Good morning. Here’s your Early Warning for 18 July 2018. (All times Eastern.)
The President will hold a cabinet meeting this morning, and has no other publicly scheduled events today.
Nothing significant to report.
There are no publicly scheduled events for the DoD’s top officials.
The Carl Vinson (CVN-70) was last reported in the Hawaii Area of Operations. The Harry S. Truman (CVN-75) is reportedly in the East Atlantic, and the Ronald Reagan (CVN-76) is in the Philippine Sea. Conflict requiring a Carrier Strike Group does not appear imminent.
Significant House Activity:
- The Committee on Transportation and Infrastructure is scheduled to hold a hearing on lessons learned from natural disasters in 2017 and preparations for the 2018 hurricane season.
- The Committee on Energy and Commerce Subcommittee on Energy is scheduled to hold a hearing on the role of U.S. energy storage in the nation’s electricity system.
- The Committee on Financial Services is scheduled to hold a hearing on “Monetary Policy and the State of the Economy”.
- The Committee on Financial Services / Subcommittee on Monetary Policy and Trade is scheduled to hold a hearing on “The Future of Money: Digital Currencies.”
Significant Senate Activity:
- The Homeland Security and Government Affairs committee is scheduled to hold a hearing on “the Administration’s government reorganization proposal.”
- The Commission on Security and Cooperation in Europe is scheduled to hold a hearing on transatlantic relations.
In a speech yesterday, Fed chief Jerome Powell said that economic growth justifies further rate interest hikes this year. He didn’t elaborate much, but he did mention short-term rates (2-year Treasuries) and long-term rates (10-year Treasuries), acknowledging that it’s weighing on Federal Reserve decision-making.
According to a Bank of America / Merrill Lynch Global Fund Manager Survey, nearly 35 percent of respondents expect the next U.S. recession to begin in the second half of 2019. Nearly 30 percent of them believe it will hit in the first half of 2020, and about 17 percent of them believe it will arrive in the second half of 2020 or beyond. (10 percent said the first half of 2019!)
According to the Council of Economic Advisors at the White House, the U.S. has a labor shortage as demand for new workers outpaces what’s available. Keep in mind that there’s an historical correlation between the trough of unemployment and the beginning of the next recession. Conditions are lining up, but the economy remains strong for now.
The National Hurricane Center reports that tropical cyclone activity is not expected during the next 48 hours.
Drought conditions persist across much of the Southwest.
What I’m Looking at this Morning
“Everything we see about the near-term outlook for the economy is quite strong.” – Former Fed Chairman Ben Bernanke