The Hill’s Morning Report — A murky economic outlook

The White House, lawmakers and the Federal Reserve today will add to an increasingly gloomy outlook about inflation, supply shortages and predictions of recession — in the United States and worldwide.

Economic realities and doomsday predictions are altering this year’s politics and Americans’ overall confidence that the U.S. is on the right track.

The Fed, scrambling to tamp down record inflation, is expected today to announce it will again raise its benchmark interest rate by three-quarters of a percentage point (The Hill and CNBC). Arguments are escalating about whether the nation’s central bank is steering the U.S. economy into a short or long period of future contraction or whether slowing U.S. output means the economy is already there. The government on Thursday will report growth in the second quarter (The Hill).

President Biden, who has sounded upbeat notes that a recession can be avoided during a midterm election year, says the employment picture is so strong that it can weather rising prices and the Fed’s aggressive efforts to cool a too-hot economy.

“We’re not going to be in a recession, in my view,” Biden said Monday. “My hope is we go from this rapid growth to steady growth.”

Major U.S. companies have been lobbying Congress to improve the overall economic picture by subsidizing computer chip manufacturing in America and asking Biden to loosen some tariffs levied by the Trump administration on Chinese goods.

The Senate on Tuesday moved a compromise semiconductor bill closer to the finish line after more than a year of halting negotiations and appeared ready to provide $52 billion in subsidies to bolster U.S. competitiveness in an arena considered essential to national security (The Hill). Final Senate votes on the measure are scheduled today, and Speaker Nancy Pelosi (D-Calif.) has pledged to take up the bill as soon as it reaches the House (The Hill).

General Motors on Tuesday reported that its profits fell 40 percent in the three months ending in June as input costs surged amid a global computer chip shortage (The New York Times).

There are growing signs that inflation is shifting some consumers’ shopping habits, according to companies that are among the first to feel the effects (The New York Times). Passing higher prices on to customers has led some to buy less or trade down to cheaper store brands, a trend seen at Unilever, the maker of Dove soap, Ben & Jerry’s ice cream and Hellmann’s mayonnaise. It’s also a factor at Walmart, which is altering its profit outlook for the year. The company’s profit warning this week in the middle of the quarter was viewed as rare and sparked new worries about how the highest inflation in 40 years is affecting the entire retail sector (The Associated Press).

Bloomberg News: Shoppers spend without splurging, clouding U.S. recession call.

The International Monetary Fund (IMF) on Tuesday roiled the debate further by predicting that a global contraction may be at hand. According to its latest report, the likelihood of a worldwide recession is rising. It said the probability of a recession starting in one of the Group of Seven advanced economies was now nearly 15 percent, four times its usual level. And it said some indicators suggested that the U.S. already is in a “technical” recession, which the IMF defines as two consecutive quarters of negative growth (The New York Times).

© Associated Press / Matt Rourke | Walmart shoppers in May.

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▪ The Hill: The House is poised to restrict private ownership of big cats with legislation that has a chance to clear the Senate. 

▪ The Washington Post: Key Democrats want Joseph Cuffari, the inspector general at the Department of Homeland Security, removed from a probe of missing Secret Service texts tied to Jan. 6.

LEADING THE DAY

➤ POLITICS

Former President Trump on Tuesday made his first appearance in Washington since departing at the end of his term in January 2021 and used the opportunity to repeat falsehoods about the 2020 election, direct his venom at the Jan. 6 committee and hint at a third White House bid in 2024.

The ex-president was addressing an event hosted by the America First Policy Institute, a group of former Trump officials and Cabinet members who are crafting an agenda in preparation for a possible second White House term. While he stuck to the policy script for a while, he veered away a number of times as he usually does, and reinvoked his 2020 loss.

“It was a catastrophe that election. A disgrace to our country,” Trump said, winking at his possible future plans. “We may just have to do it again” (The Associated Press).

Hours after Trump’s address, news emerged that the Department of Justice is investigating the former president’s actions as part of its probe into the Jan. 6 attack on the Capitol.

According to The Washington Post, prosecutors have asked witnesses in recent days about conversations with Trump and his allies during that time, including detailed questions about meetings the former president took part in during December 2020 and January 2021. The probe has also obtained phone records from the likes of Mark Meadows, Trump’s White House chief of staff at the end of his term.

▪ NBC News: Attorney General Merrick Garland during a Tuesday interview called the Justice Department’s Jan. 6 probe the “most wide ranging investigation in its history.”

▪ Brett Samuels, The Hill: Trump tiptoes closer to new White House run in D.C. address.

▪ The Hill: Biden rips Trump on “respect for the law” after crime speech.

▪ ABC News: House Jan. 6 committee in discussions with former Secretary of State Mike Pompeo for testimony.

▪ The Wall Street Journal: Trump says LIV Golf has been worth “billions of dollars” in publicity for Saudi Arabia.

© Associated Press / Andrew Harnik | Former President Trump spoke Tuesday in Washington at an America First Policy Institute event.

Meanwhile, former Vice President Mike Pence also appeared in Washington on Wednesday and attempted to turn the page once again toward the 2022 elections, but with a wink to his back-and-forth with the former president.

Speaking to the Young America’s Foundation, Pence acknowledged he and former President Trump may differ in their approaches to advancing their agendas as he urged conservatives to focus on the future to win elections.

“I don’t know that the president and I differ on issues. But we may differ on focus,” Pence told attendees on Tuesday morning. “I truly do believe that elections are about the future, and that it’s absolutely essential at a time when so many Americans are hurting, so many families are struggling, that we don’t give way to the temptation to look back” (The Hill).

The former vice president’s appearance coincided with the revelation that his book, titled “So Help Me God,” will be released on Nov. 15 — exactly a week after the midterm elections. According to Simon & Schuster, the book’s publisher, the memoir will “chronicle [Trump’s] severing of their relationship” due to Pence going ahead with the certification of the electoral results on Jan. 6, 2021.

“This is the inside story of the Trump administration from its second-highest ranking official and of a profound faith that has guided Pence throughout his life,” the publisher said, calling it “the most robust defense of the Trump record of anyone who served in the administration” (The Hill).

▪ The Hill: Trump to hold rally in Wisconsin next month, but Sen. Ron Johnson (R-Wis.) declines to attend.

▪ Max Greenwood, The Hill: Trump wades into state legislature contests in quest to install loyalists.

On the Democratic side, Sen. Elizabeth Warren (D-Mass.) has adopted a front-facing role as a party surrogate, endorsing candidates she believes will help Democrats retain control of Congress while pushing moderates to fight harder for the middle class.

With the midterm contests nearing, her supporters approve.

“President Biden has made it clear he intends to run for reelection and has my full support. But in the extremely unlikely event he changes his mind, I hope she runs,” said Charlotte Clymer, a writer and Democratic political strategist. “I would follow Elizabeth Warren anywhere” (The Hill).

IN FOCUS/SHARP TAKES

➤ PANDEMIC, POTUS & HEALTH

Still working in isolation at the White House on Tuesday, Biden’s COVID-19 “symptoms have now almost completely resolved” following his Thursday diagnosis and Monday completion of treatment with the antiviral pill Paxlovid, according to his doctor (The Hill). The president has been cleared to resume his exercise routine but will continue to isolate until he tests negative.

More than 4 out of 10 parents with children under age 5 and now eligible to be vaccinated against COVID-19 say they will “definitely not” let their offspring get the shots, according to a Kaiser Family Foundation survey released on Tuesday. Republican parents are three times as likely as Democratic parents to say they will “definitely not” get their child vaccinated (64 percent vs. 21 percent). Nearly two-thirds (64 percent) of parents who are unvaccinated feel the same way. Even among parents who are vaccinated themselves, about 1 in 4 (27 percent) say they will “definitely not” get their young child vaccinated against the coronavirus (CNN).

🦠Rep. Dutch Ruppersberger (D-Md.), 76, announced on Monday through his office that he contracted COVID-19 — his second bout since January (Baltimore Sun).

“Long COVID” can leave people with more health deficits than previously understood, according to an expansive study published in Nature. Hair loss, loss of libido, incontinence and erectile dysfunction in men are among the symptoms. More common complaints: loss of smell, shortness of breath, chest pain and fever, nausea and vomiting, bowel incontinence, fatigue and limb swelling. Researchers from the University of Birmingham analyzed the health records of some 2.4 million people in the United Kingdom, finding that those who had been infected with COVID-19 reported 63 symptoms more frequently 12 weeks after they were infected compared to those who hadn’t been infected. The study divided symptoms into three categories: respiratory issues, mental health and cognitive problems (New York Post).

If you’re in Austria and test positive for COVID-19 but are asymptomatic, you will no longer have to quarantine, the country’s health minister announced Tuesday. People in that situation by next month will simply be required to wear masks, which they can remove if they are outdoors or able to maintain distance from other people (The Associated Press).

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,027,909. Current average U.S. COVID-19 daily deaths are 367, according to the Centers for Disease Control and Prevention.

➤ NEWS MEDIA

NBC News veteran journalist Pete Williams, who retires at the end of the month after 29 years with the network and has been a go-to guest moderator on WETA’s Washington Week, has attracted laudatory farewell news coverage and send-offs (Poynter, Variety and AdWeek). NBC announced the Supreme Court beat will be handled on an interim basis by senior White House correspondent Kelly O’Donnell, who layers the court into other responsibilities, Justice Department and intelligence coverage will be handled by Ken Dilanian, and Julia Ainsley becomes NBC’s homeland security correspondent. Williams was feted Tuesday night at the Cosmos Club in Washington by colleagues and admirers, including NBC’s Andrea Mitchell, Kristen Welker, Peter Alexander and Mike Memoli; CNN’s David Chalian, Kaitlan Collins and Sam Feist; and The Hill’s editor-in-chief Bob Cusack.

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OPINION

■ Democratic meddling in GOP primaries has reached a new level of absurd, by Henry Olsen, columnist, The Washington Post. https://wapo.st/3b5sO8S

■ Walmart rings more alarm bells for the U.S. economy, by Andrea Felsted, columnist, Bloomberg Opinion. https://bloom.bg/3BscIki

WHERE AND WHEN

The House will meet at 10 a.m. The House Committee on Oversight and Reform will hold a hearing about the role of the firearms industry in America’s gun violence.

The Senate convenes at 10 a.m. to resume consideration of the CHIPS bill.

The president will virtually receive the President’s Daily Brief at 9:30 a.m.

The vice president has no public events scheduled.

The Federal Reserve concludes a two-day meeting with a 2 p.m. policy statement and a news conference with Fed Chairman Jerome Powell at 2:30 p.m.

Secretary of State Antony Blinken will deliver remarks to the press at 2 p.m.

Second gentleman Doug Emhoff at 9:50 a.m. will participate in a Wall of Remembrance dedication at Washington’s Korean War Memorial.

The White House daily briefing is scheduled at 3 p.m.

🖥  Hill.TV’s “Rising” program features news and interviews at http://thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.

ELSEWHERE  

➤ INTERNATIONAL

Russia will drop out of the International Space Station after 2024 and focus on building its own orbiting outpost, the country announced on Tuesday amid high tensions between Moscow and the West over the war in Ukraine. The space station, orbiting 250 miles from Earth, is jointly run by the space agencies of Russia, the U.S., Europe, Japan and Canada. The first piece was put in orbit in 1998, and the outpost has been continuously inhabited for nearly 22 years. NASA and other international partners would like to keep the station running until 2030, but in the meantime, NASA has been working with U.S. companies on establishing their own private space stations to eventually replace the International Space Station. NASA hopes that these commercial space stations will be up and running by the end of the decade (The Associated Press).

Meanwhile, the Russian conflict in Europe took another turn as Moscow further cut its gas delivery to European nations on Wednesday. As of this morning, the Nord Stream 1 pipeline’s capacity has been slashed to a fifth of its total load, making it tougher and more expensive for European countries to store gas ahead of the winter months (Reuters).

© Associated Press / NASA via AP | International Space Station in 2021.

➤ ENERGY

Uber announced on Tuesday that it is expanding its electric vehicle choices in seven additional cities as a step in its efforts to reach zero emissions by 2030. Comfort Electric, the company’s fleet of all-electric vehicles, will be offered in Las Vegas; Seattle; Portland, Ore.; Denver; Austin; Texas; Philadelphia; and Baltimore. The company originally launched Comfort Electric across California cities in May (The Hill).

➤ THE POT GETS RICHER

The Mega Millions lottery jackpot increased to $1.02 billion on Tuesday after no one notched the correct six numbers to win the prize, marking the fourth highest total in the lottery’s history. As The Associated Press notes, no individual has won the game dating back to April 15, and that there have been 29 consecutive drawings without a winner. The next one is Friday night.

THE CLOSER

© Associated Press / via Sotheby’s | A bidder won Buzz Aldrin’s Inflight Coverall Jacket that he wore for the Apollo 11 mission for nearly $2.8 million on Tuesday.

And finally … From the moon to the highest bidder.

The jacket worn by Buzz Aldrin on the Apollo 11 flight that landed man on the moon for the first time in history is now in the hands of someone else — for nearly $2.8 million. A bidder paid $2,772,500 for Aldrin’s Inflight Coverall Jacket from the mission, marking the highest total fetched for an American space-flown item at an auction (The Associated Press).

Aldrin and Neil Armstrong became the first individuals to walk on the moon on July 20, 1969.

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