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Senators reach consensus on gun control legislation, U.S.-China relations grow tense over Taiwan

A group of 10 Republican senators announced they had reached consensus with Democratic lawmakers over pieces of gun control legislation; inflation and rate hike concerns are mounting for investors; and tensions continue to grow between U.S. and China over Taiwan.

Video Transcript

- A group of US senators reached a bipartisan framework on new gun safety legislation in the wake of last month's shootings in Texas and New York. For more on this and the latest out of Washington, DC, we've got Yahoo Finance contributor Kevin Cirilli. Kevin.

KEVIN CIRILLI: Yeah, this is a big development that just happened-- broke yesterday actually-- where you've got 10 Senate Republicans joining with Democrats and saying that they would be able to get on board with a piece of gun reform legislation that essentially would increase the investment into mental health for families across the nation as well as in schools nationwide. And while it wouldn't increase the age to 21 for certain weapons, it would provide additional background checks and more stringent measures for individuals who are younger than 21, who are purchasing weapons. So this is something that President Biden says is not as progressive as he would have hoped and does not go as far as he would have hoped. But it is a significant compromise.

Just quickly, I would note the joint statement that this group of 10 Senate Republicans and 10 Senate Democrats put out, where they said, quote, "Families are scared. And it is our duty to come together and get something done that will help restore their sense of safety and security in their communities. Our plan saves lives while also protecting the constitutional rights of law-abiding Americans," so a remarkable development in the aftermath of all of those horrific mass shootings.

JULIE HYMAN: Yeah, the cynic in me, Kevin, would say, can protect Americans while also protecting their seats for some of the Republicans, who agreed to this. But we'll leave that aside for the moment. Let's talk about the economic front and talk about inflation, which we've been talking about a lot. We're seeing it at the grocery store. Washington has been talking a lot about it as well.

KEVIN CIRILLI: Well, it's issue front and center for the midterm elections. If you look at the price of gas, which the AAA rating has it for the first time, more than $5 a gallon average nationwide, inflation at 8.6%, a rate that we haven't seen, Julie, in more than four-- nearly four decades, since 1981. Fed Chair Jay Powell is going to be, of course, delivering remarks midweek on Wednesday. Economists anticipate that the Fed is going to have a rate hike by a half a basis percentage point. But a lot of folks are worried that should Chairman Powell raise rates higher than that, it could lead to a recession.

President Biden, for his part, he's headed to Philadelphia later this week to meet with labor workers, again a key battleground state in the midterm elections. But the Democrat who's running there, John Fetterman, is running to the left of President Biden, with an economic message that's more akin to Senator Elizabeth Warren. I say all of this, Julie, not to conflate stories but to show how the policy and the politics are really combining, especially on the economy, in these battleground states. And just over the weekend, mind you, AOC came out and dodged a question for whether or not she would endorse President Biden should he choose to run for President again. Some fascinating economic politics at play.

BRIAN SOZZI: And, Kevin, headed overseas, you're also watching China.

KEVIN CIRILLI: Yes, yes, and just over the weekend, Defense Secretary Lloyd Austin delivering remarks in Singapore, in which he says that Indo-Pacific countries shouldn't face political intimidation, economic coercion, or harassment by maritime militias. Clearly, he was talking about the Communist Party of China. Now his counterpart in the CCP came out and once again saying that they will go after Taiwan should Taiwan seek its independence. The United States views Taiwan as an incredibly important democratic ally. And this battling of intensifying words between the US and China only continues and is something that I think the markets as well as folks here in Washington are watching.

JULIE HYMAN: Kevin Cirilli, always good to get some time with you. Kevin's a Yahoo Finance contributor. Thanks, Kevin.