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Presented by ExxonMobil: Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | | |  | | By Kate Davidson and Aubree Eliza Weaver | | | Editor’s Note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. | | | Two more Senate progressives have come out against the renomination of Federal Reserve Chair Jerome Powell as President Joe Biden closes in on his decision over who should lead the central bank. In a statement this morning, Sens. Sheldon Whitehouse (D-R.I.) and Jeff Merkley (D-Ore.) said Powell “refuses to recognize climate change as an urgent and systemic economic threat” and has resisted calls to use the Fed’s tools to fight it. “President Biden must appoint a Fed chair who will ensure the Fed is fulfilling its mandate to safeguard our financial system and shares the Administration’s view that fighting climate change is the responsibility of every policymaker,” the pair said. “That person is not Jerome Powell.” They pointed to Powell’s statements that climate change “is really an issue that is assigned to lots of other government agencies, not so much the Fed,” and that “we are not and don’t seek to be climate policymakers.” The Fed chief has faced blowback in recent months from a coalition of financial regulation advocates and climate activists, and other high-profile progressives, who warn of the dangers of giving Powell a second term. Sen. Elizabeth Warren (D-Mass.) said in September that she would oppose his renomination, calling him “a dangerous man” for allowing bank regulations to be weakened. Reps. Alexandria Ocasio-Cortez, Rashida Tlaib and Ayanna Pressley in August sent a letter to the White House urging Biden to appoint a new Fed chair more focused on financial regulation and climate change. The central bank under Powell’s leadership has taken some steps to start addressing climate risks: In November, it formally highlighted climate change as a potential threat to the stability of the financial system, and in December joined an international effort of central banks and financial regulators aimed at mitigating those risks. The Fed also brought in Kevin Stiroh, a top bank oversight official from the New York Fed, to lead its new Supervision Climate Group in Washington. Powell has said officials are considering climate stress tests, citing the need for financial firms to understand their exposure to the risks. But he and other central bank officials have emphasized that there are limits to what the Fed can do on climate without explicit direction from Congress. Whitehouse and Merkley rejected that view in their statement Friday: “Climate is not a long-term challenge for the Fed; it demands action now. … Price stability, the safety and soundness of our financial system, and millions of jobs and businesses -- all of which are squarely in the Fed’s mandate -- are at stake.” It’s not surprising that Powell, if he is renominated, may lose votes from a handful of lawmakers on the left. As long as he wins over moderate Democrats, he should get plenty of support from Republicans to easily win confirmation. What was perhaps a more telling sign of Powell’s fortunes were comments from Sen. Joe Manchin (D-W.Va.), who told The Hill yesterday that he was “looking very favorably” at Powell but hadn’t made a decision whether to support him. "Well we're looking very favorably towards that, because I needed that conversation with him,” said Manchin, who spoke with Powell by phone Wednesday. “But I have not made up my mind yet. But I'm just saying that it helped an awful lot having him clear up a lot of the concerns I had.” Manchin has raised alarms about rising inflation, and told reporters earlier this week that he was trying to set up a meeting with Powell to talk about the Fed’s asset purchases, which the central bank began scaling back this month. | | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | Meanwhile, White House Press Secretary Jen Psaki told reporters Thursday that the president still “intends to make a decision in advance of Thanksgiving. And hopefully all of you financial reporters can rest easy with your turkey and mashed potatoes or whatever you like to eat and you don't have to be chasing it by then.” Many of us would be very grateful! IT’S FRIDAY — We made it. Biden is set to pardon two turkeys at the White House today and celebrate his 79th birthday tomorrow. That is, we think it’s safe to expect a Fed nomination will come next week. If you know differently or you have thoughts about how this will all shake out, email us at kdavidson@politico.com, aweaver@politico.com or on Twitter @katedavidson. | | | | A message from ExxonMobil: ExxonMobil is reducing our emissions and advancing lower-carbon technologies that support society’s net-zero goals. Expanding business opportunities in lower-carbon technologies where we have competitive advantages – areas like carbon capture and storage, hydrogen and advanced biofuels, which can make a big difference. Our company is uniquely positioned to continue powering economies around the world, while advancing climate solutions that move us all toward a lower-carbon energy future. Learn more at ExxonMobil.com/Solutions. | | | | | | Fed Governor Chris Waller speaks at 10:45 a.m. … Fed Vice Chair Richard Clarida speaks at 12:15 p.m. BIDEN BANK COP NOMINATION IN DOUBT AFTER FIERY HEARING — Our Victoria Guida: “President Joe Biden’s nominee to become the government's top banking regulator faced a wave of criticism Thursday at a tense Senate hearing that cast further doubt on her chances of being confirmed. “Saule Omarova, tapped to be comptroller of the currency, was met with resistance from Republicans over her advocacy for a dominant role for government in finance. One GOP lawmaker questioned the Cornell law professor, who was born in the former Soviet state of Kazakhstan, about her previous affiliation with a communist youth organization and asked if he should refer to her as ‘comrade.’ Omarova vigorously denied having any sympathy with communist views.” WARREN WANTS SEC PROBE OF TRUMP SPAC — From our Katy O’Donnell: “Sen. Elizabeth Warren wants the SEC to look into the special purpose acquisition company that is taking former President Donald Trump's social media startup public . Warren said in a letter to SEC Chair Gary Gensler that the SPAC — Digital World Acquisition Corp. — may have violated securities rules by failing to disclose discussions it was reportedly having about merging with Trump Media and Technology Group. SPACs are shell companies that acquire private firms for the purpose of selling shares on public exchanges.” SCHUMER, MCCONNELL TURN DOWN THE HEAT ON DEBT LIMIT FIGHT — Our Marianne LeVine and Burgess Everett: “Chuck Schumer and Mitch McConnell clobbered each other incessantly during October’s debt ceiling standoff. Now, as a new December deadline approaches, they’re taking a slightly more conciliatory approach. “‘We had a good discussion about several different issues that are all extant here as we move toward the end of the session, and we agreed to keep talking and working together,’ McConnell said after meeting with Schumer.” — The Bipartisan Policy Center warns that it would be a “high-stakes gamble” for Congress to adjourn at the end of December without acting on the debt limit, our Jennifer Scholtes reported: “Trusted for the accuracy of its debt estimates, the think tank narrowed its ‘X-date’ forecast, predicting that the Treasury Department will fully exhaust its borrowing authority sometime between mid-December and early February.” CBO: DEMOCRATS INCREASE IN IRS FUNDING WOULD GENERATE $127B — Our Brian Faler: “Democrats’ plans to boost IRS enforcement would generate $127 billion in budget savings, the Congressional Budget Office said Thursday — less than half of what Democrats were hoping to reap.” DEMOCRATS TRYING TO RETOOL IRS FINANCIAL DATA PLAN — Bloomberg Tax’s Colin Wilhelm: “Congressional Democrats and the Biden administration are discussing a more narrowly targeted plan for financial institutions to provide more customer account data to the IRS, hoping that a tighter focus will assuage privacy concerns while still helping Democrats pay for their significant social spending plans.” “An administration official said in a Thursday interview that while negotiations are fluid, the focus is on harder-to-track transactions related to business partnerships, rental income, proprietorships, and royalties. The additional data collection would be paired with increased penalties for unauthorized access to or leaks of taxpayer information, a felony already punishable by up to five years in prison, the official said." SEC ENFORCEMENT CASES RISE — The SEC filed 434 enforcement actions in fiscal 2021, up 7 percent over the prior year, the agency said in a new tally. Penalties were up by 33 percent at $1.4 billion for the year ending Sept. 30. The SEC touted cases against "emerging threats'' in the crypto and SPAC spaces. (h/t Zachary Warmbrodt) INFLATION IS BAD. KILLING JOBS IS WORSE — Employ America’s Skanda Amarnath and Alex Williams write in an opinion piece for The Agenda: “President Joe Biden is getting pummeled amid rising inflation, with ‘I told you so’s’ coming from Larry Summers and others who warned this year’s Covid relief package was too big. Some of these critics now argue that it will take a substantial reduction of fiscal and monetary policy support to keep inflation from staying this high. That would be a mistake. And policymakers would be making an even bigger mistake if they ended the pandemic wary of taking aggressive action to rescue the economy in the next severe downturn.” | | | | A message from ExxonMobil:   | | | | | | The Senate voted 53-42 this week to confirm Graham Steele, a former aide to Senate Banking Chair Sherrod Brown (D-Ohio), as assistant Treasury secretary for financial institutions. Bimal Patel, who had Steele’s job during the Trump administration, has joined PayPal Holdings Inc. as the company’s new general counsel, Reuters’ Xiumei Dong reports. Patel will start in the new gig on Jan. 1. He worked previously as head of the financial advisory and regulatory practice at O’Melveny & Myers. | | | THEY LOVE CRYPTO. THEY’RE TRYING TO BUY THE CONSTITUTION — NYT’s Kevin Roose: “In September 1787, a group of delegates gathered in Philadelphia to sign the U.S. Constitution. This week, a hastily organized crypto-collective is trying to buy it. The group, called ConstitutionDAO , is a seat-of-the-pants experiment by thousands of cryptocurrency fans who have pooled their money to make a bid on a rare original printing of the Constitution.” FLORIDA JUDGE DISMISSES POTENTIAL CLASS ACTION MEME-STOCK SUIT — WSJ’s Alexander Osipovich: “Robinhood Markets Inc. scored a victory as a federal judge dismissed a lawsuit accusing the brokerage of colluding with electronic trading firm Citadel Securities to stop investors from buying GameStop Corp. and other meme stocks in January. The lawsuit had been filed on behalf of investors who lost money when Robinhood and other brokerages imposed trading restrictions in GameStop, AMC Entertainment Holdings Inc. and several other stocks on Jan. 28.” | | | | BECOME A GLOBAL INSIDER: The world is more connected than ever. It has never been more essential to identify, unpack and analyze important news, trends and decisions shaping our future — and we’ve got you covered! Every Monday, Wednesday and Friday, Global Insider author Ryan Heath navigates the global news maze and connects you to power players and events changing our world. Don’t miss out on this influential global community. Subscribe now. | | | | | AS CLOCK TICKS ON FED PICKS, BIDEN HAS SCOPE TO ADD DIVERSITY — Bloomberg’s Saleha Mohsin, Craig Torres and Dave Merrill: “President Joe Biden is on the verge of nominations that could reshape the Federal Reserve, a group that could collectively usher in an era in which the U.S. central bank’s governing board will have more women and people of color and put more weight on reducing economic inequality.” EFFORT TO HIRE DALLAS, BOSTON FED LEADERS HITS FULL STRIDE — WSJ’s Michael S. Derby: “The search to replace two regional Federal Reserve bank presidents who resigned in the wake of a financial market trading controversy is in full swing, and boosting diversity at the central bank is expected to factor into the process. The Dallas Fed said Wednesday that it launched an effort to replace Robert Kaplan, while the Boston Fed announced its search for a successor to Eric Rosengren in mid-October.” NEW RULE SAYS BANKS MUST REPORT HACKS WITHIN 36 HOURS — Bloomberg’s Jesse Hamilton: “Banks must report major cyberattacks to regulators within 36 hours if the incident is likely to disrupt their business, according to a new rule from U.S. regulators. Any ‘computer security incident’ that threatens a lender’s operations, services to customers or the stability of the financial system has to be disclosed to the bank’s primary government watchdog, according to a rule issued on Thursday that is set to go live on May 1.”
| | | | A message from ExxonMobil: Every day, more than 23,000 scientists and engineers at ExxonMobil work to develop solutions for the world’s most complex energy challenges. It’s something we’ve been doing for nearly 140 years, and it’s where our focus remains for the next century.
Today, that means reducing our emissions and advancing lower-carbon technologies that support society’s net-zero goals. It means expanding business opportunities in lower-carbon technologies where we have competitive advantages – areas like carbon capture and storage, hydrogen and advanced biofuels, which can make a big difference in the higher-emitting sectors of manufacturing, power generation and heavy-duty transportation.
ExxonMobil is uniquely positioned to continue powering economies around the world, while advancing climate solutions that move us all toward a lower-carbon energy future.
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