| | | | | |  | | By Sam Sutton | Presented by the Consumer Credit Card Protection Coalition | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 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. Federal Reserve Chair Jerome Powell has spent the last year trying to serve up the economic equivalent of a soufflé: hiking rates just high enough for inflation to settle without baking the economy to a point of collapse. This week’s Fed meeting will be a toothpick test. With the central bank widely expected to pause rate hikes on Wednesday, Fed officials now must consider whether it’s hot enough, but also how long businesses and consumers can survive the heat. That’s going to be tricky to gauge, our Victoria Guida reports. From Victoria: “Wall Street investors, who until just weeks ago were betting that Powell would start cutting rates in the coming months, are now expecting the Fed to keep costs high through at least the rest of the year, as both the job market and inflation have stayed stronger than expected. “While the resilient economy has offered President Joe Biden a key talking point for his reelection, the prospect that high rates will continue to weigh on indebted households and firms as the race heats up could undercut his message of optimism. It could also shake public confidence by triggering the demise of more banks or other vulnerable businesses as the year wears on. “‘Keeping rates at these levels will pull more skeletons out of the closet,’ said Laura Rosner-Warburton, a senior official at MacroPolicy Perspectives and a former staffer at the New York Fed.” On Wall Street, the consensus over how the economy will fare in the coming months has started to fray. Goldman Sachs last week downshifted the likelihood of a recession in the next year to 25 percent from 35 percent. Bank of America still anticipates the economy will slump by early next year. To that point, more than a quarter of economists surveyed by Reuters still believe the Fed will cut rates between now and year-end — which would be a sign the economy has started to contract. Meanwhile, consumers and businesses are conveying pessimism as borrowing costs spike, but there are clear signs that they’re still spending at a healthy clip as wages expand and labor markets hold steady. As for investors? Well, the S&P 500 officially entered a bull market late last week. “The goal has been trying to get rates to a place where you’re going to slow the economy but not tank the economy,” Tim Duy, chief U.S. economist at SGH Macro Advisors, told Victoria. “What is that level? No one knows, exactly.” IT’S MONDAY — Buckle up, it’s going to be a very busy week. Send tips, gossip and suggestions to Sam at ssutton@politico.com and Zach at zwarmbrodt@politico.com.
| | | | A message from the Consumer Credit Card Protection Coalition: Defunding data security for credit cards and ripping away hard-earned rewards from working families would be a disaster for consumers, but that’s exactly what the Durbin-Marshall credit card bill would do. Thousands of Americans are mobilizing to demand Washington stay out of their wallets by stopping the Durbin-Marshall credit card bill. Learn more by clicking here. | | | | | MONDAY … Acting Comptroller of the Currency Mike Hsu, FDIC Vice Chair Travis Hill and Deputy Treasury Secretary Wally Adeyemo will speak at a virtual forum hosted by the Georgetown University Law Center's Institute of International Economic Law and the National Bankers Association at 9 a.m. … Secretary of State Antony Blinken will speak at the U.S.-India Business Council summit at 7:30 p.m. … TUESDAY … The Consumer Price Index for May will be released at 8:30 a.m. … Treasury Secretary Janet Yellen will testify at House Financial Services at 10 a.m. … CFPB Director Rohit Chopra will testify at Senate Banking at 10 a.m. … House Financial Services holds a digital assets hearing at 2 p.m. …… WEDNESDAY … The Producer Price Index for May will be released at 8:30 a.m. … The SEC meets at 10 a.m. … Chopra testifies at House Financial Services at 10 a.m. … U.S. International Development Finance Corporation CEO Scott Nathan testifies at Senate Appropriations at 10 a.m. … Federal Reserve Chair Jerome Powell holds a press conference following the central bank’s two-day meeting at 2:30 p.m. THURSDAY … Retail sales and regional bank manufacturing surveys will be released at 8:30 a.m. FRIDAY … Fed Gov. Christopher Waller speaks at 7:45 a.m. at the Norges Bank, International Monetary Fund, and IMF Economic Review joint conference … Warren, Waters spar over accredited investor definition — Our Eleanor Mueller and Declan Harty and the rift between Rep. Maxine Waters and Sen. Elizabeth Warren — long-time allies when it comes to cracking down on Wall Street — over a GOP push to scale back investment guardrails: “At the heart of the rift is a series of Republican-led proposals that would make it easier for individual Americans to buy stakes in startups and other privately held businesses … The fight is poised to reveal how much sway consumer protection hardliners like Warren hold over the rest of their party when it comes to rules that impact how Americans save, speculate and build wealth.” Succession — The WSJ’s Gregory Zuckerman: “George Soros, the legendary investor, philanthropist and right-wing target, is handing control of his $25 billion empire to a younger son—Alexander Soros, a self-described center-left thinker who grew up self-conscious of the family’s wealth and wasn’t thought to be a potential successor … ‘I’m more political,’ Alex said, compared with his father.” Christie’s Kushner jab — Former New Jersey Gov. Chris Christie is using Saudi Arabia’s investment in Jared Kushner’s private equity fund as a line of attack in his bid to derail former President Donald Trump’s 2024 presidential campaign, NJ Advance Media columnist Tom Moran reports. “Do you think it’s because he’s some kind of investment genius? Or do you think it’s because he was sitting next to the president of the United States for four years doing favors for the Saudis?” Christie said. Christie’s history with the Kushner family is well-documented. But his latest attack is notable given how much his own private sector work has raised eyebrows in recent years. Christie’s law firm advised fugitive financier Jho Low during the 1MDB fiasco. He also signed a lucrative deal with a pharma company only months after recommending higher Medicare rates for its non-opioid painkiller through his appointment to Trump’s bipartisan commission on opioids and addiction.
| | | | A message from the Consumer Credit Card Protection Coalition:   | | | | | Decentralized ≠ deregulated — From Sam: “Wall Street’s top derivatives regulator scored a major victory in its oversight of so-called decentralized trading platforms Friday when a federal judge ordered the online investment platform Ooki DAO to shut down.” OFAC — The WSJ’s Robert McMillan and Dustin Volz: “How North Korea’s Hacker Army Stole $3 Billion in Crypto, Funding Nuclear Program” So, how was your weekend? — Bloomberg’s Suvashree Ghosh, Yueqi Yang and Emily Nicolle: “Crypto exchange Binance.US is being thrown deeper into disarray, as banking partners prepare to rescind support, liquidity dries up and traders withdraw tokens from the platform while US regulators clamp down on the company and its owner.” — Coindesk’s Helene Braun: “Singapore-based crypto exchange Crypto.com will no longer be offering its services to institutional clients in the U.S., effective June 21, the company announced Friday. The exchange cited "limited demand" from institutional customers in light of the ‘current market landscape.’” — The exchange is holding on to its Los Angeles arena naming rights, however, writes Vulture’s Alejandra Gularte. — Coindesk’s Aoyon Ashraf and Braun: “Robinhood (HOOD), the popular trading platform, will end support for … the three tokens that were named as securities in the recent Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase.”
| | | | GET READY FOR GLOBAL TECH DAY: Join POLITICO Live as we launch our first Global Tech Day alongside London Tech Week on Thursday, June 15. Register now for continuing updates and to be a part of this momentous and program-packed day! From the blockchain, to AI, and autonomous vehicles, technology is changing how power is exercised around the world, so who will write the rules? REGISTER HERE. | | | | | | | | | There’s always an Elon angle — The FT: “Musk’s refusal to pay rent adds to Goldman bad property loans” Wait-and-see in fund land — The WSJ’s Jack Pitcher: “Flows are down markedly from this point in each of the past two years, and the money that is coming in has favored bonds and defensive equity strategies focused on less-volatile stocks. With interest rates at a 15-year high and the Federal Reserve’s path ahead uncertain, investors appear wary about stocks even after the S&P entered a new bull market Thursday.” — Growing confidence in the economy “risks a grave error for investors, according to some of the world’s biggest bond managers from Fidelity International to Allianz Global Investors,” write Bloomberg’s Alice Gledhill and Anchalee Worrachate. “They’re sticking to their forecasts for a downturn and advise hedging any bets on risk assets.”
| | | | A message from the Consumer Credit Card Protection Coalition: Millions of Americans rely on their credit card points and cash back rewards to pay for gas, groceries, travel and more. But the Durbin-Marshall credit card bill would steal the rewards that millions of Americans have earned, all to pay for a bailout for multibillion dollar retailer special interests. Worse yet, the Durbin-Marshall credit card bill would defund data security for credit cards, making it easier for cyber criminals to steal the personal and financial data of millions of Americans. Congress should protect American families, not find new ways to put Washington into the wallets of millions of consumers. Learn more about the disastrous Durbin-Marshall bill by clicking here. | | | | | Avery Jaffe has joined Chime as the fintech’s new director of policy communications. The DCCC alum was previously director of North America communications at Mastercard. The American Bankers Association has hired Chris Fisher, a longtime advisor to former Florida Gov. Charlie Crist, and Justin Melvin, former chief of staff to Rep. David Kustoff (R-Tenn.), to its congressional lobbying team. The American Securities Association has hired former Rep. Frank Lucas (R-Okla.) communications director Patrick Bond to lead its public affairs team.
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