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Presented by Sallie Mae®: Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | |  | | By Kate Davidson | Presented by Sallie Mae® | 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. Treasury Secretary Janet Yellen is getting out of Washington. Yellen kicks off a month-long tour today in Detroit to try to sell voters on the success of President Joe Biden’s agenda, despite slowing growth, rising recession risks and still-elevated inflation, your MM host reports. In several stops this month, she’ll press the message that Biden’s agenda will restore fairness to the tax code, bolster the economy’s resilience to global shocks and boost productivity through historic infrastructure investments. The good news for Yellen: Her case is much stronger than it was just a few months ago. More from Kate: “In late May, White House aides were scrambling to contain the fallout from her remarks in a CNN interview that she was wrong when she had predicted raging inflation would be temporary — an admission that Republicans used to hammer the White House over the worst price spikes in four decades. “Gasoline prices were surging, consumer sentiment was sinking and the president’s legislative agenda had stalled. Talk of an economic downturn hit a fever pitch. “‘They were in a really, really tough place,’ said Tony Fratto, a top Treasury official under President George W. Bush and now a partner at Hamilton Place Strategies. ‘This summer has been very good for the administration, and it’s been good for Secretary Yellen.’”
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Treasury Secretary Janet Yellen is hitting the road to talk up the president's economic agenda this month. | Jacquelyn Martin/AP Photo | The turning tide: “In addition to twin legislative wins for the White House — enactment of the Inflation Reduction Act and the CHIPS Act, which contains billions in funding for semiconductor production — gasoline prices have slid nearly 25 percent since their June peak, inflation has shown signs of stabilizing and employers continue to add jobs. “Yellen also scored an important diplomatic win last week when the Group of Seven economies endorsed Treasury’s untested proposal to cap the price of Russian oil, which the secretary says will help contain inflation and crimp the energy revenue that’s fueling the Kremlin’s war machine. Fratto adds: “They’ve got a fighting chance to reclaim more positive opinion from people in the coming months.” The details: Yellen speaks at 2 p.m. today in Dearborn, Mich., at Ford Motor Co.’s Rouge Electric Vehicle Center. She’ll highlight provisions in the Biden plan such as electric-vehicle incentives and funding for research and development that the White House says will boost manufacturing and strengthen supply chains. The administration’s economic agenda — what Yellen has dubbed “modern supply-side economics” — is not just pro-growth, but also pro-fairness, she will say, according to excerpts of her prepared remarks. “In layman’s terms, this approach embraces the notion that some of the best opportunities for growth occur when we invest in people and places that have been forgotten and overlooked,” Yellen will say. IT’S THURSDAY — Sam returns from vacation tomorrow and grabs the baton from Kate. He’ll be flying solo next week, so be sure to send him your best tips, story ideas and feedback at ssutton@politico.com.
| | A message from Sallie Mae®: Now, more than ever, students and families need help making informed decisions about planning and paying for college. Sallie Mae offers free tools to all students and families so they can confidently calculate college costs, evaluate financial aid offers, and discover and apply for scholarships. In fact, our scholarship search tool helped more than 24,000 students cover $67 million in college costs in 2020. That’s why Sallie Mae makes sense. | | | | | | SEC Chair Gary Gensler speaks at the Practising Law Institute event at 8:45 a.m. …Fed Chair Jerome Powell speaks at the Cato Institute’s Annual Monetary Conference at 9:10 a.m. … Senate Banking Committee hearing on insurance issues at 10 a.m. … House Financial Services hearing on accounting and auditing standards at 12 p.m. … Treasury Secretary Janet Yellen speaks at 2 p.m. … Brookings Institution Fall Brookings Papers on Economic Activity conference begins. BARR: GET READY FOR CLIMATE EXERCISES — Our Victoria Guida: “Federal Reserve regulatory czar Michael Barr on Wednesday said the central bank next year will launch a pilot exercise requiring banks to game out how climate change might affect their long-term finances. “In his first remarks in his new role, Barr called the exercise ‘microprudential,’ meaning it will deal with financial risks to specific institutions rather than aiming to assess risks to the banking system as a whole. Federal regulators have highlighted the need to gather more data before developing any more prescriptive rules.” FIRST IN MM: HOUSE GOP LETTER TO BRAINARD — Republicans on the House Financial Services Committee want Fed Vice Chair Lael Brainard to clarify her testimony from May on the Fed’s authority to issue a central bank digital currency absent specific authorizing legislation from Congress. In a letter to Brainard Wednesday, led by Rep. Patrick McHenry (R-N.C.), the GOP lawmakers ask her to clarify the Fed’s motivation for possibly issuing a CBDC, the need for Congress to support or explicitly authorize such a move, and the Fed’s position on individual retail accounts at the central bank. SENATE AG SETS CRYPTO BILL HEARING — The Senate Agriculture Committee will hold a hearing Sept. 14 on a measure from Chair Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.), one of the most widely watched proposed frameworks for overseeing the nearly $1 trillion cryptocurrency market on Capitol Hill, our Declan Harty reports. NSC SHAKEUP — Our Gavin Bade: “The Biden administration is preparing executive actions to confront China’s economic practices as one of its key policymakers for international economics departs this autumn. Peter Harrell, senior director for international economics and competitiveness at the National Security Council, is expected to depart the NSC as soon as next month, according to four industry and former federal government officials with knowledge of his plans.” POST-BREXIT DRAMA — Bloomberg’s Jordan Fabian and Justin Sink: “Any attempt to roll back rules governing the UK’s post-Brexit trade with Northern Ireland could hurt chances of a bilateral trade agreement with the US, the White House said Wednesday. White House Press Secretary Karine Jean-Pierre said there is ‘no formal linkage’ between the two issues but warned new British Prime Minister Liz Truss’s government against such a move.”
| | | | 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. | | | | | | | | ANOTHER MEGA-HIKE IN STORE? — WSJ’s Nick Timiraos: “The Federal Reserve appears to be on a path to raise interest rates by another 0.75 percentage point this month in the wake of Chairman Jerome Powell’s public pledge to reduce inflation even if it increases unemployment. Fed officials have done little to push back against market expectations of a third consecutive 0.75-point rate rise in recent public statements and interviews ahead of their Sept. 20-21 policy meeting.” Not ready to call the peak: "We are in this for as long as it takes to get inflation down," Fed Vice Chair Lael Brainard said Wednesday. — Reuters’ Howard Schneider and Lindsay Dunsmuir THE CASE FOR A SOFT LANDING — The possibility of a soft landing is so last month. Or is it? WSJ’s Greg Ip talked with Goldman Sachs Chief Economist Jan Hatzius, who still thinks Powell can pull it off despite a Fed track record that suggests otherwise. “In many goods markets, ‘You can see very large changes in inflation rates in response to relatively small changes in the supply-demand balance,’ Mr. Hatzius said, pointing to used cars, where ‘we’ve gone from sky- high inflation rates to modest deflation rates.’” RUBENSTEIN: FED WANTS HIGHER UNEMPLOYMENT — David Rubenstein, the billionaire investor and co-founder of The Carlyle Group, told CNN’s Matt Egan the Fed is actively rooting for the unemployment rate to go up to get inflation under control. “’He can't quite say this, but if the unemployment rate goes up to 4% or 5% or 6%, inflation will [probably] be tamed a bit,’ Rubenstein said of Fed Chairman Jerome Powell, whom he hired a quarter-century ago to work in private equity.”
| | | | A message from Sallie Mae®:   | | | | | | BAD TIME TO BE A TECH RECRUITER — NYT’s Erin Griffith: “Seemingly overnight, the tech industry flipped from aggressive growth, hiring sprees, lavish perks and boundless opportunity to layoffs, hiring freezes and doing more with less . … Throughout the tech industry, professional hirers — the frontline soldiers in a decade-long war for tech talent — are reeling from a drastic change of fortune.”
| | | Chip Bartlett has joined the Financial Services Forum as vice president of government affairs. He worked previously at the Consumer Bankers Association and Independent Community Bankers of America, and is a Rep. French Hill (R-Ark.) and Treasury Department alum.
| | | | DON’T MISS - MILKEN INSTITUTE ASIA SUMMIT : Go inside the 9th annual Milken Institute Asia Summit, taking place from September 28-30, with a special edition of POLITICO’s Global Insider newsletter, featuring exclusive coverage and insights from this important gathering. Stay up to speed with daily updates from the summit, which brings together more than 1,200 of the world’s most influential leaders from business, government, finance, technology, and academia. Don’t miss out, subscribe today. | | | | | | | | The export boom that has powered China’s economy through the pandemic decelerated in August, reflecting the impact from rising inflation and slowing growth elsewhere in the world. — WSJ’s Stella Yifan Xie As global economic growth slows sharply, with many major economies gripped with worries of recession, there has been a conspicuous exception: India. — NYT’s Mujib Mashal and Suhasini Raj Kim Kardashian and a former partner at Carlyle Group Inc. are launching a new private-equity firm focused on investing in and building consumer and media businesses. — Laura Cooper
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