• Federal Reserve Chair Jerome Powell told the Senate Banking Committee that it is “very likely” the central bank’s inflation strategy will cost the U.S. economy in the labor market, and in response to questioning from Sen. Elizabeth Warren (D-Mass.) over the threat of lost jobs, Powell fired back, asking if working people would “be better off if we just walk away from our jobs and inflation remains 5, 6%?” Powell, who is set to testify before the House today, also said recent economic figures were “stronger than expected” and the bank is prepared to increase the pace of interest rate hikes. (The New York Times)
• President Joe Biden’s budget proposal, set to be released tomorrow, will include plans to reduce the federal budget deficit by $2 trillion over the next 10 years, though the plan may not satisfy Republican lawmakers who are seeking a commitment to budget cuts as a condition of raising the federal debt ceiling. In addition to his strategy to shore up Medicare through tax increases, Biden seeks to raise funds via a tax on both earned income and unrealized gains in the value of liquid assets for households making more than $100 million, quadruple the tax on stock buybacks and introduce new policies to expand access to child care, provide guaranteed paid leave, universal pre-kindergarten and free community college. (The New York Times)
• Federal Deposit Insurance Corp. officials have visited the headquarters of Silvergate Capital Corp. to discuss ways to save the bank from insolvency, according to people familiar with the matter. Silvergate reported it was struggling to remain financially sound after suffering a $1 billion loss last quarter due to its exposure to the collapse of FTX, and while regulators can opt to put the bank into receivership, sources said the bank hasn’t yet made a decision on how to move forward and FDIC officials had no comment on the matter. (Bloomberg)
• A U.S. bankruptcy judge approved plans for bankrupt crypto lender Voyager Digital to sell its assets and transfer customers to Binance.US in a deal valued at $1.3 billion. The deal to Binance.US, the main facet of Voyager’s restructuring plan, still faces scrutiny from Voyager’s financial advisers, who said they need up to four weeks to review the deal, as well as regulatory approval from the Committee on Foreign Investment in the United States. (Reuters)

Worth watching: 

• The Fed’s Powell continues his “Semiannual Monetary Policy Report” to Congress today, testifying to the House Financial Services Committee at 10 a.m.
• Commodity Futures Trading Commission Chair Rostin Benham will testify in an oversight hearing before the Senate Agriculture Committee.
• The House Financial Services Committee holds a hearing on “Holding the Biden Administration Accountable for Wasteful Spending and Regulatory Overreach” and is set to hear testimony from the inspector generals from the Securities and Exchange Commission, Treasury, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.
• The Senate has set a time to vote today on the nomination of Danny Werfel to commissioner of the Internal Revenue Service, according to Punchbowl News.

A Brand’s Guide to Gen Alpha: Parents of Gen Alpha are more financially fraught — and will become even more so

Morning Consult (registration required)

Biden administration sued over student loan payment pause by SoFi

Katie Lobosco, CNN

SoFi, a private lender, sued the Biden administration last week in an effort to end the pause on federal student loan payments that has been in place since March 2020.

White House urges states to join government-wide crackdown on ‘junk fees’

Andrea Shalal, Reuters

Top White House officials and the head of the Consumer Financial Protection Bureau (CFPB) on Wednesday will urge states to expand their efforts to crack down on surprise fees consumers are forced to pay on everything from rental housing to cable bills.

Bernie on his war on corporate America

Andrew Desiderio and John Bresnahan, Punchbowl News

Sen. Bernie Sanders isn’t going to stop with Howard Schultz and Starbucks. The newly empowered chairman of the Senate’s Health, Education, Labor and Pensions (HELP) Committee — the most progressive Senate committee chair in recent history, if not ever — wants to use the panel to go after executives at Amazon, Walmart, Moderna and other mega-corporations that have long been in his crosshairs.

Biz wrestles with new R&D tax restrictions amid impasse in Congress

Brian Faler, Politico Pro

Perhaps the most important tax increase this year is one lawmakers did not entirely intend — and is having some unanticipated consequences. New restrictions on companies’ ability to deduct research and development expenses, which few expected to actually take effect — it was widely seen as a budget gimmick — have begun hitting a broad swath of companies.

Share of Black appointees to Fortune 500 boards declined last year

Emily Peck, Axios

The boardroom diversity push lost some steam last year. The share of new Fortune 500 board seats going to underrepresented groups declined, according to a report out this morning from executive search and leadership consulting firm Heidrick & Struggles.

U.S. yield curve reaches deepest inversion since 1981: What is it telling us?

David Randall and Davide Barbuscia, Reuters

Hawkish comments by Federal Reserve Chairman Jerome Powell helped push a closely watched part of the U.S. Treasury yield curve to its deepest inversion since 1981 on Tuesday, once again putting a spotlight on what many investors consider a time-honored recession signal.

House G.O.P. Prepares to Slash Federal Programs in Coming Budget Showdown

Carl Hulse and Catie Edmondson, The New York Times

With Social Security and Medicare off the table, conservatives are focusing on a wide range of smaller programs as a clash with President Biden and Democrats looms.

Summers, Blanchard Spar Over Long-Run Level of Interest Rates

Rich Miller, Bloomberg

Former Treasury Secretary Lawrence Summers took the over while ex-International Monetary Fund chief economist Olivier Blanchard took the under in a good-natured debate on Tuesday about the level of interest rates over the long haul.

​Women’s Return to the Workforce Piles Momentum on a Hot Economy

Sarah Chaney Cambon and Lauren Weber, The Wall Street Journal

American women are staging a return to the workforce that is helping propel the economy in the face of high inflation and rising interest rates.

The Pay Gap for Women Who Have Never Been Married Is Getting Bigger

Ella Ceron, Bloomberg

Never-married women are the fastest growing cohort in the labor market. Yet, as their ranks have swelled their wage gap has, too.

Biden Under Mounting Senate Pressure to Name a Latino to Fed

Catarina Saraiva, Bloomberg

Pressure on President Joe Biden is building among Senate Democrats to fill a vacancy at the Federal Reserve with a Latino, a move which would place the US central bank’s first Hispanic into a leadership role.

Americans’ Outlook for Personal Finances Is Getting Gloomier

Alexandre Tanzi, Bloomberg

Americans are turning pessimistic about their personal financial outlook over the coming year, as interest rates increase and pay raises slow down.

Hot Dogs Can Explain How Our View of Inflation and Employment Changes With the Seasons

Kara Dapena and Austen Hufford, The Wall Street Journal

Routine adjustments based on time of year can dramatically change how economic figures are perceived.

Bank of America CEO says ‘we are capitalists’ as anti-ESG critics gain steam

Lananh Nguyen and Nupur Anand, Reuters

Bank of America Corp’s (BAC.N) Chief Executive Officer Brian Moynihan had a clear message for shareholders on Tuesday: “We are capitalists.”

A bumpy road ahead for credit union auto lending

Ken McCarthy, American Banker

Vehicle prices and interest rates are both on the rise — as are fears of a recession — causing many consumers to put the brakes on their desire to take out an auto loan from their credit union. Vehicle loans account for roughly a third of credit unions’ lending portfolios, making any dropoff a potential problem for institutions that are active in this market.

Vanguard pressed to address climate risk as fiduciary duty

Hazel Bradford, Pensions & Investments

More than 1,400 Vanguard Group clients are alleging the firm is breaching its fiduciary duties by doing less than industry peers to mitigate climate risk and bowing to political pressure from anti-ESG interests.

New York’s stockmarkets are thrashing Hong Kong and London

The Economist

As it attracts more overseas listings, the Big Apple is getting bigger.

Senate Plan Aims to Revitalize Beaten-Down Communities

Andrew Ackerman, The Wall Street Journal

A bipartisan group of U.S. lawmakers is reviving efforts to spur the renovation of single-family homes in blighted neighborhoods, the latest effort to dent a long-term national housing shortage.

‘Impossible to find somewhere to rent’: Tenants say background checks, application fees, consumer-report inaccuracies and eviction records are holding them back

Emma Ockerman, MarketWatch

The Federal Trade Commission and Consumer Financial Protection Bureau want to hear from renters, landlords and others on the impacts of background screening

People hate commuting and it means a ‘seismic shift’ is coming to commercial real estate, CEO of a flexible workspace giant says

Prarthana Prakash, Fortune

Employees around the world were forced to adopt fully remote work for the first time when COVID-19 struck. But as the pandemic stretches into its third year, vaccines become more widespread, and hospitalization rates drop, companies have been trying to lure employees back to working in the office full-time once more.

Is the Home Loan banks’ mission to boost liquidity or housing?

Kate Berry, National Mortgage News

The Federal Home Loan banks have a vastly different view of their mission compared to their regulator, the Federal Housing Finance Agency, setting up a potential clash as the system faces its first major regulatory review in 90 years. The review proposed last year by FHFA Director Sandra Thompson will determine whether the $1.1 trillion-asset Home Loan Bank system is providing the public service it was created to provide.

Subpar sellers market darkens housing sentiment in February

Spencer Lee, National Mortgage News

After three months of improved consumer sentiment regarding housing, the mood soured in February, with recent economic trends leaving sellers particularly hesitant in the current environment, according to Fannie Mae.

FHA finalizes plan to offer standalone 40-year loan modification

Katy O’Donnell, Politico Pro

The Federal Housing Administration on Wednesday will release a final rule to offer a 40-year mortgage modification to more struggling borrowers, agency officials said.

These Are the Cities With the Most Super-Rich Homeowners

Alex Millson, Bloomberg

New York is the world’s most popular place for the super rich to own a property, according to a new report by data firm Altrata.

SEC’s Gensler rejects crypto’s threat to move overseas

Sam Sutton and Declan Harty, Politico

Wall Street’s top cop on Tuesday slammed crypto businesses for refusing to get in line even after a crackdown by regulators and said he sees no risk in them pulling up stakes to head overseas.

What to Watch as Grayscale and SEC Face Off Over ETF Conversion

Katherine Greifeld and Vildana Hajric, Bloomberg

The crypto world’s eyes will once again turn to Washington on Tuesday as oral arguments begin in Grayscale Investments’s lawsuit against the US Securities and Exchange Commission. The case is being argued in the D.C. Court of Appeals.

Judges question SEC rejection of Grayscale’s spot bitcoin ETF

Crystal Kim, Axios

The Securities and Exchange Commission (SEC) was in the hot seat Tuesday, fielding questions from U.S. judges sussing out its reasoning for rejecting Grayscale Investments’ application to convert its bitcoin trust into an ETF.

PayPal CFO Blake Jorgensen Steps Down

Sabela Oje, The Wall Street Journal

Mr. Jorgensen took a leave of absence for health reasons last September.

Stripe faces $3.5B tax bill

Jenny Surane and Gillian Tan, Accounting Today

Stripe Inc., one of the world’s most valuable startups, told investors it plans to use money it receives in its latest round of fundraising to help cover a roughly $3.5 billion tax bill.

Dave CEO says it’s on track to return to profitability

Carter Pape, American Banker

Neobank Dave hit its marks in its latest quarterly results, giving it a “renewed path to profitability,” according to one analyst, as its growing base of customers experience low unemployment and engage more with the company’s services.