• Oil prices surged to the highest in more than six years as talks broke down between Saudi Arabia and the United Arab Emirates on output levels, blocking the supply increases the market had expected. The White House said that it is “closely monitoring the OPEC+ negotiations and their impact on the global economic recovery,” and that administration officials are urging a compromise “that will allow proposed production increases to move forward.” (Bloomberg) 
• Some Senate Democrats are pushing back on some of the provisions to pay for the bipartisan compromise infrastructure deal, urging more focus on raising taxes on corporations instead of repurposing unspent unemployment and state assistance funds. Senate Finance Committee Chairman Ron Wyden (D-Ore.) is crafting his own proposal to pay for infrastructure investments, including raising $1 trillion from corporations and more than $300 billion from taxing unrealized capital gains, a source familiar with internal Democratic discussions said. (The Hill)
• The Biden administration is reconsidering the use of sanctions, people involved in the planning process said, and is almost finished with an extensive review of U.S. sanctions policy, which is anticipated to be released near the end of summer, one official said. The policy revamp is a departure from the Trump administration, which frequently used sanctions as part of its foreign policy. (The Wall Street Journal) 

Americans with working spouses less likely to urgently seek jobs

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‘Rampant issues’: Black farmers are still left out at USDA

Ximena Bustillo, Politico

The Biden administration is trying to make up for decades of racial discrimination in U.S. farm assistance by forgiving loans to farmers of color. But Black farmers and their advocates say that plan, while welcome, won’t fix the ongoing problem: Agriculture Department programs are still biased against them.

Why More Highway Spending Won’t Rev Up the Economy

David Harrison, The Wall Street Journal

One of the few things that Democrats and Republicans agree on is that spending billions of dollars on America’s roads would boost productivity and the U.S. economy’s growth prospects. Economists aren’t so sure.

Global corporate tax overhaul faces rocky road to completion

Leigh Thomas and Andrea Shalal, Reuters

 A long road strewn with potential political pitfalls lies ahead for countries seeking to end a race to the bottom on international corporate tax, even though 130 of them have agreed to overhaul the way multinationals are taxed. Nearly all 139 countries involved in talks at the Paris-based Organisation for Economic Cooperation and Development (OECD) last week backed plans for new rules on where companies’ profits are taxed, and a rate of at least 15%.

Workers are reaping benefits in the post-Covid economy. But their power may not last.

Megan Cassella, Politico

Wages are rising, employers are giving hiring bonuses and more Americans are quitting their jobs, sparking hopes from the White House on down that the workers who were hit hardest by the pandemic are finally being empowered. Even labor advocates, however, say that newfound leverage is unlikely to last.

After months of tepid news, White House hopeful ‘rip-roaring’ economy is here

David Harrison, The Wall Street Journal

Senior White House economists poring over jobs data for the last several months had seen virtually no progress on a key measure of economic health. Even after President Biden’s $1.9 trillion stimulus plan passed, the percentage of younger U.S. workers either employed or searching for a job remained stubbornly unchanged.

Lower-Wage Workers See Biggest Gains From Easing of Covid-19 Pandemic

Eric Morath, The Wall Street Journal

A fading pandemic and heating U.S. economy appear to be paying off for lower-wage workers. New jobs at restaurants, hotels, stores, salons and similar in-person roles accounted for about half of all payroll gains in June, according to the Labor Department.

When Will China Rule the World? Maybe Never

Eric Zhu and Tom Orlik, Bloomberg

When will China overtake the U.S. to become the world’s biggest economy? Few questions are more consequential, whether it’s for executives wondering where long-term profits will come from, investors weighing the dollar’s status as global reserve currency, or generals strategizing over geopolitical flashpoints.

From Amazon to Starbucks, What Companies Paid Workers in the Pandemic

Theo Francis and Inti Pacheco, The Wall Street Journal

While the Covid-19 pandemic disrupted millions of jobs and most businesses, many workers kept their jobs and their salaries—and some saw pay rise. Median pay changed by 5% or less either way at about a third of S&P 500 companies. It rose by more than 5% at 184 companies, and fell by more than 5% at 125.

Flaws Emerge in Justice Department Strategy for Prosecuting Wall Street

Aruna Viswanatha and Dave Michaels, The Wall Street Journal

Early one July morning in 2016, Robert Bogucki, a senior executive at Barclays BCS -1.12% PLC, walked into what he expected to be a short meeting with the British bank’s lawyers to go over a five-year-old transaction before he joined his family on vacation. Instead, he emerged after 11 hours of questions that 18 months later led to his criminal indictment—and ultimately to a trial that would expose some flaws in a broad Justice Department push to police Wall Street that continues to this day.

JPMorgan, Goldman Call Time On Work-From-Home. Their Rivals Are Ready To Pounce.

Julia-Ambra Verlaine and David Benoit, The Wall Street Journal

There is a growing divide on Wall Street: firms calling employees back and firms telling people they can work from home. Titans like Goldman Sachs GS -0.22% Group Inc. and JPMorgan JPM -0.10% Chase & Co. are taking a hard-line approach, beefing up in-person staff five days a week in New York even though it might mean losing talent. 

JPMorgan Chase buying spree is Jamie Dimon’s busiest in years

Joshua Franklin and Michael Mackenzie, Financial Times

Bank has made almost as many acquisitions this year as in the whole of 2020.

Credit Suisse Hires Hannaford as Tech Chief Amid Board Flux

Marion Halftermeyer, Bloomberg

Credit Suisse Group AG named Joanne Hannaford as its new chief technology and operations officer and appointed her to the bank’s executive board, marking new Chairman Antonio Horta-Osorio’s first major hire at the embattled lender. Hannaford’s appointment is effective Jan. 1, when current COO James Walker will step down and relocate to the U.S. as deputy chief executive officer of the bank’s entity there, according to a press release. 

The Next Big Divide in Finance Takes Shape in Your Office

Marion Dakers and Marion Halftermeyer, Bloomberg

A new divide is emerging in finance as bankers around the world return to their desks after months of lockdowns during the pandemic. In one corner, firms like JPMorgan Chase & Co. and Goldman Sachs Group Inc. are making clear their determination for staff to return to the office.

Credit Suisse’s #Zoltan Warns of Trouble Ahead in Money Markets

Julia-Ambra Verlaine, The Wall Street Journal

Trouble is brewing in the pipes that run beneath Wall Street. And once again, banks are calling Zoltan Pozsar.

How excess cash is playing out in U.S. reverse repo and money markets

Gertrude Chavez-dreyfuss, Reuters

The U.S. debt ceiling comes back into effect at the end of July, putting pressure on the Treasury to reduce its cash balance ahead of the deadline. That means more injections of cash into a financial system already swimming with liquidity, potentially sinking short-term rates and causing undue distortion in money markets.

After Freeze, Insurance Comes Up Short for Many Texans

Collin Eaton and Leslie Scism, The Wall Street Journal

Months after February’s freeze, many Texans are still living in damaged homes after learning too late that they had inadequate insurance. The extreme weather that caused days of blackouts in the Lone Star State has triggered one of the costliest and most unusual insurance events in Texas history, when indoor plumbing froze and exploded in homes bereft of heat.

Biden’s new dilemma: How to slash housing costs for low-income borrowers

Katy O’Donnell, Politico

President Joe Biden’s move to fire the top U.S. mortgage regulator is triggering calls from fellow Democrats to use the agency to expand access to loans for lower-income people, who have struggled to buy homes since the financial crisis. That’s setting up a clash with Republicans over how far the government should go in shaping an industry that makes up one-fifth of the U.S. economy.

Soaring U.S. Rents Are the Sticky Inflation With Staying Power

Alexandre Tanzi, Bloomberg

The cost of renting a home is soaring in cities across the U.S., squeezing the finances of low-income households and posing a threat to the consensus that pandemic inflation will soon fade away. The median national rent climbed 9.2% in the first half of 2021, according to Apartment List.

Bitcoin Resumes Losing Streak After Weekend Strength Evaporates

Cecile Gutscher, Bloomberg

Bitcoin started off the week on the backfoot after a recovery over the weekend proved fleeting. The largest cryptocurrency dropped as much as 6.3% Monday and was trading at $33,656 as of 3:15 p.m. in London. 

Swedish watchdog to investigate Klarna for bank secrecy breach

Reuters

Sweden’s financial watchdog said on Monday it was investigating payments firm Klarna over a potential breach of banking secrecy laws in connection with an IT incident at the firm in May. For a 30 minute period on May 27, Klarna customers were shown other users’ data – a digital mishap which the firm, in a statement on June 4, blamed on human error.

Ransomware Is the IRS of Bitcoin

James Mackintosh, The Wall Street Journal

Ransomware is to bitcoin as the Internal Revenue Service is to the dollar. Just as the taxman forces you to use dollars to pay your taxes, electronic ransom demands have been set in bitcoin, forcing companies, individuals and even some governments to use the cryptocurrency if they wish to regain control of their computer systems. If this sounds wacky, bear with me. Before getting into the full explanation, we need a brief tour of theories of money.

Bringing Low-Income Communities Out of the Financial Shadows

Craig Boundy (chief executive officer of Experian North America) and José Quiñonez (founder and CEO of Mission Asset Fund), Morning Consult

With so many economic indicators heading in the right direction, many across the country feel that we’re on the cusp of coming out of this pandemic-caused downturn. However, a lower-than-expected May jobs report quickly reminded us that not everyone shares this optimistic feeling about the future.

7 Charts That Explain the Economic Recovery So Far

Julia Cornado, The New York Times

Early Friday, the government reported that the economy added 850,000 jobs last month — a welcome pickup from the slower pace of jobs growth over the past three months and a sign that overall economic growth is tracking stronger than in the first quarter of the year. We are still roughly seven million jobs down from prepandemic levels of employment, unemployment among Black and Hispanic workers remains distressingly high, and millions have yet to return to the labor force.

Big Tech and Big Finance Breed Hubris

Bret Swanson, The Wall Street Journal

The suppression of debate over the origin of the novel coronavirus highlights a broader problem. Governments were once the chief impediments to free speech and free markets, but extremely large private companies may have become the greater danger.

The Fed Is Underestimating the Risk of Inflation

Tim Congdon, The Wall Street Journal

Economists routinely make mistakes in forecasting, and such mistakes are often forgiven. But recent errors by the Federal Reserve are deeper analytical blunders.