Morning Consult Finance: What’s Ahead & Week in Review
 

Finance

Essential financial news & intel to start your day.
August 1, 2021
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Hello, and I hope you’re having a great Sunday morning. Let’s see how well you know the American public with this quiz question: Which demographic do you think is most likely to believe the economy will worsen in the next year? 

 

A: Those with an annual income of under $50,000

B: Democrats

C: Those with an annual income of more than $100,000

D: Republicans

 

Find the answer at the bottom of today’s newsletter. 

 

What’s Ahead

The Senate Banking Committee will hold its financial regulatory oversight hearing on Tuesday. Why it’s worth watching: Chairman of the Federal Deposit Insurance Corp. Jelena McWilliams and acting Comptroller of the Currency Michael Hsu will testify at the hearing, and the theme from Democrats is expected to center on inclusion and equity in the financial system. With the OCC’s recent announcement that it will work with the FDIC and the Federal Reserve on the Community Reinvestment Act, expect redlining to be a major topic at the hearing. 

 

Randal Quarles, vice chair for supervision at the central bank, isn’t listed as a witness. From Senate Banking Committee Chairman Sherrod Brown’s (D-Ohio) office: “The Fed’s Vice Chair for Supervision is required to appear regularly before the Senate Banking and Housing Committee at the Semiannual Testimony on the Federal Reserve’s Supervision and Regulation of the Financial System. He testified on May 25, 2021.” 

 

The Aspen Security Forum will be held Tuesday and Wednesday. Why it’s worth watching: There’s some big names at the conference, including Securities and Exchange Commission Chairman Gary Gensler, speaking on the first day, and executives from Mastercard Inc. and Ripple Labs Inc. on the second day. With the security theme, I’ll be keeping an especially close eye on Gensler’s comments, particularly after the SEC mandated new disclosures from Chinese companies before they can sell shares in the United States. 

 

It’s a busy week for Fed speakers. What’s worth watching: Fed Vice Chair Richard Clarida will speak on the economic outlook and monetary policy on Wednesday at the Peterson Institute for International Economics. After the central bank’s policy meeting this week, Clarida’s remarks will be analyzed for more hints about how soon the Fed will tap the brakes on economic support to the economy, especially its bond-buying program, especially as the delta variant picks up steam across the country. 

 

Fed Governor Christopher Waller will speak on central bank digital currency at the American Enterprise Institute on Thursday. This is only Waller’s second public speech as a Fed governor after his nomination hearing where his viewpoints were largely overshadowed by those of Judy Shelton’s, who did not end up winning confirmation. 

 

Friday is jobs day. Why it’s worth watching: As extra unemployment benefits expire across various states, policymakers will want to see if that translates at all to higher employment, checking the Republican argument that extended unemployment benefits could have been dissuading jobseekers from accepting work. Economists still expect a robust report, and although the delta variant remains a big economic risk, it likely won’t show up in this report because of the timing.  

Get ready for debt ceiling chaos. The two-year hold on the debt ceiling expired Saturday, which means lawmakers must once again try to avoid a default later this year. At the moment, there’s no clear plan.

 

Events Calendar

 

Week in Review

From the Cutting Room Floor: Inflation Worries Start to Resonate With Democratic Voters

New polling from me this week showed how many voters attribute inflation to President Joe Biden’s economic policies, rather than the natural result of prices rising as consumers resume pre-pandemic activities. 

 

This is bad news for the White House’s narrative on inflation, and potentially hands Republicans a potent weapon to use against Democrats come midterms. 

 

In a little bit of b-roll from that story, let’s focus on the idea that 41 percent of Democrats believe inflation is due to Biden’s policies. 

 

That’s high, especially considering the level of support Biden’s received on plans like infrastructure and stimulus payments from his party’s voters. Biden’s economic policies have typically scored well in Morning Consult polling. 

 

While Democrats in Washington have largely brushed off concerns that inflation might not be temporary, Democratic voters are more worried.

 

Eighty-two percent of Democrats said they were “very” or “somewhat” concerned about inflation. Republicans were higher at 90 percent. 

 

That’s within the margin of error of Democrats who said they’re very or somewhat concerned about economic inequality (85 percent), one of the party’s biggest economic rallying cries of the last election and in Washington now. 

 

Other big news from last week

 

The eviction ban ends: The eviction ban expired yesterday despite a last-ditch effort from Democrats to extend it another month. Only 12 percent of the $25 billion approved for rental assistance has been spent, according to a Washington Post analysis. 

 

Robinhood disappoints on its first trading day: Robinhood Markets Inc. shares fell 8 percent after it debuted on the Nasdaq on Thursday, closing the day at $34.82 after opening at $38 per share, even as the wider market ended higher. The company said it netted almost $2 billion from selling about 55 million shares, a third of which were offered directly to its users. Just ahead of its initial public offering, the company disclosed that the Securities and Exchange Commission and the Financial Industry Regulatory Authority are investigating its employees’ trading of meme stocks such as GameStop Corp. and AMC Entertainment Holdings Inc. earlier this year, and that FINRA is looking for documents related to the registration status of Chief Executive Vlad Tenev and Chief Creative Officer Baiju Bhatt.

 

Wall Street gets spooked by China: Gensler said Friday that the agency will require new disclosures from Chinese companies before they list on U.S. stock exchanges. Earlier in the week, SEC official Allison Lee said Chinese companies listed on U.S. stock exchanges have to disclose the risk that Beijing could interfere in their businesses. 

 

Beijing regulators during the week reportedly held a call seeking to ease the concerns of global investors, Wall Street banks and Chinese financial groups, which were worried about the possibility that additional limits would be applied to Chinese tech companies listed overseas after China imposed harsh restrictions on private education companies. Attendees on the call included executives from BlackRock Inc., Fidelity Investments Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co., a person familiar with the matter.

 

The Fed holds: The Fed voted to maintain interest rates near zero and keep up its bond-buying program, but officials signaled that a slowdown to the bond-buying program could be coming. In a press conference following the two-day policy meeting, Fed Chairman Jerome Powell said that the economy has made “substantial” progress, but that “there’s still “some ground to cover on the labor market side.”

 
Stat of the Week
 

17%

Share of U.S. adults who said they used a “buy now, pay later” service in June.

 
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