Early Warning for 20 June 2018

Good morning. Here’s your Early Warning for 20 June 2018. (All times Eastern.)

Advanced Early Warning: David Spika, president of GuideStone Capital Management, says a “day of reckoning” is coming for the stock market, but it’s not due to the looming ‘trade war’ between the U.S. and China. He sees central bank tightening as the bigger threat. Nine years of stimulus from the Federal Reserve and central banks around the world was good for stocks, but tightening may now have negative effects.

ALSO: A state Senate panel in California is moving to restrict the use of force by police, a measure that is staunchly opposed by officers. Assembly Bill 931would increase the state standard for lethal use of force from “reasonable” to “necessary.” The bill was introduced after police in Sacramento shot and killed a young black man who was only holding a cell phone. We’ll analyze this in greater detail in this week’s National Intelligence Bulletin.


White House

After his intelligence brief, POTUS Trump will meet with members of Congress in the Cabinet Room. He’ll have lunch with Secretary of State Pompeo at 12:30 p.m., then depart for Duluth, Minn., at 2:00 p.m. where he will participate in a discussion on protecting American workers. He’ll attend a political rally at 6:30 p.m., then depart at 8:00 p.m. for the White House.


State Department

Secretary Pompeo will have lunch with President Donald Trump and Vice President Mike Pence, at the White House at 12:30 p.m. He will meet with German Defense Minister Ursula von der Leyen at the State Department at 4:00 p.m.

Acting Assistant Secretary for East Asian and Pacific Affairs Susan Thornton will meet with the New Zealand Secretary of Foreign Affairs Brook Barrington at 3:30 p.m.

At 4:30 p.m., Deputy Secretary John Sullivan will meet with the New Zealand Secretary of Foreign Affairs Brook Barrington at the State Department.


Defense Department

SECDEF James Mattis welcomes German Defense Minister von der Leyen at 2:00 p.m.

Deputy Secretary of Defense Patrick M. Shanahan and Chairman of the Joint Chiefs of Staff Marine Gen. Joseph F. Dunford Jr. have no public or media events on their schedules.

Army Lt. Gen. Richard J. Cripwell, United Kingdom, deputy commander, Operation Resolute Support, will brief the media by video at 11:00 a.m. in the Pentagon Briefing Room.

The Department of Defense announced the death of a U.S. Navy sailor who was deployed in support of Special Operations Command Forward – East Africa for U.S. Africa Command. Petty Officer 1st Class Matthew I. Holzemer, of Tennessee, died June 17 at Camp Lemonnier, Djibouti, as a result of a non-combat related incident.

Aircraft carrier movement/activities:

Carl Vinson (CVN-70) is participating in the RIMPAC 2018 exercises in the Pacific Ocean.

Harry S. Truman (CVN-75) is operating in the Mediterranean Sea.

Ronald Reagan (CVN-76) is operating in the Philippine Sea.

The remaining U.S. carriers are in their home ports. A conflict requiring a Carrier Strike Group does not appear imminent.


Congress

House schedule:

Senate:

  • 9:00 AM —  SD-215
Hearings to examine current and proposed tariff actions administered by the Department of Commerce.
  • 10:00 AM —  SD-406
Hearings to examine the nominations of William Charles McIntosh, of Michigan, to be an Assistant Administrator, and Peter C. Wright, of Michigan, to be Assistant Administrator, Office of Solid Waste, both of the Environmental Protection Agency.
  • 10:00 AM —  SD-342
Hearings to examine Medicaid fraud and overpayments, focusing on problems and solutions.
  • 10:00 AM —  SD-226
Hearings to examine the nominations of A. Marvin Quattlebaum, Jr., of South Carolina, and Julius Ness Richardson, of South Carolina, both to be a United States Circuit Judge for the Fourth Circuit, Roy Kalman Altman, and Rodolfo Armando Ruiz II, both to be a United States District Judge for the Southern District of Florida, and Raul M. Arias-Marxuach, to be United States District Judge for the District of Puerto Rico.
  • 10:00 AM —  SH-216
Hearings to examine the policy response to Russian interference in the 2016 United States elections; to be immediately followed by a closed session in SH-219.
  • 10:15 AM —  SD-419
Hearings to examine United States Agency for International Development resources and redesign.
  • 10:30 AM —  SR-253
Hearings to examine the nominations of Geoffrey Adam Starks, of Kansas, to be a Member of the Federal Communications Commission, and Peter A. Feldman, of the District of Columbia, to be a Commissioner of the Consumer Product Safety Commission.
  • 10:30 AM —  SR-301
Hearings to examine election security preparations, focusing on a state and local perspective.
  • 2:30 PM —  SD-628
An oversight hearing to examine promoting traditional subsistence activities in Native communities.
  • 2:30 PM —  SD-538
Hearings to examine combating money laundering and other forms of illicit finance, focusing on how criminal organizations launder money and innovative techniques for fighting them.

Economy

(1) Federal Reserve Chairman Jerome Powell says there is a “strong case” to continue raising interest rates. He is premising his comments on strong jobs and economic growth. His remarks come a week after the Federal Open Market Committee voted to raise rates a quarter-of-a-percent, which would be the sixth rate increase since December 2015. Rate increases not only make borrowing more expensive for consumers, it costs the federal government more to service its $20-plus trillion dollar debt.

(2) To Powell’s observations about the U.S. economy, sales of existing homes fell 0.4 percent in May after analysts forecast a 1.5-percent increase. That said, a shortage of properties in high-demand markets around the country pushed the price of homes upward. Existing home sales comprise about 90 percent of U.S. home sales; overall year-to-year sales of existing homes are down 3 percent.


Weather

There is no tropical storm activity expected to threaten the continental U.S. or any U.S. territories over the next 48 hours.


Yesterday’s Significant Reporting

Trump doubles down on border law enforcement

FBI agent Peter Strzok ‘escorted’ from FBI building, lawyer confirms

Ex-CIA engineer charged with massive leak to WikiLeaks


Notable Quotable

“He’s focused on border security. And like all presidents, he wants it done now. But we’re part of the legislative process. It’s slower and deliberate,” — Senate Appropriations Committee Chairman Richard Shelby (R-Ala.), responding to questions about President Trump’s threat to shut down the government in September if he doesn’t get the full $25 billion in funding for his proposed border wall.

Jon E. Dougherty is a political, foreign policy and national security analyst and reporter with nearly 30 years of experience in both fields. A U.S. Army veteran of Operation Enduring Freedom, he holds BA in Political Science from Ashford University and an MA in National Security Studies/Intelligence Analysis from American Military University.

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