• President Joe Biden is expected to announce several measures to reduce the racial wealth gap in a speech in Tulsa, Okla., on a trip to commemorate the 100th anniversary of the Tulsa race massacre, including an effort to increase the number of federal contracts for small, disadvantaged businesses. The announcement will also include the rollback of two Trump-era housing rules and an interagency initiative to counter inequality in home appraisals. (CNBC)
• West Virginia Gov. Jim Justice (R) personally guaranteed loans of about $700 million that his coal companies borrowed from Greensill Capital, the firm specializing in supply-chain finance before it went bankrupt in March, people familiar with the loans and documents said. Greensill sold those loans to Credit Suisse Group AG investment funds, which the bank froze in March, and Credit Suisse is now in talks with Bluestone Resources Inc., a coal mining company owned by Justice, to recoup some of the money, the people said. (The Wall Street Journal) 
• Transportation Secretary Pete Buttigieg said that he wants a “clear direction” on an infrastructure plan by June 7, as members of Congress return from a weeklong break. On deal-making with Republicans on an infrastructure proposal, Buttigieg said Democrats are “getting pretty close to a fish-or-cut-bait moment,” and that Democrats are concerned about funding priorities not included in the Republican infrastructure counteroffer. (The Washington Post) 
• Acting Comptroller of the Currency Michael Hsu said in an interview that there’s interest among regulatory agencies in coordinating regulation relating to cryptocurrency. Hsu said that the goals of an interagency group, including officials from the Office of the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance Corp., is to “put some ideas in front of the agencies to consider,” rather than make policy. (Financial Times)

Correction: A previous version of this newsletter misidentified Pete Buttigieg’s title as Treasury secretary. He is the Transportation secretary. 

The Luckiest Workers in America? Teenagers.

The New York Times

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Americans Are Done With 5-Days a Week in the Office. Here’s What That Means for the Economy

Olivia Rockeman, Bloomberg

Americans are shedding their masks, buying concert tickets and booking vacations like it’s 2019. But there’s one thing that doesn’t appear to be going anywhere as the pandemic fades: remote work.

What Joe Biden wants from this week’s critical infrastructure talks

Christopher Cadelago, Politico

The White House continues to see upside to infrastructure negotiations with Republicans, even as the talks run on longer than President Joe Biden initially planned. The president still has faith in his ability to win over reluctant Senate Republicans and advisers see benefits — reputationally and politically — in working across the aisle.

Global economy will return to pre-pandemic level by 2022, says OECD

Delphine Strauss, Financial Times

 Improved outlook offers governments leeway to scale back emergency support and focus on investing.

Paycheck Protection Program Closes to New Applications

Amara Omeokwe, The Wall Street Journal

The federal government’s Paycheck Protection Program closed to new applications Friday as funding was on track to be exhausted. That marked the end of a $961 billion emergency effort that helped millions of small businesses survive the pandemic but was dogged by fraud claims and criticism that it didn’t reach the neediest businesses.

U.S. Manufacturers Blame Tariffs for Swelling Inflation

Yuka Hayashi and Josh Zumbrun, The Wall Street Journal

Economists and policy makers are debating whether stimulus spending and easy monetary policy are fueling inflation. Many businesses say there is another culprit that should share the blame: import tariffs.

Biden set for G-7 boost in bid for all nations to impose minimum global corporate tax

David J. Lynch, The Washington Post

Finance ministers from Group of Seven nations meeting in London on Friday are expected to back President Biden’s call for a global minimum tax on corporate profits, giving him an early win in a grueling diplomatic campaign that is just beginning. The new minimum tax, one half of a two-pronged global reform effort, is designed to halt a cycle of corporate tax-cutting that has sapped government revenue around the globe.

Do deficits matter anymore? Biden’s first budget signals they don’t.

Heather Long, The Washington Post

President Biden waited to release his first budget until Friday afternoon of a holiday weekend, a signal that the White House wasn’t looking for a lot of attention on its proposal to spend $6 trillion in 2022 — a roughly 35 percent increase from pre-pandemic-era federal government spending. Many of the initiatives Biden wants to spend more on are popular with the public. 

First Biden Budget Retains Trump-Era Business Tax Break

Richard Rubin, The Wall Street Journal

Owners of closely held businesses would still get a 20% tax deduction under President Biden’s tax plan, leaving high-income people who run construction companies and manufacturing firms benefiting—for now—from a provision that Republicans created in 2017 over Democratic opposition. Although Mr. Biden campaigned on limiting the break, the deduction went untouched in the first $2.4 trillion worth of net tax increases that were detailed by the Biden administration on Friday.

Efforts to Advance Racial Equity Baked In Throughout Biden’s Budget

Michael D. Shear, The New York Times

 Six days after his inauguration, President Biden vowed that his administration would see everything through the lens of racial equality, making it “the business of the whole of government.” On Friday, his $6 trillion budget began to make good on that promise.

Biden budget expects hot — but not overheating — economy heading into 2022 midterm elections

Jeff Stein, The Washington Post

The budget officially released by the White House on Friday hinges on an optimistic projection that the economy will grow at a rapid pace for the next two years, with inflation under control and unemployment falling to near pre-pandemic levels. In its first budget, the Biden administration said the economy will grow at just north of 5 percent this year as the nation rebounds from the coronavirus pandemic.

Federal Reserve’s Bullard: US jobs market is tighter than it looks

James Politi, Financial Times

Comments could accelerate central bank’s timeframe for removing some monetary stimulus from the economy.

The Covid Trauma Has Changed Economics—Maybe Forever

Matthew Boesler, Bloomberg

Once ideas about how to manage the economy become entrenched, it can take generations to dislodge them. Something big usually has to happen to jolt policy onto a different track. Something like Covid-19. In 2020, when the pandemic hit and economies around the world went into lockdown, policymakers effectively short-circuited the business cycle without thinking twice. 

A new economic era: is inflation coming back for good?

 Chris Giles, Financial Times

In the first in a series, Chris Giles examines whether the extraordinary post-crisis stimulus will lead to rising prices.

Jobs Report Could Be Pivotal for Federal Reserve

Paul Kiernan, The Wall Street Journal

Friday’s jobs report is shaping up to be a pivotal data release for the Federal Reserve as it charts a plan for ending the easy-money policies that have propped up the economy and markets for more than a year. The May report will help central bankers understand two key questions that now dominate their attention. 

Fed’s Taper Talk Is Pre-Emptive Strike Against Inflation Fears

Craig Torres, Bloomberg

Inflation readings are coming in hotter than Federal Reserve officials expected and could accelerate the timing of when they debate scaling back their massive bond-buying campaign. Fed Vice Chairs Randal Quarles and Richard Clarida both declared this week that policy makers could begin this discussion at “upcoming meetings.” That echoes a line from minutes of the Fed’s April gathering but carries more weight coming from Chair Jerome Powell’s leadership team.

Fed Admonishes Deutsche Bank for Ongoing Compliance Failures

Robert Schmidt and Jesse Hamilton, Bloomberg

The Federal Reserve has privately told Deutsche Bank AG that its compliance programs aren’t up to snuff, signaling that the scandal-plagued bank is failing to adhere to a number of past accords with U.S. regulators, according to people familiar with the matter. The Fed’s recent warning came in an annual regulatory assessment that said Deutsche Bank hadn’t improved its risk management practices despite being under confidential agreements with the central bank to fix the issues, the people said. 

The Pied Piper of SPACs

Charles Duhigg, The New Yorker

In Silicon Valley, Chamath Palihapitiya, who has earned billions of dollars while tweeting things like “Im about to really [expletive] some [expletive] up” to his 1.5 million followers, rarely requires identification beyond his first name. That’s in part because, in the past decade, he has spent significant time saying things in public that rich people aren’t supposed to say. 

Return of Commuters Is a Wild Card for Downtown Property

Carol Ryan, The Wall Street Journal

Downtown offices are just as empty as the clothing stores next door, but real-estate investors much prefer the former. Part of the bias may be because the challenges facing offices are newer and less understood. The centers of major cities like London and New York have been ghost towns during the pandemic as workers have abandoned commuting.

Bitcoin ETF applications gather dust as SEC’s Gensler frets over ‘gaps’

Aziza Kasumov et al., Financial Times

Hopes have dimmed that US agency’s new chair would quickly approve cryptocurrency funds.

Wall St’s Spac gravy train hits the buffers

Joshua Franklin and James Fontanella-Khan, Financial Times

Investment banking fees from US blank-cheque companies have tumbled as market has cooled.

House Hunters Are Leaving the City, and Builders Can’t Keep Up

Conor Dougherty and Ben Casselman, The New York Times

They had a down payment. They were prequalified for a mortgage. 

An Online Lender Gave Hundreds of PPP Loans to Fake Farms. Now Congress Is Investigating.

Derek Willis and Lydia DePillis, ProPublica

A House committee has opened a formal investigation into how several online lenders may have facilitated fraudulent Paycheck Protection Program loans, following reporting by ProPublica and other news outlets. The House Select Subcommittee on the Coronavirus Crisis probe seeks answers from Kabbage and BlueVine, online lending platforms that processed hundreds of thousands of government-backed loans to small businesses, as well as Celtic Bank and Cross River Bank, which frequently partnered with the web-based lenders.

Bitcoin Is Unlikely to Escape Regulation, Riksbank Governor Says

Niclas Rolander and Hanna Hoikkala, Bloomberg

Bitcoin and other cryptocurrencies are unlikely to dodge regulatory oversight as supervisory authorities respond to the sheer popularity of the phenomenon, according to the governor of Sweden’s central bank. Though monetary policy officials have voiced near universal skepticism toward Bitcoin and its rivals, cryptocurrencies have continued to build an enthusiastic following

Sound Digital Asset Regulation Means Enabling Innovation, Not Merely Compliance

Caitlin Long (founder and CEO of Avanti Bank & Trust in Cheyenne, Wyo.,), Morning Consult

May was a dizzying month for cryptocurrency investors, and not just because of the headline-grabbing (but not unprecedented) price movement on major assets like Bitcoin. Since May 5, regulators from Washington to Beijing have issued a near-daily stream of announcements aimed at taming cryptocurrency markets.

Kamalanomics: Vice President Harris Outlines Her Vision Of Inclusive Entrepreneurship

Kamala Harris, Forbes

Iwas in Oakland when the Loma Prieta earthquake hit in 1989, and brought a section of the Bay Bridge crashing down. Leaders then had a choice—to restore the bridge to how it was, or to reevaluate and strengthen its support system to withstand future shocks.

Those $300 pandemic checks aren’t the only reason restaurant employees might not want to go back to work

Micheline Maynard, The Washington Post

Right now, anyone willing to work in a restaurant in the United States could probably pick a city, style of food and price of the cuisine, and a job would be waiting. But upward of 1 million of those positions are going begging, leading to a bitter debate over the reasons.

The real bond kings and queens sit on the Federal Reserve throne

Bill Gross, Financial Times

Cash has been trash for years but soon it may be the only haven for investors.