SUMMARY
We could write off this week as merely an extension of policymakers’ addressing the past year’s global wall of woe. That’s too easy. The range of topics and central bank speakers this week is too broad and long to summarize here. This includes more Fedspeak opportunities than any economist can count on two hands. Congressional efforts to avert a shutdown include a controversial energy provision that would expedite energy project permit reviews. Odds of passing a continuing resolution (which are expect) are higher than the odds of including Senator Manchin’s provision. Internal challenges are growing against some well-known strongmen, even as those heads of state attempt to stay on an autocratic course. The EU returns to energy policy deliberations as a core leader seeks new supplies. The DoJ’s challenge of a proposed airline merger continues a new competition thrust begun by the Biden administration a few months before new horizontal merger guidelines come out.
Central and private bankers’ focus last week on the importance of technology in payments innovation expands to Europe and Asia this week. We got questions about capital rules and payments competition after House/Senate grilling of money center bankers. The Fed, not Congress, is the place to watch on the former and the risks to existing capital rules and payments systems (Zelle, in particular) are minimal and an easily monitored slow-moving process. Vice Chair of Supervision Barr’s recent comments focused on revising super regionals’ capital structure toward more long-dated notes. This conversation is likely to end in changes to those institutions’ Tier 1 capital mix. The larger banks affected by Dodd-Frank’s sweeping risk capital re-write successfully adjusted to the multiple risk mitigation capital changes long ago.
OUTLOOK (all times eastern daylight unless noted)
Monday
9:30 a.m., Boston Fed Bank President Susan Collins (voter) gives her perspective on the economy at the Greater Boston Chamber of Commerce.
10:00 a.m., ECB President Lagarde discusses inflation with the EU Parliament’s Economic and Monetary Affairs Committee, Brussels.
12:00 p.m., Atlanta Fed Bank President Raphael Bostic (non-voter) speaks at a Washington Post event on wealth and income inequality.
3:00 p.m., St Louis Fed President James Bullard (voter) holds a dialogue on how inflation ends.
4:00 p.m., Cleveland Fed Bank President Loretta Mester (voter) discusses the economic outlook and monetary policy at MIT’s Golub Center for Finance and Policy.
International Atomic Energy Agency’s weeklong 66th General Conference begins in Vienna.
Former Japanese Prime Minister Shinzo Abe’s state funeral.
Tuesday
7:00 a.m., Bank of France “digitalization of finance” conference Bank of France “digitalization of finance” conference featuring BIS’s Agustin Carstens, Fed Chair Jerome Powell, and MAS’s Ravi Menon.
8:00 a.m., OPEC 2022 Global oil outlook
Chicago Fed President Charles Evans (alternate) speaks at Barclay’s.
Wednesday
10:00 a.m., Senate Foreign Relations Committee discusses ways to tighten sanctions against Russia by identifying and stopping “enablers”.
10:00 a.m., Senate Judiciary Committee hearing on alleged Russian war crimes in Ukraine.
1:00 p.m., House Select Committee on January 6 final scheduled hearing.
3rd Annual European Capital Markets Technology and Innovation Virtual Conference (afme.eu) – BoE’s John Cunliffe, one of four deputy governors, will reportedly address the Association for Financial Markets (though we do not see it listed on the official agenda).
Fed officials to speak this day: San Francisco Fed Bank President Mary Daly (non-voter), Bostic and Evans (again).
Thursday
8:00 a.m., executive director for markets Andrew Hauser discusses the BoE’s balance sheet.
10:00 a.m., the Senate Banking Committee explores “US outward investment.”
10:00 a.m., Senate Environment and Public Works dual-subcommittee hearing to promote the remediation of hard rock mines (e.g., gold, silver, copper, lead, zinc, nickel).
Central Bank to speak this day: Fed – Daly, Mester; ECB – Olli Rehn, Luis de Guindos; BoE’s Lane; and Riksbank’s Henry Ohlsson and Martin Floden.
Friday
5:00 a.m., EU energy ministers second emergency meeting, Brussels.
9:00 a.m., Fed Vice Chair Lael Brainard and Fed Bank New York President John Williams at a Board conference on financial stability.
11:30 a.m., ECB’s Isabel Schnabel discusses the “fight against inflation,” at the fourth annual Foro La Toro transatlantic wide-ranging three-day conversation, Pontevedra, Spain.
