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| | | The list of candidates for Federal Reserve vice chair is growing, thanks to a new push by Democratic lawmakers and progressive advocates. Sen. Robert Menendez has submitted the names of people that he hopes will be considered. He told President Joe Biden personally after a meeting with Democrats on the Hill Thursday that his goal was to see a Latino or Latina at the central bank, though they don’t have to be from his list (Victoria scooped that exchange here). Meanwhile, there’s a nascent effort by some progressive groups to get former Fed economist Julia Coronado on Biden’s radar. She might sound like a surprising choice to be championed by the left, given that her economic research firm, MacroPolicy Perspectives, advises Wall Street clients (and indeed, some groups asked by MM demurred on the subject until they look more into her). But she’s also done a lot of work bolstering the argument that the Fed doesn’t need to whack the labor market to kill inflation, said Skanda Amarnath, executive director of advocacy group Employ America. “Julia is pretty unique in the fact that her job itself is one that’s a lot closer to what is probably the day-to-day judgments and decision-making processes of a Fed governor: having to monitor the financial markets and the economy in real time, and figure out what they mean,” he said. “If you’re thinking about a credible defender of full employment conditions, who’s still intellectually rigorous, data-driven, and not going to make arguments just purely out of political convenience, she stands out.” Chris Hughes, co-founder of the Economic Security Project, emails: “I think Julia Coronado would make an excellent pick! I know her a bit, and she is widely respected.” She is still, at this point, likely a long shot. (She would not fit the bill for Menendez; Coronado is her last name by marriage.) But the dance to determine who can get broad support is underway. The Revolving Door Project, the most vocal critic of many Biden picks, has begun pushing back on two of the other prominent names – Karen Dynan and Seth Carpenter. One of the elephants in the room is who will get backing from Sen. Elizabeth Warren (D-Mass.), who has been a heavyweight in conversations around personnel. Bloomberg News reported Thursday that Warren is explicitly calling for someone who will counter Chair Jerome Powell. As for Menendez, it’s clear that his push to get Latinos at the Fed has risen high on his priority list. The senator voted against Powell last year to protest that multiple regional Fed president jobs have been filled in recent years, and none of them have gone to Hispanic candidates. (Presented without comment: The Kansas City Fed job is still open.) A White House official, granted anonymity to discuss the process, told MM: "We are looking at a highly diverse group of world class economists just as we did with the previous nominations to the Federal Reserve, including Hispanic/Latino candidates." Happy Friday – What's keeping you busy this month? We'd love to hear from you at zwarmbrodt@politico.com and ssutton@politico.com.
| | | | A message from Ripple: Ripple's crypto solutions are built for business. Using proven cryptocurrency and blockchain technology honed over a decade, we help our partners send payments quickly and efficiently. Ripple also enables organizations of all sizes to drive broader business innovation with cryptocurrency. And we work with central banks around the world to create central bank digital currencies (CBDCs). Learn more about Ripple's business impact here. | | | | | | Daniel Hornung, Special Assistant to the President for Economic Policy, talks first-time homebuyers at the Urban Institute at 10 a.m. … NYT Fed reporter Jeanna Smialek talks about her new book “Limitless” at Politics and Prose at 7 p.m. … Why Wall Street stayed quiet on the ESG rollback — Republicans, with a little help from moderate Democrats, jammed through a repeal of the Biden Labor Department’s ESG investing policy this week. We’re still awaiting Biden’s veto. If Biden had decided to let the rollback take effect, it would mean money managers would face a return to Trump-era restrictions on how they weigh environmental and social factors in retirement investments. But Republicans said they didn’t get any pushback from Wall Street. That made us ask why. The main reason, according to reporting by our Eleanor Mueller, is lobbyists were confident that Biden would block the repeal and so they decided to stay out of it. “Everyone knows that the [rollback] isn't ultimately going anywhere,” said a trade group source granted anonymity to speak candidly. Another reason is that asset managers are laying low as the issue makes its way through the courts. Texas is leading a multi-state lawsuit to undo the rule. “People will actually be relieved to see the decision down in Texas, whatever it is, and to see however it gets worked out, presumably all the way up to the Supreme Court, because that will give the regulatory certainty that we currently don't really have,” the industry representative said. Porn snafu derails Fed speech — Bloomberg: “A virtual event featuring Federal Reserve Governor Christopher Waller was scrapped Thursday after a participant displayed pornographic content that was visible to viewers.” Senate committee approves Biden IRS pick — The Senate Finance Committee on Thursday approved Danny Werfel’s nomination as IRS commissioner in a bipartisan 17-9 vote. Werfel, who leads Boston Consulting Group’s public sector practice, is now headed to confirmation by the full Senate. A flood of flood bills — Lawmakers are beginning to roll out a series of bills to overhaul the National Flood Insurance Program, with its reauthorization being one of Congress’s must-do items before Sept. 30. Sen. John Kennedy introduced bills to cap annual flood insurance premium increases and to force FEMA to explain price changes under its recent NFIP revamp, known as Risk Rating 2.0. Rep. Blaine Luetkemeyer introduced bills that would require FEMA to buy reinsurance to help pay for flood losses and allow communities to develop alternative flood maps. House Financial Services plans to have its first hearing of the year on flood insurance on March 10.
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | Lawmakers and Wall Street resist Gensler market overhaul — Declan Harty has a new piece detailing how financial firms and Washington lawmakers are teaming up to fight SEC Chair Gary Gensler’s sweeping market structure revamp. Even some of Gensler’s Democratic allies are urging him to tread lightly. Rep. Bill Foster, a top Democrat on House Financial Services, is suggesting the use of pilot programs to explore the changes more gradually.
| | | Investors look to reverse decline in Black-owned banks — A group of investors says it’s poised to make history by acquiring an existing commercial bank in a deal that would make it a new Black-owned lender. The backers behind Redemption Holding Company’s acquisition of Utah-based Holladay Bank and Trust include former Trump administration official Ashley Bell; Martin Luther King Jr.’s daughter, Bernice King; and former NFL player Dhani Jones. Bell, Redemption’s CEO and a partner at the law firm Dentons, told MM that he’s trying to develop a platform to build the “next generation of Black banks.” His goal is to not only serve the existing Utah community, but also Black customers across the country, and to seek out deals with major companies that want to do business with Black banks. “We want to be the bridge between Wall Street and MLK Jr. Drive,” he said. WSJ’s Dion Rabouin has more on the deal and the push to reverse the decline in Black-owned lenders. Brown warns regulator about losing bank branches — Senate Banking Chair Sherrod Brown urged Acting Comptroller of the Currency Michael Hsu to try to prevent bank branch closures in low- to moderate income communities. Brown said the closures are related to banking industry consolidation.
| | | | A message from Ripple:   | | | | | | Coinbase, Circle drop troubled bank partner Silvergate — Major digital asset firms Thursday announced plans to cut ties with go-to crypto bank Silvergate, after it warned it was at risk of being “less than well-capitalized” according to WSJ. Warren keeps bipartisan pressure on Binance — Sen. Warren sent a letter to crypto exchange Binance and its U.S. affiliate, Binance.US, asking for details on the company’s finances, risk management and regulatory compliance. Sens. Roger Marshall, a Kansas Republican, and Chris Van Hollen, a Maryland Democrat, signed the letter. House Republicans will try to play nice — Rep. French Hill said Thursday that the House Financial Services Committee, where he chairs a digital assets panel, will try to work with the House Agriculture Committee when it comes to crypto legislation, according to The Block.
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| | | | A message from Ripple: Real business impact. Right now.
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