Top stories: Roadblocks were placed that change the “trumpflation” narrative that was projected to keep the economy and (especially) the stock markets rising. With Fed policy moving away from monetary accomodation, markets were satisfied that fiscal stimulus would provide any lost momentum.
Obamacare not repealed
Why the repeal and replace bill died, despite a Republican majority (assuming no democrat would have voted in favor of repeal of Obamacare).
– Process. House Speaker Ryan did not get buy in first, especially from the Freedom Caucus. Instead they prepared the bill in committee (dubbed Ryancare or Obamacare 2.0 because it kept the individual mandate payable to insurance companies and pre-existing conditions) then presented it as a take it or leave it proposition. Only cosmetic changes were made after they realized they didn’t have the votes.
– Conservatives don’t act boldly. “Conservative” means no changes, once even a liberal program, like social security, has taken hold it wont be removed. “Reactionaries” repeal laws, not conservatives.
– Paul Ryan House Speaker Ryan seems to have no interest in handing Trump a legislative victory.
– No Congressional Trumpistas. President Trump has no “trumpistas” new members of congress who got elected supporting him- most republicans were neutral or ran from him.
Wall Street had bought into a narrative that a Trump administration could keep the party going with tax cuts and infrastructure stimulus spending. With those legislative items less certain and the Fed raising rates, Wall Street may soon rethink that future.
FBI investigating Russian/Trump Campaign
FBI director James Comey and National Security Agency chief Mike Rogers met with Congress last week. Comey told Congress that the FBI has been investigating Russian interference and Trump campaign connections with Russia since July 2016. Comey denied any “tapping of Trump tower”.
However, in order to investigate Trump and his campaign, the FBI would have had to have done some surveillance. That surveillance could have been of Russian actors. This type of surveillance technically is not aimed at US citizens but their conversations get picked up “incidentally” as part of the surveillance. There are supposed safeguards in place to mask the US citizens’ names when intelligence is shared.
In the case of General Flynn this was not done AND his name and contents of his discussion with Russian actors was leaked to the press. This is a security breach and a felony.
The telling part of the Comey/Rogers congressional meeting occurred when Comey broke protocol to say that the FBI was investigating Russian/Trump campaign activities (of which there has been no evidence to date produced suggesting collusion) but refused to state that they WOULD investigate the leaks coming from their own intelligence agencies.
Unless Comey is relieved of his position, the Russian angle will continue to be pursued and perhaps further leaks will occur further undermining Trump’s authority.
Having suffered a legislative defeat, the incessant charges of Russian involvement may further undermine the Trump presidency making the ability to pursue the agenda that Wall Street fell in love with hard or impossible.
Trump may decide at some point to ask for Comey’s resignation which would also perhaps undermine his authority as it would appear to be a conflict and further undermine, at least in the short term, his ability to pursue Trumpflation.
There is a good possibility that a large number of Democrats will vote against raising the debt ceiling. It may be difficult of House Speaker Ryan and President Trump to prevent some Republicans from doing the same.
Top economic story of the week: Obamacare shot down in flames.
Gold and silver.
Gold closed last week at $1228.80 an ounce and closed this week at $1242.90 +1.1 %
Silver closed last week at $17.37 an ounce and closed this week at $17.74 +2.1%
US durable goods orders rose 1.7% in Feb vs. 1.2% increase expected
Durable goods 1.7%, Exp. 1.2%
Durable goods ex-trans 0.4%, Exp. 0.6%
Atlanta Fed raises Q1GDP forecast to 1.0% from 0.9%
DOL CORRECTS JOBLESS CLAIMS FOR MARCH 18 WEEK TO 261,000 FROM 258,000
Markit Service PMI 52.9, Exp. 54.2, Last 53.8
Manufacturing PMI 53.4, Exp.54.8, Last 54.2
BULLARD: WE’RE NOT IN BUBBLE AS SAME MAGNITUDE AS RECENT CRISES
BULLARD: YOU’D SEE WEAKER EQUITIES IF FED GETS TOO AGGRESSIVE
Fed’s Dudley: We want to make monetary policy ‘less accommodative’
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