SUMMARY
Politicizing the Fed’s function is a “fools” game Larry Summers accurately observed last week, but ridiculous errands and effective constituent representation straddle a very thin line in Washington. Said pressure comes from both parties and will only intensify from here unless inflation disappears and a return to sustainable growth is nigh. The reality is adverse macroeconomic policy consequences and political risks from it are ramping. The midterm elections outcome is a relatively minor factor in this dynamic. This speaks to broad-based threats to US households and businesses from the on-going macroeconomic adjustment from long run easy monetary policy and a temporary spurt of easy fiscal policy.
Looking back, XOM’s chair proclaiming that dividends are how his and other energy companies share profits with Americans is both entertaining and indicative of changing politics for large US companies. While not as fraught as macroeconomic policy tensions, US companies face evolving political pressures from both political parties that began last decade with the advent of loose monetary policy. Finally, we would hope to be proven wrong but the attack against Paul Pelosi likely cannot be written off as an isolated event as political opponents are portrayed by some as legitimate targets of violence. Erosion of democracy is both a bottom-up and top-down responsibility.
OUTLOOK (all times eastern daylight for another week; daylight savings time ended earlier today in the UK and many EU countries)
Today
Brazil’s presidential runoff tests pre-ordained election denial schemes, governance of a crucial LATAM stalwart, and regional growth outlooks.
Monday
7:30 a.m., Danmarks Nationalbank hosts a conference in Copenhagen observing the 40th anniversary of the country’s fixed exchange-rate regime.
10:00 a.m., OPEC’s 2022 World Oil Outlook released at Abu Dhabi’s International Petroleum Exhibition and Conference.
BIS chief Agustín Carstens highlights policymakers joining finance and business leaders convening for Hong Kong Fintech Week.
China set to launch the final modules to complete its Tiangong Space Station.
Tuesday
4:00 a.m., Web Summit hosts one of the more eclectic tech-focused speaker conferences: 2022 four-day session in Lisbon.
7:30 a.m., The Nordic Council, initiated in 1952, meets in Helsinki to review its ascending geopolitical and economic place in the world.
8:00 p.m., Ceding nothing to Hong Kong, global policymakers rub coins together, figuratively no doubt, with plenty of interested parties at Singapore’s Fintech Festival.
Denmark and Israel hold elections.
Wednesday
2:00 p.m., The FOMC begins the process of telling us what they think and why.
Thursday
2:00 a.m., Executive board member Fabio Panetta keynotes the ECB’s two-day annual money market conference.
6:00 a.m., The BoE set to provide its views.
7:00 a.m., G7 foreign ministers gather in Munster, Germany for a two-day session regarding the war in Ukraine.
3:00 p.m., Jason Furman and BoE’s Catherine Mann engage a panel discussion on the global inflation challenge at the American Enterprise Institute, Washington D.C.
German Chancellor Olaf Scholz heads to China a week after the German president criticized Russia for European “wildfire” and global upheaval, an age in which “Germany must brave the headwinds” of war and violence.
Friday
5:30 a.m., ECB’s Lagarde discusses monetary policy in Tallin, Estonia (we adjusted for end of daylight savings time there).
10:00 a.m., Boston Fed Bank President Collins discusses the economic outlook, and monetary policy at the Brookings Institution, Washington, D.C.
