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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 Ben White and Aubree Eliza Weaver | 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 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. | | | Biden’s big infrastructure bill highly uncertain — President Joe Biden will meet with a bipartisan group of legislators today to talk about his $2 trillion-plus “American Jobs Plan.” The White House wants to make a cross-party deal but that’s very unlikely to happen. It’s also not clear Biden can hammer the package through with 51 votes in the Senate. As MM has reported, multiple Democratic senators including West Virginia’s Joe Manchin would probably only vote for a package with a 25 percent top corporate rather than Biden’s 28 percent proposal. And the SALT deduction issues further complicate the administration’s quest for uniform Democratic support for what is essentially the centerpiece of Biden’s initial legislative agenda. How much does it matter? — Biden will rise or fall on his coronavirus response. And he’s already gotten a stimulus bill. There’s a path to a successful first year without the jobs plan bill. And the economy could wind up managing mostly fine without it. But Biden’s popularity depends in large measure on near-uniform Democratic support. And failing to get many of the green jobs and economic inequality measures included in the jobs bill done would certainly hurt him on that front. Compass Point’s Isaac Boltansky on the bill’s chances: “The bear case is becoming easier to argue with each passing day given the following considerations: the fight over the SALT deduction, concerns over the scale and scope of tax changes, the lack of details regarding the American Families Plan component of the White House’s plan, the razor thin Democratic majorities in both chambers, and the complete lack of clarity regarding legislative strategy.” Gensler preview — Gary Gensler formally takes over at the SEC this week, making bankers very nervous. Via Cap Alpha’s Ian Katz: “His 18 years at Goldman Sachs earned him enough money so that now, at age 63, he doesn’t have to worry about whether he can get another job on Wall Street after he’s done at the SEC. “In other words, he’s not too concerned about who he’s alienating, which can be off-putting to people both in Washington and on Wall Street. Gensler has a deep understanding of many of the issues he’s going to face, so he’s not going to be intimidated by lawmakers who don’t.” GOOD MONDAY MORNING — Thanks so much to last week’s guest hosts. Glad to be back with you. 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 Sallie Mae®: You shouldn’t need a college degree to figure out how to pay for college. Sallie Mae is here to help. We do more than provide families with responsible private student loans, we help them make sense of the entire planning and paying for college process. And if they need to borrow, we work with our customers to manage their loans successfully and achieve financial independence after school. Learn more here. | | | | | | Biden on Monday meets with a bipartisan group of members of Congress to talk about the infrastructure bill and will tour an electric battery facility in South Carolina on Tuesday and participate virtually in the Leaders Summit on Climate on Thursday and Friday … Jobless claims on Thursday at 8:30 a.m. expected to tick back up a bit to 625K from 576K … IS THE CEA RIGHT ON INFLATION? — The White House Council of Economic Advisers’ Jared Bernstein and Ernie Tedeschi wrote a piece suggesting nobody should worry that another $2 trillion-plus in spending could spark a dangerous inflation spike: “[I]n the next several months we expect measured inflation to increase somewhat, primarily due to three different temporary factors: base effects, supply chain disruptions, and pent-up demand, especially for services. “We expect these three factors will likely be transitory, and that their impact should fade over time as the economy recovers from the pandemic. After that, the longer-term trajectory of inflation is in large part a function of inflationary expectations. Here, too, we see some increase, but from historically low to more normal levels.” Pantheon’s Ian Shepherdson : “The CEA's discussion of the upside risks to longer-term inflation expectations … is woefully inadequate, and amounts to little more than an exercise in finger-crossing … The fiscal impulse from Covid relief spending will fade, but the chance of a discretionary fiscal tightening anytime soon is about nil … “Nothing remotely like this has ever happened before, and you don't have to be a monetarist to regard such a massive monetary expansion as a potential inflation threat. But it doesn't even merit a mention in the CEA's note. In other words, once the growth hare is let loose by the end of Covid, it's hard to see it running out of breath anytime soon” | | | |   | | | | | | FRIDAY SAW S&P, DOW HIT RECORD HIGHS ON BANK EARNINGS — Reuters’ Shivani Kumaresan: “The S&P 500 and the Dow hit record highs on Friday after Morgan Stanley wrapped up bumper quarterly earnings reports from big U.S. banks, while optimism about a solid economic rebound put the main indexes on course for weekly gains. Nine of the 11 S&P indexes were higher, with only the information technology and the energy indexes edging lower after outperforming in the previous session.” MORE STOCKS ARE PARTICIPATING IN RALLY, AN ENCOURAGING SIGN FOR BULL MARKET — WSJ’s Caitlin McCabe: “A greater number of stocks have been propelling the U.S. market higher lately, a signal that — if history is any indicator — more gains could be ahead. What remains up for debate, however, is how smooth the climb will be. “Indicators that point to a stronger and more resilient stock market have been hitting rare milestones recently as the continuing bull run has once again widened. In the past week, stocks ranging from UnitedHealth Group Inc. to L Brands Inc. to Vulcan Materials Co. hit 52-week highs, joining 184 others in the S&P 500 that did the same. Those gains have helped extend the benchmark index’s rally for the year to 11 percent — notching 23 records along the way.” | | | | STEP INSIDE THE WEST WING : The Biden administration is quickly approaching 100 days in office — has it delivered on its early promises? What tactics and strategies are being debated in West Wing offices? What’s really being talked about behind the scenes in negotiations with Congress on the infrastructure plan? Add Transition Playbook to your daily reads for details that you won’t find anywhere else that reveal what’s really happening inside the West Wing and across the executive branch. Track the people, policies and power centers of the Biden administration. Subscribe today . | | | | | EMERGING MARKET BULLS BRACE FOR TREASURY RELAPSE — Bloomberg’s Ben Bartenstein, Lilian Karunungan and Sydney Maki: “Emerging-market bulls who’ve benefited from moderating U.S. Treasury yields are bracing for a relapse as political risks also pile up. MSCI Inc.’s developing-nation stock gauge extended a three-week winning streak on Friday, while a basket of currencies just capped its biggest weekly advance since early February. "The risk premium on emerging-market sovereign debt also narrowed to 339 basis points over U.S. Treasuries, its lowest since February 2020, according to data compiled by JPMorgan Chase & Co.” CRYPTOCURRENCIES TAKE WEEKEND HIT — CNBC’s Tom Huddleston Jr.: “The price of bitcoin tumbled on Sunday and was down as much as 19.5 percent from record highs posted by the popular cryptocurrency in the past week. Bitcoin dropped as low as $52,148.98 on Sunday morning after reaching an all-time high above $64,800 on Wednesday, according to CoinDesk. It was last trading just over $55,795. | | A message from Sallie Mae®: We know our current student loan financing system isn’t working for all students and families. Sallie Mae is committed to being part of the solution. We partner with students to help them find the right financing options — ranging from scholarships and grants to federal and private loans— that set them up for long-term success. We provide students and their families with the tools and information they need to make smart decisions that their future selves will appreciate. This responsible approach is working: 97% of Sallie Mae loans in repayment are being repaid on time and less than 2% default annually. We’re eager to work with policymakers and other key stakeholders to build a higher education system that works for all students. Learn more. | | | | | | FED STUDY: COVID DESTROYED FEWER U.S. BUSINESSES THAN FEARED — Reuters’ Howard Schneider: “Fewer than 200,000 businesses in the United States may have failed during the first year of the COVID-19 pandemic, a lighter toll than initially feared and one that may have had relatively little impact on unemployment, according to Federal Reserve research. The figure contrasts with the early forecasts that the pandemic would leave America's ‘Main Street’ desolate as well as with polls that continue to show large percentages of U.S. small business owners are worried about their survival. “Perhaps 600,000 businesses, most of them small firms, fail in any given year, and U.S. central bank researchers estimated that from March 2020 through February of this year the figure has been perhaps a quarter to a third higher.” ECONOMIC GROWTH SET TO SURGE, BUT HIRING MIGHT NOT KEEP UP — WSJ’s Sarah Chaney Cambon: “U.S. employers might have trouble hiring workers fast enough in coming months to keep up with the projected burst of economic growth. "Consumer spending at restaurants, hotels and salons is already starting to take off as the grip of the Covid-19 pandemic eases and more people get vaccinated and draw on their stimulus checks and savings. But many economists expect economic activity to pick up faster than payrolls, at least initially, for several reasons, causing bottlenecks and wage pressures.” ICYMI: WHEN FED CHIEF TALKS, SO DO LISTENERS — WSJ’s Paul Kiernan: “Federal Reserve Chairman Jerome Powell has worked hard to explain the central bank’s policies to ordinary people, hoping to shore up trust at a time of wavering public faith in institutions. "The effort has produced some unintended results. On Wednesday, for instance, Mr. Powell outlined the Fed’s new policy of seeking inflation that temporarily overshoots its 2 percent target. ‘For the last decade, you’ve seen central banks around the world really struggle to reach a 2 percent goal, and in some cases are fighting outright deflation,’ Mr. Powell said in a virtual event with the Economic Club of Washington. “As he spoke, a message board streaming alongside Yahoo Finance’s webcast of the event on YouTube lit up. ‘IF INFLATION ISN’T A THING WHY DOES THE MCDONALDS DOLLAR MENU NO LONGER EXIST,’ a user identified as Nelson Ting wrote in a message visible to the 5,000 viewers who had tuned in to watch Mr. Powell. Such are the pitfalls of public outreach in a digital age.” | | | | SUBSCRIBE TO “THE RECAST” TO JOIN AN IMPORTANT CONVERSATION : Power dynamics are changing in Washington and across the country. More people are demanding a seat at the table, insisting that all politics is personal and not all policy is equitable. 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