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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. | | | Fresh consumer price data from the Labor Department this morning is expected to show another surge in year-over-year inflation last month. Supply chain disruptions and robust consumer demand have continued to put upward pressure on prices, which are expected to remain elevated well into next year. Another alleged culprit you can expect to hear more about in 2022 — profiteering corporations. Progressives have been urging the White House to lean harder on big business to keep prices in check, aiming in part to quell voters’ inflation angst before the midterm elections and deflect blame from the president. The Biden administration has already taken some steps to ease price pressures in specific sectors, as part of a broader effort to boost competition. Officials in September said they would crack down on illegal price fixing and ramp up enforcement in the highly consolidated meat-packing industry. (Meat prices have been a major driver of increases in Americans’ grocery bills this year.) President Joe Biden last month also called on the Federal Trade Commission to investigate oil and gas companies and their role in rising gasoline prices, citing “potentially misleading conduct.” “We do think there is a very real role for addressing corporate behavior as a part of a strategy of addressing the current challenges we have around prices, and how a number of companies are pricing in ways that are anti-competitive,” one senior White House official tells MM. The FTC, an independent regulatory agency, also said it had begun a broad probe of supply chain disruptions and ordered nine large companies to turn over information “to help study causes of empty shelves and sky-high prices.” Among the firms targeted: Walmart, Amazon, Kroger, Procter & Gamble, Tyson Foods and Kraft Heinz. The message is also gaining traction on Capitol Hill, where lawmakers are questioning why businesses are raising prices while profits are soaring. “Americans are paying record high prices for their Thanksgiving turkey while big poultry companies are paying billions in dividends, giving CEOs raises & earning huge profits,” Sen. Elizabeth Warren (D-Mass.) tweeted on Nov. 23, after asking the Justice Department to investigate. House Speaker Nancy Pelosi’s office sent a press release pointing to this Nov. 30 Bloomberg story on how U.S. corporations, over the last two quarters, posted their fattest profit in more than 70 years. “Big corporations are raking in more cash than ever — squeezing working families and jacking up inflation with their price gouging and profiteering,” Pelosi’s office said. | | | | JOIN TUESDAY FOR A WOMEN RULE 2021 REWIND AND A LOOK AHEAD AT 2022: Congress is sprinting to get through a lengthy and challenging legislative to-do list before the end of the year that has major implications for women’s rights. Join Women Rule editor Elizabeth Ralph and POLITICO journalists Laura Barrón-López, Eleanor Mueller, Elena Schneider and Elana Schor for a virtual roundtable that will explore the biggest legislative and policy shifts in 2021 affecting women and what lies ahead in 2022. REGISTER HERE. | | | | | The White House has generally blamed inflation on supply-chain disruptions related to the pandemic and strong demand as the economy reopens, and noted that rising inflation is a global phenomenon. Decisions about targeting specific industries or businesses over prices will be made on a case-by-case basis, another senior White House official said, acknowledging that there may be compelling cases to take action in other sectors. “I don’t think that we are in the market for looking at, ‘Here’s a one-off problem,’ and we just want to get a quick hit out of going after a corporation,” the official said. “We’re trying to be pretty data-driven about all this.” At one point this year, meat prices accounted for half the increase in consumers’ grocery bills. “It stuck out like a sore thumb … and you look at the fact that that all stems from a highly concentrated sector. That’s why we felt comfortable there.” Tony Fratto, a White House official in the George W. Bush administration and partner at Hamilton Place Strategies, which advises companies on communications strategy, says businesses can only raise prices to the point that the market will allow. Biden supporters should focus on the good news in this economy, he said — robust demand, a competitive labor market, strong household balance sheets, low interest rates. “There are a lot of good things for them to talk about,” he said. “But they’re not going to beat inflation with stories about price-fixing and beating up big business any more than Gerald Ford did it with a ‘Whip Inflation Now’ button.” IT’S FRIDAY — We have one week left of MM newsletters before our two-week holiday hiatus. What should we be writing about? Send us your tips, hopes and dreams for economic and financial regulatory policy in the new year: kdavidson@politico.com, aweaver@politico.com, or hit us up on Twitter @katedavidson or @aubreeeweaver. | | | | A message from ExxonMobil: We’re committed to reducing emissions to help society achieve net zero. Steps we take today help drive tomorrow’s climate innovations. We recently announced new GHG emission reduction plans for 2030 consistent with Paris Agreement pathways – expected to reduce absolute corporate-wide emissions by ~20%, compared to 2016. We also plan to maintain our annual capital spending of $20-$25 billion - with potential to double earnings and cash flow by 2027 versus 2019. Learn more at exxonmobil.com. | | | | | | Labor Department releases November CPI report at 8:30 a.m. FDIC DEMS REVOLT AGAINST GOP CHAIR — Our Victoria Guida: “Democrats on the Federal Deposit Insurance Corp. board on Thursday moved to bypass Republican Chair Jelena McWilliams and request public feedback on the bank merger process, throwing the agency into confusion. “Board member Martin Gruenberg joined with CFPB Director Rohit Chopra and Acting Comptroller of the Currency Michael Hsu to approve a draft request for information on how the FDIC might improve its process for greenlighting bank deals, according to a government official close to the decision. McWilliams did not participate in the vote, the official said. Chopra and Hsu also have seats on the FDIC’s board. “The maneuver breaks with longstanding practice at the agency, and there is disagreement as to whether the Federal Deposit Insurance Act allows a majority of the board to bring an issue to a vote without the consent of the chair.” Sidebar: Victoria emails MM that this will send tremors throughout the bank regulatory agencies. “This raises so many questions. If this is legal, it would have massive implications for the FDIC’s agenda for the remainder of McWilliams’ term, which doesn’t end until 2023. Was Hsu uncomfortable with this approach? He didn’t sign on to the joint statement from Chopra and Gruenberg. Will this poison the well of joint rulemakings on, well, everything?” “A bit of intrigue: Before this happened, McWilliams circulated a separate staff draft of this request for comment that she was willing to use as a basis of negotiation, according to an agency official.” Congressional, industry blowback: Sen. Pat Toomey (R-Pa.), the ranking Republican on the Senate Banking Committee, was seething Thursday night: “This failed, publicity-seeking attempted coup is exactly the kind of lawless overreach that Senate Republicans warned about with Rohit Chopra. His reckless behavior today undermines the independence and integrity of the FDIC.” A banking industry source tells MM: “This move is legally dubious at best and would set a butt-biting precedent they’ll regret.” GENSLER PLOTS SPAC CRACKDOWN – Our Zachary Warmbrodt: “SEC Chair Gary Gensler on Thursday signaled a major regulatory revamp for special purpose acquisition companies amid growing concerns about investor risks. “SPACs — shell companies that acquire private firms and sell shares on public exchanges — have seen a boom in the last two years as an alternative to traditional IPOs. Former President Donald Trump is the latest high-profile person to jump on the craze, with plans to use a SPAC to launch a new social media venture.” —What we’re watching: Gensler explaining what exactly is a SPAC on Twitter Thursday. CFTC’S STUMP WILL NOT SEEK SECOND TERM — Zach again: “Republican CFTC Commissioner Dawn Stump said Thursday she will not seek another appointment when her term expires in April. The decision by Stump — the only member of the CFTC's five-seat commission other than acting Chair Rostin Behnam — means the White House and Senate Republicans will need to pick a replacement.” IMF STAFFERS CALL FOR GLOBAL CRYPTO ACTION — From our colleague Bjarke Smith-Meyer: “The world needs to agree on how to regulate cryptocurrencies before the market destabilizes countries’ financial health, according to senior staff at the International Monetary Fund.” DESANTIS SEEKS MONEY FOR BLOCKCHAIN PROJECT BATTLING FRAUD — Our Arek Sarkissian: “Gov. Ron DeSantis is asking state lawmakers for $700,000 to take the next step in making Florida's government more crypto-friendly by launching blockchain pilot projects at three state agencies.” SIX WAYS BIDEN IS SHAPING THE NEXT 20 YEARS OF CHINA TRADE — From our Doug Palmer: “Twenty years after joining the World Trade Organization, China has become a much more powerful economic competitor and national security threat than U.S. policymakers imagined at the time. But 11 months into President Joe Biden’s administration, the U.S. response to the changed reality is still a work in progress.” | | | | A message from ExxonMobil:   | | | SUPPORT FOR BRAINARD — We wrote yesterday about Republican opposition to Fed Governor Lael Brainard’s nomination, and whether she could secure any GOP votes. A helpful MM reader pointed out that Sen. Susan Collins (R-Maine) has already said she will support Brainard. (Collins was one of four Republicans still in the Senate who voted for Brainard to join the Fed in 2014.) —An aide to Sen. Rob Portman (R-Ohio), who also voted for Brainard the first time around, tells MM: “The senator is reserving judgment pending the confirmation hearing.” —A source who worked closely with Brainard and is close with the White House writes: “Her track record of public service, across four presidential administrations (both D and R), to improving economic outcomes for working families, will make it hard to caricature her when she is the best person to lead the Federal Reserve with Powell — particularly as our economy begins to recover from the global pandemic.” FIRST LOOK: GOP’S SUPPLY CHAIN RECORD — Watchdog group Accountable.US is out with an analysis this morning of recent Republican opposition to legislation they say would have strengthened supply chains. “Somehow with a straight face, Republicans in Congress complain about supply chain and price issues they actively kept others from addressing for years,” said Accountable.US President Kyle Herrig. | | | | 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. | | | | | | | | Sandra Lee is now the deputy assistant Treasury secretary for the Financial Stability Oversight Council. Lee, who worked in the Obama Treasury Department as one of FSOC’s first employees, returns to the Treasury from the New York Fed, where she worked on domestic and international financial stability and regulatory policy matters. | | | HOW TO LOSE $2 BILLION IN 10 YEARS: BILLS PILE UP FOR FORMER HEDGE FUND STAR — WSJ’s Rachel Louise Ensign: “Philip Falcone was worth more than $2 billion a decade ago. By last year, he was representing himself in court, saying he couldn’t afford a lawyer.” FISCAL CLIFF NEARS FOR U.S. FAMILIES AS PANDEMIC BENEFITS FADE — Bloomberg’s Nancy Cook, Janet Lorin and Laura Davison: “At the end of the month, the government’s temporary moratorium on federal student loan payments expires, meaning loans will once again accrue interest and borrowers will be expected to resume monthly payments. “And barring congressional action, on Jan. 15 many American families will lose monthly payments from the government totaling hundreds of dollars … The looming cutoff of two sources of significant federal pandemic aid to U.S. families threatens to add to Americans’ pessimism about the state of the economy, 10 months before they go to the polls to decide whether Biden’s party will retain control of Congress.” CONCERNED ABOUT OMICRON, WALL STREET BANKS ENCOURAGE BOOSTERS — Reuters’ Matt Scuffham and Noor Zainab Hussain: “Several Wall Street firms are increasing efforts to ensure staff get coronavirus booster shots, after Jefferies Financial Group Inc. reported a surge in COVID-19 cases and as countries and industries grapple with how to respond to the spread of the Omicron variant.” CHINA’S KEY ECONOMIC MEETING TO SHIFT FOCUS TO SUPPORTING GROWTH — Bloomberg: “China’s top leaders are set to convene this week to decide the economic agenda for 2022, and analysts are expecting the focus to shift to supporting growth from deleveraging and regulatory crackdowns.” | | | | A message from ExxonMobil: At ExxonMobil, we’re committed to playing a leading role in the global energy transition and helping society achieve its net zero ambitions. We’ve been reducing GHG emissions in our own operations for years and recently announced $15 billion in lower-emission investments through 2027. During that time, we also plan to maintain annual capital investments at $20-$25 billion, with the potential to double earnings and cash flow - while also reducing emissions. Our newly established Low Carbon Solutions business is advancing climate solutions like carbon capture and storage, hydrogen and biofuels. We are focused on reducing emissions at-scale across essential, high-emitting sectors like heavy industry, manufacturing and power generation. And by 2030, we expect to reduce our absolute corporate-wide GHG Scope 1 and 2 emissions by ~20%, compared to 2016 levels. Learn more at ExxonMobil.com. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |  |
