| | | | |  | | By Victoria Guida and Zachary Warmbrodt | | Presented by |  | | | 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.
| | Get ready for more Federal Reserve limbo. The Labor Department will announce employment numbers for March this morning, and the Bloomberg consensus estimate is that the U.S. added a net 213,000 jobs and the unemployment rate ticked down to 3.8 percent. If that happens, it won’t tell you much more about whether the Fed will cut interest rates in June, and markets will be left waiting for the next inflation report to help seal the deal. What would move the needle: if we get a downside surprise, showing the labor market has significantly weakened. “The Fed’s tolerance for faster job growth means that it will react to only large upside misses,” Tim Duy, chief U.S. economist for SGH Macro Advisors, wrote in a note Thursday. “We think that something like job growth above 250k would help make the Fed more wary about the wisdom of cutting rates. In contrast, even a smallish downside miss, something less than 200k, would add further support for a June cut.” In other words: It would have to be a really gangbuster number to change Fed officials’ calculus on what path the economy is on because they already expect growth and the labor market to be relatively strong. But they are worried about unnecessarily causing a recession, which will make them more sensitive to a rise in joblessness. There isn’t any evidence that’s in the offing, though. Vanguard data on enrollments in 401(k) retirement plans show the pace of hiring increased 2.4 percent in February. “We are seeing a turning point in the data with the recent uptick in hiring,” the firm’s chief global economist, Joe Davis, said, but added that it’s still at a slower pace than 2021 and 2022, as well as pre-pandemic. Meanwhile, data from small business management app Homebase finds that 88 percent of employees at small businesses are feeling secure in their position — both hours worked and the number of people working increased in March. All of that probably means more waiting. Fed Chair Jerome Powell has made clear he’s in no rush to cut for the time being, and as long as inflation stays a bit stubborn and the economy keeps chugging along, there’s nothing to force his hand yet. Happy Friday — The IMF-World Bank spring meetings are coming soon. What will you be watching? Will you be here? Drop a line to zwarmbrodt@politico.com. And keep up with Victoria at @vtg2 and vguida@politico.com.
| | | | A message from Electronic Payments Coalition: CRS: NO EVIDENCE THAT DURBIN-MARSHALL CREDIT CARD BILL WOULD HELP CONSUMERS OR SMALL BUSINESSES The independent Congressional Research Service (CRS) is the latest organization to release a report questioning whether the Durbin-Marshall Credit Card Bill would help consumers or small businesses. CRS echoed an earlier report by the Richmond Fed noting that consumers failed to see any meaningful cost savings because of similar legislation imposing routing mandates and price caps on debit card interchange. Learn more HERE. | | | | | DOL releases March jobs numbers at 8:30 a.m. … Richmond Fed President Tom Barkin speaks to the Greater Baltimore Committee at 9:15 a.m. ... Fed Governor Michelle Bowman delivers keynote remarks at a Manhattan Institute Shadow Open Market Committee meeting in New York at 12:15 p.m. SEC puts climate rule on ice — The SEC is halting the implementation of its landmark climate-risk disclosure mandate for public companies as the agency faces a barrage of litigation aimed at undoing it, Declan Harty reports. The SEC said it’s not backing down from the policy or the belief that it has the necessary authority but that the pause will “facilitate the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits." In related news, Jordan Wolman reports that the pro-ESG group Unlocking America’s Future is ramping up an ad campaign in swing districts to defend the climate rule against an expected congressional vote on rolling it back. The group is trying to press Reps. Vicente Gonzalez (D-Texas) and Marie Gluesenkamp Perez (D-Wash.) to vote against undoing theirs. Messy Fed speak — A swirl of mixed messages emerged from the Fed Thursday, a day after Powell signaled the central bank plans to stay the course with cuts this year. Stocks fell. The clashing views underscored the high degree of uncertainty surrounding current economic conditions. Per Bloomberg, Minneapolis Fed President Neel Kashkari suggested cuts may not be needed “if we continue to see inflation moving sideways.” Chicago Fed President Austan Goolsbee, whom one MM source this week floated as a Biden 2.0 Fed chair, stuck to an overall dovish tone, MarketWatch reports. He said higher-than-expected inflation readings in the last couple of months “should not knock us off the path back to target” of 2 percent inflation. Neither Kashkari nor Goolsbee is a voting member on the Fed’s rate-setting committee. A new AI warning — Acting Comptroller of the Currency Michael Hsu, a top bank regulator, said he’s concerned about a “potential explosion” of fraud driven by artificial intelligence, Michael Stratford reports. As it becomes easier to create deepfakes and clone voices, Hsu said policymakers should reconsider who bears the costs of the fraud. He cited a new U.K. rule that requires banks to reimburse customers for losses, which he said would incentivize fraud protection.
| | | | SUBSCRIBE TO GLOBAL PLAYBOOK: Don’t miss out on POLITICO’s Global Playbook, the newsletter taking you inside pivotal discussions at the most influential gatherings in the world, including WEF in Davos, Milken Global in Beverly Hills, to UNGA in NYC and many more. Suzanne Lynch delivers the world's elite and influential moments directly to you. Stay in the global loop. SUBSCRIBE NOW. | | | | | | | | First in MM: New credit score bill — Rep. Scott Fitzgerald, a Wisconsin Republican, is introducing legislation that would reverse a planned revamp of credit scoring requirements for mortgage lenders. At issue is a policy change by the FHFA that would require lenders to pull a minimum of two credit reports rather than three for mortgages sold to Fannie Mae and Freddie Mac. The U.S. has three major credit bureaus: Equifax, Experian and TransUnion. TransUnion is endorsing Fitzgerald’s bill. Republicans have been leading opposition to the change. “The FHFA’s proposal could be the obstacle that keeps borrowers from obtaining a mortgage if they have lower FICO scores but are otherwise creditworthy,” Fitzgerald said in a statement. “My bill corrects this misguided proposal by codifying the long-standing requirement that enterprises obtain a credit report and credit score on a borrower from each of the three national credit bureaus.” Warren vs. student loan exec — One of the largest student loan servicers is pushing back on Sen. Elizabeth Warren’s request for its CEO to testify Wednesday at a hearing to scrutinize the company’s management of millions of federal student loan accounts, Michael reports. Warren last month invited Scott Giles, who leads the Missouri Higher Education Loan Authority, or MOHELA, to testify before the Senate banking subcommittee that the Massachusetts Democrat chairs. But MOHELA’s attorneys responded this week that Giles can’t testify on April 10 and the company instead wants Warren to scrap the scheduled hearing in favor of private, bipartisan briefings by senior company officials. After those briefings, “MOHELA is prepared to address the possible need for a hearing, including a CEO-level hearing,” Kirkland & Ellis partners Reginald Brown and Jeremey Dresner wrote to Warren on behalf of the company in a letter obtained by MM. “However, we ask that you not prejudge the need for a hearing until you have had an opportunity to digest MOHELA’s briefings and perspective.” Warren’s team fired back. “The millions of Americans with student loans serviced by MOHELA deserve answers, and MOHELA's chief executive should appear as a witness before the subcommittee to provide them,” a Warren spokesperson told MM. “A closed door briefing is not a substitute for a public testimony."
| | | | Access New York bill updates and Congressional activity in areas that matter to you, and use our exclusive insights to see what’s on the Albany agenda. Learn more. | | | | | | | | | Is the CFPB coming for Roblox? — The bureau released a report warning of potential financial and data risks within video games and virtual worlds, where consumers are spending billions of dollars each year. The CFPB said it was part of an effort to monitor non-traditional markets where financial products and services may be offered. “The Consumer Financial Protection Bureau is working to understand how these worlds can become a haven for scams, fraud, financial losses and unanticipated purchases that can deplete a family’s real-world financial assets,” CFPB Director Rohit Chopra said in a statement. Separately on Thursday, Chopra said the bureau will propose a rule restricting data brokers’ activities in the coming months, Katy O’Donnell reports.
| | | | A message from Electronic Payments Coalition:   | | | | | Binance exec emerges in Nigeria — Bloomberg reports that Binance executive and former IRS special agent Tigran Gambaryan, who has been detained in Nigeria for more than a month, has had his case adjourned until April 19 following an initial court appearance Thursday. Gambaryan has been held by Nigerian authorities since February, following a major clash between the government and the crypto exchange. Nigerian officials blame Binance for crashing the country’s currency. Gambaryan, who leads financial crimes compliance at Binance, was charged with tax evasion during his court appearance Thursday. The judge adjourned his case after learning that he was seeing the charges for the first time. In an open letter, Gambaryan’s wife, Yuki Gambaryan, urged the Nigerian government to release him. “Tigran is merely an employee,” she wrote. “He does not have authority over Binance's corporate decisions or policies that might have impacted Nigeria. He spends his workday investigating and pursuing criminal activity on the platform.” Crypto company moves — Coinbase registered in Canada … Ripple is planning a stablecoin … PayPal is integrating its stablecoin into the company’s cross-border money transfer service.
| | | | A message from Electronic Payments Coalition: CRS QUESTIONS WHETHER DURBIN-MARSHALL CREDIT CARD BILL WOULD HELP ANYONE AT ALL Every member of Congress should read the CRS analysis which discusses the impact the Durbin-Marshall Credit Card Bill could have on small businesses and American families. Report after report has plainly demonstrated that consumers and small businesses did NOT save any money when Congress passed the 2010 Durbin Amendment, imposing new mandates on debit cards. Now, a decade later, why would anyone assume a monumental restructuring of our nation’s secure, worry-free credit card system would yield different results? After considering the facts, the only logical solution would be to strongly OPPOSE the Durbin-Marshall Credit Card Bill. Click HERE to learn more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
