President Joe Biden “will participate in the Asia-Pacific Economic Cooperation (APEC) Leaders’ Virtual Retreat, where Leaders will discuss ending the COVID-19 pandemic” … Biden will also get a briefing on the latest Covid news before heading to Camp David for the weekend and getting his weekly economic briefing on the way (or there) … Treasury Secretary Janet Yellen “will preside over an executive meeting of the Financial Stability Oversight Council (Council) by videoconference. The preliminary agenda includes Federal Reserve stress tests, housing markets, and the proposed Council report to be issued under the Executive Order on Climate-Related Financial Risk.” POWELL TALK GETS A LITTLE SHARPER — Fed Chair Jay Powell took a slightly more worried tone about inflation at his Senate hearing on Thursday, essentially rebuking MM’s prediction he would make no news. It’s not MUCH news but it’s worth noting especially coupled with comments from Yellen. Here’s what Powell said: “This is a shock going through the system associated with the reopening of the economy and it’s driven inflation well above 2%, and of course we’re not comfortable with that.” Obviously, the “not comfortable” bit seemed new and raised eyebrows. And then Yellen, on CNBC: “We will have several more months of rapid inflation so I'm not saying that this is a one month phenomenon. But I think over the medium term, we'll see inflation decline back toward normal levels. But, of course, we have to keep a careful eye on it.” The “rapid” bit kind of jumped off the screen. Taken together, the firm wall of “everything is just fine” seemed to tremble just the slightest bit. SPEAKING OF POWELL — Yellen demurred on whether she would advise Biden to re-nominate her successor as chair. (It’s an awkward thing all around given Yellen would much preferred to have stayed but got dumped by Trump.) “That's a discussion I'm gonna have with the President,” she said of Powell before fully dodging a question on whether she thinks he’s done a good job. Some financial reform advocates, meanwhile, do not buy the idea that Biden can just appease the left by keeping Powell but getting rid of fin reg czar Randy Quarles. MIT’s Simon Johnson emails: “The whole ‘replace Quarles and keep Powell’ line overlooks the dynamics that would ensue. You need strong financial regulation to cope with asset bubbles that only become more likely during prolonged periods of easy money. “Is the Fed really going to do that with a chair who has overseen and perhaps even facilitated deregulation? The Fed staff typically recoil from an agenda that the chair might not like. Given Powell’s record, particularly during the Trump administration, can he provide credible leadership for more effective financial regulation? I don't see it.” BIDEN/MERKEL PRESENT UNITED FRONT — Our Maeve Sheehey: “Biden and German Chancellor Angela Merkel presented a united front on energy and environmental issues after their bilateral meeting Thursday, despite ongoing disagreements over Nord Stream 2. At the joint press conference following the meeting, Biden said he reiterated his concerns about the $11 billion pipeline from Russia to Germany, which is almost fully built” LIANG CONFIRMED FOR TREASURY — Our Victoria Guida: “The Senate in a bipartisan 72-27 vote … confirmed longtime Federal Reserve staffer Nellie Liang as undersecretary of domestic finance at the Treasury Department, where she will play a key role in influencing financial regulations, housing policy and government debt management. “Liang, a Ph.D. economist, is a prominent expert on financial stability. She was the first head of the Fed’s office dedicated to that area, overlapping with now-Treasury Secretary Janet Yellen’s term when she was chair of the central bank. After leaving the Fed in early 2017, Liang went to the Brookings Institution, where she was a senior fellow. She’s since been a senior adviser to Yellen for months.” | 
