| | | | |  | | By Sam Sutton | 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.
| | The biggest story of the 2024 campaign has nothing to do with what voters think of the economy, at least right now. But it’s important to consider that, even after former President Donald Trump was indicted in four separate criminal cases, polls have consistently identified the economy and the labor market as the top issue voters will consider when they cast their ballots. Will Trump’s conviction on 34 criminal counts in New York loosen his narrow advantage over President Joe Biden in the polls? Possibly. But it may also strengthen Trump’s lock on the Republican base and provide an unexpected boost to his fundraising efforts with high-dollar donors in the investment and banking world. Minutes after the verdict was announced Thursday, Sequoia Partners venture capitalist — and former Hillary Clinton donor — Shaun Maguire announced on X that he’d made a $300,000 contribution to pro-Trump efforts. Trump allies are hopeful others in financial services follow suit. “I think his polling numbers go higher, which means donors are going to be more likely to give,” Point Bridge Capital founder Hal Lambert, an investor and Republican donor, told MM on Thursday evening. Republican leaders on key committees that oversee banking and market regulators were quick to rally around Trump. — Senate Banking’s top Republican Tim Scott of South Carolina said in a recorded statement that the verdict “erodes the confidence that Americans have in the justice system.” — Four veteran representatives who are running to lead Republicans on House Financial Services leaped to Trump’s defense — alternatively calling the verdict a “sham trial” (Andy Barr of Kentucky), “a political gotcha game” (French Hill of Arkansas) and “dangerous lawfare” (Bill Huizenga of Michigan). “Thank goodness President Trump is a fighter,” said Rep. Frank Lucas (R-Okla.). Reaction among top Democrats on those committees was equally emphatic. — “Hallelujah!!! My predictions came true! I predicted three years ago at a speech with the Human Rights Champaign [sic] that Stormy Daniels would be the one to get Trump,” the committee’s top Democrat, Maxine Waters of California, tweeted. She said her “faith in the criminal justice system has been strengthened!” You need to check out POLITICO’s wall-to-wall coverage of the verdict and its aftermath. But for now, here’s what’s happening in economic news: IT’S FRIDAY — As always, send tips and suggestions to me at ssutton@politico.com and to Zach at zwarmbrodt@politico.com
| | | | THE GOLD STANDARD OF ENERGY POLICY REPORTING & INTELLIGENCE: POLITICO has more than 500 journalists delivering unrivaled reporting and illuminating the policy and regulatory landscape for those who need to know what's next. Throughout the election and the legislative and regulatory pushes that will follow, POLITICO Pro is indispensable to those who need to make informed decisions fast. The Pro platform dives deeper into critical and quickly evolving sectors and industries, like energy, equipping policymakers and those who shape legislation and regulation with essential news and intelligence from the world's best politics and policy journalists.
Our newsroom is deeper, more experienced, and better sourced than any other. Our energy reporting team—including Ben Lefebvre, Alex Guillen and Kelsey Tamborrino—is embedded with the market-moving legislative committees and agencies in Washington and across states, delivering unparalleled coverage of energy policy and the energy industry. We bring subscribers inside the conversations that determine policy outcomes and the future of industries, providing insight that cannot be found anywhere else. Get the premier news and policy intelligence service, SUBSCRIBE TO POLITICO PRO TODAY. | | | | | The Commerce Department will release the personal consumption expenditures (PCE) index for April at 8:30 a.m. …
| | PCE — The Federal Reserve’s preferred gauge for measuring inflation will be out at 8:30 a.m. At this stage, the April report would need to reflect a sharp slowdown in price growth to convince central bankers to move ahead with rate cuts. The Fed will proceed with rate cuts “at some point,” New York Fed President John Williams said at the Economic Club of New York on Thursday, according to Reuters. But right now? “I don't feel any urgency.” The consensus estimate is that prices climbed by an annual rate of 2.7 percent last month. Inflation in “core” sectors of the economy — which don’t include volatile food and energy prices — is projected to have climbed by 2.8 percent. In either case, both measures are still running hotter than the Fed’s 2 percent target. “I’m looking at the end of the year, the fourth quarter, as the time where we might actually think about and be prepared to reduce rates,” Atlanta Fed President Raphael Bostic said this week, according to Bloomberg. Bostic and Williams are both voting members on the policy-setting Federal Open Market Committee. In other words? A market-boosting rate cut anytime before the Nov. 5 presidential election is looking less likely. Economic growth slowed — First-quarter GDP growth was revised downward on Thursday, a sign that consumer spending is starting to slow, the New York Times reports.
| | Big High Court ruling — The Supreme Court delivered a setback to Bank of America in its attempt to avoid a New York law that requires banks to pay at least 2 percent interest on home mortgage escrow accounts, Michael Stratford reports. The unanimous decision scrapped a lower court’s ruling that would have preempted “virtually all state laws that regulate national banks,” Justice Brett Kavanaugh wrote in the opinion. The justices sent the case back to the lower court, directing it to adopt a more “nuanced” analysis in deciding when federal law overrides state policies. The Daily Musk — Elon Musk has agreed to testify for up to five hours in the SEC’s investigation into his acquisition of Twitter, now known as X, Declan Harty reports. Musk is also reportedly advising Trump on crypto policy, according to Bloomberg’s Nancy Cook, Ted Mann, and Edward Ludlow.
| | | | YOUR DAILY DOWNLOAD ON ALL THINGS TECH: Today marks the 200th episode of the POLITICO Tech podcast! That's 200 incisive conversations with global policymakers, tech executives, social activists and other influential voices reshaping our world, one algorithm at a time. Join host Steven Overly for a daily dive into the major political and policy battles around artificial intelligence, election disinformation, competition with China, TikTok, microchips and much more. SUBSCRIBE AND LISTEN TODAY via Apple, Spotify, Simplecast or your preferred podcast player. | | | | | Another major super PAC haul — Jasper Goodman reports that venture capital firm Andreessen Horowitz has chipped in an additional $25 million to a network of cryptocurrency super PACs, pushing the group’s total recent fundraising haul above $135 million. New rules — Crypto companies licensed in New York will have to establish “effective” policies for handling customer service requests and complaints, Declan reports.
| | Bill Ackman likely to back Trump — Hedge fund billionaire Bill Ackman is preparing to support Trump in the general election, the FT’s Antoine Gara, James Fontanella-Khan and Alex Rogers report. An endorsement by Ackman, the head of Pershing Square Capital Management and one-time Democratic donor, would mark a coup for Trump as he pushes for big-ticket donors on Wall Street.
| | | Biden talks frozen Russian assets — President Joe Biden will host Belgian Prime Minister Alexander De Croo at the White House this afternoon where they’ll discuss efforts to use frozen Russian state assets to help Ukraine. The meeting comes before a G7 leaders meeting next month where the U.S. is pushing to convince European allies to finalize an emerging plan that would issue a loan to Ukraine backed by the future profits generated by Russia’s assets. As our European colleague Gregorio Sorgi reports, Belgium is a key player in the deal because it’s home to Euroclear, the securities depository that holds the bulk of Russia’s assets in Europe. Biden is expected to pile pressure on De Croo to give up the 25 percent corporate tax revenue on Euroclear’s profits to maximize the size of the loan to the war-torn country. Meanwhile, U.S. Deputy Treasury Secretary Wally Adeyemo is in Berlin this morning where he’ll make the case for tougher Western sanctions targeting Russia, including going after Chinese firms that are facilitating trade that helps the Kremlin build weapons. “Chinese firms can either do business in our economies or they can equip Russia’s war machine with dual-use goods,” Adeyemo plans to say. “They cannot do both.” — Michael Stratford
| | Big Citi moves in Washington — Rachel Goldberg is joining Citigroup on July 8 as head of U.S. government affairs, after overseeing the London Stock Exchange Group's government affairs operations for the Americas. Rob Runyan, who leads Citi's policy communications, is taking on a newly created government affairs role on June 10 as the head of third-party public policy engagement. The new unit will be responsible for working with organizations including think tanks and other advocacy groups that influence policy impacting Citi's business. — Zach Warmbrodt First in MM — Alysa James’ last day as communications director for Senate Banking Chair Sherrod Brown (D-Ohio) was Tuesday, Eleanor reports. She is now senior spokesperson and advisor to CFPB Director Rohit Chopra. — Eleanor Mueller | | | | Follow us on Twitter | | | | Follow us | | | | |
