• President Donald Trump boasted about the strong economy during his annual State of the Union address, which didn’t mention his ongoing impeachment trial. Trump said he has “reversed the failed economic policies of the previous administration,” which is why the world is now “witnessing this great economic success.” (The Wall Street Journal) 
• Jeffrey Epstein set up a bank after he registered as a sex offender and closed his money management firm, describing himself as one of finance’s “pioneers” and claiming that he wanted to explore the “dynamic discipline of international banking,” according to his banking license application in the Virgin Islands, which was reviewed by a media outlet. Though a lawyer for Epstein told the Virgin Islands in 2018 that the bank, Southern Country International, hadn’t begun operating, Epstein’s estate transferred more than $12 million to the bank after Epstein’s death, court documents said. (The New York Times) 

• At a discussion hosted by the Bipartisan Policy Center, former Federal Reserve Chair Janet Yellen said rising economic inequality poses a risk to the economy as it fuels populist movements and efforts to curb trade and immigration. Yellen said that globalization and trade liberalization have been important to “boosting growth all around the world.” (The Hill) 

Trump touts his economy as ‘the best it has ever been.’ The data doesn’t show that.
Heather Long, The Washington Post

President Trump’s State of the Union address had a lengthy section celebrating the U.S. economy, which has been growing for 11 straight years, the longest expansion in U.S. history. Trump claimed the U.S. economy is “roaring” and “the best it has ever been.”

Coronavirus Crisis Could Delay U.S. Boost From Deal With China, Kudlow Says
Katy Stech Ferek and William Mauldin, The Wall Street Journal

White House National Economic Council Director Larry Kudlow said Tuesday he expected the fallout from the deadly coronavirus to delay—but not derail—the economic boost the U.S. anticipated from the first phase of the trade deal with China. “The export boom from that trade deal will take longer because of the Chinese virus,” said Mr. Kudlow in a Fox Business Network interview.

New Trump Rule Will Allow Tariffs Against Currency Manipulation
Josh Zumbrun, The Wall Street Journal

The Trump administration says it will allow companies to pursue tariffs against foreign competitors if they can show those rivals have benefited from currency manipulation in their countries. Under a new regulation published in the Federal Register on Tuesday, undervalued currencies would be treated as a subsidy that improperly benefits foreign businesses. 

New York Fed repo auction attracts strong demand
Colby Smith, Financial Times

Central bank receives $59bn in bids for $30bn offering.

News outlets request Labor Dept. back off new restrictions on economic data
Joe Concha, The Hill

The Associated Press, Bloomberg News and Reuters joined other news outlets Tuesday in asking the Labor Department to reconsider a recent decision that would limit access to government economic data. The Labor Department last month announced that beginning March 1, computers would be taken out of a secure room, known as a “lockup room,” where journalists are given early access to market-moving reports measuring employment, inflation and consumer spending.

Equities Gain on Virus Treatment Hope; Bonds Fall: Markets Wrap
Todd White, Bloomberg

Stocks rallied globally and bonds slipped amid hopes for a breakthrough in fighting the coronavirus. Crude oil advanced with industrial metals.

The Money Behind Trump’s Money
David Enrich, The New York Times

One Day in early 2017, Mike Offit went to the Yale Club in Manhattan for a lunch hosted by a group called Business Executives for National Security. Offit, who has a craggy face and shoulder-­length hair, had spent much of his career in banking, but that had ended nearly two decades earlier. 

Ex-Goldman Sachs VP renews lawsuit alleging anti-LGBTQ bias
Jonathan Stempel, Reuters

A former Goldman Sachs Group Inc vice president has renewed his lawsuit accusing the Wall Street bank of firing him after he complained about being discriminated against because he was gay. William Littleton filed his complaint in Manhattan federal court on Tuesday, consolidating New York and federal civil rights claims he had previously filed with a New York state court and the U.S. Equal Employment Opportunity Commission.

Goldman Sachs’s 1MDB Case Completes Move to Malaysia High Court
Anisah Shukry and Hadi Azmi, Bloomberg

Malaysia completed the transfer of criminal cases against the three Goldman Sachs Group Inc. units facing charges linked to 1MDB to a higher court. The High Court granted the application to move Goldman Sachs Singapore Pte.’s case from the Magistrate Court, after previous attempts to do so were unsuccessful as the unit hadn’t successfully been served the court summon.

U.S. banks on high alert as coronavirus spreads
Jon Prior, American Banker

Bankers who breathed a sigh of relief as trade tensions between the U.S. and China began to ease at the end of last year are on edge again as the spread of the coronavirus is threatening to close off the world’s second largest economy. Analysts and economists have outlined several ways the industry could feel the impact from the crisis, which is not just limited to megabanks looking to break into the recently opened financial markets in China.

Fund giant Vanguard bypasses banks with forex algos
Tommy Wilkes, Reuters

Vanguard, the $5.6 trillion asset manager, plans to start using computer-run algorithms this year to trade FX directly with other funds, depriving banks of some of the fees they earn as the middlemen in currency deals. The head of FX trading at U.S.-based Vanguard, which trades about $225 billion in currencies each month, told Reuters the fund giant was in talks with several forex platforms about launching specialist algorithms designed to seek out and trade with other asset managers.

City’s housing agency changes ‘devastating’ voucher policy after domestic violence suit
Janaki Chadha, Politico 

A woman who said she was trapped between her abusive ex-husband and a “devastating” city housing policy will avoid eviction from her home, following the settlement of a federal-class action lawsuit that forced a change in how the city’s housing agency treats survivors of domestic violence. The woman, identified in court documents as B.D., was unable to shift a city-administered rental voucher into her name from her ex-husband’s — a man she said physically attacked her, threatened to kill her and raped her after she was instructed to refrain from sex because of a medical procedure.

Trump urges Congress to pass bill allowing new parents to advance tax credits
Naomi Jagoda, The Hill

Trump urges Congress to pass bill allowing new parents to advance tax credits

President Trump on Tuesday urged Congress to pass bipartisan legislation to allow new parents to advance child tax credits, saying it would allow parents across the country to have access to paid family leave. “I call on Congress to pass the bipartisan Advancing Support for Working Families Act, extending family leave to mothers and fathers all across our nation,” Trump said in his State of the Union Address.

A Dozen States Puzzling Out How to Tax Foreign Income
Michael J. Bologna, Bloomberg Tax

States have struggled for two years to give consistent and clear guidance on whether—and how—they will tax a new federal category of foreign income, causing confusion for multinational businesses confronting this patchwork of rules. But that could change this year.

Amazon, Microsoft Back Tax to Fight Seattle-Area Homelessness
Matt Day and Noah Buhayar, Bloomberg

Amazon.com Inc., Microsoft Corp., Costco Wholesale Corp. and other big Seattle-area companies expressed support for a proposed business tax to combat the region’s homelessness crisis. A Washington State bill released last week would authorize King County, home to Seattle and the headquarters of those companies, to impose a levy on big businesses with employees who make more than $150,000 a year.

Congress looks at taxes, oversight, crime in fintech bills
Peter Feltman, Roll Call

A review of the latest fintech-related bills by CQ Roll Call shows lawmakers’ latest efforts are focused on fostering innovation by some and making sure the technology isn’t abused by others. A bipartisan bill introduced in January, for example, would remove the tax implications each time cryptocurrency is used to make a purchase. 

Drink kombucha — get results: The No. 1 place to work in fintech
Jessica Matthews, American Banker

Even though the CEO of YCharts, a financial data and portfolio fintech, makes himself accessible to everyone at the company’s 52-employee Chicago office, he makes sure he’s not the center of attention. Every Friday at YCharts is “Know Your Colleague” day, where one or two employees are profiled over video conference call, highlighting aspects like what has influenced their career and what they’d do if they won the lottery.

Protecting the Right to Monopolize? What the PRO Act Means to Small Businesses
James M. Wordsworth, Morning Consult

The U.S. economy is thriving, and restaurants continue to be an industry of opportunity — whether it is providing a first job, a second chance after incarceration or a job change, a flexible family-friendly income or a stable and advancing career. But the opportunity millions seek in our industry is at risk because of a special interest bill soon expecting a vote in the House of Representatives.

The Two Words Every Central Banker Wants to Hear
Daniel Moss, Bloomberg

For central bankers around the world, acting locally now means thinking about China. The spread of the coronavirus will likely hit mainland growth hard enough to warrant a global monetary-policy response.

The economy is strong, as Trump says. But at what cost?
The Editorial Board, The Washington Post

As Congress gathered for the annual State of the Union address Tuesday, there was no denying that the state of the national economy is good indeed, although President Trump, predictably, exaggerated how good. The broadest measures — gross domestic product growth, wages and labor force participation — all point in varying degrees in the right direction, with the most sensitive indicator, unemployment, at a 50-year low of 3.5 percent.

Does the Lack of Financial Stability Impair the Transmission of Monetary Policy?
Viral V. Acharya et al., The National Bureau of Economic Research

We investigate the transmission of central bank liquidity to bank deposits and loan spreads in Europe over the period from January 2006 to June 2010. We find evidence consistent with an impaired transmission channel due to bank risk.