• After Sen. Bernie Sanders (I-Vt.) won the New Hampshire primary, former Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein took to Twitter to criticize the presidential candidate as someone who will “ruin our economy and doesn’t care about our military.” Blankfein also said that if Sanders becomes the Democratic nominee, “the Russians will have to reconsider who to work for to best screw up the US,” referring to Sanders and President Donald Trump. (CNBC) 

• Trump is yanking his nomination of Jessie Liu, former U.S. attorney for the District of Columbia, as the Treasury Department’s undersecretary for terrorism and financial crimes, two people with direct knowledge of the matter said. Administration officials are wondering why the president made the call to pull the nomination, with a nomination hearing scheduled with the Senate Banking Committee for Thursday, and said that the developments in the Roger Stone case, which saw four prosecutors resign after the Justice Department overruled their sentencing recommendation, are the only new information they are aware of. (Axios)  

• Geoffrey Okamoto, acting assistant secretary for international finance and development at the Treasury Department, has emerged as a possible successor for the No. 2 job at the International Monetary Fund in Washington, replacing David Lipton, people familiar with the matter said. Traditionally, the United States nominates the IMF’s first deputy managing director, whose appointment is subject to approval by the fund’s executive board. (Bloomberg)

As Coronavirus Stifles China, Economic Logjams Build Worldwide
Matt Phillips, The New York Times

In Australia, after hauling hundreds of thousands of tons of iron ore to China, returning freighters can face a 14-day quarantine before being able to reload. BHP, which has headquarters in London and Melbourne and is one of the world’s largest copper mining companies, has been in talks to possibly delay shipments to Chinese ports.

Powell Suggests the Fed May Lack Ammo to Combat Next Recession
Rich Miller and Craig Torres, Bloomberg

Federal Reserve Chairman Jerome Powell came close to acknowledging that the central bank may not have the firepower to fight the next recession and called on Congress to get ready to help. The current low level of interest rates “means that it would be important for fiscal policy to support the economy if it weakens,” he told the House Financial Services Committee on Tuesday.

More than 10 years after the crisis, central banks are hoping the public will give them a new direction
Silvia Amaro, CNBC

Central banks are experiencing a soul-searching moment as they look to strengthen their popularity after the global financial crisis — an exercise that could ultimately change how they operate. The European Central Bank (ECB) is hosting its first “listening event” in Brussels next month. 

Powell Says Fed Will ‘Never’ Declare Victory on Full Employment
Matthew Boesler, Bloomberg

Congress gave the Federal Reserve two mandates: maximum employment and price stability. Fed Chair Jerome Powell told lawmakers Tuesday that the central bank will never declare victory on the first one.

Warren’s Economic Populist Mantle Is Carried Forward by Sanders
Joshua Green and Misyrlena Egkolfopoulou, Bloomberg

Elizabeth Warren began her presidential campaign with a blast of economic populism and calls for “big, structural change.” After disappointing finishes in Iowa and New Hampshire, that message still looks viable — but so far, voters prefer that Bernie Sanders, not Warren, carry it forward.

U.S. Futures Climb With Europe Stocks; Bonds Slip: Markets Wrap
Robert Brand, Bloomberg 

U.S. equity-index futures gained along with European stocks on Wednesday and crude oil rallied amid signs the spread of the coronavirus in China is slowing and investor optimism the global economy can weather the storm. Treasury yields edged higher.

New Credit-Loss Standard Could Benefit Lenders if Regulators Loosen Capital Requirements, Study Says
Mark Maurer, The Wall Street Journal

A new accounting standard on credit losses could prompt federal banking regulators to set looser capital requirements for financial institutions—a potential benefit for lenders that have largely criticized the rule, new academic research suggests. The rule, which began to go into effect for large public banks in December, requires lenders to record expected future losses as soon as loans are issued.

6 statehouse issues on bankers’ radar
Laura Alix, American Banker
With a presidential election looming and trade issues top of mind, bankers could almost forget that a new year also means a host of local proposals that might help — or hurt — large swaths of the industry.

Visa Sees Data Sales Driving $3.5 Billion in Consulting Revenue
Jennifer Surane, Bloomberg

Visa Inc. said revenue from its consulting arm will climb 20% this year as the network makes more money selling data and analytics to banks and retailers. Revenue from consulting and analytics will rise to $3.5 billion during the company’s 2020 fiscal year, which ends in September, Visa President Ryan McInerney said Tuesday at the company’s investor day. 

Can a ‘numbers guy’ with insurance DNA finally fix AIG?
Suzanne Barlyn, Reuters

Peter Zaffino sat at 2 World Trade Center poring over financial reports on the morning of Sept. 11, 2001, when the first plane struck a neighboring building. Zaffino, known by colleagues for his laser-like focus, remained at his desk as staff began fleeing. It was not until a fire warden pleaded with Zaffino – who was then an executive at reinsurance brokerage Guy Carpenter – that he finally left, a person familiar with the situation said.

Study: High child-care costs are a hurdle for first-time home buyers
Michele Lerner, The Washington Post

The damping effect of student loan debt on homeownership has been much discussed. Student loan debt reached a record of $1.41 trillion in 2019, according to Experian credit report agency, up 33 percent from $1.06 trillion from 2014.

Boom: Mortgage lending just had its biggest quarter in 14 years
Ben Lane, HousingWire

It probably won’t come as a surprise to those in the mortgage business that the fourth quarter of 2019 was a big one, considering that originations continued to rise throughout the year thanks to near-historic lows in mortgage rates. But just how big the fourth quarter actually was may make the most ardent observers stand up and take notice.

Companies Shifted Deductions, Income to Maximize 2017 U.S. Tax-Rate Cut
Richard Rubin, The Wall Street Journal

U.S. corporations accelerated deductions and deferred income to maximize the benefits of the 2017 tax-rate cut, contributing to a large temporary drop in federal corporate-tax revenue in 2018, according to newly released data. Companies made the moves as Congress was cutting the corporate tax rate to 21% from 35%.

Democrats, GOP spar over Treasury rules on Trump tax law
Naomi Jagoda, The Hill

Lawmakers at a hearing on Tuesday debated regulations meant to implement provisions for businesses in President Trump’s 2017 tax-cut law, the latest round in the messaging battle between Democrats and Republicans over the president’s signature legislative accomplishment.

Bitcoin hits highest price this year, above $10,000, as Fed Chair Powell discusses cryptocurrencies
Arjun Kharpal, CNBC

Bitcoin hit its highest level this year and also in five months on Wednesday, jumping above $10,000 and continuing the recent bull run for the cryptocurrency. In the early morning on Wednesday, bitcoin hit $10,489.78, the highest price it has logged since September, according to data from Coindesk.

Fintech has finally cracked the US banking sector
John Detrixhe, Quartz

Varo Money is poised to become a full-fledged bank, making it the first of a new wave of fintech upstarts to win that approval in the US. The company’s long and expensive journey through a thick barrier of regulation is a reason why America’s banks have repelled the tech disruption sweeping through other industries.

2020 Will Be the Manufacturing Election
Kip Eideberg, Morning Consult

In November, Americans will head to the polls to decide which party controls state capitals, the House of Representatives, the Senate and the White House. It is something that happens only once every four years, but the outcome of the 2020 election will have a profound impact on equipment manufacturers, the manufacturing sector and the U.S. economy for years to come.

This Is No Way to Run a Central Bank
The Editorial Board, The New York Times

The Federal Reserve takes the Goldilocks view of economic growth: not too hot, not too cold. President Trump, by contrast, has made it clear that he wants the economy to grow as fast as possible in the short term, even if that increases the risk of an eventual crash. 

Inflation Dynamics: Dead, Dormant, or Determined Abroad?
Kristin Forbes, The National Bureau of Economic Research

Inflation dynamics have been difficult to explain over the last decade. This paper explores if a more comprehensive treatment of globalization can help. CPI inflation has become more synchronized around the world since the 2008 crisis, but core and wage inflation have become less synchronized.