Two Important Deadlines are Slipping

by Greg Valliere, AGF Management Ltd.

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Insights and Market Perspectives

Author:Ā Greg Valliere

August 24, 2021

IN A CITY AS DYSFUNCTIONAL AS WASHINGTON, setting deadlines is often futile. They usually slip, which is the likely fate of deadlines on a complete Afghan pullout and House approval of infrastructure legislation.

THE MORE IMPORTANT ISSUE is the Aug. 31 deadline to leave Afghanistan. Over 10,000 U.S. citizens and Afghans were evacuated yesterday, bringing the total to about 37,000 since Kabul fell. But itā€™s unlikely that all evacuations will be finished by Aug. 31, the Talibanā€™s ā€œred line.ā€ The final U.S. evacuees will be 6,000 troops.

G-7 LEADERS will meet virtually today, with Boris Johnson expected to urge an extension of the deadline, and Joe Biden expected to agree. We think the Taliban will relent; they may stay on good behavior for a while, eager to extract billions of Afghan dollars ā€” much of it earned in the drug trade ā€” that are stashed in Western banks.

THE ULTIMATE DEADLINE may be Sept. 11 ā€” a somber date, as Al Qaeda and ISIS eye a return to sanctuaries in Afghanistan, which precipitated this war in the first place.
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THE DEADLINE FOR HOUSE PASSAGE of two infrastructure bills wasnā€™t met last night, with talks set to resume at noon today. This issue wonā€™t be fully resolved for many more weeks, despite bipartisan support for the first bill, which would spend billions on infrastructure.

THE SECOND BILL, which would spend about $3.5 trillion on social programs, cannot pass in a stand-alone vote ā€” largely because Democratic Sens. Joe Manchin and Kyrstin Sinema would never accept a pricetag close to $3.5 billion. So the two bills will have to be combined in some form; an artful compromise on the process to be used this fall is possible as early as this week.

BUT A COMPROMISE ON THE ACTUAL DETAILS (and cost) of the second bill is a long way off, as is a deal on raising the debt ceiling. The next deadline will be the Oct. 1 start of the fiscal year, but that also is likely to slip. The ultimate deadline may be some time in December.
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JEROME POWELLā€™S BIG ENDORSEMENT: Bloomberg reported this weekend that Treasury Secretary Janet Yellen has endorsed Jerome Powell for a second term as Fed Chairman. Yellen has tremendous clout with moderates and progressives, and if she has told the White House to keep Powell, that should be seal the deal.

MARKET IMPLICATIONS: The knock on Powell is that heā€™s not an aggressive regulator; other Fed officials, like Gov. Lael Brainard, favor a tougher stance. If Powell is nominated and confirmed, it would be a net plus for the financial services industry and a setback for progressives like Sen. Elizabeth Warren.
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EDITORā€™S NOTE: We donā€™t plan to publish every day between now and Labor Day.


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. AGFā€™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.

Ā©2021 AGF Management Limited. All rights reserved.

This post was first published at the AGF Perspectives Blog.

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