AGF Management : What We’re Hearing on Capitol Hill

Insights and Market Perspectives

Author: 8

July 27, 2021

What We're Hearing on Capitol Hill
July 27, 2021
VIRTUALLY EVERYONE IN THIS SWELTERING CITY wants to get out of town by early August, not to return until mid-September. But there are at least two weeks of drama ahead - and a growing sense that President Biden's agenda is in trouble.

HERE'S WHAT WE'RE HEARING ON CAPITOL HILL -

EVERYTHING HAS GROUND TO A HALT: Passage of a Senate infrastructure measure still isn't imminent as disagreements persist on key issues like spending on clean water and public transit.

IF THERE'S A SENATE DEAL later this week, Chuck Schumer will then press ahead on a second bill - costing $2.5 trillion or more - that has no support among Republicans and some wavering from Democrats. Only progressive zealots are excited about this second bill.

EVEN IF THE SENATE AGREES TO THE $1 TRILLION COMPROMISE, final enactment probably is unlikely until fall. People we talk with dread the fall workload - it may be Christmas Eve before there's a budget for the new fiscal year.

PRESIDENT BIDEN IS WELL-LIKED ON CAPITOL HILL, but there's a sense that his political capital may be slipping. Members of Congress are getting an earful about crime and inflation; the latter may subside but the former could be a huge albatross for the Democrats.

THE VAST MAJORITY OF DEMOCRATS on Capitol Hill scoff at 'defund the police,' but the label has stuck; progressives have inflicted tremendous damage to the Democrats' brand. The left has one winning issue - more health benefits: dental, vision, hearing.

BIDEN'S HIGH SCORES on handling Covid may slip, as confusion reigns over masks, booster shots and travel restrictions. There's resignation on Capitol Hill that this latest Covid wave may not peak for another two months.

NO DEMOCRATS WILL SAY THIS PUBLICLY, but party leaders concede in private that they may lose the House next fall. The Senate is too close to call.

MEMBERS OF CONGRESS ARE HEARING from companies in their home districts that they're worried the Biden regulatory activism will be bad for business.

ANTIPATHY TOWARD CHINA is overwhelming on Capitol Hill; Beijing's curbs on its own tech companies have made investors leery. Biden's hard-line stance on China has widespread support.

THERE'S SURPRISINGLY STRONG SUPPORT from the public for tax hikes on the rich and big corporations; even some Republicans could support higher taxes.

THERE'S GROWING UNEASE OVER THE BUDGET DEFICIT on Capitol Hill, but most constituents want to spend more money. Republicans will try to blame big spending for the pickup of inflation.

THERE'S CONCERN OVER INFLATION AROUND THE COUNTRY, but Fed Chairman Jerome Powell has solid support on Capitol Hill; no one is expecting a rate hike for at least another year.

THERE'S LITTLE ENTHUSIASM AMONG VOTERS to re-visit the Jan. 6 riot; testimony begins today but the hearings are all about politics. The GOP looks bad on this issue, but - in public at least - most Republicans are afraid to challenge Donald Trump.

TRUMP AND BIDEN are widely viewed as the likely 2024 nominees, but some members agree with us that neither may run - not the increasingly frail Biden or the scandal-plagued Trump.

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.

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.

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