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Presented by Canadian National Railway Company : 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 |  | | | 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 Powell Problem — Victoria Guida and I write here about President Joe Biden’s coming conundrum on whether to renominate Jerome Powell as Fed Chair early next year. While the hard left will want to go another way, markets and many progressives including some in the White House see no reason to ditch a highly dovish central bank leader. “The Biden administration’s top economic aides like him. Lawmakers on both sides of the aisle respect him. And investors lapping up the rewards of loose money seem to love him. Even a potential rival for his job has endorsed him. “Now the biggest force standing between … Powell and a second term leading the central bank may be an activist left prepared to create a spectacle in the coming months before the critical decision … Some progressive groups are mobilizing against Powell’s reappointment, calling on Biden to pick a more liberal candidate” Timing — Senior White House officials believe Powell has done a good job of aiding the economy and supporting the markets. But they say Biden is not yet close to settling on another term for the Republican, a decision that could come by late summer or early fall. Spriggs backs Powell — “‘My hope would be that he would be reappointed,’ said William Spriggs, a professor at Howard University and chief economist at the AFL-CIO, a significant endorsement since Spriggs himself is often touted on the left as a potential pick to head the central bank.” The Powell charm factor — One senior Democrat close to the White House said Powell should not be underestimated. “I think in January, when they were putting things together, they thought they would replace Powell. I don't really think they think that now,” the Democrat said. “And I can't imagine that once they get in the room together that Biden is going to be the first person in history who does not immediately like Jay Powell. Because it's impossible not to like him. Biden is going to have a very hard time firing him.” GOOD TUESDAY MORNING — 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 Canadian National Railway Company: CN + KCS: Creating The North American railway for the 21st century.
CN is the better bid, better partner, better railway and best solution for KCS. Together, CN and KCS will create a true USMCA railroad that establishes a seamless single-line service to expand North American trade and power economic prosperity. For important information, visit www.connectedcontinent.com. | | | | | | Senate Banking has a hearing at 10:00 a.m. on the nominations of Adrianne Todman to be deputy HUD secretary and Nuria Fernandez to be administrator of the Federal Transit Administration … The Federalist Society has an all-star event at 11:00 a.m. on financial regulation hosted by former senior White House official Andrew Olmem and including FDIC’s Jelena McWilliams, Michael Piwowar and many others. … The Competitive Enterprise Institute at noon has an event on “market-friendly ideas to improve access to capital” featuring Todd Zywicki, NCUA’s Kyle Hauptman and others … RESTAURANT RESCUE UPDATE — Our Kellie Mejdrich: “The Small Business Administration reported Monday that in its first week it’s funded more than 16,000 applicants at a cost of roughly $2 billion, with businesses expected to see funds show up in their bank accounts as early as Tuesday. There’s still a lot of funding left – Congress approved $28.6 billion for the program.” GOP COULD GO BIGGER IN INFRA — Our Burgess Everett and Marianne LeVine: “Senate Republicans are signaling that they could raise the price tag of their infrastructure offer to … Biden, days ahead of a pivotal series of meetings that could make-or-break Biden’s hopes for a bipartisan deal. “While Democrats have panned the GOP’s initial $568 billion bid as insufficient, several Republican negotiators said in interviews on Monday night that they were willing to go higher — as long as the bill in question is limited to physical infrastructure. ‘The first offer is meant to be countered, so I would imagine that none of those figures are solid,’ said Sen. Shelley Moore Capito (R-W.Va.), who is leading the negotiations on the GOP side.” | | | | SUBSCRIBE TO "THE RECAST" TODAY: Power is shifting in Washington and in communities across the country. More people are demanding a seat at the table, insisting that politics is personal and not all policy is equitable. The Recast is a twice-weekly newsletter that explores the changing power dynamics in Washington and breaks down how race and identity are recasting politics and policy in America. Get fresh insights, scoops and dispatches on this crucial intersection from across the country and hear critical new voices that challenge business as usual. Don't miss out, SUBSCRIBE . Thank you to our sponsor, Intel. | | | | | WH LOOKS TO BOOST LOCAL GOVT’S — Our Victoria Guida and Brian Faler: “The Treasury Department … announced it will begin doling out the $350 billion set aside by Congress for states and cities, an effort to bolster the budgets of municipal governments across the country. “Local officials will have considerable leeway in how they spend money that replaces revenue losses they’ve experienced during the coronavirus pandemic, while additional funds will have to be directed toward more specific uses, such as public health expenditures, food and housing assistance and replenishing reserves for unemployment benefits.” HOW DEMS LEARNED TO STOP CARING ABOUT DEFICITS — Our David Siders: “It took a recession, a pandemic, massive demographic change and an ideological re-sorting of the two parties, but the Democratic Party has finally exorcised the ghosts of Walter Mondale’s landslide 1984 defeat. … The proof? Joe Biden’s multitrillion-dollar spending plans. “His expansive agenda, in part precipitated by the coronavirus pandemic, represents the toppling of decades of Democratic orthodoxy on the economy and the role of government — beliefs and practices rooted in fear of the tax-and-spend label that emerged from Mondale’s ill-fated promise to raise taxes.” | | | |   | | | | | | TECH SELL-OFF DRAGS STOCKS LOWER — AP’s Damian J. Troise and Alex Veiga: “A sell-off in technology companies dragged stocks lower on Wall Street Monday, pulling the major indexes back from their recent all-time highs. The S&P 500 fell 1 percent after wobbling between small gains and losses the first half of the day. The decline broke a three-day winning streak for the benchmark index, which set a record high on Friday. “Big Tech companies, including Apple, Facebook, Amazon and Google’s parent company, accounted for most of the index’s decline. Communication stocks and companies that rely on consumer spending also helped pull the market lower, outweighing gains in household goods makers, utilities and other sectors.” CONSUMERS EXPECT NEAR-TERM INFLATION BUMP — Reuters: “U.S. consumers expect housing prices and other costs to rise in the near term as the economy recovers from the crisis caused by the coronavirus pandemic, but they don't expect the inflation bump to last, according to a survey released Monday by the Federal Reserve Bank of New York. “Consumers surveyed in April said they expect inflation to rise by a median of 3.4 percent over the next year — the highest level since September 2013. Expectations for inflation over the next three years were unchanged at 3.1 percent.” REGULATORS REVIEW DERIVATIVES MARGIN RULES AFTER ARCHEGOS MELTDOWN — Reuters’ Huw Jones: “The meltdown at Archegos Capital Management that triggered big losses at several banks highlighted the need to review rules on posting margin or cash against derivatives trades, the head of a global markets regulator said on Monday. Archegos was highly exposed to ViacomCBS Inc, whose shares plunged in March, leaving the hedge fund facing a massive margin call from its prime broker banks. Archegos was unable to meet the call to secure equity swap trades the banks had partly financed.” | | | | SUBSCRIBE TO WEST WING PLAYBOOK: Add West Wing Playbook to keep up with the power players, latest policy developments and intriguing whispers percolating inside the West Wing and across the highest levels of the Cabinet. For buzzy nuggets and details you won't find anywhere else, subscribe today. | | | | | | | | BIDEN DISPUTES ARGUMENT THAT ENHANCED UNEMPLOYMENT BENEFITS ARE HAMPERING ECONOMY — WSJ’s Ken Thomas and Kate Davidson: “President Biden pushed back Monday against Republicans and business groups who say enhanced jobless benefits are discouraging Americans from working, defending his economic prescriptions and saying his administration would make clear that people can’t turn down suitable jobs and keep collecting benefits, except in specific circumstances. “‘I never said and no serious analyst ever suggested that climbing out of the deep, deep hole our economy was in would be simple, easy, immediate or perfectly steady,’ Mr. Biden said at the White House Monday.” POWELL DASHBOARD SHOWS WIDER DISPARITIES AS JOB GROWTH SLOWS — Bloomberg’s Matthew Boesler: “Federal Reserve Chair Jerome Powell says he wants to see a recovery that reaches all corners of the labor market before the U.S. central bank begins raising interest rates. “The numbers in Friday’s jobs report suggest the economy didn’t make much progress toward that goal in April. The U.S. central bank announced last year an overhaul of its monetary policy strategy, a move which included changing the way it defines its congressionally-mandated goal of maximum employment to be ‘broad-based and inclusive.’” CFPB REDISCOVERS ITS TEETH UNDER BIDEN — AP’s Ken Sweet: “The nation’s consumer watchdog is signaling a more aggressive approach toward the financial services sectors after a few years of being on a tight leash. Under President Biden, the Consumer Financial Protection Bureau has rescinded or scaled back a number of policies put in place by the Trump administration. And the bureau is staffing up in anticipation of taking a more active role in regulation and enforcement, as it did during the Obama administration. “This is all being done without the CFPB having a permanent director, an important position since the bureau’s authority comes from the director who is answerable only to the president. Dave Uejio, a long-time career employee of the bureau, has been the bureau’s acting director since Trump’s appointee Kathy Kraninger resigned the day Biden was sworn into office.” BIDEN ADMINISTRATION TO START DOLING OUT $350B IN AID TO STATE, LOCAL GOVERNMENTS — WSJ’s Richard Rubin: “The Biden administration will begin distributing $350 billion to state and local governments this month, giving them money to pay for pandemic-related costs, fill revenue shortfalls and pay for water, sewer and broadband projects—but not to cut state taxes. "Money could start flowing to state, local and tribal governments within days, senior administration officials said Monday. ‘These governments have endured unprecedented strains, forcing many to make untenable choices,’ said Deputy Treasury Secretary Wally Adeyemo.” | | A message from Canadian National Railway Company: CN+KCS: Safer. Faster. Cleaner. Stronger.
Creating The North American railway for the 21st century.
Safer. CN brings an uncompromising commitment to safety – both in culture and in ongoing investments in advanced technology.
Faster. A combination will provide more end-to-end single-owner, single-operator services from Mexico to Detroit than any other Class 1 railroad with more network access and benefits for customers, ports and terminal owners.
Cleaner. New competitive routes will be created through a combination of CN and KCS, accelerating the shift from truck to rail while driving down greenhouse gas emissions, fuel consumption and congestion.
Stronger. CN and KCS will create a true USMCA railroad that establishes a seamless single-line service to expand North American trade and power economic prosperity.
For important information, visit www.connectedcontinent.com. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |  |
