The Day at a Glance | Jun 22 2022

The Top

*Biden will call on Congress to suspend taxes on gasoline to reduce prices.

*Jerome Powell will testify before the Senate this morning; markets will stay focused on any comments regarding inflation and interest rates.

*Inflation in the United Kingdom reached 9.1% annual, a new 40-year record.

*Oil and raw materials recede in light of fears of a recession.

*Mortgage rates in the United States reached 5.78% (their highest level in 15 years), new and existing home sales dropped to their lowest levels in two years.

*ECB still believes that a scenario involving stagflation in Europe is unlikely, although it is possible.  

*China builder Greenland – one of the most resistant in the real-estate sector`s crisis – was cut to Selective Default by S&P Global.

Economic environment

Biden`s administration fights inflation. According to reports, President of the United States, Joe Biden, will call for Congress to suspend the federal tax on gasoline for 3 months in order to decrease price pressures for consumers. The tax is currently 18.4 cents per gallon, with the average price of gasoline at $5 dollars per gallon. Additionally, the federal government will call on state governments to suspend taxes on fuels. Several legislators (among them, some Democrats) have opposed said measure as it implies lower federal income necessary to maintain highway infrastructure. Furthermore, several Congressmen considered that the withdrawal of said tax will not necessarily be passed on to consumers. The President is expected to address the issue at 2:00pm Washington time. On the monetary front, Chair of the Federal Reserve, Jerome Powell, will give his semi-annual testimony before the Senate this morning – and before the House of Representatives tomorrow. Markets will be alert for any comments concerning the possibility of avoiding a recession in a moment in which the FED fights 40-year high inflation with aggressive interest rate increases.