Biden sends message to Cuomo — Fed to stay fully dovish — House extends PPP

From: POLITICO's Morning Money - Wednesday Mar 17,2021 12:02 pm
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By Ben White and Aubree Eliza Weaver

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Quick Fix

Message to Cuomo? — MM kicked off a bit of Twitter debate following our reaction to President Joe Biden’s comments to ABC’s George Stephanopoulos about the allegations swirling around New York Governor Andrew Cuomo.

To us, the sharpness of the remark on potential prosecution seemed like a clear body check designed to send a message to Albany. That message? White House patience for a drip-drip-drip sexual harassment story involving Cuomo is not unlimited.

Biden himself, according to a person close to him, is inclined to tilt toward due process and avoiding a direct call for resignation. Others in the White House orbit — focused on the stimulus, Covid and infrastructure — are somewhat less tolerant.

The basic fact is there isn’t much dragging on Biden right now (beyond the lack of press conferences or whatever). And people eager to keep the national focus on White House progress do not want Cuomo headlines getting in the way of the narrative.

Here’s what Stephanopoulos said and how Biden responded: “‘I know you said you want the investigation to continue,’ Stephanopoulos told Biden … ‘If the investigation confirms the claims of the women, should he resign?’ ‘Yes,’ the president replied. ‘I think he'll probably end up being prosecuted, too.’” … That last bit is what seemed to us like a shiv in the back.

And more to come … Our Benjamin Din: “There are more women with sexual harassment allegations against … Cuomo … who have not come forward publicly, an attorney for one of his accusers said on Tuesday.”

GOOD WEDNESDAY MORNING — And happy St. Patrick’s Day to all who celebrate! Email me on bwhite@politico.com and follow me on Twitter @monringmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver.

A message from the American Bankers Association:

“The first thing I did was call my banker.” That’s Washington, D.C., small business owner Angel Rivas. Like millions of entrepreneurs across the country, in the wake of COVID-19 Rivas found herself having to quickly reimagine how her boutique media firm DC Media Connection did business. With M&T Bank by her side, she was able to build a plan and secure the financial lifeline necessary to move forward during unexpected challenges. Watch her story.

 
Driving the Day

FOMC announcement at 2 p.m. expected to include no changes to rates or QE. Fed Chair Jerome Powell in his presser at 2:30 p.m. will likely continue to reject any notion that the economy could overheat … President Biden holds a virtual bilateral meeting with Irish Prime Minister Micheal Martin and takes part in the traditional Annual Friends of Ireland Celebration …

House Financial Services at 10 a.m. holds a hearing on “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide, Part II” … Senate Budget has a hearing at 11:00 a.m. on “The Income and Wealth Inequality Crisis in America” … Senate Small Business has a hearing at 2:30 p.m. on “The Paycheck Protection Program: Performance, Impact, and Next Steps”

FED PREP — Pantheon’s Ian Shepherdson: “The FOMC will revise up its growth forecasts … in light of the sustained drop in Covid cases and hospitalizations, which is triggering a gradual reopening of the services sector, and the passage of the American Rescue Act …

“Most of that money will flow this year, rendering untenable the Fed’s 4.2% December forecast for growth in the year to Q4 this year. Our estimate is 8%, but we expect the Fed to be a bit more cautious, with the new estimate likely to be in the 6-to-7% range.”

FIRST LOOK — Via a new report out this a.m. from multiple progressive groups: “Billionaire landlords have amassed $240.9 billion in wealth, $24.4 billion of it during the pandemic … Many have continued evictions despite the restriction, and are poised to tighten their grip on the housing sector, in much the same way they did after the 2008 financial crisis.”

HOUSE PASSES PPP EXTENSION — Our Zachary Warmbrodt: “The House … overwhelmingly passed a bipartisan bill that would give small employers another two months to seek tens of billions of dollars left in the Paycheck Protection Program, after business groups warned that many firms were at risk of missing out on the rescue.

“The lawmakers voted 415-3 in favor of the legislation, which would delay the PPP's loan application deadline to May 31 from March 31. … The bill would also give the SBA 30 days after the proposed May 31 deadline to process pending applications.”

Also via Zach: “The Senate confirmed Isabel Guzman to head the Small Business Administration … putting her in charge of an agency that has struggled to take on an unprecedented role in rescuing the economy during the pandemic.”

 

A message from the American Bankers Association:

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Markets

S&P ENDS LOWER AS INVESTORS EYE FED MEETING — Reuters’ Noel Randewich: “The S&P 500 ended lower on Tuesday, weighed down by energy and industrial stocks as investors awaited the result of the Federal Reserve’s two-day policy meeting.

“The U.S. stock market lacked direction for much of the day after the S&P 500 and Dow Jones Industrial Average closed at record highs on Monday. Wall Street has recently benefited from optimism about a $1.9 trillion fiscal stimulus package and ongoing vaccination drives that have bolstered views that the economy is on a path to recovery.”

EXCHANGE LEADERS SAY GAMESTOP SAGA HIGHLIGHTS REGULATORY CHALLENGES — Reuters’ John McCrank: “The recent trading frenzy around GameStop Corp and other so-called ‘meme’ stocks highlights shortcomings and challenges in the U.S. markets as retail investors become a bigger presence, exchange leaders said on Tuesday.

“‘The regulatory structure of the U.S. equity markets, in my mind, is flawed,’ Jeff Sprecher, chief executive of New York Stock Exchange owner Intercontinental Exchange Inc, said on a panel at the Future Industry Association’s virtual FIA Boca conference.”

 

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.

 
 

PUTTING THE RISK INTO RISK-FREE TREASURYS — WSJ’s James Mackintosh: “For investors in the longest-dated Treasurys, the past three months have been as bad as the ‘taper tantrum’ plunge in government bonds in 2013. Just as in 2013, the concern isn’t, or at least isn’t mainly, that the Federal Reserve will jack up interest rates and kill the economy.

"Buyers have concluded that locking up their money for a decade or more in Treasurys is now riskier than before, because there is a much greater chance of high inflation eroding the value of fixed income.

WHY GOOD NEWS FOR THE ECONOMY CAN BE A DRAG ON YOUR 401(K) — AP’s Stan Choe: “A huge shift is underway within the stock market, one that might roil your 401(k) in the short term, but one that many professional investors also see leading to longer-lasting gains.

"A surge of optimism that the pandemic is on the way out has convinced investors to revamp their playbooks for where to put money. Most stocks across the market are rising, with the biggest gains coming from companies that would benefit most from a healthier economy, such as airlines and banks, after they got pounded lower for much of the pandemic.”

ICYMI: THE 10 BLACK BANKERS RESHAPING WALL STREET — Bloomberg’s Lananh Nguyen and Michelle F. Davis: “Wall Street prizes innovators — people who think differently and change how business is done. We’ve identified 10 Black bankers, endorsed by their peers for being leaders who stand out in an industry that’s working to transform itself from one dominated by White men”

A message from the American Bankers Association:

Throughout the COVID-19 crisis, America has seen banks of all sizes at their best. As the largest economic rescue program in U.S. history, SBA’s Paycheck Protection Program put the entire banking industry to the test. America’s banks stepped up.

To date, PPP relief has supported over 50 million American jobs across 50 states—with more than a quarter of the relief provided to women- and minority-owned businesses in historically underserved areas. In January alone, over 4,000 community banks delivered critical PPP funds to small businesses not unlike their own—cornerstones of their local economies.

Support from America’s banks through PPP ensures businesses and the economy have a viable path toward recovery. It’s what banks have done, and continue to do, every day—help build vibrant and growing communities, and fuel the national economy—and it’s never been more important.

 
Fly Around

FED SEEN STANDING FIRM ON INTEREST RATES, BOND PURCHASES — WSJ’s Paul Kiernan: “Federal Reserve officials will likely note an improving economic outlook at their policy meeting this week, while also stressing that it is too early to change their plans for interest rates and bond purchases.

“Fed Chairman Jerome Powell has said repeatedly in recent weeks that he wants to see ‘substantial further progress’ in the recovery before the central bank begins scaling back its $120 billion a month in bond purchases. The Fed, meanwhile, won’t raise rates until its goals of maximum employment and sustained 2 percent inflation have been reached — a scenario officials have described as a long way off.”

CONGRESS EYES ACTION AGAINST MONOPOLIES — AP’s Marcy Gordon: “The battle against bigness is building. Whether it’s beer, banks or book publishing, lawmakers are targeting major industries they say have become so concentrated that they’re hurting competition, consumers and the economy.

"The economic dislocation of the pandemic has laid bare the struggles of small businesses unable to compete with corporate giants that have been able to capitalize on the new order. Experts and lawmakers are throwing out stunning stats:”

CITI URGES DEALMAKERS TO SEND MORE BUSINESS TO PRIVATE BANKERS — Bloomberg’s Jennifer Surane: “Citigroup Inc.’s dealmakers have been keeping busy with family offices looking to get in on the blank-check frenzy. Now the lender wants to bring its private bank a piece of the action. Citigroup encouraged its banking, capital markets and advisory business this week to begin cross-selling private-banking services to clients. Last year, the bank established a joint venture between the two divisions in the hopes of deepening ties with customers.”

 

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.

 
 
 

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