- On Wednesday, Fed will release FOMC minutes
- House in recess, Senate budget votes
- March 14 shutdown deadline nears
- Congress issue: one or two step budget process
- Russia and U.S. talk about a Ukraine peace deal
On Wednesday, the Federal Reserve will release the minutes from the January FOMC rate-decision meeting. Rates were held steady at the last meeting, and Fed Chair Jerome Powell has said both at the press conference last month and at this month’s House and Senate hearings that the central bank is in no hurry to reduce rates.
The FOMC will meet again on March 18-19.
Congress and deadlines
The government shutdown deadline of March 14 gets closer with no plan in Washington, D.C., on how to fund the government past the end of the current Continuing Resolution (CR). The Congress is working on a strategy to implement President Donald Trump’s agenda that includes more money for defense, border protection and deporting illegal migrants, energy policies, and extending Trump’s 2017 tax cuts. The House and Senate continue down two different paths toward the same goal. Both the House and Senate plan to use the Budget Reconciliation process that allows a bill to pass without the threat of a Senate filibuster, and a Budget Resolution is the first step in the Reconciliation process.
Last week, the House Budget Committee passed a massive budget resolution that accomplished all the Republican goals in what Trump called will be “one big beautiful bill.” The House bill would accomplish the Trump agenda and to get the votes of the conservative Freedom Caucus members, the bill has $2 trillion in budget cuts. The bill also includes a $4 trillion dollar increase in the national debt ceiling, which could be reached in June. While some members of the Freedom Caucus are opposed to any debt ceiling increase, they supported the bill through the Committee with the promise of large budget cuts.
The House is out of session this week, taking advantage of the Presidents Day holiday to return to their districts. The House leadership hopes to pass the budget resolution next week. With three vacancies in the House, the Republican majority has been reduced to 217 Rs to 215 Ds. As a bill in the House dies on a tie vote, Republicans can only afford to lose one vote, and on a bill as large and complicated as the Budget Resolution that could be a tough mission for the leadership.
The Senate is in session this week and is moving on its Budget Resolution that differs from the House version, as it breaks the Trump agenda into two baskets. This first bill contains the defense, border, and energy issues but leaves the tax cuts until later in the year. The Senate could consider their Budget Resolution this week, setting up two different budget strategies. The two bill versus one bill may seem like a lot of Washington, D.C., jargon, but in the end, to get the Trump program through Congress, they must decide on which approach to take. It is likely going to require the president to step in to demand a decision by the Congressional leadership.
Ukraine peace talks
After a weekend of talks between the U.S. and Europe, U.S. and Russia have announced that they will conduct preliminary talks in Saudi Arabia this week. Trump’s foreign policy team will meet with a Russian delegation. At this point it is not clear the role Ukrainian President Volodymyr Zelensky and the European NATO leaders will play. There could be some critical headlines coming out of these bilateral U.S. and Russia talks this week.
Over the weekend, there was also talk of a natural resources deal between Ukraine and the U.S. Ukraine has several resources, including the highly strategic rare earth minerals, that Trump wants access to for U.S. industries.
