US ECONOMY & POLITICS

White House, Senate Negotiators Try to Keep Infrastructure Deal Alive – Wall Street Journal, 6/28/2021

• The White House and Senate negotiators sought to keep a bipartisan infrastructure deal on track Sunday after its future was cast into doubt when President Biden made and then withdrew a suggestion that he would veto the proposal if lawmakers failed to pass a separate antipoverty package favored by Democrats.
• Several Senate Republicans who reached agreement with Democratic lawmakers and the president on infrastructure appeared reassured Sunday by Mr. Biden’s statement a day earlier walking back his comments tying the fate of the roughly $1 trillion infrastructure agreement to the larger piece of legislation that could cost trillions more.
• In the Senate, Democrats hope to pass the bipartisan bill by drawing enough Republican votes to reach the 60-vote threshold required for most legislation to advance.
• They also hope to pass the broader bill, which expands child care, Medicare, affordable housing and other programs under a special process tied to the budget, known as reconciliation, that requires only a simple majority.
• While Mr. Biden’s earlier linking of the two initiatives drew a rebuke late last week from Senate Minority Leader Mitch McConnell (R., Ky.), Sen. Bill Cassidy (R., La.) said he thought Mr. McConnell would support the plan “if it continues to come together as it is.”

Fed Officials Debate Scaling Back Mortgage-Bond Purchases at Faster Clip – Wall Street Journal, 6/28/2021

• As Federal Reserve officials discuss how to eventually scale back their easy-money policies, they are debating whether to start by reducing purchases of mortgage-backed securities to avoid adding more fuel to the housing boom.
• The Fed has bought $982 billion of the mortgage bonds since March 5, 2020, and currently plans to keep buying at least $40 billion each month.
• Those purchases, along with the Fed’s monthly purchases of $80 billion of Treasury debt, aim to hold down long-term borrowing costs to stimulate the economy as it recovers from the effects of the pandemic.
• One option suggested at the meeting was to start scaling back the mortgage-bond purchases earlier or more quickly than the Treasury debt purchases, officials said. Call it a two-speed taper.
• St. Louis Fed President James Bullard, in a June 18 CNBC interview, said, “I’m leaning a little bit toward the idea that maybe we don’t need to be in mortgage-backed securities with a booming housing market and even a threatening housing bubble here, according to some people.”

Iran-Backed Militias Threaten Revenge After U.S. Airstrikes in Iraq, Syria – Wall Street Journal, 6/28/2021

• Iran-backed militias vowed revenge on Monday for U.S. airstrikes overnight in Iraq and Syria, underscoring Baghdad’s struggles to rein in these groups that have attacked American troops.
• The U.S. strikes, which the paramilitaries said killed four of their members, highlight the challenge facing the Biden administration as it attempts to deter attacks on American and allied forces in Iraq without provoking an escalation with the militias or their main sponsor, Iran.
• The U.S. strikes came in response to a campaign of drone attacks by the militias on the American military presence in Iraq, which includes about 2,500 troops to support Iraqi forces’ fight against Islamic State insurgents.
• A spokesman for Iraqi Prime Minister Mustafa al-Kadhimi condemned the U.S. airstrikes, calling them “a blatant and unacceptable violation of Iraqi sovereignty and Iraqi national security.” Iraq’s military spokesman also issued a rare condemnation of the strikes.

Costly New Alzheimer’s Drug Could Force Medicare to Restrict Access – Wall Street Journal, 6/28/2021

• The recent approval of a high-price Alzheimer’s drug is raising questions about who will have access to a treatment that could cost Medicare billions of dollars in coming years.
•  Biogen priced the drug Aduhelm at $56,000 a year.
• Wall Street analysts estimate it could eventually surpass $5 billion in yearly sales, mostly paid by Medicare, while some health economists warn the bill would be multiples higher.
• The FDA acted over the objections of some of its statisticians and outside medical advisers, who said further studies were needed to prove the drug worked.
• The Centers for Medicare and Medicaid Services, the agency overseeing Medicare, is reviewing Aduhelm’s approval and will have more information soon about its coverage, a spokesman said.

EUROPE & WORLD

Emergency ECB stimulus could end next March: Holzmann – Reuters, 6/28/2021

• The European Central Bank could end its emergency stimulus scheme next March and markets may be right in not pricing in an increase in more traditional bond purchases, Austrian central bank chief Robert Holzmann said on Monday.
• With the pandemic now receding, analysts, including the ECB’s own Survey of Monetary Analysts, expect the 1.85 trillion euro Pandemic Emergency Purchase Scheme to end next March and see no increase in volumes under the Asset Purchase Programme (APP) to compensate for the lost stimulus.
• “This is how the market sees this and I think the market gives the right assessment,” Holzmann, who sits on the ECB’s rate setting Governing Council said. “We don’t know yet but at the moment it looks like the end is in March.”

Renault seals electric car battery deals with Envision, Verkor – Reuters, 6/28/2021

• French carmaker Renault said on Monday it had sealed partnerships with China’s Envision and France’s Verkor to produce electric car batteries in northern France.
• Carmakers globally are racing to keep ahead of rivals in producing cleaner vehicles, a technology shift that is already prompting Germany’s Volkswagen to build six battery cell plants of its own in Europe.
• Renault made the announcement, which confirmed earlier media reports, before a visit of President Emanuel Macron to the Douai site in northern France where Envision is investing up to 2 billion euros ($2.4 billion) close to “Renault ElectriCity” electric car hub to create 2,500 new jobs by 2030.

SoftBank shrinks robotics business, stops Pepper production- sources – Reuters, 6/28/2021

• SoftBank Group is slashing jobs at its global robotics business and has stopped producing its Pepper robot, according to sources and documents reviewed by Reuters, as the conglomerate downgrades its industry ambitions.
• Production of the humanoid Pepper, touted as the first robot with “a heart”, was stopped last year, according to three sources familiar with the matter and the documents. It would be costly to restart production, two of the sources said.
• Built by Foxconn in China, Pepper was meant to help plug labour shortages but struggled to find a global customer base. Only 27,000 were produced, one of the sources said.
• As part of the retrenchment, SoftBank plans to eliminate about half of its 330 staff positions in France in September, according to four sources and documents, cutting into the historical heart of the business, whose origins lie in SoftBank’s 2012 acquisition of French robotics firm Aldebaran.

Factmonster – TODAY in HISTORY

• The fourth president of the United States, James Madison, died at Montpelier, his Virginia estate. (1836)
• Archduke Francis Ferdinand of Austria-Hungary and his wife were assassinated, setting off World War I. (1914)
• The Treaty of Versailles was signed in France, ending World War I. (1919)
• In Iraq, the United States transferred power back to the Iraqis two days earlier than planned. (2004)