FOMC No Surprise, Ukraine G-7 Focus, and Vote in Congress

The FOMC met this week, and as expected, it kept interest rates steady.  The surprise was that the Committee changed its outlook and revised potential rate cuts from three to one.  While the official statement and Chair press conference were hawkish, there remains a likelihood that there will be at least one cut this year.

President Biden was in Italy this week for a meeting of the G-7 nations.  Their commitment to Ukraine was a central focus of the meeting, and the nations committed $50B for the defense and rebuilding of Ukraine.

In Congress the House is considering the National Defense Authorization Act (NDAA), annual legislation that approves DoD programs that will be funded in the coming fiscal year.  The legislation represented a one-percent increase from FY 2024 and came in at $883.7B.  The bill has traditionally had broad bipartisan support, and indeed was approved by the House Armed Services Committee on a vote of 57 to 1. Additionally, the White House sent a message to Congress supporting the bill approved by the Republican-controlled Committee. However, the Republicans added social policy riders which led to a partisan final vote of 217 YES to 199 No.

When the bill reached the House floor this week conservative Member Marjorie Taylor Greene offered an amendment to prohibit funding for Ukraine.  The motion was defeated on a bipartisan vote of 74 Yes to 343 No.  All 74 votes in support came from Republicans but a majority of Republicans, 138, joined all the Democrats in opposing the Ukraine-funding ban.

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