Enter the congressional budget committees, the true rulers of the republic
- US President Trump presented a shopping list of tax changes in Indiana last night. Financial markets have reacted positively, which is not unexpected given the proposed benefits to larger companies. A lower corporate tax rate and a repatriation tax holiday are both in the proposals. However, the president proposes, Congress disposes.
- The president's track record of getting things done in Congress is less than 100%. Attention must turn to the congressional budget committees to try to get a sense about what legislation is likely to emerge from this process. Republican members of Congress would like something to present to the voters at the 2018 mid-term elections.
- Assorted inflation numbers make their way out today. Spanish consumer price inflation and various regional German consumer price inflation numbers are due. The German inflation data has been inclined to surprise to the upside in recent months. US second quarter GDP is revised (economic revisions are getting larger), and will include the PCE deflator measure of inflation.
- Central bankers are trampling one another in their attempts to get air time on CNBC today. Three Fed speakers (including the outgoing Vice Chair Fischer), three ECB speakers and an RBA speaker are all going to be competing for our attention.