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Presented by Accountable.US : 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 Accountable.US | 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. | | | Real talk on infrastructure — So yeah, great. President Biden embraced the centrist, bi-partisan Senate infrastructure package that would pump nearly $600 billion in new dollars into the economy focused on roads, bridges, rail lines, broadband and the like. If it gets through, the package is likely to be a significant positive for an American economy that is ridiculously and embarrassingly behind on these investments. Drive anywhere, ride the train or try to get decent Internet outside major metro areas and you know this to be true. The U.S. is a terrible joke when it comes to maintaining and upgrading the basic arteries that make the economy work. This bill would not solve that but it would be a start. The impact on long-term productivity and standards of living from these kinds of investments are real and undeniable. RSM’s Joe Brusuelas: “In my estimation this agreement represents a rare opportunity to lift the long term growth path of the economy, productivity and the living standards of individual Americans.” But, but, but … Nothing about this is done. Progressives are livid that the investments are relatively narrow and limited. Biden himself said he won’t sign the bill without a separate reconciliation package with a significantly higher price tag that includes more of his agenda focused on “human infrastructure.” But Democrats are wildly far apart on what that package should look like. Figures like $6 trillion from Sen. Bernie Sanders (I-Vt.) are simply insane and would never get 51 Democratic votes. Something closer to $2 trillion? Maybe. But that’s no lock. And, as MM has noted, you need to pass an actual budget to do reconciliation. And efforts to jam a larger package through with 51 votes could cause Republicans to bail on the infrastructure bill. In short: Absolutely do not assume that any of this actually gets done. And if it doesn’t, the long term economic outlook will take a significant hit. And so will Biden. GOOD FRIDAY MORNING — Happy weekend, everyone. 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 Accountable.US: Dear Corporate America: (a) protect voting rights (b) remain a member of the U.S. Chamber of Commerce. Pick one. You can’t do both. The U.S. Chamber of Commerce has poured millions of dollars into organizations that have pushed voter suppression and is fighting against legislation that would protect our democracy. It’s time to live your values and #DropTheUSChamber. TAKE ACTION: dropthechamber.org | | | UNEMPLOYMENT CUTS COULD SLAM BLACK AND LATINO WORKERS — Our Eleanor Mueller: “The decision by more than two dozen governors to slash federally supplemented unemployment benefits will have a disproportionate impact on Black and Latino workers and, some economists say, could have lasting economic repercussions for them. “Of the 17.4 million workers who applied for and received unemployment benefits between January and May, a disproportionate 21.5 percent were Latino and 18.4 percent were Black, Census data show. That’s greater than their respective shares of the overall workforce.. “The differences are even more pronounced in states that have cut jobless aid or are about to. In Georgia , 61.4 percent of those who have received unemployment benefits between January and May are Black, according to the Census data. In Texas, 35.8 percent are Latino. In Mississippi, 46.3 percent are Black. And in South Carolina, 28.7 percent are Black.” STRESS TEST REACT — Cowen’s Jaren Seiberg on results from the Fed’s annual big bank stress tests: “These are strong results that should offer political protection to the banks from charges that they are too big to manage or represent a systemic risk. … We expect distributions to increase materially as the results show what happens when banks retain extra capital for more than a year. “That could represent a different political problem for the big banks if they are not careful in how they frame the returns. Progressives may argue banks should use this cash to eliminate fees for consumers and raise pay for lower-level employees rather than give it to shareholders.” CapAlpha’s Ian Katz: “The banks can announce their capital distribution plans after the market closes Monday. Given the results, the already high expectations could rise further. Bank stocks climbed after hours Thursday. … While we expected the banks to do well, we usually see one or two get dinged by the Fed, breaching or almost breaching a capital requirement. That doesn’t appear to be the case this time. “This could be the peak bank moment for the stress tests. Randy Quarles’ term as vice chairman for supervision expires in October. He’ll be replaced by someone with a more skeptical view of big banks.” Better Markets’ Dennis Kelleher: “The Fed’s so-called stress tests no longer stress or test the banks. After all, there is no stress in a test that every bank passes comfortably, particularly when that result is predictable because the test-giver’s (the Fed’s) massive intervention in the markets ensures the test-takers (the banks) have everything they need to ace the test.” | | | | 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. | | | | | GORDON TO FHFA — Our Katy O'Donnell: “Biden will nominate housing nonprofit executive Julia Gordon to be the commissioner of the Federal Housing Administration … Gordon is the president of the National Community Stabilization Trust, which facilitates the rehabilitation of homes in underserved markets. … She was also the housing director at the Center for American Progress and managed the single-family policy team at the Federal Housing Finance Agency.” EVICTION MORATORIUM EXTENDED — As expected (though perhaps not as long as expected), also via Katy: “The Biden administration unveiled a raft of measures to prevent people who lost income during the pandemic from losing their homes on Thursday, including by extending nationwide eviction and foreclosure bans until July 31. “The White House and other federal agencies sprang into action amid growing concerns that state and local governments were not prepared to protect renters if the federal eviction ban expired next Wednesday. More than six million renter households are behind on rent, according to a recent survey by the Census Bureau.” | | | | A message from Accountable.US:   | | | | | | NASDAQ, S&P 500 SCALE NEW PEAKS — Reuters’ Devik Jain and Noel Randewich: “The Nasdaq and the S&P 500 indexes hit all-time highs on Thursday, with the Dow also jumping, as U.S. President Joe Biden embraced a bipartisan Senate infrastructure deal. “After the U.S. economy grew at a 6.4 percent annualized rate in the first quarter, thanks to the massive fiscal stimulus, investors have been banking on an infrastructure agreement that could steer the next leg of the recovery for the world's largest economy. Caterpillar jumped 3.5 percent and Boeing rallied 2.2 percent, helping lift the Dow Jones Industrial Average.” DOWNWARD JOBLESS CLAIMS TREND STALLS OUT — WSJ’s Amara Omeokwe: “A recent downward trend in worker filings for jobless benefits stalled in mid-June amid other signs the labor market continues to gradually recover. "The Labor Department reported Thursday that initial unemployment claims, a proxy for layoffs, moved slightly lower last week to a seasonally adjusted 411,000 from an upwardly revised 418,000 the prior week, when claims rose. The four-week average for claims, which smooths out volatility in the weekly figures, rose slightly off a pandemic low to 397,750.” JOB HOLE OR INFLATION? FED POLICYMAKERS SPLIT OVER RISK VIEW — Reuters: “As Federal Reserve policymakers begin an intense debate over when and how to start reducing the central bank's support for the economy, they are split over what poses the bigger risk: a still-large jobs deficit or a potential inflation shock. "Robert Kaplan and James Bullard, chiefs respectively of the Dallas and St. Louis Fed banks, on Thursday both warned that inflation could stay higher for longer than many of their colleagues may anticipate.” | | | | TUNE IN TO DISPATCH+ ON APPLE PODCASTS : POLITICO Dispatch, our daily podcast that cuts through the news clutter and keeps you up to speed on the most important developments of the moment, is expanding. In collaboration with the new Apple Podcasts Subscription platform, Dispatch+ launches this week! This new podcast gives premium Dispatch+ s exclusive bonus weekly reporting and analysis from POLITICO's newsroom. Don't miss out, subscribe and listen to Dispatch+ on Apple Podcasts. | | | | | CONGRESS ENDS TRUMP-ERA RULE ENABLING PAYDAY LENDERS TO AVOID INTEREST RATE CAPS — WSJ’s Julie Bykowicz: “Congress voted Thursday to undo a Trump administration rule that enabled high-interest consumer lenders to attach themselves to banks and circumvent state-level interest rate caps. “The Office of the Comptroller of the Currency’s ruling in late October said that any bank or federal savings association that signs loan documents is to be considered the ‘true lender,’ even if the loan is serviced by or sold to a high-interest entity such as a payday lender. Prior to that rule, courts had sometimes found those arrangements to be illegal. Under then-President Donald Trump, the OCC had cited differing court approaches as a reason it wrote the rule.” ARCHEGOS’ BANKS FACING DOJ PROBE — Bloomberg’s Sridhar Natarajan, David McLaughlin and Tom Schoenberg: “U.S. investigators who focus on corporate collusion are examining how global banks handled multibillion-dollar trades with Archegos Capital Management that sent stocks into a spiral and burned other shareholders. “The Justice Department’s antitrust division is handling at least part of the probe into the collapse of Bill Hwang’s firm after lenders rushed to liquidate souring positions in March, according to people familiar with the matter. The debacle also erased much of the billionaire owner’s fortune and saddled banks with more than $10 billion in losses.” TOP U.S. OFFICIALS CONSULTED WITH BLACKROCK AS MARKETS MELTED DOWN — NYT’s Jeanna Smialek: “As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.” WHO REALLY MAKES OVERDRAFT MONEY — Brookings’ Aaron Klein in POLITICO Agenda: “[S]topping the analysis with the largest banks misses an important reality: A handful of smaller banks are the true overdraft giants … “According to my calculations, for multiple years running, at least six small banks depend on overdraft revenue for a majority of their profits. For three of those banks, overdraft revenues have exceeded total profits for each of the past two years — meaning these banks lost money from banking, except for charging overdraft fees.” | | | | A message from Accountable.US: Dear Corporate America:
(a) protect voting rights
(b) remain a member of the U.S. Chamber of Commerce
Pick one. You can’t do both.
Corporate America has pledged to speak up and protect Americans’ sacred right to vote … but many remain members of the U.S. Chamber of Commerce, a group that has poured millions of dollars into voter suppression efforts and backing anti-democratic actions. You can’t protect democracy and support the U.S. Chamber.
It’s time to live your values and #DropTheUSChamber. TAKE ACTION: dropthechamber.org | | | | | | | Follow us on Twitter | | | | Follow us | | | | |  |
