Frank Kelly’s Geopolitical Week Ahead | February 12, 2024

Jordanian King will meet with President Biden

Another busy week globally. First, we would note that Jordanian King Abdullah will meet with President Biden at the White House this week to discuss the War in Gaza and the broader security crisis in the Middle East. Long a solid ally to the United States, Jordan has both been the target of terrorist attacks as well as striking back at Iranian militia proxy groups attacking U.S. and other Middle Eastern forces. While they meet, U.S. diplomats will meet with senior Iraqi officials to determine the future of U.S. military forces in the country. More than 100 members of the Iraqi Parliament have signed a letter demanding U.S. forces be kicked out.

Indonesia holds presidential elections

China celebrates the Chinese New Year this week, with most businesses and financial markets closed. But it will be a busy and important week elsewhere in the Indo-Pacific as Indonesia holds presidential elections. Indonesia – the 4th most populous country in the world – chooses between three candidates, each with very different perspectives on the nation's future.

Munich Security Conference is to be held

At the end of the week, the Munich Security Conference is held in Munich, Germany. More than 100 presidents, prime ministers and foreign ministers will gather, and the top topics will undoubtedly be the Ukraine War and the situation in the Middle East. Ukrainian President Volodymyr Zelensky is expected to attend and make an impassioned plea for continued support from Western supporters.

Global economic reporting

On the global economic reporting radar screen this week, markets will be looking at released U.S. inflation numbers and the strength of U.S. retail sales data. In the EU, markets will look for the UK inflation numbers and the German ZEW survey release.   As we mentioned, China is celebrating the Chinese New Year in Asia, so few releases are expected out of Beijing. But Japan will release its Q4 gross domestic product (GDP) figures, which will be seen as strongly correlating with future Bank of Japan interest rate decisions.

U.S. Financial Regulatory Week Ahead

The big regulatory events this coming week will be dueling speeches between a Federal Reserve Board governor and the Acting Comptroller of the Currency and then, a few days later, a big speech by the Federal Reserve Board Vice Chair for Supervision. 

First, on Tuesday, Federal Reserve Board Governor Michelle Bowman and, later in the day, Acting Comptroller of Currency Michael Hsu will speak at the American Bankers Association Conference for Community Bankers in San Antonio, Texas. We expect further sparring over the Fed’s large bank capital requirement proposal from Bowman and Hsu. 

On Thursday, Federal Reserve Vice Chair Michael Barr will speak at the National Association of Business Economics in Washington, D.C., on “monetary policy and regulation.”  Again, we expect a vigorous defense of the bank capital increase in the face of growing opposition from Congress, big banks, and major business lobbies.

Also of importance this week, the House Financial Services Committee is also holding an oversight hearing of FinCEN. FinCEN Director Andrea Gacki will be testifying along with Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson. 

Finally, we will be listening closely to SEC Chair Gary Gensler’s duel events at Yale this week – one at the Yale School of Law and then later in the day at the Yale School of Management – where Artificial Intelligence (AI) and the financial markets will be a significant topic..