FOMC at 2:00 p.m. is expected to leave policy unchanged. Powell at his 2:30 p.m. press conference is likely to suggest that asset purchase reduction discussions are underway but otherwise stick close to the “transitory” inflation script … President Biden heads to Allentown, Pa. where he will visit the Mack - Lehigh Valley Operations Manufacturing Facility and deliver remarks around 2:00 p.m. on “the importance of American manufacturing” … House Financial Service will vote on multiple bills at 10:00 a.am. … MORE FED PREP — Scott Ruesterholz, Portfolio Manager at Insight Investment: “We expect the Fed to announce no change in policy and offer no formal guidance on tapering … Powell will likely seek to use his press conference to emphasize the Fed’s data dependence as well as its patience while reiterating the view that elevated inflation is transitory. “While the delta variant is unlikely to spark new lockdowns in the U.S. given the level of vaccination, it may slow growth somewhat. This development likely strengthens the hand of the doves on the FOMC who do not want to remove policy accommodation prematurely. “ Pantheon’s Ian Shepherdson: “Today's FOMC meeting is unlikely to be consequential; no policy changes will be announced, and the tone of … Powell’s press conference will be little changed from June 16. “The Fed will acknowledge the ongoing increase in economic activity, but we expect the statement to note that the rapid spread of the Delta variant poses a threat, especially in states where vaccination rates remain low. The variant still has the potential to cause wider problems, because almost every state is short—and in many cases, far short—of the 85% immunity needed to drive cases down permanently.” FLASH: TRUMP CANDIDATE LOSES IN TEXAS — Worth noting, via Texas Tribune’s Patrick Svitek: “State Rep. Jake Ellzey of Waxahachie beat fellow Republican Susan Wright on Tuesday to succeed her late husband, U.S. Rep. Ron Wright, R-Arlington, and pull off a major upset against a candidate backed by former President Donald Trump. “With 93% of precincts reporting, Decision Desk HQ called the race for Ellzey late Tuesday, when he had 52.92% of votes to 47.08% for Wright, a longtime GOP activist. … Trump endorsed Susan Wright in the final days before the May 1 election. He got more involved in the runoff, issuing three statements reiterating his endorsement, starring in a robocall for her and headlining a telephone rally for her on Monday night.” WH UNDER PRESSURE ON EVICTION BAN — Our Katy O'Donnell and Kellie Mejdrich: “The White House is facing increasing pressure from Democrats in Congress to extend the federal eviction ban before it expires this weekend amid persistent bottlenecks in the distribution of rental aid. “House Financial Services Chair Maxine Waters (D-Calif.) said she is pushing the Biden administration to renew the moratorium beyond a Saturday deadline despite concerns that an extension would rest on shaky legal footing. A majority of Supreme Court justices signaled late last month that they believed the Centers for Disease Control and Prevention exceeded its authority when it imposed the ban.” SBA LOOKS TO SPEED UP END OF PPP — Our Zachary Warmbrodt: “The Small Business Administration this week will begin a push to accelerate the end of the nearly $1 trillion Paycheck Protection Program by making it easier for millions of employers to have emergency payroll loans forgiven. “The SBA on Wednesday plans to outline a new initiative aimed at encouraging borrowers with loans of $150,000 or less — accounting for more than 90 percent of the pandemic-era program — to apply for loan forgiveness. The ability to convert PPP loans into grants in exchange for maintaining payroll was a critical feature of the small business rescue. Nearly 7 million of those loans have not been forgiven.” | 
