• The Internal Revenue Service plans to hire 30,000 new employees over the next two years, including 8,782 staff positions dedicated to enforcement and 13,883 dedicated to customer service, according to a report released yesterday by the agency outlining how it will spend the $80 billion in new funding it is set to receive during the next 10 years. The IRS will allot about 60% of those new funds — $47.4 billion — to increasing tax collection and enforcement actions on wealthy individuals and corporations “with complex tax filings and high-dollar noncompliance.” (Reuters)
• The Office of the Comptroller of the Currency has scheduled an audit of JPMorgan Chase & Co.’s dealmaking, according to people familiar with the matter, after the bank acquired dozens of smaller companies in 2021 and 2022. The audit will include a review of JPMorgan’s due diligence on its $175 million purchase of Frank, a student-loan services startup which is now subject to a lawsuit by the bank and whose founder faces fraud charges over allegations that she lied about the breadth of the company’s user base. (Financial Times)
• International Monetary Fund Managing Director Kristalina Georgieva said rising interest rates and lingering effects on economic growth related to Russia’s war in Ukraine and COVID-19 could lead to the weakest period of global economic growth since 1990, adding that she expects global growth to remain at about 3% over the next five years. (The Guardian) JPMorgan CEO Jamie Dimon said in a CNN interview that while the banking industry remains sound, recent turmoil is “another weight on the scale” toward recession, and while he couldn’t say if more banks could fail in the coming months, he noted that recent bank failures are nothing like the 2008 financial crisis and “the American public shouldn’t think that.” (CNN)
• Charles Schwab Corp. Chairman and founder Charles Schwab and CEO Walt Bettinger said the company had core net new client assets of $53 billion in March, the second-highest total for that month in the firm’s history. The executives’ statement comes as investors have fretted over the bank’s unrealized losses, contributing to a 37% loss in its share price in the first three months of 2023, its worst quarter since 2008. (Bloomberg)

Toronto-Dominion Becomes Biggest Bank Short With $3.7 Billion on the Line

Bloomberg

The Pandemic Didn’t End Card Rewards. It Made Them Stronger.

Telis Demos, The Wall Street Journal

Credit-card points and perks survived Covid-19. Now they face a banking crisis and Washington.

A nonprofit just joined forces with a major student-loan lender in asking a federal court to end the payment pause, saying the relief has limited the ‘financial incentive’ to work in public service

Ayelet Sheffey, Insider

On Thursday, the New Civil Liberties Alliance, a nonprofit law firm aimed at protecting constitutional freedoms, filed a lawsuit on behalf of the Mackinac Center, a nonprofit think tank based in Michigan that advocates for limited government.

In hard times, Corporate America looks out for its CEOs

Allison Morrow, CNN

Part of the deal with being the boss is you get paid top dollar in exchange for taking on the most risk. In theory, at least.

US jobs growth expected to have slowed as Fed tightening bites

Colby Smith, Financial Times

Economists forecast economy added 233,000 jobs in March as central bank considers another rate rise.

Fed should stick to raising rates while labor market strong, Bullard says

Lindsay Dunsmuir, Reuters

The Federal Reserve should stick to raising interest rates to lower inflation while the labor market remains strong, given the high probability recent financial stresses will continue to abate and absent a marked tightening of credit conditions, St. Louis Fed President James Bullard said on Thursday.

Latest Fed Increase Came Down to the Wire. ‘That Was a Rough Weekend.’

Nick Timiraos, The Wall Street Journal

Jerome Powell and other officials waited and watched the fallout from SVB, Swiss bank crisis, finally deciding the financial system was stable enough to raise rates.

Treasuries Set for a Super-Sized Jobs Reaction on Good Friday

Masaki Kondo, Bloomberg

The release of key US jobs data on Good Friday risks making the Treasuries market reaction one-and-a-half times more volatile than it usually would be, according to JPMorgan Chase & Co.

‘Powell’s curve’ plunges to new lows, flashing US recession warning

Davide Barbuscia, Reuters

The Federal Reserve’s preferred bond market signal of an upcoming recession has plunged to fresh lows, bolstering the case for those who believe the central bank will soon need to cut rates in order to revive economic activity.

Global Food Costs Mark One Year of Drops, at Odds With Inflation

Agnieszka de Sousa, Bloomberg

Global food costs fell for a 12th straight month to reach the lowest level since July 2021, though there is still little sign the rout is actually feeding through to grocery shelves.

NY Fed index shows global supply chain pressures eased further in March

Michael S. Derby, Reuters

International supply chain stress continued to ease last month, the Federal Reserve Bank of New York said on Thursday, in data that suggests at least some of the pressure that has been pushing inflation higher is abating.

Top economist Mohamed El-Erian has some advice for Jerome Powell and the Fed: ‘Talk less, smile more’

Tristan Bove, Fortune

The Fed came under intense criticism for its delayed response to inflation last year, stepping in to raise interest rates when annualized inflation was already at 7.9%. Many critics targeted Fed Chair Jerome Powell, who along with several other top officials, had said in 2021 that rising prices were only temporary.

SALT Tax Break Gets Fresh Push From New York-Area Republicans

Laura Davison, Bloomberg

New York Republicans, whose congressional ranks swelled in the last election, are reviving plans to expand the state-and-local tax break, picking up a piece of unfinished business from Democrats that has been resisted by most in their own party.

JPMorgan Subpoenas Staley’s Former Hedge Fund in Epstein Dispute

Ava Benny-Morrison, Bloomberg

JPMorgan Chase & Co. subpoenaed information from the hedge fund where Jes Staley was once managing partner as part of its lawsuit over his ties to Jeffrey Epstein, according to people familiar with the matter.

Declines in Loan Values Are Widespread Among Banks

Jonathan Weil, The Wall Street Journal

Lenders could face pressure on earnings or liquidity, or to pay higher rates for deposits.

Startup Pushing Equity in Banking Accused of Discrimination

Chris Dolmetsch, Bloomberg

Current, a $2 billion startup that markets digital banking services to young people and Black Americans, was accused of discriminating against a former senior director and firing her right before she was set to return from leave for breast cancer treatment.

Bank of America cuts short conference after outrage at comments on Ukraine war

Jonathan Wheatley, Financial Times

Event was ‘overwhelmingly pro-Russian’, says one attendee, as bank calls clients to apologise.

Fed’s Emergency Loans to Banks Decline to $149 Billion

Jonnelle Marte, Bloomberg

Banks once again reduced their borrowings from two Federal Reserve backstop lending facilities in the most recent week, a sign the financial stresses that emerged following a string of bank collapses last month may be stabilizing.

Morgan Stanley CEO’s total pay rose 13% to $39.4 mln in 2022

Nupur Anand and Mehnaz Yasmin, Reuters

Morgan Stanley Chief Executive James Gorman’s total compensation rose nearly 13% to $39.4 million in 2022 versus a year earlier, according to a filing Thursday.

It’s Big vs Small as Banks Square Off to Avoid New Rules After Failures

Laura Davison et al., Bloomberg

US banks are pitted against each other as regulators move to strengthen oversight after a series of failures undermined confidence in the financial system.

Comerica Selloff Has Bank Analysts Divided Ahead of Earnings

Breanna Bradham, Bloomberg

Wall Street analysts are at odds over the outlook for Comerica Inc. after turmoil in the banking industry has them weighing whether the beaten-down stocks are worth the risks into earnings season.

Climate-focused neobank Aspiration to lay off 180 employees

Catherine Leffert, American Banker

Climate-focused neobank Aspiration will lay off more than 180 employees in May as part of a restructuring initiative, marking the company’s latest round of layoffs since it cut about 100 jobs in December.

Robinhood to Pay Up to $10.2 Million to Settle Outage Probe

Austin Weinstein and Steve Dickson, Bloomberg

Robinhood Markets Inc. will pay as much as $10.2 million in penalties to settle allegations stemming from a multistate probe into outages that left customers unable to trade during market volatility fueled by the pandemic in March 2020.

How are money market funds preparing for a potential debt ceiling crisis?

John Mccrank, Reuters

Assets in money market funds have soared to record levels, drawing investors with their safe-haven appeal and yields that far exceed those paid on bank deposits.

StraightPath Receiver Outlines Recovery Steps for Investors

Ted Bunker, The Wall Street Journal

StraightPath Venture Partners investors may see a glimmer of light signaling the eventual return of at least some of the capital sunk into what regulators have characterized as a fraudulent operation.

One sign of investor pullback in the mortgage market

Kate Marino, Axios

The gap between mortgage rates and the Treasuries they’re benchmarked to has widened since the collapse of Silicon Valley Bank last month.

Mortgage Rates in the US Are Slipping — Again

Prashant Gopal, Bloomberg

Mortgage rates in the US fell for a fourth straight week. The average for a 30-year, fixed loan was 6.28%, down from 6.32% last week and the lowest in almost two months, Freddie Mac said in a statement Thursday.

Office Vacancies Send Real-Estate Investors to the Exits

Sam Goldfarb, Reuters

Prices of bonds backed by commercial mortgages have recently dropped to levels not seen since the early days of the pandemic, pointing to a growing economic threat stemming from office vacancies and rising interest rates.

Concerns Grow as Tighter Lending Threatens Commercial Real Estate

Ephrat Livni, The New York Times

The recent banking turmoil added scrutiny to a sector already weighed down by office vacancies, rising interest rates and mounting debt.

FDIC to take a closer look at property appraisal bias

Kyle Campbell, National Mortgage News

The Federal Deposit Insurance Corp. will be expanding its examination process of property appraisal matters as part of its supervision of fair lending practices. The renewed focus is outlined in the bank regulator’s latest Consumer Compliance Supervisory Highlights report, which is released every spring.

New York Finance Regulator Says Signature Bank’s Closure Not Related to Crypto

Mengqi Sun, The Wall Street Journal

NYDFS Superintendent Adrienne Harris calls idea closure was about regulators looking to kill crypto sector ‘ludicrous.’

U.S. Treasury Warns DeFi Is Used by North Korea, Scammers to Launder Dirty Money

Sandali Handagama and Jesse Hamilton, CoinDesk

Decentralized finance (DeFi) services that aren’t compliant with anti-money laundering and terrorist financing rules pose “the most significant current illicit finance risk” in that corner of the crypto sector, according to the U.S. Department of the Treasury’s first analysis of hazards from the technology.

Australia cancels Binance’s financial services license amid probe

Lewis Jackson, Reuters

Cryptocurrency exchange operator Binance will close its Australian derivatives business after relinquishing a financial services licence on Thursday amid a regulatory probe into its operations.