by Greg Valliere, AGF Management Ltd.
THE TIMES THEY ARE A-CHANGING: The staggering shift in American public opinion, led by young people of all races, will almost certainly produce police reform legislation — and an African-American running mate for Joe Biden.
IT MAY TAKE A FEW MORE WEEKS for Congress to agree on police reform; Democrats on Monday introduced a sweeping bill, banning aggressive police tactics and no-knock search warrants, mandating police training, making it easier to recover damages, etc.
REPUBLICANS WILL INTRODUCE A BILL SOON and a compromise seems possible; a measure will pass regardless of input from President Trump, who increasingly is viewed — within both parties — as incapable of understanding this issue, or expressing any empathy. He will claim that Democrats will defund the police, but the party’s leadership will not embrace that option.
THE NEXT BIG FOCUS will be on Biden’s running mate, who — he promised — will be a woman. Biden has been urged by influential supporters like Rep. James Clyburn to pick a black VP, and we think he will. Here’s our handicapping:
The favorite — Kamala Harris: The California Senator ambushed Biden in the Democrats’ first debate, but both insist that there’s no ill feelings. Progressives charge that Harris put a lot of black men in jail when she was a prosecutor in San Francisco, and critics also charge that she wasn’t tough enough on rogue police officers. But Harris has star power and is considered the favorite.
The rising star — Val Demmings: A well-regarded House member, excellent on TV, Demmings, 63, previously was Police Chief of Orlando, Fla. Her ties to police unions could help — or hurt.
The long-shot — Atlanta Mayor Keisha Lance Bottoms, 50, an early Biden supporter who campaigned tirelessly for him. The telegenic mayor is being vetted and suddenly is on the short list. Georgia has 16 electoral votes, and she could produce a huge turnout in the state.
The field — Stacey Abrams is a grass-roots favorite, but the unsuccessful 2018
Georgia senate candidate is viewed by Biden aides as not ready for a jump to the
national stage. Susan Rice is probably too controversial, despite (or because of ) her foreign policy track record.
Bumped from the list — Amy Klobuchar, once the co-favorite with Harris, was reluctant to prosecute rogue cops in Minnesota, and would be an unacceptable candidate for most of Biden’s African-American allies. Elizabeth Warren could turn off moderates but she still has passionate advocates. She turns 71 later this month and Biden, 77, needs a young running mate.
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JEROME POWELL TODAY: The Fed Chairman’s press conference this afternoon will be the big market story today. We think Powell is still worried about downside risks to the economy, especially with covid-19 infections rising in much of the country. So Powell is very likely to urge Congress to pass more stimulus, and he will emphasize that the Fed is prepared to do more.
AT SOME POINT, perhaps by winter, Powell will rely more on forward guidance to alert markets if the Fed might consider policy tweaks in 2021. But it’s too early to think that the Fed could become less accommodative — the patient may be out of the ICU but is not out of the hospital, and the Chairman is still very dovish.
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This post was first published at the AGF Perspectives Blog.
