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Presented by Altria: 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. | | | Dems' trouble with tax hikes — Lots of react to our piece suggesting lobbyists and corporate executives are not exactly terrified of many of President Joe Biden’s proposed tax hikes becoming law. In fact, most are almost certain that the hikes will not happen because moderate Democrats won’t accept them. Email to MM from someone deeply familiar with internal Democratic politics at the highest levels: “I think you really captured where things are right now better than most have. “At least in the House Dem Caucus, members are VERY concerned with the jobs numbers (specifically for women) and for them it reinforces the need to go big and spend money for both the Biden legacy and recovery purposes - women will get left behind if not. “On corp rate, Dem moderates have communicated to leadership they want as few votes as possible at the end of the day and ideally just want to vote on a 25 percent corp rate. Stephanie Murphy and Sinema are in lock step on that. On cap gains, I’m picking up that many members are hesitant to speak up yet but feel it’s too high and that it will eventually settle somewhere lower.” Taxing the rich is much more a messaging argument for Dems right now than a likely policy path. Not that they won’t be able to get some of them done. But narrow margins and Democrats in marginal states and districts (especially those with wealthy residents angry about SALT) make much of the laundry list of tax increases pretty unlikely. For instance, the Patriotic Millionaires protests centered on tax day , aimed at Amazon CEO Jeff Bezos and others, are mostly meant to pressure Republicans and highlight taxes as an issue to be fought over in 2022. It’s going to be difficult for Democrats to add to their margins in the midterms (given historical patterns). But they are going to have to if they want to fully deliver on their complete economic reorganization agenda. 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 Altria: Moving beyond smoking. Altria’s companies are leading the way in moving adult smokers away from cigarettes – by taking action to transition millions toward less harmful choices. We are investing in a diverse mix of businesses to broaden options beyond traditional, combustible cigarettes. See how we’re moving. | | | | | | President Biden heads to Dearborn, Mich. where he will tour the Ford Rouge Electric Vehicle Center and offer remarks … Treasury Secretary Janet Yellen delivers a keynote address at 9:15 a.m. at the U.S. Chamber of Commerce Global Forum on the “Build Back Better” agenda … Brookings holds an event on “new approaches to measuring financial health” featuring Gene Ludwig, former Comptroller of the Currency among others HOUSE GOP HAS ITS OWN INFRA PLAN — Our Sam Mintz: “House GOP leaders are planning to introduce their own infrastructure proposal this week, the latest in a series of offers as the White House and Congress try to find some middle ground on a package to fund infrastructure, an issue that gets bipartisan agreement broadly but which breaks down fast when it comes to details. “The newest plan, led by House Transportation and Infrastructure ranking member Sam Graves (R-Mo.), is designed as a surface transportation reauthorization and would come in at over $400 billion over five years, according to a GOP committee aide. It includes a resiliency title and changes to the environmental review process, and "just a number of things that make a lot of sense," said Rep. Garret Graves (R-La.), another senior GOP committee member, in an interview.” BIDEN’S REAL ESTATE TAX PLANS — Via ibanker Chris Whalen: “Biden is seeking higher taxes on real estate transactions with gains of more than $500,000, a target aimed directly at the heart of small real estate investors, family farmers and owner-occupied businesses. “In combination with his plans to eliminate step-up basis on the resolution of estates, the Biden tax proposal will greatly increase the cost of farmland and thus food prices, property prices and rental costs in some markets.” | | | |   | | | | | | STOCKS FALL FURTHER FROM RECORDS — AP’s Damian J. Troise: “U.S. stocks closed modestly lower Monday, tacking more losses onto last week’s stumble, as worries about inflation continue to dog Wall Street. The S&P 500 lost 0.3 percent following its 1.4 percent drop last week from its record high. Big Tech stocks weighed most heavily on the market. The sector has been responsible for big swings in either direction over the last few weeks as investors weigh the impact of rising inflation and a broad economic recovery.” S&P SETTLES CHARGES OVER VOLATILITY GAUGE — WSJ’s Gunjan Banerji: “The Securities and Exchange Commission charged S&P Dow Jones Indices LLC for failing to properly oversee a volatility-related index that landed at the center of market turmoil in February 2018. “The civil charge pertains to the S&P 500 VIX Short Term Futures Index, which fed into the VelocityShares Daily Inverse VIX Short Term Exchange-Traded Note. The once-popular exchange-traded note, overseen by Credit Suisse Group AG, left investors with big losses during a bout of market volatility.” INVESTMENT FIRMS BET ON STOCKS HIT BY ARCHEGOS UNWIND — Reuters’ Maiya Keidan: “Several prominent investment management firms purchased shares in the first quarter of companies that plummeted when large banks sold them in a hurry amid the collapse of private investment firm Archegos Capital Management at the end March. “Regulatory filings show that Soros Fund Management and hedge funds HG Vora Capital Management and Coatue Management entered positions in media stock ViacomCBS Inc after disclosing no holdings in the previous quarter.” | | | | 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. | | | | | SOME BIG HEDGE FUNDS LOADED UP ON SPACS, VALUE STOCKS DURING Q1 — Reuters’ David Randall: “A number of well-known U.S. hedge funds bought value stocks and blank-check acquisition companies, selling some winners from the technology-led stock rally as bond yields rose during the first quarter, filings released on Monday showed. "Special-purpose acquisition companies, known as SPACs, proved popular among hedge fund managers, with funds such as Third Point and Saschem Head adding shares of SPACs, including FinTech Acquisition Corp V and healthcare company Orion Acquisition Corp to their portfolios.” WHAT’S DRIVING CRYPTO’S RISE? — WSJ’s Peter Santilli, Caitlin Ostroff and Paul Vigna: “Cryptocurrencies such as bitcoin, ether and dogecoin have surged to highs that few investors would have predicted a year ago. The furious run has even the most optimistic traders asking: Can it last? “The forces underpinning the crypto mania mirror those that saw GameStop Corp. shares tear higher earlier this year. Excess money from stimulus checks aimed at helping the most vulnerable make rent has also found its way to brokerage accounts that offer free trading. Meanwhile, people globally have spent more time at home and in front of screens as the pandemic shut businesses.” | | | | A message from Altria: Moving beyond smoking. Altria’s companies are leading the way in moving adult smokers away from cigarettes. Today, we are taking action to transition millions toward less harmful choices.
From cigarettes to innovative alternatives. By investing in a diverse mix of businesses, Altria is working to further broaden options. Our companies are encouraging adult smokers to transition to a range of choices that go beyond traditional, combustible cigarettes.
From tobacco company to tobacco harm reduction company. And while Altria is moving forward to reduce harm, we are not moving alone. We are working closely with FDA and other regulatory bodies, and will work strictly under their framework.
See how we’re moving. | | | | | | FED BETS INFLATION EXPECTATIONS WILL STAY CONTROLLED (BUT IT’S A GAMBLE) — NYT’s Jeanna Smialek: “Turn on the news, scroll through Facebook, or listen to a White House briefing these days and there’s a good chance you’ll catch the Federal Reserve’s least-favorite word: Inflation. If that bubbling popular concern about prices gets too ingrained in America’s psyche, it could spell trouble for the nation’s central bank. “Interest in inflation has jumped this year for both political and practical reasons. Republicans, and even some Democrats, have been warning that the government’s hefty pandemic spending could push inflation higher. And as the economy gains steam, demand is coming back faster than supply. It’s a recipe for bigger price tags for everything from airline tickets to used cars, at least temporarily. SURVEY: PANDEMIC HIT LESS-EDUCATED WORKERS HARDEST — WSJ’s Paul Kiernan: “The economic fallout from the coronavirus pandemic was concentrated among minorities, women and workers who hadn’t finished high school, according to a new survey from the Federal Reserve. “Three-fourths of U.S. adults reported doing at least OK financially in November 2020, a share that was unchanged from previous years, the Fed said Monday. But that finding masked significant divergences in economic well-being between workers who retained their jobs and those who were laid off, households with more education and those with less, and those who have children versus those without.” WELLS FARGO LAUNCHES EFFORT TO INCREASE SERVICES TO THE UNBANKED — Bloomberg’s Hannah Levitt: “Wells Fargo & Co., the fourth-largest U.S. bank, is rolling out an initiative to bring more people into the banking system. "The firm said it will increase access to affordable products, expand financial-education offerings and launch a National Unbanked Advisory Task Force. Wells Fargo also will set a 10-year goal for reducing the number of people who are unbanked, according to a statement Monday.” ICYMI: THE WORLD ECONOMY IS SUDDENLY RUNNING LOW ON EVERYTHING — Bloomberg’s Brendan Murray, Enda Curran and Kim Chipman: “A year ago, as the pandemic ravaged country after country and economies shuddered, consumers were the ones panic-buying. Today, on the rebound, it’s companies furiously trying to stock up. “Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.” | | | | 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. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |  |
