Damage Control in Washington — Infrastructure Bill Still Alive

by Greg Valliere, AGF Management Ltd.

Insights and Market Perspectives

Author: Greg Valliere

June 28, 2021

JOE BIDEN’S REPUTATION as a shrewd negotiator took quite a hit this past weekend. His seeming demand for two infrastructure bills, not just the one that he and negotiators agreed to, astonished allies and angered Republicans, prompting aggressive White House damage control that has kept the $1 trillion bill alive.

WE’RE HEARING THAT BIDEN felt he needed to assure progressive Democrats that he would not abandon the second bill, a nearly $2 trillion package of social spending that has no Republican support. But issuing an ultimatum that the two bills had to be considered “in tandem” nearly blew up the talks — and reinforced suspicions that Biden is inclined to cave in to demands from the left wing.

MANY REPUBLICANS FAVOR THE FIRST PACKAGE, which addresses highways, bridges, dams, broadband, clean water, etc. We think that measure could win 60 Senate votes, thus avoiding a filibuster, some time before the August recess.

BUT THE SECOND BILL could only pass via the reconciliation process, which would require support from all 50 Senate Democrats — a far more difficult task, unlikely to receive a vote until well into the fall. So there will be one bill this summer, and we’ll stick with 60-40 odds that it will pass, despite Biden’s gaffe last Friday.
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TWO BIG STORIES THIS WEEK: In the political world, it’s the imminent indictment of the Trump Organization on a wide range of charges, mostly involving tax fraud. Trump will mock charges from liberal prosecutors in New York as a “witch hunt,” but more Republicans will question whether Trump’s legal woes are worth sticking with him when there are rising stars like Ron DeSantis who don’t have baggage like Trump’s. No one has baggage like Trump’s.

IN THE FINANCIAL WORLD, the big story will be Friday’s unemployment report, which comes amid reports that in states where jobless benefits have ended, workers are returning to the work force.

BIDEN, WHOSE JOB APPROVAL NUMBERS have stalled out, needs a good number — perhaps the jobless rate falling to 5.7% and nonfarm payrolls rising by 700,000 would convince the markets and the public that a solid recovery is still on track.
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CONGRESS HAS LEFT SWELTERING WASHINGTON for the next two weeks, so we won’t publish every day until after the July 4 holiday.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

©2021 AGF Management Limited. All rights reserved.

This post was first published at the AGF Perspectives Blog.

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