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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. | | | Big jobs day question — Friday’s June jobs report is expected to jump back up closer to 1 million from the disappointing numbers the last couple of months. White House officials hope the numbers keep climbing especially when extra federal jobless benefits expire in September. You’d expect to see some impact given 12 states already dropped the extra $300 per week. Ten more states will do so at the end of this week and 26 in total have said they will curtail benefits before they officially expire. But data so far don’t really show much of an impact, suggesting the extra money might not be the main factor keeping people from re-joining the labor force, which could suggest bigger structural problems that could hold back the Covid-19 recovery. Per Pantheon’s Ian Shepherdson: “Emerging evidence from the Homebase employment data suggests that the ending of federally-financed enhanced unemployment benefits in many states has not clearly pushed people back into the labor force, yet. “This is not necessarily the end of the story, though, because the data are subject to revision. … [M]any of the states which have ended the benefit made the change as recently as last week, though the intention to stop taking the federal money was made and announced earlier” Theoretically, the end of benefits should show up with more people taking jobs starting in September. It might have made sense for large swaths of lower-paid workers to wait out Covid and get vaccinated. But vaccines are here now, Covid is (mostly) waning and staying out of the labor force past Labor Day probably won’t be possible for millions of Americans. If the labor force participation rates stays stubbornly low past that, well, we’ve got other issues. Those issues would likely include lack of child care and other areas covered in President Biden’s American Families Plan. But the legislative path forward for that package remains highly perilous. 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. | | | | SUBSCRIBE TO WOMEN RULE : The Women Rule newsletter explores how women, in Washington and beyond, shape the world, and how the news — from the pandemic to the latest laws coming out of statehouses — impacts women. With expert policy analysis, incisive interviews and revelatory recommendations on what to read and whom to watch, this is a must-read for executives, professionals and rising leaders to understand how what happens today affects the future for women and girls. Subscribe to the Women Rule newsletter today. | | | | | | | | Biden heads to Wisconsin where he will tour the La Crosse Municipal Transit Utility and deliver remarks pitching the bipartisan infrastructure framework ahead of the July 4th holiday … House Financial Services has a hearing at 10:00 a.m. entitled "A Biased, Broken System: Examining Proposals to Overhaul Credit Reporting to Achieve Equity” … House Financial Services subcommittee at 3:00 p.m. has a hearing entitled “The Legacy of George Floyd: An Examination of Financial Services Industry Commitments to Economic and Racial Justice” … HEARING PREP — Cowen’s Jaret Seiberg on the credit rating hearing: “There will be headline risk out of this hearing as we expect all but one of the witnesses to advocate for radical changes to the existing system such as the creation of a government-run alternative to the existing credit bureaus. “We believe this hearing will clear the way for the full committee as soon as next month to vote on legislation that would establish a government-run credit bureau … We do not see similar support in the Senate so the risk that these provisions are enacted appears low. That said, the vote will provide political cover for the Consumer Financial Protection Bureau to enact changes via enforcement and rulemaking” FACEBOOK RULING MAY PUNT ISSUE TO CONGRESS — Our Leah Nylen and Emily Birnbaum: “A federal judge’s rejection of a major lawsuit against Facebook gave Silicon Valley’s critics one reason for hope: They say it perfectly illustrates the urgency for Congress to rewrite the nation’s antitrust laws. “U.S. District Judge James Boasberg said … that the Federal Trade Commission’s antitrust complaint failed to show that the world’s largest social network … is a monopoly. The ruling left the FTC and a coalition of nearly every state’s attorneys general with a month to revise their cases to pass muster... "But it also fueled quick calls for action by tech industry critics from both parties in Congress, who called it further evidence that existing antitrust laws don’t deter the online industry’s behemoths from unfairly quashing competitors.” BIDEN ON THE INFRA DEAL — Our Myah Ward: “Biden … pitched the bipartisan infrastructure deal as one the ‘American people can be proud of,’ while cautioning that there was a lot of work ahead to finish the final product. “‘This deal is the largest long-term investment in our infrastructure in nearly a century,’ Biden wrote in an op-ed on Yahoo News. ‘Economists of all stripes agree that it would create good jobs and dramatically strengthen our economy in the long run.’ Biden also made clear that he was not satisfied that the bill is missing some ‘critical initiatives on climate change’ MM SIDEBAR — Biden still says he’ll do all the climate change stuff along with much of the Families Plan agenda in a reconciliation package. Saying that may help him keep Democrats together on the infrastructure bill but it risks losing Republicans. It’s kind of an excruciatingly difficult dance with no certainty the White House can pull it off. Wall Street still very much expects passage of the infrastructure bill. But it but may be ignoring the risks of all it coming apart. | | | TECH GAINS NUDGE S&P 500, NASDAQ HIGHER — AP’s Damian J. Troise and Stan Choe: “Strength for tech stocks nudged U.S. indexes a bit further into record heights Monday, more than making up for losses across much of the rest of Wall Street. "The S&P 500 rose 9.91 points, or 0.2 percent, to 4,290.61 after drifting between small gains and losses for much of the day. It added to its all-time high set Friday as optimism builds about the strengthening economy and expectations that the Federal Reserve will keep interest rates low for a while longer.” QUARLES UNCONVINCED ON FED DIGITAL CURRENCY — Our Victoria Guida:
“Federal Reserve Vice Chair for Supervision Randal Quarles … expressed deep skepticism about the idea of the central bank issuing its own digital currency, a possibility that the Fed is seriously exploring. “Quarles began his remarks to the Utah Bankers Association citing Americans’ enthusiasm for novelty, something he said ‘has sometimes led to a mass suspension of our critical thinking and to occasionally impetuous, deluded crazes or fads.’ ‘Which brings us to my topic today: central bank digital currencies,’ he added. Quarles said he isn’t convinced that a Fed-issued virtual currency would either defend the dollar’s primacy or increase financial inclusion.” | | | | 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. | | | | | | | | CONSUMER WATCHDOG APPROVES NEW FORECLOSURE PROTECTIONS — Reuters’ Michelle Price: “The U.S. consumer watchdog on Monday finalized new protections for homeowners who are struggling to make mortgage payments due to the pandemic, but said foreclosures will be allowed to resume in coming months once those extra protections have been met. “The Consumer Financial Protection Bureau in April proposed, among other measures, a new review process which it said at the time would generally prohibit mortgage servicers from starting a foreclosure until after Dec. 31, 2021.” FED OFFICIALS DEBATE SCALING BACK MORTGAGE-BOND PURCHASES AT FASTER CLIP — WSJ’s Paul Kiernan: “As Federal Reserve officials discuss how to eventually scale back their easy-money policies, they are debating whether to start by reducing purchases of mortgage-backed securities to avoid adding more fuel to the housing boom. “The Fed has bought $982 billion of the mortgage bonds since March 5, 2020, and currently plans to keep buying at least $40 billion each month. Those purchases, along with the Fed’s monthly purchases of $80 billion of Treasury debt, aim to hold down long-term borrowing costs to stimulate the economy as it recovers from the effects of the pandemic.” BARKIN SAYS U.S. HAS MADE PROGRESS ON INFLATION GOAL — Reuters: “The U.S. Federal Reserve has made "substantial further progress" toward its inflation goal in order to begin tapering asset purchases, Federal Reserve Bank of Richmond President Thomas Barkin said on Monday, as he indicated U.S. employment numbers may soon follow. “‘It's pretty clear to me we have had substantial further progress against our inflation goal,’ Barkin said during an event at the Rotary Club of Atlanta. ‘I'm pretty optimistic about the labor market. ... If the labor market opens as I suggested it might, then I think we're going to get there in relatively short order.’” FANNIE, FREDDIE OVERHAUL REBOOT IS A BOON TO MANY MORTGAGE PLAYERS — WSJ’s Telis Demos: “Fannie Mae and Freddie Mac may have been waylaid on their journey back to private hands. But the way things are moving, some big players in the mortgage business could end up in a better place. “The Supreme Court ruling last week that the government’s sweep of the housing giants’ profit didn’t exceed their regulator’s statutory authority and that presidents can readily replace the head regulator was a one-two blow to Fannie and Freddie’s shares, which are down more than 40 percent in the past week." BANKS PLEDGE TO FIGHT INEQUALITY — CNN’s Matt Egan: “America's biggest banks insist they can and will do more to combat the nation's racial inequality crisis. The trade group behind JPMorgan Chase, Wells Fargo, Bank of America and dozens of other big banks is detailing 30 best practices lenders can take to ease inequality in Black communities. | | | | Follow us on Twitter | | | | Follow us | | | | |  |
