to Likely Places.”

• NHTSA campaign. National Highway Traffic Safety Administration event at the Governors Highway Safety Association’s 2023 meeting to kick off the annual August/Labor Day “Drive Sober or Get Pulled Over” high-visibility enforcement campaign to combat alcohol- and drug-impaired driving.

• Invasive species and climate. Interior Department Office of the Secretary virtual meeting of the Invasive Species Advisory Committee for updates and discussion on subcommittee deliberations related to climate change, underserved communities, and national priorities.

• Small businesses and cybersecurity. Senate Small Business and Entrepreneurship Committee field hearing on “Cybersecurity: Challenges and Opportunities for Small Businesses.”

Wednesday, Aug. 16

• Lab-grown meat. Washington Post Live virtual discussion on “The Future of Lab-Grown Meat.”

• Covid, China and supply chains. Peterson Institute for International Economics virtual discussion on “Global Shipping: The Challenges of Climate, Covid Recovery, and China.”

• U.S./Mexico relations. Wilson Center’s Mexico Institute discussion on the future of U.S./Mexico relations, including the outlook for Mexico’s 2023 presidential election.

• China naval bases. Heritage Foundation discussion on “China’s Future Naval Bases: New Empirical Data Points to Likely Places.”

• NHTSA campaign. The National Highway Traffic Safety Administration (NHTSA) holds an event at the Governors Highway Safety Association’s 2023 meeting to kick off the annual August/Labor Day “Drive Sober or Get Pulled Over” high-visibility enforcement campaign to combat alcohol- and drug-impaired driving.

• Accounting standards meeting. Federal Accounting Standards Advisory Board meeting, including on issues of climate-related financial reporting and accounting and reporting of government land. Runs through Thursday.

• Trump impacts on GOP presidential race. American University online media briefing on former President Trump’s 2024 re-election campaign, “the dilemma facing his rivals, and what Trump’s attendance — or absence — at the next week’s debate means for his rematch against President Biden.”

• Messaging apps. Atlantic Council virtual discussion on “Protecting point-to-point messaging apps: Understanding Telegram, WeChat and WhatsApp in the United States.”

Thursday, Aug. 17

• Accounting standards meeting. Final day of the Federal Accounting Standards Advisory Board meeting, including on issues of climate-related financial reporting and accounting and reporting of government land.

• 6G, spectrum sharing, wireless technologies. Federal Communications Commission meeting of the Technological Advisory Council on issues such as 6G, artificial intelligence, advanced spectrum sharing technologies, and emerging wireless technologies.

• U.S./Brazil relations. The Carnegie Endowment for International Peace (CEIP) holds a virtual discussion on “Pivotal States: A New Era for US-Brazil Relations.”

• Small business resiliency. Senate Small Business and Entrepreneurship Committee field hearing on “Small Business Resiliency: Learning to Succeed in America’s Dynamic Economy.”

• Chronic wasting disease. USDA’s Animal and Plant Health Inspection Service virtual meeting of the Chronic Wasting Disease Herd Certification Program.

Friday, Aug. 18

• Hawaiian agriculture. Senate Small Business and Entrepreneurship Committee field hearing on “Promoting a Resilient Economy for Hawaii Farm Businesses.”

Economic Reports for the Week

The retail sector will be in the spotlight this week with Home Depot, Target and Walmart set to issue their Q2 earnings reports and update on consumer trends.

Monday, Aug. 14

Earnings: Suncor Energy and Rumble.

Tuesday, Aug. 15

Census Bureau releases retail sales data for July. Consensus estimate is for spending to rise 0.4% month over month following a 0.2% increase in June. Resilient consumers have powered the economy this year in the face of a contracting manufacturing sector.
August’s Empire State index is expected to come in near breakeven at minus 0.4. This would follow July’s plus 1.1 and June’s plus 6.6 which, however modest, was the first back-to-back positive showing since late 2021.
Import prices fell 0.2% in June with July’s expectations calling for a 0.2% rebound. Export prices, which in June dropped 0.9%, are expected to edge 0.1% higher. This report has consistently pointed to substantial cooling in cross-border price pressures.
Business inventories in June are expected to rise 0.2% to match May’s 0.2% build.
Forecasters expect the housing market index for August, despite a new rise underway in mortgage rates, to hold steady at 56 after edging 1 point higher in July.
Earnings: Home Depot, Agilent Technologies, On Holding, and CAVA Group.

Wednesday, Aug. 16

MBA Mortgage Applications
The Federal Open Market Committee (FOMC) releases the minutes of its late-July monetary-policy meeting. The FOMC raised the federal funds rates at that meeting by a quarter of a percentage point to 5.25%-5.50%, which most traders expect to be the last interest-rate hike for this cycle.
After slowing from 1.559 million in May to 1.434 million in June, housing starts in July are expected to post a limited rebound to a 1.455 million annualized rate. Permits, which slowed from 1.496 to 1.440 million in June, are similarly expected to rise to 1.464 million.
After falling 0.5% for two straight months, industrial production is expected to rebound 0.3% in July. Manufacturing output, after falling 0.3% and 0.2%, is seen no better than unchanged. Capacity utilization is expected to rise to 79.1% from 78.9%.
Earnings: Cisco, TJX Companies, Target, JD.com, and Brinker International.

Thursday, Aug. 17

Jobless claims for the August 12 week are expected to come in at 240,000 following a 21,000 jump to 248,000 in the prior week that unexpectedly pointed to easing demand for labor.
The Philadelphia Fed manufacturing index has been in contraction the last twelve reports, at minus 13.5 in July with August’s consensus at minus 10.0.
Conference Board releases its Leading Economic Index for July. Economists forecast a 0.3% month-over-month decline. The LEI has fallen for 15 straight months, and the Conference Board still expects a recession later this year.
Fed Balance Sheet
Money Supply
Earnings: Walmart, Applied Materials, Ross Stores, Farfetch, and Tapestry.

Friday, Aug. 18

Earnings: Deere, Palo Alto Networks, and Estee Lauder.

Key USDA & international Ag & Energy Reports and Events

With USDA’s initial crop estimates for major crops released Friday, the focus turns on how August weather will impact crop output.

Monday, Aug. 14

Ag reports and events:

Export Inspections
Crop Progress
Season-Average Price Forecasts
Feed Grains Database
Wheat Data
Dairy Data
Turkey Hatchery