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Frank Kelly’s Geopolitical Week Ahead | January 5, 2025

1/5/2025

The U.S. Congress certifies the 2024 Election, Venezuela’s opposition leader meets with hemispheric leaders, and Canadian Prime Minister Trudeau resigns.

Francis (Frank) J. Kelly

Founder & Managing Partner, Fulcrum Macro Advisors LLC and Senior Political Strategist for DWS

The U.S. Congress certified the 2024 Election
Venezuela’s opposition leader meets with hemispheric leaders
Canadian Prime Minister Trudeau resigned
Global economic radar screen
U.S. financial regulatory week ahead
Fed Vice Chair Barr steps down

We hope you all had a wonderful New Year holiday. The world returns to work this week following the holidays, and a lot is happening.

U.S. Congress certified the 2024 Election

The U.S. Congress convened in a joint session on Monday to certify the election of President-elect Donald Trump and Vice President-elect J.D. Vance. The event was relatively quick – about an hour and a half – and much different than four years ago when riots broke out around and inside the Capitol.

The new Congress was sworn in

The new Congress was sworn into office last Friday and is busy getting to work. We would note that Congress's schedule will be quite different this year as the U.S. Senate has adopted a calendar for working five days a week and going for ten straight weeks without a break. That is quite a change of pace for the Senate, which has worked three days a week for as long as we can remember, allowing members to return home Friday through Monday to meet with constituents. The market should expect a lot of action in Congress this year at fairly unrelenting pace.

Venezuela’s opposition leader meets with hemispheric leaders

Also this week, Venezuela’s exiled opposition leader, Edmundo Gonzalez Urrutia will continue a series of meetings throughout the Hemisphere with leaders to bolster support for his victory last July in the presidential elections. Gonzalez will meet President Biden in Washington and then go to Panama, the Dominican Republic. He recently met with Argentine President Javier Milei.

Meanwhile, Venezuelan dictator Nicolas Maduro, who by most independent accounts clearly stole the election in July, will be sworn in for a third term in office this coming Friday.

Canadian Prime Minister Justin Trudeau resigned

Canadian Prime Minister Justin Trudeau resigned from office early Monday morning. Having served for nine years as Prime Minister, he faced low approval numbers and internal party dissent that led to the resignation of his Deputy Prime Minister and Finance Minister, Chrystia Freeland. Freeland is now considered a leading contender to be elected the new leader of the Liberal Party before elections in late October.

Global economic radar screen

Looking at the global radar screen, this week's economic reporting schedule is relatively light.

In the U.S., markets will be looking at the U.S. jobs report that will be coming out on Friday. Also out in the U.S., this week will be the ISM services index on Tuesday and the University of Michigan consumer sentiment report on Friday. And last but certainly not least, the Fed releases meeting minutes.
In Asia, China will release inflation data, official PMI prints, and the Caixin services PMI. In Japan, wage data is out this week, and Bank of Japan regional branch managers are meeting to discuss wage growth.
Moving to Europe, CPI reports will be released for the Eurozone, France, Germany, and Italy. The European Central Bank’s consumer expectations survey will also be released on Tuesday.

U.S. financial regulatory week ahead

Washington (kind of) roars back to life this week with the new Congress sworn in and President-elect Trump continuing his record pace of nominations. We said "kind of" because Washington got hit Monday with the biggest snowstorm we have seen in years, closing all schools and the federal government. Nonetheless, Congress is gathering to certify the presidential election results.

Also, the week will be truncated with the funeral of former President Jimmy Carter. He will lie in state in the Capitol Rotunda until his funeral at 10:00 a.m. at the Washington National Cathedral. All living presidents have been invited, and President Biden will give a eulogy.

Fed Vice Chair Barr steps down

Looking at the regulatory week ahead, the big news of the day is Federal Reserve Vice Chair Michael Barr's announcement this morning that he will step down from the Vice Chair role but stay on (for now) as a Fed Governor. Speculation has already begun regarding who will replace Barr, primarily focused on current Fed Vice Chair Michelle Bowman and former FDIC Chair Jelena McWilliams.

Also, this week, we have officially entered the retrospective phase of the Biden Administration's regulatory world, and the Brookings Institution seems to be the place to go to do that – particularly this Wednesday. At 11 a.m. CFTC Chair Rostin Behnam will deliver remarks and participate in a fireside chat, "Commodity derivatives regulation: Where do we go from here?" Then, at 2:00 p.m., FTC Chair Lina Kahn sits for a fireside chat on the future of the FTC (and perhaps her plans – is she staying or going?).

We also expect President-elect Trump to make several regulatory nominations this week. So far, he has only nominated Paul Atkins for SEC Chair. We are also expecting him to fill out the nominations for the top jobs at Treasury under Treasury Secretary-nominee Scott Bessent.

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Francis (Frank) J. Kelly

Frank is the Founder and Managing Partner of Fulcrum Macro Advisors LLC, a political risk advisory firm based in Washington, DC. He is the senior political strategist for DWS.

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Frank Kelly’s Geopolitical Week Ahead | January 5, 2025

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