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April 29, 2021
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ICYMI: People Who Are Willing to Get Vaccinated Are More Economically Confident 

Across the board, people who are willing to get a coronavirus vaccine have a higher level of consumer confidence than those who are unsure about vaccination and those who say they have no plans to get vaccinated, per new data from Morning Consult economist John Leer. Another notable takeaway: There’s little difference between those who have already been vaccinated and those who plan on being vaccinated. Read more here.


Top Stories

  • In his first address to a joint session of Congress, President Joe Biden delivered his vision for the country’s recovery from the pandemic, pitching an expanded role for the federal government that would bring about a raft of social proposals including child care, paid leave, two years of free community college and higher taxes on the wealthiest Americans and corporations. Aides to Biden say he views the country’s recovery as a rare opportunity to persuade voters that the country is more united and ready to make significant taxpayer investments. (Bloomberg
  • Alex Oh, just days into her tenure as enforcement director of the Securities and Exchange Commission, resigned from her position after a judge questioned her conduct in a lawsuit concerning Exxon Mobil Corp. Melissa Hodgman will serve as enforcement chief on an acting basis. (The Wall Street Journal)
  • Federal Reserve Chairman Jerome Powell said that the uptick in vaccine access and “strong policy support” is helping the economy recover, and although inflation is rising in some areas, it isn’t enough to reverberate throughout the entire economy. Powell said that the Fed will consider cutting economic support when it sees “more data” showing that the economy has healed, emphasizing that it’s “not more complicated than that.” (The Washington Post)

Chart Review


Events Calendar (All Times Local)


What Else You Need to Know


How the middle class became downwardly mobile

Simon Kuper, Financial Times

‘Nowadays bank managers, teachers and lawyers can find themselves living in their childhood bedrooms.’


Stocks Are Off to Best Start to a Presidential Term Since Great Depression

Karen Langley, The Wall Street Journal

The stock market is set to close out President Biden’s first 100 days in office on Thursday with its best start to a presidential term since the days of Franklin D. Roosevelt. The S&P 500 has risen 10% since Mr. Biden’s Jan. 20 inauguration. The index is on course for its strongest performance since the start of Mr. Roosevelt’s first term in 1933, when it surged 80% after a spectacular crash in the Great Depression, according to a Dow Jones Market Data analysis.


‘Buy American’ sounds good in theory. Biden will find it’s painfully slow in practice.

Doug Palmer, Politico 

President Joe Biden wants to require federal agencies to buy more American products to help rebuild America’s factory base. He’s about to find out how hard it will be to deliver on his goal.

Fiscal Policy

Private Equity and Hedge Funds, Facing a New Tax Burden, Prepare Their Defense

Miriam Gottfried and Juliet Chung, The Wall Street Journal

Some private-equity firms and hedge funds are pushing back against a proposal from President Biden to end the carried-interest tax advantage these types of firms enjoy. Mr. Biden is unveiling a $1.8 trillion proposal that includes new spending on child care, education and paid leave, as well as extensions of some tax breaks. 


Why Wall Street’s Favorite Tax Break Is Biden Target

Sabrina Willmer and Melissa Karsh, Bloomberg

One of the most reviled loopholes in a tax code full of them is under threat again. While the average American worker must pay the standard tax rate on their income, wealthy private equity managers and venture capitalists are able to pay a lower capital gains rate on one of their main forms of compensation. 


California Is Awash in Cash, Thanks to a Booming Market

Matt Phillips, The New York Times

As the pandemic raged last May, California was reeling. Spending on unemployment assistance and health care had jumped, while tax revenues were on the verge of cratering. State officials, just months earlier counting on a $5.6 billion budget surplus, now anticipated a $54 billion shortfall. 


Biden Disappoints SALT Democrats, Setting Up Headache for Pelosi

Laura Davison and Kaustuv Basu, Bloomberg

President Joe Biden’s decision, in a raft of individual tax proposals released Wednesday, to leave in place a cap on state and local tax deductions threatens to complicate congressional negotiations over his sweeping new social-spending program. The omission disappoints a group of Democratic lawmakers pushing to remove the $10,000 cap on state and local tax, or SALT, deductions that went to help pay for a slice of President Donald Trump’s 2017 tax cuts. 


Biden Dares Democrats to Shift Tax Burden to Wealthy Americans

Justin Sink, Bloomberg

Joe Biden took the riskiest step of his presidency with a call for higher taxes on the wealthy to fund a massive investment in the nation’s social safety net, betting he could sell the American public on sweeping change following a pandemic that exacerbated economic and social divides. Biden devoted his first address to a joint session of Congress to a call for a “a once-in-a-generation investment in our families,” prescribing trillions of dollars in new spending for infrastructure, child care, paid leave, community college tuition, and a bevy of subsidies for working class families.


Boomer Wealth Is Cascading Down as Biden Weighs Inheritance Tax

Alexandre Tanzi, Bloomberg

The handover of assets from U.S. Baby Boomers to their children, expected to rank among the biggest wealth transfers in history, is well under way according to a new survey by research firm Spectrem.The study, published as President Joe Biden prepares to scrap a longstanding capital-gains tax break used by wealthy estates, found that 66% of households with a net worth of more than $25 million in 2020 attributed their wealth to inheritance. That’s up from just 22% in 2007.

Economy and Monetary Policy

Today’s economic-growth numbers could show signs of boom to come

Andrew Van Dam and Rachel Siegel, The Washington Post

The U.S. recovery probably found its rhythm in the first three months of 2021, according to early forecasts of data to be released by the Bureau of Economic Analysis on Thursday morning. It appears likely that all coronavirus-era losses will be recovered by the middle of this year.


U.S. Economy Appears to Be Lifting Off

Josh Mitchell, The Wall Street Journal

The U.S. economy appears to have expanded rapidly in the first quarter, extending what economists project will be a robust, consumer-led recovery from the pandemic this year. Fueled by a flood of federal cash to households and rising vaccinations, the nation’s gross domestic product likely grew at a 6.5% seasonally adjusted, annual rate in the first three months of 2021, according to economists surveyed by The Wall Street Journal. 


Biden’s big bet: He can remake the economy without any negative side effects

Heather Long, The Washington Post

President Biden, fresh off a victory on a large stimulus package, is pitching another $4 trillion in spending to make bold investments in the nation’s physical infrastructure and human capital in an effort that he says will spur growth, create a more equitable economy and make the United States more competitive with China — without any negative side effects. It’s an experiment that hasn’t been tested in the modern U.S. economy. This year and next, forecasters are predicting a burst in hiring and growth that will rapidly heal most financial wounds from the pandemic. 


Unemployment Claims Are Expected to Reach Fresh Covid-19 Low

Eric Morath, The Wall Street Journal

New applications for unemployment benefits are projected to show a further easing to the lowest level since the Covid-19 pandemic took hold in the U.S. more than a year ago. A decline would be consistent with other signs that the labor market is rebounding this spring.


G.D.P. report is expected to show an economic pickup.

Nelson D. Schwartz, The New York Times

As the coronavirus pandemic recedes and government relief kicks in, fresh evidence of the economy’s revival is expected Thursday morning when the government releases its estimate of first-quarter growth. Experts are looking for a pickup in activity after the economy’s tepid performance in the fourth quarter, when an increase in coronavirus cases and tightened restrictions hampered business and consumer spending.


Powell Says Archegos Collapse Revealed Breakdowns at Some Banks

Jesse Hamilton and Catarina Saraiva, Bloomberg

Federal Reserve Chairman Jerome Powell said the central bank is examining the Archegos Capital Management blowup because it revealed risk-management failures at a number of banks his agency supervises. “It seems as though there were risk-management breakdowns at some of the firms — not all of them — and that’s what we’re looking into,” Powell said at a press conference Wednesday.


Credit Suisse, Bank of America, Credit Agricole Fined by EU for Bond-Trading Cartel

Anna Hirtenstein, The Wall Street Journal

The European Union fined Credit Suisse Group AG, Bank of America Corp. and Crédit Agricole SA for illegally colluding on trades in government bond markets at the expense of their clients. The three banks were together fined €28.5 million, equivalent to $34.4 million. Deutsche Bank AG also participated in the trades, but wasn’t fined because it alerted the EU about the existence of the alleged cartel.

Financial Products and Investments

Biden’s Tax Plan Expands Federal Grants, but Doesn’t Include Student Loan Forgiveness

Amber Burton, The Wall Street Journal

President Biden’s American Families Plan was released on Wednesday with a number of proposed provisions that would lessen the amount of student debt taken on by future students. Proposed solutions in the $1.8 trillion plan include two years of subsidized community college for all Americans and expanding the Pell Grant for low-income students.

Housing and GSEs

Grassley, Johnson call for removal of housing regulator watchdog

Katy O’Donnell, Politico 

Senate Republicans are calling on the White House to fire the top watchdog for a federal housing regulator after investigators found that she and two deputies abused their authority. Laura Wertheimer, inspector general for the Federal Housing Finance Agency, which supervises mortgage finance giants Fannie Mae and Freddie Mac, allegedly disparaged employees and sought to intimidate whistleblowers, an investigation by an oversight panel found.

Financial Technology

Senate Democrats take aim at ‘true lender’ interest rate rule

Sylvan Lane, The Hill

Senate Democrats are ramping up pressure on a federal bank regulator to scrap a Trump-era rule they say allows lenders to evade state interest rate limits and bilk vulnerable consumers. In a Wednesday hearing, Democrats on the Senate Banking Committee said it was long past time for the Office of Comptroller of the Currency (OCC) to revoke its “true lender” rule.


It’s Hard to Take Dogecoin Seriously, But the Doge Doesn’t Care

Joanna Ossinger, Bloomberg Businessweek

Here are some things with a total market value in the neighborhood of $40 billion: Insurance giant Prudential Financial Inc., the manufacturer Carrier Global Corp., and, at just a few billion less, Southwest Airlines Co.  Or, for a recent price of about 30¢ each, the supply of Dogecoin, the cryptocurrency that started as a joke in 2013. After climbing more than 6,000% this year in a hockey-stick rally, it’s still largely a gag—but one with a potentially darker punchline.


Bitcoin Is Facing a Make-or-Break Moment, Technicals Show

Vildana Hajric and Lu Wang, Bloomberg

Bitcoin is facing a make-or-break moment following a recent bout of selling, according to technical analysis. Though the cryptocurrency has rebounded above its average price over the past 100 days, it’s still trading below its 50-day moving average. 


Government, industry push bitcoin regulation to fight ransomware scourge

Joseph Menn and John Shiffman, Reuters

Government and industry officials confronting an epidemic of ransomware, where hackers freeze the computers of a target and demand a payoff, are zeroing in on cryptocurrency regulation as the key to combating the scourge, sources familiar with the work of a public-private task force said.


Fintech lender Upgrade tops FT ranking of fast-growth companies

Robert Armstrong, Financial Times

The online lender, founded by former Lending Club chief Renaud Laplanche, doubled revenues last year.

Opinions, Editorials and Perspectives

Life After PPP for the Small-Business Economy

Sam Graziano (chief executive officer of Linear Financial Technologies) and Todd McCracken (president and chief executive officer of the Small Business Association), Morning Consult 

The nearly $750 million in Paycheck Protection Program loans disbursed over the last year provided an essential lifeline to millions of businesses and delivered an enormous benefit to the economy by preserving economic stability within the small business sector – the segment of our economy that employs more Americans than any other. This enormous infusion of capital into small businesses is helping to accelerate the impending economic recovery and has preserved the livelihoods of millions of Americans.


A policy agenda for Wall Street’s new sheriff

Dennis Kelleher, Financial Times

The specific areas where new SEC head Gary Gensler needs to act over rigged markets.


A Progressive Vision Is Possible if We Spend Money Thoughtfully Now

Robert Gordon and Michele Jolin, The New York Times

Last night, President Biden offered a vision of government as an instrument for progress not heard from a president since Lyndon Johnson. Congress should put that vision into legislation this summer, but success will also depend on countless smaller decisions made across the country.


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