Early Warning for 02 August 2018

Good morning. Here’s your Early Warning for Thursday, 02 August 2018. (All times Eastern.)

 

White House

The President is scheduled to hold a fundraiser in Pennsylvania this evening.


State Department

Secretary of State Mike Pompeo is traveling to Malaysia, Singapore, and Indonesia from 01-05 August. This weekend, the annual Association of Southeast Asian Nations (ASEAN) ministerial meetings take place in Singapore. Topics of discussion will include economic security and the Indo-Pacific Strategy to counter China’s aspiring dominance of the region.


Defense Department

Defense Secretary Mattis has no public events scheduled for today.

The Carl Vinson (CVN-70) was last reported in the Hawaii Area of Operations (RIMPAC 2018).

The John Stennis (CVN-74) recent left port in Bremerton, Washington and is in the eastern Pacific.

The Ronald Reagan (CVN-76) is at port in Yokosuka, Japan.

Conflict requiring a Carrier Strike Group does not appear imminent.


Congress

Significant House Activity:

  • Nothing significant to report.

Significant Senate Activity:

  • Nothing significant to report.

* Reporting will appear in the Strategic Intelligence Summary or National Intelligence Bulletin.


Economy/Finance

– The U.S. Treasury announced yesterday that it would increase borrowing by 63 percent (as compared to the same six months last year). The Office of Management and Budget predicted that the U.S. would run trillion dollar deficits in each of the next four years, starting next year. The Trump strategy is based on the key assumption that lower taxes creates more economic growth, which would offset a drop in tax revenue. Said one financial strategist: “The notion that tax reforms are going to pay for themselves is being tested right now.” [source]

– Yesterday, the Federal Reserve decided to not raise interest rates just yet. Fed officials say they have no plans to change their policy of incremental rate increases to prevent the U.S. economy from overheating. The next potential rate hike comes in September. A Bloomberg survey I mentioned yesterday has new data today: 87.7 percent chance of a rate hike next month; up 5.2 percent from yesterday.

 


Weather

The National Hurricane Center reports that tropical cyclone activity in the Atlantic is not expected during the next 48 hours.

Drought conditions persist across much of the Southwest.

 


What I’m Looking at this Morning

L.A. Mayor: Tariffs could drop our economic growth to zero, risk 200,000 jobs

The Marine Corps boots a neo-Nazi lance corporal


Notable Quotable

“We’re seeing a lot of comments from the [survey] respondents about evaluating whether to manufacture something in the U.S. or make it in Canada or make it in Mexico. If the end market is Europe or China, you’re going to want to move it outside the U.S. at this point.” – Timothy Fiore, chairman of the ISM Manufacturing Survey

 

Samuel Culper is a former military intelligence NCO and contract Intelligence analyst. He spent three years in Iraq and Afghanistan and is now the intelligence and warfare researcher at Forward Observer.

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