Infrastructure deal.

The bipartisan infrastructure deal has come out and is already in jeopardy of failing. The $1 trillion plan has caused much handwringing and negotiating between Republicans and Democrats over funding and spending levels. The Biden administration spent the last few days busily working to walk back the President’s suggestion that he would not sign the bipartisan bill without a tandem one being pushed by progressive Democrats. It now seems the standalone infrastructure bill may just make its way to the President’s desk without that requirement.

Inflation and wage growth. 

The labor market holds positive news for the workforce. As the economy continues to recover, companies are hiring at a rapid pace. Workers seeking new opportunities have greater negotiating power than in recent memory, resulting in higher wages and more flexibility. The flipside of this labor market shift? Some economists are beginning to think rising prices may be more persistent than they initially thought. 

In response, the Federal Reserve has begun signaling toward intervention measures, like eliminating bond purchases and bumping up the rate increase timetable to late 2022. The Fed’s recent comments still assert that supply chain disruptions and pent-up demand will lead to inflation being more temporary. Nevertheless, the hedging of bets has begun in earnest.