GENSLER: WALL STREET PAY CLAWBACKS TO GET FRESH SEC REVIEW — Bloomberg’s Akayla Gardner and Benjamin Bain: “U.S. Securities and Exchange Commission Chair Gary Gensler said he is keen to finish a long-stalled requirement to clamp down on Wall Street bonuses when companies report incorrect financial information. “Gensler said he’s asked SEC staff to provide recommendations on a rule for clawing back executive pay and other parts of never-finished regulations that were mandatory under the Dodd-Frank Act. Specifically, Gensler said he wants to make sure that executives return any funds they are overpaid when a company publishes incorrect information in its financial statements.” FED’S INTENTIONS ON RATES REMAIN MUDDLED — WSJ’s Justin Lahart: “Federal Reserve policy makers have been at pains to convince investors that winding down the central bank’s asset purchases won’t necessarily lead to rate increases. But they made something of a muddle of that message on Wednesday. “In the statement released following its two-day meeting, the Fed’s policy-setting committee said that a reduction in the central bank’s monthly asset purchases ‘may soon be warranted.’ Barring a serious setback — a worse-than-expected hit to the job market from the Delta variant, say, or the China Evergrande mess badly damaging global financial markets — that all but tees up a decision to begin tapering at the next Fed meeting in November. By sometime in the middle of next year, those purchases would fall to zero.” The Fed also signaled it may soon slow bond purchases — NYT’s Jeanna Smialek: “Federal Reserve officials indicated on Wednesday that they expect to soon slow the asset purchases they have been using to support the economy and predicted they may raise interest rates next year, sending a clear signal that policymakers are preparing to pivot away from full-blast monetary help as the business environment snaps back from the pandemic shock. “’If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,’ the policy-setting Federal Open Market Committee said in its September statement. The new phrasing eliminated wording that had promised to assess progress over ‘coming meetings,’ suggesting that a formal announcement of the slowdown could come as early as the central bank’s next gathering in November.” POWELL: FED TO RELEASE PAPER ON CENTRAL BANK DIGITAL CURRENCY — Reuters’ Jonnelle Marte: “The Federal Reserve will release research ‘soon’ examining the costs and benefits of a central bank digital currency, or CBDC, Fed Chair Jerome Powell said on Wednesday. “‘We're working proactively to evaluate whether to issue a CBDC and, if so, in what form,’ Powell said in a news conference following the conclusion of the U.S. central bank's latest two-day policy meeting. The ultimate test that will apply when assessing a CBDC, he told reporters, is if there are ‘clear and tangible benefits that outweigh any costs and risks.’” He also said the Fed can’t protect markets in event of a default — Bloomberg’s Christopher Condon: “Federal Reserve Chair Jerome Powell said the central bank doesn’t possess the ability to shield financial markets or the U.S. economy from severe damage should Congress fail to lift the nation’s debt limit in coming weeks and precipitate a default on government obligations. “‘It’s just very important that the debt ceiling be raised in a timely fashion so that the United States can pay its bills when and as they come due,’ Powell said Wednesday in a virtual press conference following a meeting of the Fed’s interest-rate setting panel.” WELLS FARGO ASSET CAP TO STAY IN PLACE UNTIL PROBLEMS FIXED — Reuters’ Pete Schroeder: “Federal Reserve Chair Jerome Powell said on Wednesday that the Fed is closely monitoring efforts by Wells Fargo & Co to fix its ‘widespread and pervasive’ problems, and that it would take appropriate actions if the bank failed to do so. "In 2018, the Federal Reserve ordered Wells Fargo to keep its assets below $1.95 trillion until it had improved its governance and risk controls following sales practice scandals. That constrains Wells Fargo's ability to make new loans.” | 
