Month: January 2022

During the week of the Jan.3rd second anniversary of the 2020 killing by US drone strike of IRGC commander Gen. Qassem Soleimani, there’s been a spate of attacks on bases where American troops are stationed in Iraq and Syria. On Wednesday there’s been three consecutive attacks so far. 

As ABC News details, “Iraqi military bases hosting U.S. troops in Iraq’s western Anbar province and the capital of Baghdad were hit by Katyusha rockets Wednesday while in Syria, eight rounds of indirect fire landed inside a base with members of the U.S.-led coalition, the Iraqi and U.S. militaries said.”

This includes a rocket attack on al-Assad base in Western Iraq, after the day prior small drones targeted the base, but which were downed by the US anti-air systems operating there.

In Syria the base named ‘Green Village’ in Deir Ezzor was targeted in a fresh attack, the day following US ‘preemptive’ action against suspected rocket launch sites used by area militias.

The US-led Coalition on Wednesday issued a rare statement very openly blaming what it called “Iran-supported malign actors”. US forces responded with artillery rounds, according a regional correspondent. 

“Our Coalition continues to see threats against our forces in Iraq and Syria by militia groups that are backed by Iran,” the statement said, singling out the Islamic Republic. “These attacks are a dangerous distraction from our Coalition’s shared mission to advise, assist & enable partner forces to maintain the enduring defeat of Daesh.”

Visual update here:

Aerial footage of US-led coalition’s airstrikes on several rocket launching positions around Green Village, Deir Ezzur, Syria.

It seems that some attacks occurred this morning just before the Coalition base in Green Village became under rocket attack. pic.twitter.com/zWHRNiYL5a

— Nafiseh Kohnavard (@nafisehkBBC) January 5, 2022

US forward operating bases in Syria are especially vulnerable to possible attack, given their smaller size compared to Iraq bases where Americans are hosted. 

Images in the aftermath of the attack in Syria were released Wednesday…

Exclusive

Pix shows the impact of this morning’s rocket attack on US base in Green Village, Deir Ezzur, Syria.

Coalition forces has responded it by firing six rounds of artillery towards the point of origin of the attack just outside Mayadin, Syria pic.twitter.com/gGsMyoQCQ2

— Nafiseh Kohnavard (@nafisehkBBC) January 5, 2022

Despite the usual Iran blame-game coming out of the Pentagon, it also remains that Syrian Army and pro-Assad national forces want to see the US occupation come to an end. Could this be the start of a pressure campaign being waged from Damascus? 

After all, if Assad decided to seek imposing a significant “cost” on US forces being there (chiefly in the oil-rich northeast, as well as al-Tanf on the Iraq border), it would indeed create huge problems back in Washington, given the current status of a relatively ‘undefined’ mission there.

Since December 15th’s FOMC statement, bonds have been battered, the dollar is down modestly while stocks and gold are up strongly….

Source: Bloomberg

The short-end of the yield curve has risen dramatically, pricing in the new hawkish dot-plot offered by The Fed (for 2022) with a 73% chance of Fed hikes by March 2022 now ((from 40% pre-FOMC)…

Source: Bloomberg

Interestingly though, the market has rejected The Fed’s longer-term dots, presumably pricing in a policy-error/reversal…

Source: Bloomberg

All of which leaves the market desperately seeking clues today on the accelerated taper and timing of lift-off and trajectory of rate-hikes among the Minutes.

On the liftoff timing and pace of rate-hikes:

“Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated. Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate. Some participants judged that a less accommodative future stance of policy would likely be warranted and that the Committee should convey a strong commitment to address elevated inflation pressures.”

On Omicron’s impact:

“In particular, the possibility that COVID-19 cases could continue to rise steeply, especially if the Omicron variant proves to be vaccine resistant, was seen as an important source of downside risk to activity, while the possibility of more severe and persistent supply issues was viewed as an additional downside risk to activity and as an upside risk to inflation.”

“Members also agreed that, with the emergence of the Omicron variant, it was appropriate to note the risk of new variants of the virus in their assessment of risks to the economic outlook.”

Additionally, a key thing to understand from the Minutes is that there was a wide variety of views on when to start shrinking the balance sheet.

“almost all participants agreed that it would likely be appropriate to initiate balance sheet runoff at some point after the first increase in the target range for the federal funds rate.”

*  *  *

Read the full Minutes below:

Authored by Jonathan Turley,

Ghislaine Maxwell’s conviction has been widely celebrated as bringing some justice to the victims of Jeffrey Epstein. However, that moment may prove fleeting in light of a startling disclosure made by one of the jurors to Reuters this week. A juror identified only by his first two names (“Scotty David”) admitted that he was able to sway fellow jurors by discussing his own experience with abuse. It is not clear if he disclosed that prior abuse on the juror questionnaire as part of the voir dire process. The disclosure could give Maxwell a strong argument for reversal if the prior abuse was not revealed and was then used in the jury room to pursue the jury after it deadlocked in its proceedings.

David, 35, told the Independent that the room went silent when he disclosed his past abuse. What is most concerning is that he seemed to suggest that his account was used to overcome the problem that jurors had with the failure of the victims to recall key facts in their testimony.  He also reportedly used his own experience to explain the delay in the victims disclosing their abuse.

He is quoted by Reuters as saying that “when I shared that, they were able to sort of come around on, they were able to come around on the memory aspect of the sexual abuse.”

That is troubling in itself. That is precisely why such past experiences are the subject of intense review during voir dire. The 230 prospective jurors were given questionnaires asking, among other things, if they or anyone in their families had experienced sexual abuse.

David could not remember if he answered affirmatively to that question and said that he “flew through” the questionnaire.

We have previously discussed major juror misconduct questions in high-profile cases like the prosecutions of Roger Stone. and Derek Chauvin. The First Circuit recently overturned the sentence of Boston Marathon bomber Dzhokhar Tsarnaev due to juror bias.  Nevertheless, I have been critical of judges who turn a blind eye to juror bias, including false answers on jury forms.

This would be exceptionally serious if a juror failed to disclose prior abuse and then used that prior abuse to influence jury deliberations. The Supreme Court has repeatedly declared that the “minimal standards of due process” demand “a panel of impartial, indifferent jurors.” I expect we will learn soon if the juror failed to disclose such abuse but it would be odd, if he did, that the defense did not question him about it.

Authored by Tammy Hung via The Epoch Times,

U.S. Homeland Security’s top official told reporters on Jan. 4 that the department was “not aware of any specific, credible threats at this point related to Jan. 6, 2022,” one year after protesters breached the Capitol building.

“But at the same time we are operating at a heightened level of vigilance because we are at a heightened level of threat. The threat of domestic violent extremists is very grave,” Department of Homeland Security Secretary Alejandro Mayorkas told reporters in a conference call obtained by USA Today.

U.S. Capitol Police Chief Tom Manger told reporters on Tuesday that while the Capitol Police are aware of several events planned for Thursday, there is “no intelligence that indicates there would be any problems.”

Manger also indicated that there were “over 8,000” threats last year, up from 4,000–5,000 a few years prior, in the form of phone calls, emails, and social media messages.

In a bill passed in July 2021, Congress allocated $300 million to upgrade security measures at Capitol Hill. The $300 million budget was “merely focused on windows and cameras” according to Capitol Architect Brett Blanton.

Under a separate budget, damaged windows from the Capitol Hill breach have been repaired, while door reinforcements have been put in place along with security lighting upgrades and electrical systems for surveillance detection, Blanton stated.

The Capitol Police recently came under fire for “critical deficiencies with operational planning, intelligence, staffing, and equipment,” according to Manger’s Jan. 5 testimony (pdf) before the Senate.

Of the 103 recommendations issued by the inspector general, Capitol Police has “implemented and/or addressed over 90 of them,” the testimony continued.

Based on recommendations from the Committee on Rules and Administration, Capitol Police will be implementing additional training and communication enhancements, among other measures.

While Democratic lawmakers have pushed the narrative that the Jan. 6 breach was an “insurrection” led by former President Donald Trump supporters, Trump himself, via lawyers, has denied that he incited violence. During a Jan. 6, 2021 speech, he called on demonstrators to “peacefully and patriotically make [their] voices heard.”

The former president has cancelled his press conference at Mar-a-Lago previously scheduled on Thursday, the one-year anniversary of the Capitol Hill incident.

“In light of the total bias and dishonesty of the January 6th Unselect Committee of Democrats, two failed Republicans, and the Fake News Media, I am canceling the January 6th Press Conference at Mar-a-Lago on Thursday, and instead will discuss many of those important topics at my rally on Saturday, January 15th, in Arizona—It will be a big crowd!” he said in a statement.

Submitted by Newsquawk

SUMMARY: The upcoming minutes will be viewed for commentary regarding the latest Fed decision to double its tapering of asset purchases which on the current schedule is set to end in March, although the Fed provided optionality noting that this can be adjusted if economic conditions warrant it, therefore commentary on what conditions might prompt another change will be a focus. We also saw the latest summary of economic projections, which now sees three hikes this year. The timing of the first hike will be of key importance, hawks have suggested it could come as early as March once the asset purchases conclude and any commentary around this in the minutes will be key. Powell noted they had a discussion on the balance sheet although no decisions were made at the December meeting, while he also noted that the timing between rate hikes and the conclusion of asset purchases will be discussed in upcoming meetings, so clues on these themes will also be in focus.

ASSET PURCHASES: The latest FOMC Meeting saw the Fed double its tapering of asset purchases to USD 30bln a month (consisting of USD 20bln in Treasuries and USD 10bln in MBS), which will start in January. Fed guidance was also for this to be tapered by the same amount again in February to see them conclude by mid-March, although the Fed left the optionality open that this could be adjusted if economic conditions warranted it. The minutes will be eyed for clues to see what this would entail, or as well to gauge policymaker views and see if the hawks would have preferred a larger reduction of asset purchases or the doves preferred a more conservative approach, although the final decision was unanimous.

LIFT-OFF: The meeting also saw an update of the latest Summary of Economic Projections which saw the dot plots pencil in three hikes this year, revising up its view from one hike pencilled in at the September FOMC (recall that in September, the Committee was essentially split on the potential need for a second 2022 rate hike); longer-term, it has left its terminal rate view unchanged, however. Recent commentary from Fed Governor Waller (Hawk) suggested that the whole point of accelerating the bond taper was to make the March Fed meeting a live one for the first rate hike, adding that his base case is that March is very likely for lift-off but it could be pushed back to May. Note, Fed’s Kashkari (Dove), who sees two hikes in 2022, expects the Fed’s threshold for raising rates will be met after April 2022 data is released, he said on January 4th. Any commentary around this in the minutes will be key to gauge the timing of the first lift off, although the Fed has stressed that they will be taking a data dependent approach once the asset purchases conclude. Fed Chair Powell reiterated that asset purchases and rate hikes are separate tools, and the extent to which they will be separated in time will be discussed over coming meetings.

BALANCE SHEET: Powell, on the balance sheet, noted the Fed had a balance sheet discussion at its December meeting but did not make any decisions on when the balance sheet would shrink. Meanwhile, Waller, sticking to his hawkish tone, suggested there is no reason to delay adjustment of the balance sheet and that a balance sheet of 20% of GDP is reasonable, compared to the current 35%, adding the Fed can move faster on this given the flow of the ON RRP facility. Waller also noted that a balance sheet runoff by Summer would help remove accommodation and ease the need of further rate hikes, adding there are yield curve considerations in waiting too long to reduce the balance sheet after policy rates start to rise. Therefore, any remarks or updates on the balance sheet will be in focus.

ECONOMY: The inflation forecasts at the latest FOMC meeting were also revised up, with headline PCE seen at 2.6% in 2022 (prev. 2.2%), while the core measure is seen at 2.7% (prev. 2.3%); in line with recent testimonies to lawmakers, the ‘transitory’ characterisation of inflation within its statement has been removed, and now frames the “elevated” levels of inflation as a function of supply and demand imbalances related to the pandemic and the reopening of the economy. Although, with 2023 and 2024 inflation forecasts also seen edging lower, they still see the recent inflation spikes as temporary. On the labour market, the Fed sees the jobless rate returning to 3.5% this year (prev. saw 3.8%), where it is likely to stay over its forecast horizon, with the Chair acknowledging the “rapid” progress that the labour market was making, although the pick-up in participation was subdued and disappointing, with Powell suggesting that it was now likely that higher participation will take longer than previously anticipated. Powell explained the subdued participation may be a result of people not wanting to go back into the labour force while COVID is still prevalent; lack of availability of childcare; Americans’ portfolios are stronger, and have higher savings. As inflation has exceeded 2%, the Committee continues to expect to maintain rates until labour market conditions have reached levels consistent with the Committee’s assessments of maximum employment. That said, there is clearly an urgency that has been injected by inflation, with the Chair stating that with inflation above target, the Fed cannot wait too long to get to maximum employment, and indeed, higher inflation was a threat to full employment.