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OVERNIGHT MONEY: Bernanke to face tough questions from Congress
THE NEXT BIG STORY:
Busy Bernanke: The halls of Congress will be pretty quiet on Friday, with both chambers calling it a week on Thursday. So, in looking ahead, we're hoping Fed Chairman Ben Bernanke has a restful weekend, because he's got a full slate of meetings on Capitol Hill when lawmakers return next week.
On Tuesday and Wednesday, the chief of the nation's central bank will be testifying before the Senate Banking and House Financial Services committees, respectively.
The spotlight on the Fed is growing brighter with each disappointing piece of economic data, leading markets and policymakers to probe and dissect everything coming out of the central bank for indications of potential new efforts to boost the economy.
Minutes from the Fed's last meeting revealed that some Fed officials think further moves will likely be needed in the near future, so we'll expect Bernanke to get plenty of questions from both sides of the aisle about his thinking on the matter.
Throw in questions about what the Fed knew about potential problems with how banks were setting a key interest rate, and it's shaping up to be a grueling stretch for the Fed chairman.
Off Capitol Hill, Bernanke will be meeting with a delegation from the parliament of the European Union that is visiting the United States, as he and other economic policymakers continue to monitor that continent's debt crisis as a looming threat to an already tenuous U.S. recovery.
WHAT ELSE TO WATCH FOR
My Old Virginia Home: President Obama heads back across the Potomac River on Friday for a trio of campaign events in Virginia, a swing state that could be especially key for Republicans and Democrats come November.
The president is scheduled to head to the Hampton Roads and Richmond areas on Friday, before finishing his Virginia swing in Roanoke.
During his trip south, Obama is expected to discuss his proposal to extend the Bush-era tax rates for only family incomes up to $250,000 annually, an idea that has taken center stage on Capitol Hill in recent days and sparked a vigorous back-and-forth between Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.).
In advance of the trip, Jay Carney, the White House press secretary, was grilled on Thursday about the potential impact of automatic defense cuts on the Virginia economy.
Virginia — which had gone Republican in 10 consecutive presidential elections before flipping to Obama in 2008 — also has a heavy military population.
Carney said that the president had made clear that he didn’t want to see the sequester implemented, but blamed a Republican refusal to agree to tax increases in a deficit deal as the main obstacle to ensuring the defense cuts don’t go through.
“That has been the stoppage, the stalemate, that’s been created by the Republican insistence that there be no revenues as part of a balanced approach,” Carney told reporters. “And that’s unsustainable. And in the end, the president believes, we will get that balanced approach because it is what the American people support and it’s the right thing for our economy.”
Others are busy, too: Thomas Donohue, head of the U.S. Chamber of Commerce, is heading to South Korea, China and Japan on Saturday to meet with heads of state and business leaders to discuss trade and other issues.
“American interests in Asia run deep,” said Donohue. “We’re taking this trip to highlight our commitment to economic cooperation with key partners across the region and to deepen the alliances that are so vital to our future.”
Donohue will meet with South Korea's president and senior Chinese leaders in Beijing, then head to Tokyo, where he will meet with senior government and business leaders to urge Japan to join the Trans-Pacific Partnership negotiations on the same strong terms adopted by other participants.
Japan has professed interest in joining the talks, but no decisions have been made.
ECONOMIC INDICATORS
Michigan sentiment: Thomson Reuters/University of Michigan will release its final measure of consumer sentiment for July. On Thursday, a Bloomberg poll showed that confidence hit its lowest level in four months as the economic recovery moved along at a slow pace.
Producer Price Index (PPI): The Labor Department will release its June report that tracks the prices of goods at the wholesale level. The market tracks PPI closely because it represents prices for goods that are ready for sale to consumers.
WHAT YOU MIGHT HAVE MISSED
— Dems: GOP opposing small-business tax cut to hurt Obama
— Administration ramps up Iran sanctions
— Speaker says no decision has been made on farm bill vote
— Mortgage rates hit new record lows
— GOP senator: CFTC head should resign over firm collapse, missing funds
— Wells Fargo to pay $175 million to settle discriminatory lending charges
— Jobless claims drop to lowest level in four years
Catch us on Twitter: @VickoftheHill, @peteschroeder, @elwasson and @berniebecker3
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