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| | Wall Street investors have spent the last six weeks trying to decipher whether President Donald Trump’s tariff threats are negotiating tactics or the beginning salvos in a new trade war. But the threats alone are already reverberating throughout the U.S. Ahead of fresh inflation data out this morning, our Victoria Guida reports that while Trump has only made one major move on tariff policy since returning to the White House — another 10 percent tax on all imports from China — the self-described “Tariff Man” has threatened plenty of other new levies. And that’s beginning to rattle investors, businesses and, of course, voters. “Forty-three percent of Americans said in a recent survey that they were seeing the tariff threats feed into higher prices. Key benchmarks of consumer sentiment this month showed expectations for future inflation have ticked up. And the stocks of some key companies like Walmart have taken a hit in recent weeks on expectations of higher import costs,” Victoria reports. The prospect of major and sweeping tariffs — as Trump has repeatedly declared are on the table — has been spooking economists and financial titans for months, who have warned that Trump is risking a spike in inflation all over again. But the alarms are starting to get louder. Billionaire Ross Perot Jr. told Bloomberg last week that the threat of tariffs is “a big concern,” and hedge fund manager Steve Cohen said at a conference in Miami that “tariffs cannot be a positive.” The threats have only added more stress to investors, many of whom were already worried about the frothiness of U.S. stocks. Still, Trump is only plowing ahead. He declared Thursday that the U.S. will indeed be instituting previously paused 25 percent tariffs on Canada and Mexico. The president’s allies and advisers have repeatedly shot down the notion that tariffs are sure to fan prices higher. That includes his pick to lead the Council of Economic Advisers, Stephen Miran, who told lawmakers on Thursday that there is a precedent for “extraordinary economic transformation” at times of high tariff rates, such as in the 1800s. “Now, I don’t want to claim that correlation is causation, but nevertheless, you know the historical record is very clear that the American economic story has seen periods of high tariff rates coincide with extraordinary economic success,” Miran said. For now, all eyes are on the data. Friday’s inflation report is unlikely to carry much of an impact from tariffs, but, as SGH Macro Advisers Chief Economist Tim Duy told Victoria, “there’s some anecdotal evidence that firms are already starting to pull through prices.” “That could start to bite here in the next couple of months,” Duy said. IT’S FRIDAY — Next week is shaping up to be another busy one, so if you’ve got tips, get them in now. For all your SEC and CFTC news, you can reach me at dharty@politico.com. And as always, Sam is at ssutton@politico.com.
| | | | Donald Trump's unprecedented effort to reshape the federal government is consuming Washington. To track this seismic shift, we're relaunching one of our signature newsletters. Sign up to get West Wing Playbook: Remaking Government in your inbox. | | | | | | | The Commerce Department will release the personal consumption expenditures index for January at 8:30 a.m. … JPMorgan Chase CEO Jamie Dimon and Chicago Fed President Austan Goolsbee are among the speakers at Stanford’s SIEPR Economic Summit. CFPB pullback continues — The Consumer Financial Protection Bureau dropped a string of lawsuits against Capital One, Rocket Companies and others Thursday, just as Trump’s pick to lead the agency, Jonathan McKernan, was testifying on Capitol Hill, our Katy O’Donnell and Michael Stratford report. The awkward timing sparked a new line of questioning at the hearing and for Democrats like Sen. Elizabeth Warren “underscored the tension between the White House’s slash-and-burn approach to the bureau and the more conventional regulator Trump has selected to run it,” per Katy and Michael. — “It seems to me the timing of that announcement is designed to embarrass you and to show exactly who is in charge of the agency right now — Elon Musk and his little band of hackers,” Warren, the top Democrat on the Senate Banking Committee, told McKernan. — McKernan, a former board member of the Federal Deposit Insurance Corp., told lawmakers throughout the hearing that he would be in charge of the CFPB if confirmed — despite the administration and Elon Musk’s attacks on the agency, which have included Acting CFPB Director Russ Vought requesting no future funding for the bureau. But even McKernan seemed to acknowledge at one point that the agency’s fate is in limbo, telling lawmakers that “if we’re going to have the CFPB as presently constituted then we will need funding to perform our statutory responsibilities.” Shutdown incoming? — From our Meredith Lee Hill and Rachael Bade: “Senior Republicans are seriously exploring how to include cuts made by Elon Musk’s Department of Government Efficiency in an upcoming government funding bill — a move that would skyrocket tensions with Democrats and drastically raise the potential for a government shutdown.” — “Top GOP leaders and President Donald Trump’s team have been discussing the idea, which is far from finalized, according to three people who were granted anonymity to discuss the conversations,” Meredith and Rachael report. “But one of the people said the idea would be to codify some of the “most egregious” examples of alleged waste that DOGE has identified and incorporate them into a government funding patch through the end of the fiscal year. Republicans would then dare Democrats to vote against the package, lest they be blamed for causing a shutdown come the March 14 deadline,” they report.
| | Comer drills down on debanking — House Oversight Chair James Comer is pushing Acting FDIC Chair Travis Hill in a new letter for “a trove of unredacted correspondence on crypto activities” as part of its ongoing debanking investigation, our Benjamin Guggenheim reports. Comer said in the letter that the committee “is concerned that overreach by government regulators may have arbitrarily suppressed industries they deemed unfavorable.” Faulkender’s nomination hearing set — The Senate Finance Committee will hold a hearing for Michael Faulkender, who has been tapped to become deputy Treasury secretary, March 6, the committee said Thursday.
| | Gamble at your own risk — The SEC has a message for traders in the inherently wild world of memecoins: Don’t come calling us for help. In a statement, the SEC’s staff on Thursday said that “memecoins — an extremely volatile type of cryptocurrency token that is often launched for entertainment purposes — generally fall outside the SEC's purview and are not protected by the agency's investor-protection rules,” your host reports. — SEC Commissioner Caroline Crenshaw blasted the staff statement late Thursday for advancing what she called “an incomplete, unsupported view of the law” and raising “more questions than it answers.” Crenshaw, a Democrat, warned that the guidance risks serving as “a roadmap for crypto enterprises looking to evade oversight by labeling themselves as a meme coin” and pushed back on the staff’s claim that meme coins are “cultural projects.” — “The reality is that meme coins, like any financial product, are issued to make money,” she said. Down goes the Coinbase litigation — Also from your host: “The SEC is officially dropping its case against cryptocurrency giant Coinbase, ending what had been a major part of the federal government's clampdown against the digital assets industry.” — In a separate statement shared last night, Crenshaw criticized the SEC’s “unprecedented” decision to walk away from the case. She said the move risks undermining the SEC Enforcement Division’s credibility by creating “the specter that the agency will deploy its enforcement resources in conjunction with election cycles or in favor of those with means.”
| | FBI pins Bybit hack on North Korean-linked group — “The FBI has accused North Korean-linked hackers of conducting one of the largest thefts of cryptocurrency publicly known, seizing some $1.5 billion worth of ethereum from a Dubai-based firm,” the AP reports. Treasury’s new crypto counselor backs stablecoin push — From CoinDesk: “Within hours of the announcement that he’d started as the crypto counselor for Treasury Secretary Scott Bessent, the former Galaxy Digital lawyer Tyler Williams was addressing a private digital assets event in Washington, D.C., telling the crowd that helping Congress get stablecoin legislation across the goal line is a worthy opening effort.”
| | A new stock exchange — Dream Exchange — a new stock exchange venture that wants to cater to small and minority-owned businesses — has filed an application to become a national securities exchange with the SEC, the Wall Street Journal reports. (Long-time MM readers may recall reading about the Dream Exchange once before.) Goldman Sachs dumps DEI — The Wall Street institution has “erased diversity targets from a key regulatory filing,” Bloomberg reports, noting that the firm is the latest “to turn away from specific goals for a more representative workforce after an executive order by President Donald Trump.”
| | Former Rep. Blaine Luetkemeyer is joining the American Consumer and Investor Institute, which advocates for wider investor access to U.S. markets, as CEO, the group said Thursday. | | | | Follow us on Twitter | | | | Follow us | | | |
