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 . It is a very, very busy week in Washington, and the Morning Money team is going to have its hands full, but here are three of the top stories we’re tracking as we make the final sprint to the holidays. First — FOMC Meeting: Chair Jerome Powell and other Fed officials have telegraphed that the central bank will raise rates by half a percentage point on Wednesday. That’s a smaller increase than the 75-basis-point hikes that became de rigueur this year in the battle to contain soaring consumer costs. We’ll be watching Powell’s comments closely for any sign that the Fed will continue to take its foot off the gas to assess the market’s response to a historic series of rate increases. Rate adjustments often “take time to feed through to economic activity,” our Victoria Guida writes. More from Victoria : “The damage to financial markets and the broader economy has been relatively modest, and inflation is showing signs of easing. Bubbles in both the stock market and home prices are shrinking from their historic surge — but only gradually. Crypto’s implosion has barely caused a ripple. And beyond Wall Street, consumer spending has held up, factory orders are rising, and the job market is consistently beating expectations.” “If the Fed can tame inflation without crashing the economy — achieving the so-called soft landing that has eluded the central bank so often in the past — it would defy the warnings of Wall Street CEOs and most economists.” Second — The FTX hearings: Disgraced crypto titan Sam Bankman-Fried will testify in front of House Financial Services on Tuesday. He’s also been invited — and threatened with a subpoena — to make an encore at a Senate Banking meeting on Wednesday. The epic collapse of Bankman-Fried’s Bahamas-based investment empire barely made a dent in traditional financial markets. However, given Washington’s fascination with crypto — and given how much money Bankman-Fried and other FTX executives splashed into midterm races — Tuesday’s hearing will offer lawmakers a plum opportunity to publicly batter a notorious industry figure who has publicly admitted to squandering billions of dollars in customer assets. Bankman-Fried is bound to get plenty of time in the barrel, but readers should also keep an eye on how crypto-friendly legislators leverage the hearing to lob shots at SEC Chair Gary Gensler — who has simultaneously been accused of taking a heavy hand against crypto businesses while being asleep at the wheel when it comes to FTX. “I’d like to understand from Bankman-Fried what guidance he received from the SEC regarding consumer protection standards,” Rep. Josh Gottheimer (D-N.J.), who sits on the committee, told MM in an interview on Sunday. “What requirements of the SEC [did they] tell you specifically to do? Did they ignore that? … Gensler has made points that he thinks existing rules and laws are sufficient to protect consumers, but clearly they're not.” Gensler has repeatedly argued that exchanges and other crypto businesses need to register with his agency to assure customers are adequately protected. Those efforts have been met by fierce resistance by the crypto industry and its allies in Congress. In the interview, Gottheimer doubled-down on a letter he signed earlier this year that hammered the SEC’s enforcement division for launching probes of unregulated crypto businesses. “The letter was about making sure the SEC was taking the necessary actions to put in place guardrails in the crypto industry to protect consumers,” he said, later adding that any opposition Gensler’s gotten from the Hill when it comes to registering crypto companies is “not from me.” “They haven't done rulemaking. They've done a very spotty approach,” he said. “He’s been criticized not just by me for this but by lots of people.” Third — SEC Market Structure Rule Changes: Last — and certainly not least — the SEC on Wednesday will consider a sweeping set of proposals that would reshape the plumbing of financial markets. The hotly contested rule changes, some of which are already under threat of litigation , would affect the execution of stock orders placed by individual investors, create new standards for brokerages and change how exchanges structure pricing. This a good opportunity to revisit a primer on what’s coming from Declan Harty: “Gensler’s bid to revamp the structure of the stock market is shaping up to be one of the most contentious pieces of an already ambitious agenda that has also sought to impose landmark climate disclosure rules on public companies and tame the largely unregulated crypto marketplace. Billions of dollars are on the line at some of Wall Street’s most powerful firms. SEC officials have talked about rewriting the trading rules for years without making major changes.” IT’S MONDAY — What else should lawmakers ask SBF on Tuesday and (maybe) Wednesday? What else should we have our eye on this week? Please send tips to ssutton@politico.com and zwarmbrodt@politico.com .
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