The Day at a Glance | August 10 2021

The Top

*Senate will vote on infrastructure plan in the United States.

*Bostic (Atlanta FED) and Barkin (Richmond FED) consider that enough economic progress has been made to withdraw monetary stimuli.

*Central Bank of China open to greater stimuli: The central bank is concerned about the risks of growth and considers inflation is temporary and “controllable”.

*Confidence in the German economy dips to its lowest level since November due to the Delta variant`s spread (ZEW 40.4).

Economic environment

United States Senate prepares to vote on infrastructure package. The United States Senate will vote on an infrastructure investment draft law today, which was initially proposed by President Biden and was negotiated throughout the last few months. This morning, Senators will vote on the bipartisan proposed deal worth up to 550 billion dollars in new investment, which, along with already existent spending projects, will add up to a total of 1 trillion dollars in infrastructure investment. The larger part of the spending will focus on the construction of roads and bridges in the United States in a span of 5 years, in addition to improving the internet network infrastructure and sustainable projects. According to statements made by Democrats, the plan will help the local manufacturing sector grow and lay the foundations for future sustainable growth. In case the proposed law is approved, it would be passed to the House of Representatives during the fall; which is dominated by Democrats. After the initial voting, debates on the plan that considers 3.5 trillion additional dollars in investment will begin – related to greater spending on social programs and education. Democrats plan to pass this last bill without Republican support through a “budget reconciliation” process, which only requires vote by simple majority. This would allow them to move budget forward this week and implement it as early as the end of 2021, complying with most of Biden`s ambitious spending plans. After discussions and voting will take place on the infrastructure plan and the budget plan today, the Senate will be in recess for a month and will return in September in order to discuss government funding for the new fiscal year as well as the debt ceiling.