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Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | | |  | | By Ben White 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 6 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. | | | OCC post nearly done — MM hears that the Biden White House is close to naming UC Irvine professor (and former New Yorker) Mehrsa Baradaran as the nominee to head the Office of the Comptroller of the Currency, long a back-water agency viewed as in the pocket of the banking industry. Baradaran would vault over University of Michigan’s Michael Barr, the administration’s initial choice. Barr, who worked in the Clinton administration and on Dodd-Frank under President Barack Obama, came under fire from the left despite a strong progressive record on financial services issues. His ties to fin-tech firms and perceived opposition to some tougher versions of the Volcker Rule in Dodd-Frank became flash points for progressives. MM previously reported that Barr’s potential nomination was all but dead. Baradaran, a law professor who has written extensively on inequality in the banking system, would also add another woman of color to the top ranks of the administration. And she would face a significant task in moving the OCC, which has extensive power over bank charters and other matters, closer to par with traditionally tougher regulators like the FDIC and the Fed. The nomination is not locked yet but also comes as it appears that Shalanda Young is likely to eventually be nominated as OMB Director over other potential candidates like former top Obama and Clinton administration economic adviser Gene Sperling. Adding Janet Yellen at Treasury and Susan Rice at the head of the Domestic Policy Council, it would make for perhaps the most diverse financial policy team in White House history. And it could also assuage some fears that top West Wing adviser jobs tend a little bit toward the white and the male. In addition to Baradaran, Manny Alvarez, currently Commissioner of the California Department of Business Oversight, also remains a potential nominee at OCC. GOOD TUESDAY MORNING — Email me on bwhite@politico.com and follow me on Twitter @ morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver. | | | | SUBSCRIBE TO “THE RECAST” TO JOIN AN IMPORTANT CONVERSATION: Power dynamics are changing. “Influence” is changing. More people are demanding a seat at the table, insisting that all politics is personal and not all policy is equitable. “The Recast” is our new twice-weekly newsletter that breaks down how race and identity are recasting politics, policy and power in America. And POLITICO is recasting how we report on this crucial intersection, bringing you fresh insights, scoops, dispatches from across the country and new voices that challenge “business as usual.” Don’t miss out on this important new newsletter, SUBSCRIBE NOW. Thank you to our sponsor, Intel. | | | | | | | | Senate Banking has a remote hearing at 10 a.m. on “Who Wins on Wall Street? GameStop, Robinhood and the State of Retail Investing” … Treasury Secretary Yellen delivers remarks virtually to the National League of Cities on municipal COVID-19 relief efforts … President Biden will visit a small business in Washington, D.C. “that has benefited from a Paycheck Protection Program loan.” CATCH UP ON THE STIMULUS BILL — Catch my chat on WAMU/NPR’s “1A” show breaking down everything that’s in the bill along with NBC’s Leigh Ann Caldwell. SOARING HOUSE PRICES ALARM POLICY MAKERS — Our Katy O'Donnell: “The booming housing market helped stave off economic collapse in 2020. But soaring prices are starting to worry policymakers, who fear the market could lock a generation of would-be buyers out of homeownership. Home prices in January — typically a slow month for the market — were up 14 percent over the same month the previous year, while sales jumped 24 percent, despite an unemployment rate that was almost twice as high. “Demand for existing homes is so strong that the average residence is on the market for just three weeks, and inventory is at a record low after seeing its steepest drop last year since the data was first tracked in 1999. It all threatens to freeze broad swaths of the population out of the market, leaving millions of Americans in a less secure financial position” MEET McWILLIAMS — Our Victoria Guida: “FDIC Chairman Jelena McWilliams is overseeing the banking system in the middle of an economic crisis, while working to adapt to new technology and grappling with evolving risks from climate change. “She’s also a Republican who will soon see her agency’s board filled with Democrats. Despite all that, she’s optimistic about the coming year and what the agency can achieve. … McWilliams is highly focused on financial technology, both in the industry and at the FDIC. … She said the regulator has consolidated its work on climate change into a unified research goal, which is aimed at understanding both its effect on low and moderate-income communities and its implications for the safety and soundness of banks” YELLEN ON INFLATION: DON’T SWEAT IT —Yellen to MSNBC’s Stephanie Ruhle: “I’m anticipating that our economy will be back to full employment where we were before the pandemic next year. .. We had a 3.5 percent unemployment rate before the pandemic and there was no sign of inflation increasing. It was too low rather than too high. “You know, there are a lot of risks faced by this economy and I think that this package addresses the most important of those risks … If it turns out to be inflationary, there are tools to deal with that and we'll monitor that closely.” | | | NASDAQ ENTERS CORRECTION TERRITORY — WSJ’s Anna Hirtenstein and Amber Burton: “Technology stocks continued falling Monday, pulling the Nasdaq Composite into correction territory, as a selloff in U.S. government bonds extended into a sixth week and sapped demand for the once highflying shares. “The Nasdaq dropped 310.99 points, or 2.4 percent, to 12609.16, extending the declines from its Feb. 12 record to more than 10 percent. Rising bond yields dent the allure of growth stocks like those of big tech companies.” ICYMI: A LOOK INSIDE THE $156B SPAC BUBBLE — Bloomberg’s Heather Perlberg: “Whenever greed meets reality and giddy markets collapse, Wall Street pros usually admit that they sensed the end was coming. “The warning signs were so familiar, they belatedly confess, that it was difficult to believe anyone could miss them. The chain of fools was running out. This can’t last. Today those sober words are being whispered again in American finance, this time about one of the biggest money-grabs in the business, SPACs. “Who hasn’t heard about SPACs by now? Once dismissed as sketchy Wall Street arcana, these publicly traded shells are created for one purpose: to merge with real businesses that actually make money. Nowadays everyone who’s anyone seems to be doing one. Sports figures like Alex Rodriguez and Shaquille O’Neal; former House speaker Paul Ryan; Wall Street rainmakers like Michael Klein — the list runs on. The count from the past 15 months stretches to 474 SPACs. Together, they’ve raised $156 billion.” TREASURY YIELDS JUMP (AGAIN) — WSJ’s Paul J. Davies: “U.S. Treasury yields jumped Monday following the Senate’s approval of the $1.9 trillion Covid-19 relief bill over the weekend, which moves President Biden’s key spending package closer to being signed into law. … “The 10-year yield briefly rose as high as 1.610 percent on Monday morning, surpassing the 1.609 percent hit when Treasurys sold off sharply on Feb. 25, according to Tradeweb. It later dropped back to 1.594 percent, which was up versus Friday’s close of 1.550 percent. Bond yields rise when prices fall.” | | | | THIS THURSDAY: HEAR FROM GOVERNORS ACROSS AMERICA : 2020 was marked by crisis —from the global pandemic and ensuing economic recession to racial injustice protests and the fallout from the presidential election and its aftermath. Governors have been left to pick up the pieces. “The Fifty: America’s Governors,” is a series of live conversations featuring various governors on the unique challenges they face as they take the lead and command the national spotlight in historic ways. REGISTER HERE. | | | | | | | | Yellen also said the pandemic was having an “unfair” impact on women’s income, jobs — Reuters’ Andrea Shalal: “The Covid-19 pandemic has had an ‘extremely unfair’ impact on the income and economic opportunities of women, U.S. Treasury Secretary Janet Yellen said on Monday, calling for long-term steps to improve labor market conditions for women. “Yellen, in a dialogue with International Monetary Fund chief Kristalina Georgieva, said it was critical to address the risk that the pandemic would leave permanent scars, reducing the prospects for women in the workplace and the economy. She noted that women’s participation in the workforce was already lower in the United States before the pandemic than in Europe, another issue that needed to be addressed.” FED EXTENDS SMALL BUSINESS LIQUIDITY FACILITY TO JUNE 30 — Reuters’ Pete Schroeder: “The Federal Reserve announced Monday it was extending by three months to June 30 an emergency liquidity facility meant to help lenders extend relief to small businesses under the Paycheck Protection Program. “In a statement, the Fed said three other emergency facilities — the Commercial Paper Funding Facility, the Money Market Mutual Fund Liquidity Facility, and the Primary Dealer Credit Facility — would expire as scheduled on March 31, saying they had not seen ‘significant usage’ in months.” | | | | Follow us on Twitter | | | | Follow us | | | | |  |
