Inflation, guns, China: 3 things to watch in D.C. this week
Geopolitical concerns haven't slowed down despite the U.S. still grappling with its own problems, including gun violence and an unstable economy.
Lawmakers are working together to create legislation that will appease both pro-gun control activists and pro-Second Amendment individuals. On top of that, the country is battling record inflation as the national gas price average finally topped $5.00 a gallon. And on the other side of the world, U.S. Defense Secretary Lloyd Austin stirred controversy after delivering remarks alluding to the political situation in Taiwan.
Here are some of the biggest political headlines affecting the business world:
Guns
A bipartisan group of lawmakers have reached consensus on a series of gun reform laws.
The lawmakers said the legislation increases funding for school-based mental health services and increases the investment into family and youth mental health services. While it would not raise the age to purchase some guns to 21, the bill would enhance the review process for those trying to purchase guns who are younger than 21-years-old.
“Families are scared and it is our duty to come together and get something done that will help restore their sense of safety and security in their communities,” the lawmakers said in a joint statement. “Our plan saves lives while also protecting the constitutional rights of law-abiding Americans.”
President Biden has said the legislation does not go as far as he’d like but called for passage of the proposal. Ten Republican senators — the minimum amount needed to clear procedural hurdles in the Senate to bring the bill to a vote — have publicly backed the bill, including Sens. Mitt Romney (R-UT), John Cornyn (R-TX), and Lindsey Graham (R-SC).
Inflation
The Federal Reserve is likely to raise interest rates a half percentage point as economists fear that a larger rate hike could lead to an economic recession.
Fed Chair Jerome Powell will deliver remarks on Wednesday. His comments about inflation come as the U.S. saw inflation rise 8.6% in May — a pace not seen in four decades — and the average price of gas has reached more than $5.00 per gallon nationwide.
Mohammed El-Erian, Allianz chief economic advisor, told CBS’s Face The Nation that inflation could still rise to 9%.
"I was very puzzled when a year ago so many people were so confident that inflation was transitory," El-Erian told CBS. "There was so much we didn’t understand about the post-COVID inflation that humility would have been a good idea."
President Biden will travel to Philadelphia to attend a labor convention, further underscoring Democrats’ effort to keep labor unions engaged ahead of midterm elections.
U.S.-China relations
Geopolitical watchers will continue to watch the Indo-Pacific as China continues to threaten war with Taiwan should Taiwan seek independence.
Things grew tense between China and the U.S. after Defense Secretary Lloyd Austin said on Saturday at the Shangri-La Dialogue in Singapore that while U.S. “policy hasn’t changed,” China has continued to issue a “steady increase in provocative and destabilizing military activity near Taiwan.” Austin said that “Indo-Pacific countries shouldn’t face political intimidation, economic coercion or harassment by maritime militias.”
One day after Austin’s remarks, Communist China Party’s Defense Secretary Wei Fenghe continued to threaten war against Taiwan should Taiwan attempt to secede.
“If anyone dares to secede Taiwan from China, we will not hesitate to fight,” Weid said at the IISS Shangri-La Dialogue in Singapore, as reported by Bloomberg. “We will fight at all costs and we will fight to the very end.”
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