Good morning. Here’s your Early Warning for Monday, 20 September 2021. You can receive this daily briefing by signing up at https://forwardobserver.com/daily-sa
- Congress has 10 days to act on the debt ceiling
- The Fed is expected to announce a taper decision
- China tries to avoid steel overproduction
- BLM to remain headquartered in D.C.
- Former spy chief says Chinese military action on Taiwan will be necessary
CONGRESS: Sen. Joe Manchin (D-WV) is quietly calling for a “strategic pause” on Congressional spending initiatives until 2022 at least. Without specifying a target date, Democratic leadership in the House continues to press on with 27 September being the target date for passage of the $3.5 trillion “human infrastructure” plan. Lawmakers and the White House may be forced to invoke section 4 of the 14th Amendment and ignore the debt limit until Congress can reach a deal. Warnings to Congress from Treasury Secretary Yellen continue to play out publicly in Op-ed exchanges. (AC: Lawmakers are unlikely to reach an agreement in the next 10 days, increasing the chance of political and financial turbulence. Republicans reportedly will not support the new spending provisions in a vacuum without also considering the debt-limit fight. In related news, the Senate parliamentarian struck down plans to include amnesty or a pathway to citizenship in the $3.5 trillion infrastructure bill, striking a blow to Democrats. – D.M.)
FED: Federal Reserve Chair Jerome Powell is expected to announce that the Fed will begin tapering its $120 billion monthly asset purchase program. The Fed was initially looking for substantial job growth for three consecutive months and a healthy correction to inflation before they announced a taper. Still, after the August jobs data came back weaker than expected, Fed officials have hinted that the taper may begin, anyway. (Analyst Comment: Although the Fed continued to reiterate that inflation is transitory, inflation expectations continue to increase. Some critics believe that increasing the Fed’s inflation target for an overall goal of 3% would stimulate job growth and economic activity; however, the Fed continues to predict a return to 2.1% in 2022. -T.W.)
STEEL: China is imposing restrictions on steel production to combat the adverse effects of its manufacturing process on the climate, which are often viewed negatively by the public. The limits are directly affecting iron markets, where futures have decreased by over 60% since May. These operational limits imposed on factories compound the already stressed supply chain, failing to produce enough components to make goods. China plays a crucial role in the world’s steel market, creating ten times as much yearly as the next largest producer, India. China hopes that the restrictions will inhibit overproduction risks. -T.W.
LAND MANAGEMENT: The Biden administration cancelled previous plans by the Bureau of Land Management to relocate its headquarters from Washington D.C. to Grand Junction, CO. The move followed an August 2020 determination by the bureau “that the public interest is best served by relocating BLM’s Headquarters to the western United States.” The Biden administration decided to keep the headquarters in D.C., instead. “The Bureau of Land Management doesn’t need two headquarters. What the bureau needs is an honest director who doesn’t bring shame to the agency. The single headquarters of the Bureau of Land Management belongs in the West, closer to the resources it manages and the people it serves,” Sen. John Barasso (R-WY) said. (AC: The previous administration’s push to relocate the bureau headquarters outside of D.C. has largely stopped or been reversed. Power holders from politicians and lobbyists to federal employees do not want a decentralized distribution of federal offices as it reduces their direct influence in policy and resource allocations. – D.M.)
CHINA: Former deputy director of MI6 Nigel Inkster said China is close to the conclusion that military action to retake Taiwan will be necessary. He pointed to the recent Australia-United Kingdom-United States defense agreement and increased U.S. military sales to Taiwan. Chinese foreign ministry spokesperson Zhao Lijian said the trilateral agreement is an “obsolete cold war zero-sum mentality”. The UN Secretary-General Guterres is increasingly calling on the U.S. and China to reduce tensions and avoid a new Cold War. (AC: The compromised nature of international bodies like the U.N. make their calls for peace ring hollow as the Chinese have zero-interest in “fairness.” – D.M.)
HURRICANE SEASON: Tropical Storm Peter is expected to remain off the coast of the U.S. this week. The National Hurricane Service predicts Tropical Storm Rose will remain in the mid-Atlantic before dissipating around the end of the week.
In today’s Early Warning, Dustin looks at this past weekend’s Justice for J-6 Protest in D.C. Upgrade your Situational Awareness to Early Warning here: https://forwardobserver.com/subscribe