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Presented by the American Bankers Association: Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by |  | | | 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. | | | More on Gene Sperling and the stimulus — So the White House finally confirmed POLITICO’s big scoop that Gene Sperling, veteran of the Clinton and Obama administrations, would join the administration and oversee implementation of the $1.9 trillion stimulus package. President Biden, who spoke to Sperling on Monday, basically said it was Gene’s job to coordinate with mayors, governors and everyone else getting stimulus cash to make sure it’s all deployed in the best way possible. Read between the lines: If stuff gets messed up on the stimulus, it’s Gene’s fault. It’s a big job for sure but necessarily a glamorous one. Sperling will have the ear of the president and top West Wing staff (remotely from Los Angeles for now, but eventually in DC). But there are thankless elements to the job. And contrary to some concerns, Sperling would NOT be coming in over the eventual OMB Director nominee ... That remains very likely to be Shalanda Young, though MM is told the decision is not yet final. There is some concern out there that Sperling would somehow become the big dog on budget and spending issues. But that’s not the case, according to officials familiar with the situation. The OMB director is a member of the Cabinet and runs the annual budget process and appropriations issues and overall spending strategy for the White House. It is by all accounts a bigger job then a senior adviser role overseeing spending from the stimulus. Sperling could wind up trying to wrangle inspector general probes into stimulus spending while Young, or whomever gets the OMB job, deals with a much broader set of issues. Bottom line: The White House obviously wants Sperling and his significant policy skills playing a role in the economic strategy of the next two years. But they are not looking to place him in some kind of shadow role where he outshines anyone else. Also, that's not really his MO. He's just a wonk's wonk. GOOD TUESDAY MORNING — OK, so if you don’t have Gonzaga winning it all in March Madness, who do you have? MM is looking for upset picks, especially in early rounds. Bring your best calls. 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. | | A message from the American Bankers Association: The banking system works best when it works for all Americans. While the number of unbanked is now at its lowest level ever, there is still more to do. One solution: a growing number of banks are joining the Bank On movement to give everyone a chance to enjoy the benefits of a bank account. Learn more about ABA’s support for Bank On and how the program promotes financial inclusion. | | | | | | President Biden heads to Chester, Pa., to tout the stimulus package before overnighting in Delaware … Senate will resume consideration of Isabella Casillas Guzman to be Administrator of the Small Business Administration. … There will be three roll call votes on Guzman and the nomination of Katherine C. Tai to be U.S. trade representative … Senate Banking at 2:00 p.m. has a hearing on “Home (Equals) Life: The State of Housing in America” … Senate Finance has a hearing at 10:00 a.m. on “Made in America: Effect of the U.S. Tax Code on Domestic Manufacturing” … Retail Sales at 8:30 a.m. expected to drop 0.7 percent and rise 0.1 percent ex-autos … FED ON DECK — Standard Chartered’s Steven Englander on the FOMC meeting that starts today: “Being dovish is harder than it looks for the FOMC. We expect two hikes in the 2023 dots. … But we think the Fed can present its dots as good news -- a maximum employment soft landing is approaching quicker than expected” JPM’s David Kelly: “At this rate, given resistance gained from both infection and inoculation, the United States appears set to approach herd immunity over the summer, allowing life to return to almost normal by the fall. … “[W]hile we do not expect any changes in policy at this week’s meeting, the language in the post-meeting statement will likely be upgraded. In particular, the Fed may feel obliged to acknowledge the resilience of recent economic data, the potential for oil prices to boost inflation going forward and the positive impact on the economy from a receding pandemic and extraordinary fiscal support.” WARREN DOMINATES IN VERY QUIET WAY — Our Zachary Warmbrodt: “Wall Street was relieved when Sen. Elizabeth Warren was passed over for the leadership of the Treasury Department. But now the financial industry faces another threat … Biden is enlisting a small army of her former aides and allies to run his government. “Warren's expanding network in the upper echelons of the administration includes protégés who helped execute her aggressive oversight of big banks and other corporations as well as friends who share her views of the risks looming on Wall Street. But it goes beyond finance, covering pivotal posts at the Department of Education and even the National Security Council.” WATERS REBUFFS McHENRY — Also via Zach: “House Financial Services Chairwoman Maxine Waters has turned down a request from Rep. Patrick McHenry, the panel’s top Republican, to ramp up in-person hearings, according to a letter obtained by POLITICO.” | | | | A message from the American Bankers Association:   | | | | | | STOCKS EXTEND GAINS FOR FIFTH DAY — AP’s Damian J. Troise and Alex Veiga: “Stocks shook off an early stumble and closed broadly higher Monday, nudging some of the major U.S. indexes to more all-time highs as the market added to its recent string of gains. “The S&P 500 rose 0.7 percent after having been down 0.5 percent in the early going, extending its winning streak to a fifth day. Technology stocks, airlines, cruise operators and other companies that rely on consumer spending helped lift the market. Banks and energy stocks were the only laggards.” TREASURY MARKET’S BEARS ARE SET FOR A REALITY CHECK FROM FED — Bloomberg’s Liz McCormick and Edward Bolingbroke: “The bond market is about to get a serious reality check, with traders leaning heavily toward higher long-term yields and also a scenario where the Federal Reserve starts lifting rates from near zero well before officials now envision. "The big test of the profitability of these wagers is set to come Wednesday, when the Fed wraps up a two-day meeting. The likely key for bond investors is the trajectory officials pencil in for their policy rate over the coming few years. In December, they projected holding rates near zero through the end of 2023.” | | | | JOIN THE CONVERSATION, SUBSCRIBE TO “THE RECAST”: Power dynamics are shifting in Washington, and more people are demanding a seat at the table, insisting that all politics is personal and not all policy is equitable. “The Recast” is a new twice-weekly newsletter that breaks down how race and identity are recasting politics, policy and power in America. Get fresh insights, scoops and dispatches on this crucial intersection from across the country, and hear from new voices that challenge business as usual. Don’t miss out on this new newsletter, SUBSCRIBE NOW. Thank you to our sponsor, Intel. | | | | | | | | WHITE HOUSE WEIGHS HOW TO PAY FOR LONG-TERM ECONOMIC PROGRAM — WSJ’s Kate Davidson: “The Biden administration is looking past its $1.9 trillion coronavirus relief bill and starting to consider how to pay for the next round of programs meant to bolster long-term economic growth with investments in infrastructure, clean energy and education. The challenges are twofold. “Officials face a decision over how much of the bill to pay for with tax increases and which policies to finance with more borrowing. In a narrowly divided Congress, they must also craft a bill that can win support from nearly every Democrat. The decision will help determine how much of President Biden’s Build Back Better economic agenda he can advance in his first year in office.” FED LIKELY TO PEN ROSIER FORECASTS — Reuters’ Ann Saphir: “Federal Reserve policymakers are expected this week to forecast that the U.S. economy will grow in 2021 at the fastest rate in decades, with unemployment falling and inflation rising, as the COVID-19 vaccination campaign gathers pace and a $1.9 trillion relief package washes through to households.” HOW THE U.S. GOT IT (MOSTLY) RIGHT IN THE ECONOMY’S RESCUE — NYT’s Ben Casselman: “When the coronavirus pandemic ripped a hole in the economy a year ago, many feared that the United States would repeat the experience of the last recession, when a timid and short-lived government response, in the view of many experts, led to years of high unemployment and anemic wage growth. Instead, the federal government responded with remarkable force and speed” BANKS WILL TURN LAST YEAR’S FEAR INTO THIS YEAR’S PROFITS — WSJ’s David Benoit: “U.S. banks are sitting on a pile of cash that could turn into billions of dollars of profits. In the coming months, banks are expected to free up tens of billions of dollars in reserves they set aside to cover soured loans — losses that still haven’t materialized a year into a pandemic that shut down swaths of the U.S. economy.” PPP MISTAKENLY PAID $692M IN DUPLICATE LOANS — Reuters’ Pete Schroeder: “The U.S. Small Business Administration (SBA) mistakenly paid out $692 million in duplicate small-business pandemic relief loans because of technical errors and other mistakes, the agency’s internal watchdog said on Monday. “Lenders participating in the Paycheck Protection Program (PPP) distributed the cash to 4,260 borrowers who had already received funds due to multiple technical glitches within the SBA’s loan processing systems, which struggled to process the volumes of loans, the SBA Inspector General wrote in a report.” COVID IGNITED A HOUSING BOOM — BUT IT’S DIFFERENT FROM THE LAST ONE — WSJ’s Nicole Friedman: “The current housing boom is far more stable than the last one and poses fewer systemic risks, economists say. A downside: There are more barriers to entry, and it’s more difficult for buyers who aren’t already homeowners to make that first purchase. “Most real-estate analysts agree that the pandemic helped ignite the current boom as some urbanites looked to leave crowded cities like New York and San Francisco for cheaper cities or for more space in the suburbs while working from home. When lockdowns began lifting last year, home sales took off: June sales surged nearly 21% over the prior month, the biggest monthly increase on record going back to 1968. That milestone lasted only a month, when July sales rose almost 25% from June.” | | A message from the American Bankers Association: ABA believes that everyone can benefit from the safety, security and opportunity that comes with having a bank account. For those currently outside the banking system, opening a basic transaction account can be a first step toward long-term financial security.
The Bank On movement connects consumers to safe and affordable accounts that offer user-friendly features like low or no fees and online bill pay. When an account is Bank On-certified, customers know it will meet their needs, giving them more confidence to begin or restart their banking relationship with the right tools to manage their money.
We’re committed to making the banking system work for all Americans, and Bank On is part of the solution. When safe, affordable and accessible financial products are readily available, families, communities and the economy can prosper. Find out more about Bank On and ABA’s commitment to financial inclusion. | | | | | | TRANSITIONS — Via Talking Biz News: “Bloomberg News reporter Sarah Ponczek is leaving the news organization to become an advisor at UBS Private Wealth Management.
She will start her new job this summer” … Via White House: “Leslie Kiernan, General Counsel of the Department of Commerce … Leslie B. Kiernan has decades of experience working with corporations, boards, nonprofits, and governmental entities in litigation, regulatory compliance, policy development, and enforcement matters.” WOMEN IN PRIVATE EQUITY — Via the American Investment Council (AIC): “As we celebrate Women’s History Month … [AIC] is highlighting women-led businesses and the private equity industry’s support for female entrepreneurship.” | | | | HAPPENING THURSDAY - PLAYBOOK INTERVIEW WITH CONGRESSMAN LEE ZELDIN : The GOP has not won a statewide election in New York in nearly two decades. Rep. Lee Zeldin (R-N.Y.), an ally of former President Donald Trump, is one of several Republicans considering a challenge against embattled New York Gov. Andrew Cuomo. Join Playbook co-authors Tara Palmeri and Ryan Lizza for a conversation with Rep. Zeldin to discuss a potential gubernatorial run and how he is working with Democrats in Congress. REGISTER HERE. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |  |
