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The halting progress on the FY24 appropriations bills since Speaker Mike Johnson’s election will itself likely come to a halt next week, with the current continuing resolution (CR) keeping the government open expiring at 12:01 am deadline next Saturday. With a CR extension or without one, this process will resume thereafter, but between now and …

Update 734 — Calm Before the Storm: Will CR Bring Christmas in November? Read More »

The House Subcommittee on Financial Institutions and Monetary Policy held a hearing yesterday featuring an attack on the Basel III Endgame capital requirements rule proposed by the Fed and other financial regulators in July. The comment period for the proposal is January 16. We have seen the banking industry’s ads on TV and social media …

Update 733 — Aiming at Basil Endgame: GOP’s Copious Canards on Capital Rules Read More »

Despite, or perhaps due to, the installation of a new Speaker of the House, Congress remains stuck in a fiscal policy time warp. 15 days remain before the Continuing Resolution (CR) keeping the government funded expires, and the House and Senate are making their way through a regular order appropriations process that is very unlikely …

Update 732 — Regular Order in Slow Motion: FY24 Progress Resumes, Sides Miles Apart Read More »

The Federal Reserve once again held interest rates in place, maintaining a 5.35-5.50 percent prime rate target, driving slowly like a car with dimmed headlights in a fog rather than stopping and preparing for an imminent reversal of hikes. Its critical December meeting could be the occasion for another, possibly final, rate hike on the …

Update 731 — Fed Again Pauses Rates: No News is Good News or Hawkish Hold? Read More »

The massive increase in GDP last quarter — the economy grew by 4.9 percent on an annualized basis from July to September, double the growth over the previous quarter — was long predicted only by the Atlanta Fed. The consensus among other observers is that this surge, and the consumer spending driving it, cannot be …

Update 730 — 3d Qtr GDP Jumps up 4.9%: Surge Sustainable or Subject to Fed Rates? Read More »

The powerful resilience of the U.S. economy and the dominant dollar continue to demonstrate global leadership as the world recovers from the COVID pandemic. Challenges from abroad — from the outbreak of conflict in the Middle East to the rapid economic contraction in China — and ones at home, which we detail below, have not …

Update 727 — Economy Stays Strong: Amid Int’l Conflict, Paralysis in House Read More »

Be careful what you vote for. The House, having voted to remove Kevin McCarthy as Speaker, is now consumed by the struggle to replace him. The proximate cause of his removal: McCarthy offered a bipartisan CR to keep the government open that passed overwhelmingly, but it enraged his House GOP critics. The next Speaker is …

Update 726 — Out of the Frying Pan: Speaker Fight Raises Shutdown Risk Read More »

Even close observers were surprised to learn that Speaker Kevin McCarthy had pivoted overnight on Friday from acquiescing to draconian demands from the Freedom Caucus to his right to offering a bipartisan proposal to keep the government open without changing fiscal or any policy. Who would have predicted that the Speaker would be so willing …

Update 725 — Saturday’s Surprise: Shutdown Averted in the Final Hour Read More »

While two days and a few votes in Congress remain before the federal government enters the 2024 fiscal year at 12:00 am on Sunday, the prospects for a budget agreement by then to fund operations are vanishingly small. For millions of federal workers and program beneficiaries, life will not go on as usual. The questions …

Update 724 — Days Grow Few, Down to Two: As Nation Confronts Government Shutdown Read More »

The Fed held interest rates steady this week, with chair Jerome Powell suggesting that rates are likely to remain higher for longer than previously expected, raising recession worries. Meanwhile, on the Hill, House Speaker McCarthy sent members home for the weekend without moving any closer this week to a resolution of the months-long effort to …

Update 723 — Fed Pauses, House Punts: Econ. Policy in Week of Moving Sideways Read More »