Lawmakers return to Washington this week to kick off a busy lame-duck session ahead of the holidays.
And as economic data, Fed policy, and a potential government shutdown remain in focus, there are now protests in China over COVID lockdowns for investors to consider.
With that in mind, here are three key stories to watch in business and politics this week:
Washington pushes back against China's zero-COVID policy as protests erupt
Some policymakers are speaking out against Chinese leader Xi Jinping's zero-COVID policies, which have sparked rare protests from Shanghai to Beijing that have drawn comparisons to the 1989 protests in Tiananmen Square.
China's state-controlled media is still backing Xi's policies; however, the protests expose Xi's government to a new generation of democratic dissenters.
For his part, President Biden has been tight-lipped on China's COVID policies so far. The protests in China come as Biden and Xi moved to deescalate tensions between the nations during their face-to-face meeting earlier this month in Bali. Other administration officials, however, indicated this past weekend how the administration might respond.
“Obviously, [China's zero COVID policy] is not our strategy," White House coronavirus response coordinator Ashish Jha said to Martha Raddatz on ABC News. "We don’t think that’s realistic, certainly not realistic for the American people. Our strategy has been to build up immunity in the population by getting people vaccinated. That’s how you managed an incredibly contagious variant like Omicron.”
Economically, the protests and China's response to them will continue to highlight the risk that U.S. businesses face while operating in China.
Look no further than Apple. The tech giant's stock dipped about 2% on Friday amid unrest at Foxconn's Zhengzhou plant, a major iPhone manufacturing site where thousands of workers quit in part because of the zero-COVID policies.
Fed Chair Powell steps into the economic fray
Fed Chairman Jay Powell will deliver remarks at the Brookings Institute on Wednesday, and economists will be watching to see if he reveals any clues about what the central bank will do next regarding interest rates.
Market watchers will also be keeping an eye on employment data as the U.S. Labor Department is set to release the jobs report for the month of November on Friday.
The jobs data coupled with China's response to growing public dissent are two potential wild cards for the Fed as economists continue to predict a mild recession next year.
As Greg Valliere, chief U.S. policy strategist at AGF Investments, put it in his weekly Washington note: "[Powell is] ready to signal that the central bankers will end their 75 basis point rate hikes; a half-point increase is likely at the Dec. 13-14 FOMC meeting."
Congress's busy agenda in the lame-duck session
A Dec. 16 deadline is approaching — the date that lawmakers need to pass a government funding bill by to avert a partial government shutdown.
One unifying factor in the omnibus spending package has been ongoing bipartisan support for Ukraine. The White House is asking for $38 billion to assist Ukraine in fighting a war against Russia.
But there's also one big unknown that could disrupt negotiations: the potential for a railroad workers' strike.
Republicans and Democrats have said that they will pass legislation to avert a rail strike, which would cost the U.S. economy $2 billion per day, according to estimates from the Association of American Railroads.
The U.S. Commerce Clause allows for Congress to intervene and end the strike by passing legislation, as CNBC noted. The bipartisan Problem Solvers Caucus stated it will not let a rail strike wreak havoc on the economy.
“Failure is not an option here," Rep. Brian Fitzpatrick (R-PA), co-chief of the caucus, told Fox News Sunday. "We cannot have our transportation system responsible for one-third of our products being transported throughout our country struck down. That’s not an option.”
How does this impact the government shutdown? Floor time is valuable in the House and the Senate, so any time spent on avoiding a rail strike — no doubt a top priority — could make it more complicated for lawmakers trying to reach a deal on the government funding package.
Kevin Cirilli is a visiting media at the Atlantic Council's Global China Hub and the Krach Institute for Tech Diplomacy at Purdue. Follow him on LinkedIn here.