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Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | |  | | By Sam Sutton and Kate Davidson | 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 said she has no intention of stepping down after the midterms. That hasn’t stopped Democrats from fighting over her possible successor. Commerce Secretary Gina Raimondo has emerged as a top candidate to take over Treasury if the 76-year-old Yellen decides to forego two years of bruising tax, debt and economic policy battles that would devour her time should Republicans take control of Congress. The possibility of a Raimondo-led Treasury department has enraged progressives and watchdog groups who claim that she’d take a light touch with regulating powerful interests in finance, tech and international trade. From our Ben White and Gavin Bade : “The possible choice of a new Treasury secretary poses a major dilemma for the White House, which has maintained detente with the Warren-led progressive wing. With a possible recession looming and the GOP ready to make gains on Capitol Hill, choosing Raimondo — a former Rhode Island governor and venture capitalist — could signal that Biden wants a moderate, politically minded Treasury boss with ties to both Republicans and Wall Street.” MM sources on Wall Street and the Washington lobbying circuit are bullish on Raimondo, saying the Ocean State native would be one of the few pro-business pragmatists in the administration with President Joe Biden’s ear. But while she’s notched critical victories for the administration around the CHIPS Act, her profile has remained limited compared to Yellen’s decades-long presence as a fixture in Washington economic and monetary policy circles. “The question ultimately will be: How much can the Commerce secretary do?” one Wall Street attorney told POLITICO early this year. Commerce “has traditionally not been an office with a lot of influence.” Progressives’ alarm over Raimondo’s possible ascension to Treasury would suggest that Raimondo wielded her influence at Commerce rather effectively. And as Republicans hammer Biden over an uncertain economy and unyielding inflation, the White House will face pressure from moderates – particularly those in the financial world – to change tack in 2023 and 2024. That strategy comes with its own political risks. “The Obama economic team focused too much on trying to placate elites and too little on trying to understand the economic pain and anger coursing through the country, and that combination helped fuel right-wing populism,” Dan Geldon, a consultant and former chief of staff to Sen. Elizabeth Warren (D-Mass.), told Ben and Gavin. “A lot of insiders like Raimondo. But putting her at Treasury risks that same dynamic heading into 2024.” IT’S MONDAY — Happy Halloween from your MM co-host JoJo, the champion of this year’s Morningside Park Dog Run Howl O Ween Celebration ! Have a tip, story idea or feedback to share? Let us know: kdavidson@politico.com and ssutton@politico.com .
| | | | NEW AND IMPROVED POLITICO APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. With a fresh look and improved features, the sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. Already a POLITICO app user? Upgrade today! DOWNLOAD FOR iOS – DOWNLOAD FOR ANDROID . | | | | | | | | | HUD Secretary Marcia Fudge hosts a homebuying event at 6:30 p.m. … Job opening and quits data released on Tuesday … Assistant Commerce Secretary for Economic Development Alejandra Castillo to speak on developing tech hubs on Tuesday … The SEC meets on Wednesday … Federal Open Market Committee meeting and Chair Jerome Powell interest rates announcement on Wednesday … CFTC Chair Rostin Behnam speaks at the European Financial Forum on Thursday …Trade deficit and labor productivity data released on Thursday … Unemployment, hourly earnings and labor participation rate data released on Friday ELON MUSK OWNS THE CONVERSATION — POLITICO’s Rebecca Kern, David Siders and Meridith McGraw: “America’s political and media players woke up Friday to a new reality: One of the country’s most outspoken, often divisive, business figures is now the moderator of its most obsessive political conversation.” — Reuters: “Musk fired top executives in an effort to avoid hefty severance payouts , while lining up other layoffs as soon as Saturday to avoid stock grants due on Nov. 1.” — Daily Beast: “Days after he promised advertisers that Twitter would not become a ‘free-for-all hellscape,’ Elon Musk used the platform he now owns to amplify a baseless conspiracy theory about the hammer attack on Nancy Pelosi’s husband by an intruder.” YELLEN YELLIN’ — Janet Yellen faced routine grilling from members of Congress during her tenure as Federal Reserve chair, but was it more than her fair share? Yes, according to a new analysis of gender bias among U.S. politicians . The authors looked at how lawmakers treated Yellen during congressional hearings compared to her predecessor, Ben Bernanke, and successor, Jay Powell. “We find that legislators who interacted with both Yellen and at least one other male Fed chair over this period interrupt Yellen more, and interact with her using more aggressive tones,” the authors wrote. The kicker: For lawmakers with daughters, there was no such increase in hostility. MM PLANS TO AVOID AFTER THE GRIZZLIES RUINED THEIR PARLAY — Our Declan Harty: “A band of Washington insiders, business titans and top economists is urging regulators to let Americans wager on elections, despite warnings from watchdogs that it would cause gambling to proliferate … They’re urging the Commodity Futures Trading Commission to sign off on a proposal from prediction market operator Kalshi, which is trying to persuade the agency to allow for bets to be placed on whether Republicans or Democrats will control Congress after next month’s elections .” ICYMI — “ POLITICO’s economics and financial services team held a briefing Thursday for s to talk about what’s ahead for the economy as high inflation continues to hit American wallets and feed instability throughout the globe.”
| | | SURGE — NYT’s Ben Casselman and Jeanna Smialek: “The Fed’s preferred measure of inflation, the Personal Consumption Expenditures price index, climbed by 6.2 percent in the year through September , in line with the increase the month before, the Commerce Department said Friday … [the] data will probably do little to change the central bank’s views.” GET READY — Bloomberg’s Steve Matthews and Kyungjin Yoo: “Federal Reserve officials will maintain their resolutely hawkish stance next week, laying the groundwork for interest rates reaching 5% by March 2023 , moves that seem likely to lead to a US and global recession, economists surveyed by Bloomberg said.” — Bloomberg’s Simon Kennedy: “Goldman Sachs Group Inc. economists said they now expect the US Federal Reserve to raise interest rates to 5%.” I REPEAT, WE’RE NOT IN A RECESSION — WSJ’s Nick Timiraos: “Washington’s response to the pandemic left household and business finances in unusually strong shape, with higher savings buffers and lower interest expenses . It could also make the Federal Reserve’s job of taming high inflation more difficult.” BUT BUT BUT — As Bloomberg’s Vildana Hajric and Katherine Greifeld point out, as disappointing corporate earnings reports roll in, “a case can be made that bad corporate news has started to become good — or at least a necessary evil — when taken as a signal of cooling demand, something that’s ultimately a positive for economic stability and, one day, markets themselves.”
| | | NEW BOSS — POLITICO’S Benjamin Guggenheim: “Treasury Secretary Janet Yellen on Friday appointed Douglas O’Donnell as acting head of the IRS during a potentially transformative period for the agency.” WHO WILL LISTEN? — Also from Benjamin: “The IRS found that taxpayers paid nearly half-a-trillion dollars less than they should have in 2014 through 2016, potentially strengthening Democrats' case to preserve new enforcement funding.” BETTER LEVERAGE, BETTER PAY — WSJ’s Chip Cutter: “New York City employers are starting to comply with a new salary transparency law taking effect this week that will require nearly all job listings to include a pay range, a move expected to reshape workplaces and how companies hire.”
| | | BIG TROUBLE IN TREASURIES — WSJ’s Matt Grossman and Sam Goldfarb: “The ranks of traders ready to buy and sell Treasurys are shrinking. Individual trades are moving prices more. Treasury securities with similar characteristics are trading at larger-than-normal price differences . Major players, including the big banks and asset managers that have long been significant buyers, are in retreat.” TALKING POINTS — NYT’s Clifford Krauss: “Exxon Mobil and Chevron, the largest U.S. oil companies , reported on Friday a fourth consecutive quarter of robust profits on the back of high oil and natural gas prices and strong chemical and refining earnings.”
| | | | DON’T MISS A THING FROM THE MILKEN INSTITUTE’S MIDDLE EAST AND AFRICA SUMMIT: POLITICO is partnering with the Milken Institute to produce a special edition "Digital Future Daily" newsletter with insider reporting and insights from the Milken Institute's Middle East and Africa Summit happening November 17-18. Hundreds of global leaders will convene, highlighting the important role connection plays in advancing global well-being. Whether you’re in-person at the event or following online, sign up for this special edition newsletter for daily coverage of the event. SUBSCRIBE TODAY . | | | | | | | | Since Saudi Arabia and Russia agreed to slash oil production this month, President Biden and other U.S. officials have been in an uproar. But among the American business leaders attending the kingdom’s annual investment conference this week, there was plenty of sympathy for the Saudi point of view . — NYT’s Kate Kelly and Vivian Nereim Voters in Brazil on Sunday ousted President Jair Bolsonaro after just one term and elected the leftist former President Luiz Inácio Lula da Silva to replace him, election officials said, a rebuke to Mr. Bolsonaro’s far-right movement and his divisive four years in office.— NYT’s Jack Nicas | | | | Follow us on Twitter | | | | Follow us | | | | |  |
