Kyrsten Sinema Caves, as Expected
Author: Greg Valliere
August 5, 2022
SINEMA GOT WHAT SHE WANTED: Manufacturing companies will not be hit by a 15% minimum corporate tax; a poorly defined drought relief provision for Arizona will be included; and most importantly, a provision killing the carried interest tax break will be excluded, confirming our belief that carried interest is like Rasputin — it can’t be killed.
REMAINING OBSTACLES: The Senate parliamentarian will have to rule within days on whether provisions in the bill, especially those covering prescription drugs, can be considered under budget reconciliation rules that waive the 60-vote filibuster barrier.
IF THE RULING IS FAVORABLE for the Democrats, the Senate in the next few days will begin a mandatory process called “Vote-O-Rama,” which will allow consideration of hundreds of amendments from both parties (we’re not making this up).
ONCE THE SENATE PASSES THIS COMPROMISE, the House will return to town later in August to vote on the bill, which could be signed into law by President Biden before Labor Day. As we wrote yesterday, the impact — on industry sectors, the macro economy and the markets — will be modest.
THE INTERESTING ANGLE will be political, as Biden signs another bill in his
effort to show the public that the White House is aggressively confronting inflation
and the softening economy. But Republicans will argue that any new taxes or fresh
spending will be harmful to the economy. So we think passage of this bill will have a
modest impact on the election.
THE BIGGER ISSUE, as we await the unemployment report this morning, is whether Democrats can make a case that inflation and interest rates have peaked, which some Wall Street analysts now suspect.
SIGNS THAT GASOLINE AND FOOD PRICES are beginning to soften could make a difference in the fall elections, as will the public’s reluctance to accept rigid new state laws banning abortion with no exceptions. The Kansas abortion vote was the biggest political story of the week, with major implications for the election — and it has blindsided the politicians.
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. 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.
For further information, please visit AGF.com.
©2023 AGF Management Limited. All rights reserved.
