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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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
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.
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.
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.
Faith Guvenen et al., Becker Friedman Institute for Economics at UChicago
Using panel data on individual earnings histories from 1957 to 2013, we document empirical facts about the distribution of lifetime earnings in the United States. First, from the cohort that entered the labor market in 1957 to the cohort that entered in 1983, median lifetime earnings of men declined by 10%–19%.