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Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | | |  | | By Ben White and Aubree Eliza Weaver | 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. | | | More China talks — Via Bloomberg early this morning Beijing time: “The Chinese and U.S. commerce ministers agreed to push forward trade and investment links in their first call since the start of the Biden administration. “Chinese Commerce Minister Wang Wentao and his counterpart Gina Raimondo ‘agreed to promote the healthy development of pragmatic cooperation in trade and investment,’ in a phone call … “The two ‘exchanged views frankly and pragmatically on relevant issues and mutual concerns,’ according to a Chinese government statement . The call was the third between senior officials in recent weeks, after Vice Premier Liu He spoke with U.S. Trade Representative Katherine Tai and Treasury Secretary Janet Yellen.” So what? — None of these generic readouts mean much. But the fact that talks are picking up suggests that while the White House wants to push a fairly tough line with Beijing they also want to avoid the bitter trade fights that damaged the economy under President Trump. Biden raises the flag — China remains the focus but President Biden is also looking to stitch back relationships in Europe and draw a sharp line with the Trump approach, via our Anita Kumar in Plymouth, U.K.: “In his first remarks as president overseas … Biden attempted to send a message to the rest of the world: American will resume its leadership role, recommit to global alliances, and push democracy over the rise of authoritarianism. “‘At every point along the way, we are going to make it clear that the United States is back and the democracies of the world are standing together to tackle the toughest challenges and issues that matter most to our future,’ Biden said.” GOOD THURSDAY 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. | | | | DON'T MISS THE MILKEN INSTITUTE FUTURE OF HEALTH SUMMIT: POLITICO will feature a special edition of our Future Pulse newsletter at the 2021 Milken Institute Future of Health Summit. The newsletter takes readers inside one of the most influential gatherings of global health industry leaders and innovators who are turning lessons learned from the past year into a healthier, more resilient and more equitable future. Covid-19 threatened our health and well-being, while simultaneously leading to extraordinary coordination to improve pandemic preparedness, disease prevention, diversity in clinical trials, mental health resources, food access and more. SUBSCRIBE TODAY to receive exclusive coverage from June 22-23. | | | | | | | | Biden meets with U.K. Prime Minister Boris Johnson in Cornwall, U.K. … Jobless Claims at 8:30 a.m. expected to tick down again to 370K from 385K … Consumer Prices at 8:30 a.m. expected to rise 0.4 percent headline and 0.5 percent core WH KEEPS UP BIPARTISAN HOPES — Our Natasha Korecki and Laura Barrón-López: “Biden put the kibosh on infrastructure negotiations with one group of Republican senators this week. But inside the White House, there is a glimmer of hope that a separate set of talks could lead to bipartisan agreement. At a minimum, they still see little downside in trying. “The move to keep bipartisan negotiations going sparked a round of progressive anger … as liberals warned their demands need to be met, too, and that prolonged negotiations could hamper other big legislative priorities. But even if it were to move forward on infrastructure with just Democratic support, the White House hasn’t finished one of its most important sales jobs: wooing Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.)” FORMER TREASURY SECS ON TAX EVASION — Via Timothy F. Geithner, Jacob J. Lew, Henry M. Paulson Jr., Robert E. Rubin and Lawrence H. Summers in the NYT: “Six hundred billion dollars per year, and growing: That is two-thirds of total nondefense discretionary spending by the federal government, about what is spent on defense operations, military personnel and procurement, and more than mandatory federal expenditures on Medicaid. “It’s also approximately how much unpaid taxes cost the U.S. government. This must change, and it can. … While we are not in agreement on many areas of tax policy, we believe in the importance of strengthening the tax system to do more to collect legally owed but uncollected taxes — which, left unaddressed, could total $7 trillion over the next decade.” FIRST LOOK: NEW RESTAURANT GRANTS PROPOSED — Our Zachary Warmbrodt: “A bipartisan group of lawmakers on Thursday proposed spending $60 billion to launch a second round of federal grants for restaurants, after an initial $28.6 billion was met with overwhelming demand. “The legislation — introduced by Sens. Kyrsten Sinema (D-Ariz.) and Roger Wicker (R-Miss) with Reps. Earl Blumenauer (D-Ore.) and Brian Fitzpatrick (R-Pa.) — will test Washington's appetite for Covid-19 relief as the pandemic wanes in the U.S. … The bill's backers say that the initial tranche of funding fell well short of the need — there were $75 billion in applications, according to the lawmakers — and that even restaurants that survived the pandemic need help to pay rent and rehire workers.” GARLAND SAYS TAX LEAK A PRIORITY — Our Toby Eckert: “Attorney General Merrick Garland said … the investigation of who leaked reams of tax information about wealthy Americans to a news organization will be a priority for him, calling the situation ‘astonishing.’
‘This is an extremely serious matter,’ Garland told members of a Senate appropriations subcommittee when he was asked about the breach of IRS data.” | | | INDEXES END LOWER — AP’s Damian J. Troise and Alex Veiga: “A slide in banks and industrial companies nudged stocks on Wall Street to modest losses Wednesday after an early gain faded in the last half-hour of trading. Stocks championed by hordes of online retail investors, the “meme” stocks as they have become known, were volatile once again. “The S&P 500 slipped 0.2 percent, erasing its meager gain from a day earlier. The benchmark index’s modest moves this week have it on track for its first weekly loss in three weeks. The Dow Jones Industrial Average gave up 0.4 percent, while the Nasdaq held up somewhat better, ending down just 0.1 percent.” GAMESTOP GAINS AS TRADERS AWAIT QUARTERLY REPORT — Reuters’ Noel Randewich and Svea Herbst-Bayliss: “GameStop's (GME.N) stock jumped 7 percent on Wednesday before the company was due to release its quarterly results, which a cult following of individual investors will scrutinize for progress in the videogame retailer's turnaround amid this year's rally in its shares. The stock extended gains and was on track to end the session at its highest closing price since January.” ARE PRISONS THE LATEST MEME-STOCK FAD? — Bloomberg’s Eliza Ronalds-Hannon: “The meme-stock craze has turned rental cars, video games and movie theaters into day traders’ playthings over the past year. "The fad took a darker turn Wednesday as the Reddit horde brought prisons into the mix. Retail traders drove shares of Geo Group Inc. up as much as 73 percent, even as the company struggles for survival in a world turning on private-prison operators. As of the close, Geo surged a record 38 percent.” SEC PURSUING BROAD REVIEW OF STOCK-MARKET STRUCTURE — WSJ’s Dave Michaels and Alexander Osipovich: “The Securities and Exchange Commission is considering changing rules that govern how U.S. stocks are traded, including pricing incentives that exchanges and high-speed traders use to attract orders, Chairman Gary Gensler said Wednesday. “Speaking to an industry conference, Mr. Gensler outlined a broader examination of market structure than he had previously described. Mr. Gensler, who took over the SEC in April, has questioned the system that results in many individual investors’ orders being routed to high-speed traders known as wholesalers, such as Citadel Securities and Virtu Financial Inc., instead of going to public exchanges.” FED’S REVERSE REPO VOLUME SURGES TO RECORD HALF A TRILLION DOLLARS — Reuters’ Gertrude Chavez-Dreyfuss: “The Federal Reserve's reverse repurchase window on Wednesday took in $503 billion in cash, hitting a record peak for a third consecutive session, as financial institutions flush with liquidity flocked to the Fed facility to park their cash and secure Treasury collateral. “The U.S. Treasury has targeted a $450 billion cash balance by the end of July, the debt ceiling deadline. To get there, the Treasury needs to spend its cash, which usually ends up on bank balance sheets, often in the form of money market funds.” | | | | 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. | | | | | | | | BITCOIN INVESTIGATION UPENDS IDEA THAT BITCOIN IS UNTRACEABLE — NYT’s Nicole Perlroth, Erin Griffith and Katie Benner: “When Bitcoin burst onto the scene in 2009, fans heralded the cryptocurrency as a secure, decentralized and anonymous way to conduct transactions outside the traditional financial system. Criminals, often operating in hidden reaches of the internet, flocked to Bitcoin to do illicit business without revealing their names or locations. The digital currency quickly became as popular with drug dealers and tax evaders as it was with contrarian libertarians. “But this week’s revelation that federal officials had recovered most of the Bitcoin ransom paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not as hard to track as cybercriminals think.” THE FED PROBABLY GOT A PIECE OF THOSE BITCOIN JUNK BONDS — Bloomberg’s Katherine Greifeld and Claire Ballentine: “While the Federal Reserve’s top brass has cast a skeptical eye on cryptocurrencies, the central bank may be a surprisingly early adopter of the first Bitcoin-linked junk bond. After the pandemic froze credit markets last year, the Fed bought bond exchange-traded funds to get things moving again. “That made it the fourth-biggest owner, as of late March, of the SPDR Bloomberg Barclays High Yield Bond ETF. About 0.01 percent of that ETF, commonly known by its JNK ticker, is dedicated to the junk bonds MicroStrategy Inc. issued Tuesday to buy Bitcoin. So, that technically means the Fed — assuming it still holds the fund — just contributed a teeny bit to help MicroStrategy’s crypto foray.” TECH FILLS THE GAP AS JOBS LAG GDP — WSJ’s Greg Ip: “The economy is booming. Why isn’t job growth? Payrolls have risen 1.6 million in the past three months and are up 1.7 percent this year through May, which in normal times would be impressive. “But these aren’t normal times. The economy is rapidly reopening, consumers are flush with federal stimulus cash, and retail sales, factory orders and housing are all booming. Inflation-adjusted gross domestic product is up 5.3 percent through May this year, according to a monthly series calculated by IHS Markit.” TRANSITIONS — Tom Donohue of the Chamber of Commerce is rejoining the Hudson Institute board of trustees … Lucy Byrd is now marketing and communications manager at private equity firm Spectrum Equity … Visa expanded its roster of lobbyists for the first time in a few years according to new filings. It brought on 535 Group’s David Lugar and Jefferies Murray. Labor Secretary Marty Walsh is on travel to Dallas, Texas to meet with business and labor leaders and state and local officials to discuss the American Jobs Plan and the American Families Plan, June 10-11. | | | | Follow us on Twitter | | | | Follow us | | | | |  |
