Rush for Easter break with Jackson confirmation, Russia trade and Fed watch

L . Thomas Block

After weeks of talk and anticipation, the Fed’s Federal Open Markets Committee (FOMC) meets next week and announces its rate policy on Wednesday.  The meeting ends at 2:00 on Wednesday and is followed by the Chair’s press briefing.  Not only will Powell talk about the 50bps increase the Fed is likely to approve, but he will need to address growing talk of a 75bps increase in June.

Chair Powell has done a good job of telegraphing policy, and he knows that when the minutes of next week’s meeting are released if they show broad support for larger increases at future meetings, Powell is likely to address that at his Wednesday briefing. He will likely be asked about the surprise downturn in the GDP and what impact it may have in FOMC thinking on future rate policy. Obviously, the Fed will leave all its options open; but expect a news filled Wednesday next week as the markets digest the FOMC action.

Ukraine

On Capitol Hill President Putin has accomplished more to unify Congress than President Biden and former President Trump could possibly even dream of.  This unity will be on display as Congress considers the White House request for $33B in aid for embattled Ukraine.  What’s interesting is that the opposition is likely to come from the political extremes in both parties.

For Republicans there are a handful of Senators and Representatives, led by Senator Rand Paul, who oppose efforts to help Ukraine and have voted against the aid and other measures of support.  Similarly, there are progressive Democrats in the House who tend to vote against military aid across the board.  The Ukraine vote is a great example of the divide in US politics, with two extremes meeting and coming to the same result albeit for different reasons.

Manchin and Biden agenda Over the last week pivotal Senator Joe Manchin of West Virginia reportedly had some very preliminary talks with Democratic Leader Chuck Schumer.  As the rate of inflation continues to rise, Manchin is focusing on a strategy to reduce the deficit; but at the same time give some ground on Democratic priorities.  He told reporters that he could support tax increases on corporations and the wealthiest individuals if the new income was split between programs and deficit reduction.  This will be a tough sell for Democrats, especially House progressives, but at least a behind-the-scenes discussions have begun.

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L . Thomas Block
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